Non-Competes for Sandwich-Makers?

Fast-food chain Jimmy John’s Sandwich Shops bills itself as a place that makes good sandwiches “freaky fast.” Perhaps the formula behind “freaky fast” is so vital and unique that it’s worthy of being shielded behind the walls of Fort Knox, Ky.? That seems to be the gist behind an interesting issue revealed via a class-action lawsuit filed against Jimmy John’s and its franchisees: They apparently require employees to sign a non-compete agreement stipulating that, should they leave (or be fired from) Jimmy John’s employ, they will not seek employment for at least two years with any other establishment that derives at least 10 percent of its revenue from selling sandwiches that’s within a three-mile radius of any Jimmy John’s location.

The lawsuit in question is Brunner v. Jimmy John’s Enterprises Inc., and the details were first reported by the Huffington Post. The plaintiffs accuse the sandwich-chain’s franchisees and its corporate parent of violations under the Fair Labor Standards Act. In the lawsuit, the plaintiffs assert that the non-compete clause “effectively restricts an employee ‘from working in an area that is over 6,000 miles large, at innumerable types of business … in any capacity for a period of two years in 44 states and the District of Columbia,” according to the Workplace Prof blog, which analyzes the details of the non-compete clause.

Is a non-compete clause for fast-food workers enforceable? Unlikely, according to two attorneys interviewed by Politico. Rochelle Spandorf, a business-franchise attorney, said non-competes for low-level workers are quite rare and “very hard to enforce in court.” “I don’t think it’s a smart policy for any employer to apply a non-compete to lower-level employees who are taking directions from supervisors and who are not given independent access to really classified information,” she said.

However, Jimmy John’s and its franchisees — and indeed, many other organizations that require large numbers of their employees to sign these agreements — may have an ulterior motive that’s linked to the traditionally high turnover rates in their field, said Eric Fink, a professor at Elon University Law School.

“It’s not uncommon for employees to extend non-competes that are far broader than the law allows,” he told Politico. “Employees may be scared by this.”

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Egg Freezing: Unique Benefit or Bad Idea?

pregnant womanThe Apples and Facebooks of the world are known for their original and generous employee perks and benefits. But these companies find themselves in the news this week for offering a new benefit that goes well beyond the usual on-site dry cleaning services and free haircuts.

Earlier this year, Facebook began covering up to $20,000 for female employees to freeze and store their reproductive eggs, so they can put off pregnancy as they establish themselves during their prime career-building years. Apple has announced it will start doing the same in January 2015.

Cryopreservation and egg storage could be seen as the latest advance from the tech firms that continue to blaze the trail for employee benefits that help attract and retain the best and brightest.

“Egg freezing is one in a long line of innovative HR practices intended to be attractive to educated people with many employment options, seeking a focus on flexibility in the difficult balance between work and life,” according to James Hayton, professor of human resource management at the Warwick Business School in Coventry, England.

“The cost appears to be moderate, although not trivial, at about 20 percent of average salary at these firms,” says Hayton. “The benefits, in terms of attracting and retaining employees, can be expected to significantly outweigh the costs. The positive PR will pay for itself by signaling these employers’ values with respect to women’s control over this important life choice to prospective female employees.”

All that said, the practice isn’t without its detractors.

Healthcare law and bioethics expert Seema Mohapatra, for example, wrote in August that egg freezing “seems to put a Band-Aid on the problem of how difficult it is for women to have a career and raise a family concurrently.”

This week, one woman, speaking on the condition of anonymity, told the New York Times that delaying fertility for female employees is “certainly in the employer’s interest … from a business perspective. But in my experience, it’s more personal: Are you married or not married, and if you’re not and you’re over 35, it’s a health thing.”

In the same Times article, Mohapatra expressed concern that women who “do not fit that profile” could feel pressure to use the benefit.

“What I worry about is it’s not going to be just used by that population, but [it’s] going to be used by the population in their 20s and early 30s saying, ‘If I want to be seen as a serious employee and make it to vice president, I can’t take maternity leave,’” said Mohapatra, a law professor at the Barry University School of Law in Orlando, Fla.

