Category Archives: SHRM

Future World College-Graduate Shortage Looms Large

college grad-122486537More bad news on the skills-shortage front since my last post on the subject. This time, the shocker comes in the form of a number, part of the McKinsey Global Institute’s recent World at Work report: By 2020, according to the report, the world could have 40 million too few college-educated workers.

Youch. That’s a huge shortage — as the late George Carlin might have said in his infamous oxymoron routine.

As Tracy McCarthy, senior vice president of human resources at Chicago-based SilkRoad technology, told the Society for Human Resource Management in it’s report (subscription required) on this matter,

This skills shortage, particularly for high-tech skills, has existed in the United States for some time now. If you look at the number of H-1B visa holders, you’ll find the majority are for high-tech skilled workers such as engineers.”

Yes, I’ve been aware of the skills shortage for some time now; I know about the scarcity of math-and-science-proficient engineers (something I keep telling my engineer son to bear in mind and use to his advantage as he plots his future); I just hadn’t seen a 40-million-shortage headcount by 2020 until now.

Ravin Jesuthasan, Chicago-based global-talent-management-practice leader for Towers Watson, says the future gap will come with some friction points too. As he puts it,

While there will be an overall shortage of college-educated talent, there will be dramatic differences across countries. Developed markets like the United States, Japan, Germany and the United Kingdom will experience huge shortages, while countries like India and Indonesia will generate significant surpluses as the key drivers of education, demographics and immigration play out differentially. The challenge for employers will be how they tap into these surpluses; making the mobility of work essential.”

What the McKinsey report does not cover, Jesuthasan adds, are the specific skills that businesses will demand and the gaps relative to those within the current workforce. As noted in Towers Watson’s Global Talent 2021 report, he points out, employers expect to place increasing emphasis on four skill areas: digital skills, agile thinking, interpersonal and communication skills, and global operating skills.

I guess you can look at all this as more fodder for the battle cry to bring the best thinkers of the world together now — from employment, academic, even governmental sectors — to try and solve this thing before the global marketplace closes up shop.

Time to Start Talking About Healthcare Exchanges

No harm in reminding one and all that you have until March 1 — according to the recently enacted Affordable Care Act — to notify your employees about state-specific healthcare exchanges to be set up before 2014.

This alert from the Society for Human Resource Mangement lays out what you need to be doing next, according to the new law, after you’ve satisfied your January 2013 healthcare-benefit cost-reporting requirement for 2012 W-2s, that is. (Appropriate informational links are included in the SHRM piece; note, though, that the SHRM site is a subscription-based one.)

In the piece, Jennifer Benz, CEO of Benz Communications, lists three specific communication requirements employers must satisfy by March 1:

State exchange basics. This is a description of the state exchange, the services provided by the exchange and how to contact the exchange (website and customer service number). One wrinkle: not all states have decided how they’re going to comply (the National Conference of State Legislatures provides an up-to-date chart of state implementation efforts). Employers in multi-plan states will have an even more challenging time.

Individual plan value. This explains whether employees will receive at least 60 percent coverage of essential health benefits through employer-provided coverage, and whether employees may be eligible for a premium tax credit if they purchase a plan on the state exchange.

Tax implications. Because health-insurance premiums under employer-sponsored coverage may be paid with pre-tax dollars, buying coverage through a state exchange may change an employee’s tax obligations. Employees using an exchange to purchase coverage may lose their employer’s tax-free contribution (if any) to their health coverage, also.

Although many benefits and HR experts are predicting the March deadline will be extended, considering the U.S. Department of Labor has yet to release proposed regulations or samples of a model notice, Benz suggests integrating the three-part notice into your overall health-benefits-communication strategy regardless.

“No matter what deadline the DOL ultimately sets,” says Benz, “employers need to be prepared to include [these three points] in their communication plans for 2013.”

Communicate your 2014 position before the legalese does,” she adds. “Be sure to use language that fits the notice into your big-picture approach to healthcare-reform compliance. For many employers, this strategy is going to include high-deductible health plans and incentive-heavy wellness programs, two benefit strategies that require robust, thoughtful communications in their own right.”