Critics may also note that, “while perks such as these are very impressive and innovative, broader pay equity might be an even stronger signal of the importance of women in the workplace,” says Hayton.

Additionally, companies offering this benefit could draw the ire of religious groups with serious reservations over “the tricky domain of bioethics and reproductive choices,” he continues, adding that other observers may be “squeamish about the degree of paternalism when employers show concern for their employees’ reproductive choices.”

While we’re certain to see these and other strong reactions in the days to come, Hayton, for one, is confident that employers providing egg freezing options for female employees will prove to be a good thing.

“Ultimately … these policies are innovative and forward-thinking, and likely to benefit the employers [that are] creative enough, and bold enough, to offer them.”

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Transforming the Future of Work

As expected, Ray Wang gave attendees at HR Tech’s closing session, “Transforming the Future of Work,” a lot to think about last Friday.

In his usual highly energetic way, Wang, founder and principal analyst of Constellation Research, explored how technology is altering work as we know it—and what HR and IT leaders need to do to prepare for the new business models that are emerging.

145926450Early on in his remarks, he touched on the parts mobile, social, the cloud and Big Data are playing—and are going to play—in shaping the digital landscape of tomorrow.

“Mobile is not about the device,” Wang told the packed room. “When you mobile-enable something, it means you can do it in motion … ” in 30 seconds or less.

Social, meanwhile, is not about the networks, but about creating brand-new verbs such as  “share, like and publish,” and about engaging people.

The cloud? It’s an option that allows you to say, “ ‘Hey, I don’t need to worry about technology [and] can spend more time improving the process and improving the experience.” And Big Data isn’t about information, but about the insights that can be generated and about making better decisions.

At the end of the day, Wang said, the goal is for businesses to take all of this data and create new experiences and outcomes. Today, he said, companies are in the “outcomes business” and building relationships, not selling products and services.

In turn, Wang said, this is inevitably going to impact the kinds of people they are hiring, the skill sets they need and the ways they are structured.

In the digital world, what’s the best way to hire away your competitor’s talent? he asked. “Monitor LinkedIn,” he said. “If you see 48 changes at the same company, you know something’s going down. The signals are all there.”

Wang told attendees that companies are going to need to continually look to the data to generate meaningful insights and thereby make better bias-free decisions.

In line with that, he predicted that more companies are going to be appointing chief digital officers who are dedicated to thinking about and operationalizing the organization’s digital strategy—and he suggested that all leaders are going to need to be digitally enabled.

Going forward, Wang said, HR and IT are going to have to work more closely together.

“If you’re on the HR side,” he said, “you want it simple, no manuals. You also want the ability to have it scalable [so you don’t] need to call IT to make a change. You want it sexy”—so people will want to use it.

In contrast, he said, IT wants it safe. “You don’t want to take the system out. You want to make sure that the system is not going to be insecure, [since] you don’t want to be on the front page of the Wall Street Journal. And you want to make sure it’s a sustainable platform … .”

Change, he said, isn’t going to happen in a silo.

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Screening in a Peer-to-Peer World

Does background screening have a role to play in shaping the future of peer-to-peer marketplaces?  HireRight certainly thinks so.

At this week’s HR Tech, the Irvine, Calif., company announced a new practice that aims to address the needs of “sharing” businesses.

Lyft_Pink_MustacheIn recent years, peer-to-peer marketplaces have been gaining traction, with big bets being made on enterprises like Uber, Lyft and Airbnb. But in order for these organizations to thrive, HireRight CEO John Fennelly believes participants are going to want to know that those they’re entering into a business relationship with are trustworthy.

Through its technology platform, HireRight is looking to provide those individuals with some level of comfort.

In some cases, HireRight’s press release says, a marketplace might mandate screening to help ensure consumer safety and mitigate risk, such as for drivers belong to a ride-sharing service. In other cases, it might offer screening as an option so providers can differentiate themselves, such as for clerical or personal-assistant services.

In the world of background screening, Fennelly says, self-verification is pretty much nonexistent today. But if it begins to catch on in the peer-to-peer world, he says, the approach could eventually transition into more traditional workplace settings.

It should be interesting to see if this indeed turns out to be the case.

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Recruiting Beyond Traditional Social Networks

An interesting little recruiting story came out of a late-afternoon session at the HR Technology® Conference in Las Vegas Thursday. 178915467--social mediaSlugged “How Red Hat Approaches Hiring Beyond Traditional Social Networks,” the session featured Brad Warga, senior vice president of customer and employee success for Gild Inc., a San Francisco-based technology-talent search firm, and Don Farr, director of global-talent acquisition for Red Hat, a global open-source provider.

“We found [traditional candidate sources such as] LinkedIn just weren’t providing the recruiting results we needed,” Farr told conference attendees. Long story short, he knew Warga, but not much about Gild, so decided to try him out with an assignment: Find him 200 top technology developers in a city abroad where Red Hat does business. Warga turned it around in record time “and more than half of the developers on his list were already employees of Red Hat,” said Farr.

Pretty convincing. So Farr decided to use Gild’s sourcing and reporting tool, based on far-more specific tech-developer social-media data — including code information and technical questions and answers, indicating levels of focus and expertise — to complement the recruiting system he already had in place.

Not only has it enriched Red Hat’s recruiting, with vastly improved and far enhanced returns on the right kinds of candidates for the growing company, it’s even provided some surprises.

Key among them was proof it needed to enhance its employee-referral service as well. Using Gild’s tools and services, Red Hat was able to determine that 70 percent of its developers who came in outside the referral program were actually connected in some way to current employees through social media.

“In other words,” said Farr, “we could have hired them ourselves if we had just sourced them through more social [streams]. The connections were out there.”

Long story short, Farr convinced his CEO to invest more in employee referrals and the savings are already being realized.

“We now have an employee-referral portal tracked through our applicant-tracking system,” Farr said. “We’ve effectively built a process where referrals aren’t going into a black box anymore.”

Lesson learned here? “Take advantage of the opportunity to embrace social media in multiple ways,” particularly when you’re looking for something as specific and hard to find as tech developers, he said.

“This is really the story of the old guard and the new guard,” Farr added. “You have to adapt or die.”

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HR Tech: Out With the Outmoded!

“If talent is the most important part of every business, then why do we manage it so badly?”

This question, posed near the beginning of Jason Averbook’s presentation at HR Tech 2014, titled “What the End of the ‘Job’ Means for the Future of Work and Talent Management,” was one of the major themes of his talk. Averbook, chief innovation officer at technology consulting firm Appirio and author of the new book HR: From Now to Next, repeatedly made the point that as the nature of work undergoes drastic change, the talent-management practices still used by a majority of companies today also need to be transformed, or perhaps jettisoned altogether.

“Many of the talent processes still in use today come from a time when our economy was manufacturing-based,” he said. “So today, most of our talent practices are broken down old pieces of crap — we manage people like they were machines, with annual performance reviews, timekeeping, performance ratings.”

Talent is the most important part of any business and, unlike machinery, can’t be easily replaced, said Averbook. So why, he asked, do HR departments continue to subject this precious resource to outmoded processes that no one — not even HR itself — believes actually work?

“How many of you here believe that your performance-management process actually helps improve performance?” he challenged the audience.  When only one person raised his hand, Averbook asked “So why, then, do you continue to use it?”

“For compliance,” one person replied. “Because HR makes us,” said another.

These outmoded processes include how most organizations go about measuring employee engagement, said Averbook,

“If engagement is so important, how come you’re only measuring it once or twice a year?” he said. “Do you look at your Facebook page just once a year, to see if anyone ‘liked’ your stuff? Engagement should be something you look at every day.”

Twitter can be an excellent way to determine employee engagement because it can reflect current engagement levels, rather than what they were six months ago, said Averbook. HR is a business function, not a support function, he said, and as such, its technology for supporting talent should incorporate the following five principles:

  1. It should be real time
  2. It should be looking now and forward, not backward
  3. It should be based on killing silos within the organization
  4. Its processes should be for the good of the business, not HR
  5. It should be easy.