Employee Health Takes on New Meaning

Two different studies came to my attention at SHRM’s 2012 Annual Conference and Exposition — both underscoring a growing awareness that keeping workers working, and healthy and productive, is probably the best way to cut healthcare costs.

In essence — though as important cost-cutting factors — focusing on plan design and doctors’ and drug costs may be taking a back seat to keeping workers healthy and happy, at work.

One, a just-released report from The Standard Insurance Co.’s Workplace Possibilities program, titled Health-Related Lost Productivity: Causes and Solutions, kind of turns on its ear the notion that medical care and drug costs should be employers’ biggest worries.

It cites recent studies (one in the Journal of Occupational Environmental Medicine, “Health and Productivity as a Business Strategy: A Multi-Employer Study,” and two others by Mercer and Kronos on the Total Financial Impact of Employee Absences) showing that medical and pharmaceutical costs make up only 30 percent of the total cost of poor employee health.

The other 70 percent can be attributed to what The Standard calls health-related lost productivity costs. Those accrue through presenteeism (workers showing up but not producing at full capacity due to illness) and absenteeism. And the latter costs accrue through all kinds of demons: overtime for the workers left to pick up the pieces, turnover should patients never return, temporary staffing, working slow, late deliveries (because, let’s face it, replacements just don’t know the ropes like the employees themselves), replacement training, customer and variable product quality.

Michael Klachefsky, national practice leader of The Standard’s Workplace Possibilities program and author of the report, calls it the “iceberg concept.”

“These are the hidden costs, like the part of the iceberg under the water’s surface,” he tells me. “Our findings show the people left to pick up the slack are, on average, 15 percent to 44 percent more expensive, and 21 percent to 29 percent less productive.”

His research shows that, for every $1 employers spend on worker medical or pharmacy costs, they absorb at least $2.30 of HRLP costs.

“It’s intuitive,” says Klachefsky, “but no one ever measured it before.”

His company actually bases its services on this concept through numerous proactive fixes, such as on-site wellness and return-to-work consultants, ergonomic advice, products and services, and a blog — — devoted solely to educating employers and employees about ways to avoid medical leave and keep short-term disability from becoming long-term disability.

“We’re doing the 70 percent,” Klachefsky says. “Most others are addressing the 30 percent.”

Also at the conference, SHRM released its 2012 Employee Benefits Survey, showing more employers are offering benefits now that encourage employees to improve their health. Of the 550 randomly selected HR professionals surveyed by SHRM, 45 percent are now offering health and lifestyle coaching, up from 33 percent in 2008, and 35 percent are rewarding — through lower premiums or bonuses — workers who complete health and wellness programs, up from 23 percent in 2008.

“Employers recognize that providing employees with the opportunity to improve their health can increase morale, confidence and productivity,” says Mark J. Schmit, vice president or research at SHRM.

“Organizations continue to look for ways to manage costs as the economy slowly improves,” he says, “[recognizing that] healthier employees … help decrease healthcare costs to employers and employees.”



Varied Perceptions of SHRM Conference’s Opening Day

Hank Jackson, president and CEO of the Society for Human Resource Management, took to the stage at the opening session of SHRM’s 2012 Annual Conference and Exposition in Atlanta Sunday with a positive message about HR moving as a profession into the driver’s seat of growth and change.

Against a backdrop of business successes such as Intel and Apple, and casualties such as Twinkies’ bankruptcy and Blockbuster’s inability to withstand what he called the “disruptive innovation” of Netflix, Jackson warned that “businesses that don’t see change coming will be gobbled up and taken over.”

The speed and growth of change in the business world, said Jackson, “has changed the way we live and work,” and HR, and SHRM, “will help drive that growth and new direction.”

After listing many of SHRM’s recently launched and ambitious initiatives — including its introduction of HR competencies and standards, established in partnership with the American National Standards Institute, and its even-more-recently announced commitment to immigration as a future-workforce promise — Jackson called on the thousands of HR professionals in the audience to join with his group and help lead the nation’s businesses to a new age.

“We as HR professionals now own our seat at the table,” he said. “Now we have to take that next step and take our place at the head of the table.”

Former U.S. Secretary of State Condoleezza Rice was also positive in her opening keynote. Despite the nation’s crisis in education threatening to become “our No. 1 national-security threat,” she said, “I’m still optimistic — like our country [which has endured powerful hardships in its past] and like me, a girl from a black neighborhood in Birmingham, Alabama, who goes on to become the country’s secretary of state.

“We will emerge,” said Rice, “this exceptional country called the United States of America.”

Earlier that day, however, in a press conference called by the SHRM Members for Transparency, a different kind of change was being called for — one intended to right a SHRM ship that the group’s members say has drifted far off course.

Some of the SMFT’s key concerns about the current SHRM leaders center around what it considers non-transparent decision-making, salaries adopted for SHRM board members that fly in the face of today’s still-sputtering economy (and SHRM traditions) and board members being appointed without being certified by the Human Resource Certification Institute (a practice that has been in place since the HRCI was established in 1976).

At the press briefing, the SMFT released results of two surveys it conducted in May — one of 3,607 SHRM volunteer state, regional and chapter leaders, and another of 350 grassroots members — showing definitive support for what the SMFT is trying to address.

Highlights of the survey results include a 98-percent agreement that the SHRM board should follow the Center for Association Leadership and BoardSource recommendation of establishing an independent compensation committee, which the current SHRM Board has chosen not to do. Additionally, 91 percent agree that the board’s compensation is too high; 94 percent agree that the current perks, such as domestic premium-class air travel, are not necessary to recruit and retain good board members; and 87 percent believe it is unacceptable that only 38 percent of SHRM board members possess HRCI certification.

The group also announced Sunday that it was launching a massive write-in campaign to elect four of its members to the SHRM board to correct these flaws.

This February 2011 HREOnline news analysis says that, “among other issues, the Transparency group is actively encouraging SHRM members to request outside reviews of board compensation and travel-reimbursement policies; to have the job specifications for the CEO revised to require HR experience and education [which Jackson does not have]; and to discontinue future use of the consumer-price index as a factor in dues increases.

“Reasonable people can disagree on how you attract the best board members,” Jackson said in that story, “and I think the group’s fundamental concerns are that we’re breaking SHRM traditions. But SHRM is growing in size and complexity and that means some of the more traditional things may go away because of that.”



Made in America

“Remember when they used to actually make things in this country?” How many of you have heard that from older relatives, or your parents? How many of you have actually said it yourselves? So now it’s time to talk about a nascent trend: The rebirth of manufacturing in the United States.

The auto industry, aided by its controversial bailout from the federal government, continues to add workers as sales stay strong despite the uncertain economy. Then there’s the (also controversial) “fracking” industry in states like Texas, Colorado and Pennsylvania: As oil-and-gas companies drill through shale rock to reach rich deposits of oil and gas, they’ve generated a big demand for steel piping and other equipment that’s helping to revitalize the steel industry in places like Ohio. And then there’s “re-insourcing,” touted by President Obama earlier this year, with companies like Master Lock and General Electric moving jobs that they outsourced to places like China back to the U.S. to save on shipping costs–and to take advantage of the fact that with rising labor costs overseas, it can make more sense to have goods made here instead of over there.

But there’s a risk that this trend may stall if one crucial problem isn’t solved: Finding the skilled talent necessary to actually do the work. This ain’t your grandfather’s assembly line: Today’s manufacturing jobs often require advanced skills in math and robotics that can be hard to find, especially given the fact that in our society, high-achieving students are pushed to enroll in four-year colleges and jobs that require working with your hands are not held in the highest esteem, shall we say, in many of today’s households. A SHRM poll from last year found that more than half the participating companies were having trouble finding skilled talent, with the manufacturing industry having a particularly tough time. Highly skilled technicians, engineers and tradespeople (electricians, carpenters) were among the most difficult-to-fill positions, according to SHRM.

The organization plans to address this topic during an upcoming half-day summit at its annual conference, to be held this year in Atlanta. Representatives from SHRM, the U.S. Dept of Labor and manufacturers will discuss potential solutions for filling the skills gap. The event will be held on Sunday, June 24, at the Georgia World Conference Center.