As the nature of work and jobs continues to change, with many organizations moving toward an independent-contractor model, talent processes can no longer be cyclical and the technology supporting them can’t be user-unfriendly, said Averbook.

“You’ve heard of business-to-business — well, now we live in a business-to-employee world, and if a process isn’t simple, employes won’t do it,” he said.

And if your technology vendors can’t provide tools that are simple and intuitive and that meet your specific needs, then build your own, said Averbook.

“If your vendor can’t come through, then build an app yourself,” he said. “It’s not hard. My 10-year-old builds apps.”

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New Workforce Data Explored at HR Tech

Based on new research released Wednesday at the 17th Annual HR Technology® Conference and discussed in Thursday’s opening 174186913 (1)general session, employers and HR leaders seem to have some exciting new arsenal for recreating, reshaping and sustaining their workforces of tomorrow.

The research, to be released in quarterly reports as part of an ongoing ADP Workforce Vitality Report, measures the total real wages paid to the U.S. private-sector workforce based on a number of metrics, including job holders’ wages, job holders’ hours worked, job switchers’ wages and total employment. Although this index, at 110.6 in the third quarter of 2014, is considered the report’s baseline, it did show 0.77 percent growth from the previous quarter.

So job growth, as measured by this new combination of statistics, is, essentially, going up.

What’s especially exciting, though, seems to be the potential future indicators that so much data can provide the employment sector, when you consider it’s depth — based on the wages and employment profiles of ADP’s more than 50 million (one in six) paycheck recipients.

Segments of the U.S. workforce and the growth of wages and hours worked in any industry in any state are now tangible, or at least potentially tangible, showing where growth is strongest and weakest, and perhaps why. Segments “by age, by income, by full-time and part-time status, and even by gender” will also be available, “the latter of which is especially exciting to me,” said Ahu Yildirmaz, head of the ADP Research Institute, at the panel discussion.

Here, for more, is a recent CNBC televised discussion about the new research and another report from MarketWatch.

The session — moderated by David Gergen, senior political analyst at CNN, and including panelists John Boudreau, professor and research director at the University of Southern California’s Marshall School of Business; Steven Cochrane managing director at Moody’s Analytics; Steven Rice, executive vice president of HR for Juniper Networks; and Yildirmaz — took in differing perspectives on just what all this data might mean.

Although the report indicates the South is leading the Northeast in job creation, and low-wage jobs — as in trade, transportation and retail — are leading over higher-income positions, questions still loom over whether this retail boom “is driven by higher wages or higher numbers of jobs” since the data combines all factors into one vitality — or growth — index, said Boudreau.

Moreover, “HR folks today can think of [where to find, place and develop talent] like a chess game, playing it in a more nuanced way,” he said. For instance, the index looks at four types of workers in the labor market: those who stay with the same firm (job holders), those who change jobs (job switchers), those newly hired (entrants) and those who left the firm either voluntarily or involuntarily (leavers).

Where index indicators show higher numbers of “leavers” or “entrants” — be they by industry or region — or higher-level jobs unfilled, “HR folks can be asking, ‘What would it take to make [a particular] pocket of folks who aren’t ready to fill this new talent need more ready for this need as opposed to [having to] seek talent outside the organization?’ ” said Boudreau.

The dynamics of the numeric indications, said Cochrane, actually show “economic growth happening everywhere … we have moved through the downturn, albeit in  the context of a slow-growing economy … but the gap is widening between the South and West, and the Northeast and Midwest” … and this could be indicative of growth in general in the South, as in Texas oil and energy, and the “structure of the economy changing.”

Rice left attendees with an important reminder as the sole HR practitioner on the panel; that being that, while the ADP data is a start and a helpful tool, the main goal for all HR leaders using it will be to “build the best workforce to build our companies of the future.”

Looking at organizations, he said, “has completely changed for heads of HR [in terms of] where talent is located, where it’s leaving, cost of labor, etc.” It’s far more of a global challenge now.

“We need to be able to tap into that new talent pool,” said Rice. “There’s a lot of shifting, too, in terms of skill sets and teaching of skill sets to tie into that changing talent pool.”