In the meantime, you can read about how some manufacturers are trying to grow their own talent through apprenticeship programs–in which students actually get paid to learn, rather than going into debt.

The Painful End of Maternity Leave

Found a nice reminder today on the Society for Human Resource Management website about just how hard it is for most moms to return to work after maternity leave.

The top video in SHRM’s archive features Cathy Carothers, president of the International Lactation Consultant Association, describing just what returning young mothers go through.

So often, what employers — and employees — focus on are the numbers of weeks and days allowed for maternity leave under state and federal laws (which just so happens to be the focus of the second video, following Carothers’).

What Carothers does is make it very personal and specific — the physical stress of post-birth and lactation, the loss of sleep, the emotional stress around leaving your baby in the arms of someone else … .

I so rarely hear those specific hardships talked about when reporting or writing about young moms returning to work. Hearing Carothers took me right back to my own painful pangs some 30 years ago. And to the much-more-recent experiences of young women in my life and circle of friends.

As Carothers stresses, every employer would do well to consider the special needs — beyond time-and-attendance — that these women come back to work with. (Suggestions might include extra counseling, support or affinity groups, and lactation and rest areas, to name just a few.)

Indeed, the transition from maternity to work would be so much easier for all involved, employers and employees, if organizations catered more to the whole returning new parent, not just the returning employee.



Deadline Approaching for Disability Hiring Help

Wanted to alert you all to a deadline fast approaching to get applications in for funding designed to encourage disability hiring.

The deadline came to my attention through this piece on the Society for Human Resource Management site (subscription required) about the U.S. Department of Labor making $1.6 million available in a second round of funding aimed at increasing employment opportunities for people with disabilities.

The money is being made available through the Add Us In program, launched in 2010 by the DOL’s Office of Disability Employment Policy. The deadline to get applications in is Sept. 2.

Labor Secretary Hilda L. Solis, in announcing this second round of funding at the National Disability Forum on Aug. 4, said her department “is committed to ensuring that every American who wants a job can find one, including people with disabilities.”

Employers’ failures to hire disabled workers was only one of the concerns raised in a recent story by Jared Shelly on HREOnline™ about the skyrocketing number of disability discrimination claims filed in 2010.

One reason for the increase, according to experts quoted in his story, was the expanded definition of “disabled” under the revised Americans with Disabilities Act. But also onerous is the hesitation on the part of employers to hire people with disabilities because of the perceived difficulties in ensuring the required accommodations are provided.

Sollis stressed during her announcement, however, that “if we [simply] make modest accommodations, we can see [disabled workers’] talent[s] unleashed.”

Changes to FLSA Urged Before Congress

The notion of modifying the Fair Labor Standards Act to bring it up-to-date with today’s more mobile, flexible and technology-driven workforce took a step forward last Thursday in a hearing before the House Subcommittee on Workforce Protections.

The hearing was chaired by Rep. Tim Walberg, R-Mich., and included statements by J. Randall MacDonald, senior vice-president of HR for Armonk-N.Y.-based IBM Corp.; Nobumichi Hara, senior vice president of human capital for Phoenix-based Goodwill Industries of Central Arizona (speaking on behalf of the Society for Human Resource Management); Richard L. Alfred, partner at Seyfarth Shaw in Boston; and Judith M. Conti, federal advocacy coordinator for the National Employment Law Project in Washington. Here’s a link to the hearing’s agenda, plus full testimonies of all who participated.

Almost everyone in attendance urged for revisions to the law’s exempt and nonexempt definitions, overtime regulations and other wage-and-hour stipulations that they say prevent employers from competing in today’s marketplace.

Hara cited an example in which his company would have to pay overtime to a group of employees in the first week of their proposed biweekly schedule even though the second week (a lighter schedule) would have satisfied the two-week hourly requirement. “SHRM believes the FLSA hinders employers’ abilities to provide the flexibility that millions of nonexempt employees want,” Hara said.

MacDonald, who also chairs the HR Policy Association (representing more than 300 CHROs of the nation’s largest companies) testified that “there are areas of major disconnect between this 70-year-old labor law and today’s rapidly changing workplace environment.” (Here’s a link to his testimony.)

“The business world of 2011 barely resembles that of the 1930s and 1940s, while our primary labor law is becoming ever more outdated, having barely changed in all that time,” he said. “Simply put, this law is now a job killer. It yields advantages to global competitors without commensurate payback to U.S. workers.

“If nothing is done to make necessary reforms,” MacDonald said, “we sustain a disincentive for job growth in America, hampering employees’ opportunities and giving U.S. employers another reason to invest elsewhere. … The disconnect between the FLSA and the modern workplace will continue to grow, increasing tensions between employers, employees and regulators, with the only true beneficiary being the plaintiff’s bar.”

MacDonald urged Congress to make six specific changes to the law, including updating the definition of computer employees to include more duties, expanding exemptions to include “well-compensated, commissioned inside salespeople” and allowing a broad pre-emption of state and local wage and hour laws.

“Why is it,” MacDonald asked, “that a 70-year-old law, enacted in a different century, which was based on a different model of the U.S. economy, and at a time that pre-dates global competition and nearly all technology we use today, should not be modernized, clarified and made relevant for today’s economic realities?”



Delivering Happiness

Tony Hsieh, CEO of Zappos, brought his message of the importance of happiness to the SHRM conference in a morning keynote address on Tuesday. 

He shared a bit of his personal history — making and selling pizzas while in college (eventually hiring as the Zappos CFO his No. 1 customer — who he found out was buying his pizzas and then selling them by the slice to college kids — and later, creating an online company he eventually sold to Microsoft when he dreaded going to work in the morning because it wasn’t fun anymore.

Selling out during the dot-com boom, he became an investor and ultimately decided to join Zappos, which he describes as “a service company that just happens to sell shoes.” It is a company designed to offer “the very best customer service and customer experience.” To that end, for example, Zappos offers free shipping both ways and a 365-day return policy.

But a company can’t offer excellent customer service, he said, if it doesn’t have an excellent company culture. So, everyone hired at Zappos goes through two types of interviews — one for skills and one for cultural fit. Regardless of skill level, individuals will not be hired unless they fit — and they may be fired for the same reason.

To ensure new hires are excited about the oportunity of working there, Zappos offers a bonus of a few thousand dollars if they want to quit during the training period — and everyone, regardless of job title, goes through the same training, which includes two weeks on the call center phones, he says.

His story has been covered a lot — especially since his 23-city book/bus tour last year — but it’s surely a welcome message for HR leaders, as they are the keepers of the culture — and as they are the executives who talk up the value of culture with their C-suite colleagues.

During those talks, they could share some of the research findings Hsieh talked about that link successful companies with both strong cultures and “counterintuitively,” offer a higher purpose beyond higher profits.

That vision, that purpose, that passion, he said, gets companies — and individuals — through the tough times. It inspires employees and seemlessly results in better performance — and higher profits.

“There’s a huge difference between motivation and inspiration,” he said. “Conmpanies with a higher purpose actually generate more profits in the long term.”

The Changing Nature of Work

Gary Kushner offered lots of data about the future nature of work so that HR leaders could begin questioning the way their organizations are designed, the composition of their total rewards and the purpose underlying their HR strategies — but he didn’t provide any answers during his session at SHRM on Monday afternoon.

Kushner, president and CEO of Kushner & Co., a consultancy focusing on employee benefits and strategic HR, outlined five global trends affecting strategic HR: technological advancement, outsourcing, changes in demographics and diversity, changing worker attitudes and values, and globalization.

He also noted that, while business success was based on manufacturing processes 40 years ago and on technology 20 years ago — that it is people who “are our competitive advantage” today.

Kushner talked about the adjustments that would have to be made with four generations — and soon, five — in the workplace, especially the way it would impact upward advancement. And that the ever-growing segment of older workers would impact total rewards and benefits.

He talked about the challenges that the combination of employees, temps, independent contractors and outsourcing have on creating a shared vision and facilitating teamwork. And he talked about how individuals have changed their attitude from living to work to working to live.

“How do we leverage the way we think about all of these trends?” he asked. “The way work has been done is not the way it is going to continue to be done.”

But it will be up to individual CHROs to take it to the next step — and figure out what the answers are.