HR leaders are also grappling with when it makes sense to bring talent together under one roof versus allowing for more virtual project work and collaboration.

“We all need to be asking, ‘What are the areas where we can drive the talent for our ideal workforce?’ ” said Rice. “This kind of data can help.”

 

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HR Tech: Rise of the Machines

When you’re a first-time passenger in a Google driverless car rolling down busy Highway 101 near San Francisco, you go through three phases, said HR Technology Conference keynote speaker Andrew McAfee: the first is “raw, abject terror,” quickly followed by phase 2 — active fascination. Twenty minutes in, that tends to be followed by the third and final phase: mild boredom.

“These cars are programmed to drive the way we were taught to in driver’s ed classes and then promptly forgot,” said McAfee, principal research scientist at the Massachusetts Institute of Technology and co-author of the recent bestseller The Second Machine Age. “There’s no speeding or abrupt lane changes — it feels like riding an airport monorail.”

McAfee’s driverless car adventure was the indirect result of a book  by two professor colleagues, who had written that despite the advances of computers and robotics, they would probably never overtake human beings’ ability to master and rapidly adapt to quickly changing patterns. Thus, they wrote, a computer could never do something like navigate a car through heavy traffic. The book in question, The New Division of Labor, was published in 2004. Six years later, Google announced that its engineers had been riding in computer-guided cars for a number of years.

“As soon as I heard that, I knew I had to experience it,” said McAfee.

The subject of McAfee’s talk, “Making the Right Choices in the Second Machine Age,” was that we’re now living in the greatest era of transformation since the Industrial Revolution. Driverless cars, supercomputers that handily beat long-time Jeopardy! champions and cheap, flexible robots mean that many jobs long-thought to be “automation-proof” because they could only be done by humans will likely be taken over by artificial intelligence. This will, of course, have huge implications for the workplace and for enterprises, he said.

“I don’t think all this will result in enormous factories staffed by only two employees, one of whom is a dog whose job is to bite the human if he tries to touch anything important,” said McAfee. “But I do think we need to re-examine the boundaries between technology and humans and rethink our business models.”

Ideally, human intelligence and artificial intelligence can complement each other, he said. He cited organizations that opened themselves to input from outsiders and used data algorithms to greatly improve service, accuracy and productivity. Such organizations stand in sharp contrast to those that continue to rely on “HiPPOs,” or “the highest-paid person’s opinion,” whether it be the CEO or highly paid outside consultants.

“Some HiPPOs will take data in, but it’s their gut that ultimately makes the decision,” said McAfee.

Geeks, by comparison (McAfee considers “geek” a compliment and describes them as people who are “fascinated and driven by data”) are willing to ignore their gut and follow the data to where it leads them.

This reaps notable dividends, he said: Companies that adopt “data-driven decision-making” achieve  a level of productivity that’s 5 percent to 6 percent higher than those that don’t. Digital intelligence is remaking occupations from dairy farming to pathology — indeed, a digital pathologist created by Stanford scientists has proven to be better, on average, at cancer detection than highly trained human pathologists, said McAfee.

For organizations, he said, the upshot of all this must be that they make themselves more open to data-driven approaches and to outsiders who promise to bring in different ways of thinking and doing things, rather than continuing to rely on HiPPOs. He cited the Obama 2012 campaign, which not only brought in “data geeks” to identify new ways of identifying and motivating voters but put them in charge of key operations — a sharp departure from most political campaigns, he said.

“A lot of companies will not be open to this approach, and that will lead to a lot of disruption,” he said. “But if we can find new ways to combine human and digital intelligence, then the sky’s the limit.”

 

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Giving Employees a ‘Priceless’ Experience

When it comes to interfacing with HR, MasterCard Inc. wants its employees to have a—you guessed it—“priceless” experience.

At a session yesterday titled “Deploying Technology to Support the HR Experience at MasterCard” during the 17th HR Technology Conference and Expo in Las Vegas, Lois Miller, senior vice president and group head of HR services and solutions at MasterCard, walked attendees through the company’s recent implementation of a global HR portal. (The portal was built with the help of Towers Watson.)

MasterCard_Logo_svgIn 2011, Miller said, the Purchase, N.Y.-headquartered company officially moved over to Workday from a Lawson HCM and several best-of-breed solutions. In doing so, the company sought to create a unified platform with greater efficiencies and effectiveness, including giving employees direct access to information. “We wanted to enable employees to find the answers to questions themselves” instead of having them call or email HR directly, she explained.

At the same time, Miller said, MasterCard sought to give its 10,000 employees around the globe a “consumer-grade look and feel”  in order to simply the experience for them.

In conjunction with the portal going live, Miller and her team shut down HR’s email system so employees would have no other choice but to use PeoplePlace to get the information they were seeking. If employees came up empty handed, they could seek an answer through another new tool called AskHR. (Prior to the rollout, she said, HR performed a number of usability studies to ensure that both PeoplePlace and AskHR were a positive experience.)

Miller noted that “change management” topped the list of challenges she and her team faced. Interestingly, she said, it turned out that employees and managers were more accepting of the changes than HR. (Certainly, a comment we’ve heard before.)

To address the barriers standing in the way of adoption, HR produced a comprehensive communication effort, including a video featuring MasterCard’s CHRO Ron Garrow and describing the new portal and its purpose. HR also created a competition aimed at getting employees to try out PeoplePlace, asking them to locate five words (“find human resource information faster”) buried throughout the tool.

Speaking to the success of the effort, Miller reported that adoption has been impressive and that there’s been “zero pushback.” In August of this year, she said, HR received 30 percent fewer AskHR cases than emails it received in August 2013.

As might be expected, the company is currently tracking how the tools are being used, including the kinds of information employees are consuming, and plans to use that data to make improvements.

Miller presented the session with Jonathan Sears, Towers Watson’s Americas practice leader.

 

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HR Tech Keynoter: Big Data is a People Issue

Although the buzz phrase “Big Data” can still fill the hearts of some HR professionals with dread, Rahaf Harfoush wants them to get over it — indeed, they need to get over it.  Harfoush, co-author of the recent bestseller The Decoded Company: What If We Understood Our Talent Better Than Our Customers?, delivered the first-ever “Welcome Keynote” yesterday at the 17th HR Technology Conference and Expo at the Mandalay Bay Resort in Las Vegas.

“Big data is no longer a technology issue, it’s a leadership issue,” she said.  The sheer amount of data being produced these days — particularly by individuals, thanks to the ubiquity of smartphones — means that big data will affect all industries.

“We live in a time of data abundance, and we as individuals have become data-producing powerhouses thanks to Facebook, YouTube, Twitter and the like,” said Harfoush. All of this personalized data floating around makes it much easier for companies to offer products and services tailored to individual tastes, based on personal preferences, she said.

Data abundance and the rise of personalization is coming up against a third trend, she said: A talent shortage that, according to a Manpower survey, has left one out of three companies unable to fill key roles.

Companies that make smart use of big data can become “talent magnets,” said Harfoush. She urged the attendees to consider “the Decoded Model,” which consists of using technology as a coach, using data as a sixth sense, and “engineered ecosystems.”

By using technology as a coach, companies such as Sprint have been able to track data from its 45 call centers to link shortcomings in performance to training deficiencies, and use those “teachable moments” to support its employees in providing better customer service, she said.

UPS relied on “data as a sixth sense” to analyze the routes its delivery drivers used and discovered that if it came up with routes that eliminated the need for left turns, it was able to save millions of dollars in reduced costs and improved delivery time.  Google, meanwhile, used “engineered ecosystems” to identify the eight qualities of its most-effective managers via its Project Oxygen initiative. Once those eight qualities were identified, said Harfoush, Google remade its management training and recruitment processes to take into account that the ability to be an effective coach ranked much higher than technical skills. The result, she said, was higher employee job-satisfaction rates and lower turnover.

“The best part about a ‘Decoded Company’ is that their workplaces don’t suck,” said Harfoush. “People like going to work there.”

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