TrendWatchers

Is Twittering a Productive Use of Work Time?

I was torn. On one hand, I was skeptical about Twitter. Despite its growing popularity as a social networking site, it struck me as superficial and geared toward narcissists. After all, users can post messages of no more than 140 characters, so they often wind up posting mundane details of their personal lives.

On the other hand, at i4cp we're paid to look at data, and certain Twitter-related data was showing something interesting and mysterious. It was a study of how Web 2.0 technologies are being used for learning purposes in organizations, one commissioned by the American Society for Training & Development (ASTD).

Specifically, we asked about the degree to which certain Internet sites are useful for learning. Google dominated, with a whopping 94% of respondents saying it is useful or very useful for learning. By contrast, a mere 11% pointed to the microblogging site Twitter. But, out of all the sites studied, Twitter turned out to be the one most highly correlated with Web 2.0's contribution to learning effectiveness.

Huh?

We mentioned this finding at ASTD's recent International Conference & Exposition, where we presented some findings from the report. Sure enough, there were professionals there whose companies use Twitter for learning purposes, saying it can be great for tracking and communicating information on, say, leadership development.

Such comments, along with the fact that Twitter was reportedly playing an important role in the organization of and communication from protesters in Iran, pushed me to investigate Twitter as a workforce management tool and to become an actual "Twitterer."

So far, the jury is still out on Twitter's overall utility for business. About two-fifths of those surveyed in one poll said Twitter has business relevance, according to Doremus, a business communications firm. Another two-fifths didn't see the relevance, and the rest were undecided (Hoak, 2009).

And if you've used Twitter, you can understand why questions about relevance continue to crop up. It feels like millions of shards of disparate information and opinion thrown up onto the computer screen in a constantly shifting kaleidoscope. It's fun, distracting and beautiful in its own way, which helps account for an upsurge in its popularity. Research firm Nielsen Online reports that unique visitors to Twitter skyrocketed from fewer than half a million in February 2008 to seven million a year later (Frauenheim, 2009).

But is it useful in the workplace? Some believe so, stressing certain HR and management applications. Workforce Management, for example, cites corporate learning consultant Jeanne Meister: "She recently pointed to several possible uses of Twitter on her blog, including 'reminders of upcoming training events and reminders of key learning content,' 'preemptive help for learning a new process or procedure' and 'links to new articles of interest'" (Frauenheim, 2009).

My own experience of Twitter is that its utility depends on how it's being used and what a Twitterer's job entails. I doubt that Twittering for fun at lunchtime is going to hinder work at many companies, but lots of personal Twittering during business hours could be a major productivity killer. Still, work-related Twittering for certain types of people - such as marketing or research types - probably makes sense. For example, Twitter can be used to "follow" all kinds of news sources and knowledge experts, so it can be a useful tool for scanning and tracking the business environment, in much the same way that RSS feeds are.
I am currently following business journals such as Fortune and BusinessWeek as well as scientific and political media. And I follow experts such as former GE CEO Jack Welch, writer Steve Baker, and HR guru Libby Sartain.

So, yes, I can see how Twitter can serve as a useful tool in the learning field if used to complement more conventional methods of training and development. I can also see how firms could use it to easily distribute quick tidbits of information in real time, helping to coordinate people. At the same time, i4cp's research demonstrates that many companies have security concerns about using such Web 2.0 technologies. In that light, several colleagues have mentioned that Yammer is another microblogging tool designed to be used inside company networks, reducing security risks.

i4cp Recommendation: It's easy to write off Twitter as a business tool. Twitter has the potential to be a productivity killer and security risk. It also has unique attributes that can, when used correctly, boost the productivity and effectiveness of some people in some organizations. As with many other social networking tools, the devil is in the details (and in the broader context). At the very least, Twitter is worth exploring, so managers better understand the concept of microblogging, even if it's only to gather their own personal stories about why it's just not for them.

References

Hoak, A. (2009, June 16). Don't rule out Twitter's usefulness as a business tool. Wall Street Journal.

Frauenheim, E. (2009, April 8). HR world not immune from Twitter craze. Workforce Management.

So How Do You Really Feel About Management?

Full disclosure: I'm a manager, and there are days when I wish I were nearly anything else.

So it was reassuring to see a recent i4cp survey - to which there were 675 respondents - showing that most folks agree that being a boss is tough. What wasn't so reassuring is that a lot of employees just aren't impressed by their current management teams.

Overall, six of 10 respondents to the April 2009 survey said that managers tend to have "tough but fulfilling" jobs, while almost nobody thinks managers have easy jobs. One respondent clarified, "It can be tough and fulfilling or just tough."

But management isn't an Olympic event where you get a lot of points for degree of difficulty. Too much is riding on managers, and they have to earn the respect they get. Slightly fewer than half of respondents think that the overall management in their organizations is above average, and that number drops to two-fifths when you're asking only non-managers.

Some participants were downright harsh. About 15% said their companies' overall management is either "barely deserving the name ‘management'" or just plain "hopeless," a proportion that rises to 19% among non-manager respondents.

But not all managers are created equal. "Some are very good; some are very bad," stated one participant. Another elaborated, "For most of them, dodging bullets and carrying an extinguisher around is a must. For the successful ones, they anticipate things, plan ahead, work towards goals, and balance multiple tasks at once with ease."

To find out which kind of managers people prefer, i4cp asked participants to choose between easy-going and tough. More than a third (34%) opted for "easy-going" over "tough" (9%), but the majority didn't like either of those two options. Nearly 57% selected "other" and elaborated on their own idea of a preferred manager.

Most people recognize management as a complex process. They want a mix of managerial qualities, with fairness, consistency, balance and flexibility being among the most widely cited characteristics.

In another question, participants were asked to write in one positive word to describe managers. The top answer was "leadership," followed by "supporting" and "mentor." "Motivating," "inspirational" and "responsible" were other top words. Asked to provide a negative word, the main choice was "micro-manage," followed by "controlling," "selfish," and "arrogant."

Given the challenges of the job and the negative feelings people often associate with it, it can be difficult to understand why anyone becomes a manager. To get an idea, i4cp asked current managers why they took their jobs. The number-one answer wasn't about higher compensation or promotion offers - though those play a role. The top-rated answer, by far, was that they want to "make more of a difference in my organization." Two-thirds of managers gave that answer, a figure that rises to 70% in large companies.

This is bound to strike some skeptical non-managers as self-serving, "Oh, sure," they might think, rolling their eyes, "it's all about 'making a difference' rather than about money or power." But I'd say there's a good deal of truth to it. For many people, management is just too hard a job to do without the "fulfilling" part of being able to help the organization or make some other kind of difference in the lives of others.

Still, plenty of people don't want to take on the role of boss. In fact, when non-managers were asked if they wanted to become a manager, fully two-fifths said they didn't. The top reasons were that they think there's no work/life balance, followed by the notion that there's just "too much stress." In write-in answers, one participant said, "It seems to change people for the worse," and another summed up being a manager this way: "thankless job, stressful, between a rock and a hard place - conflicting interests." Some were clearly speaking from experience: "Been there; done that," one noted.

i4cp Recommendation: HR professionals and executives should keep in mind that managers aren't driven solely, or even mostly, by compensation-related matters. What they want is to make a difference. To do this, they need the proper skill sets and enough latitude to do their jobs well.

Yes, plenty of money has been poured into leadership development programs over the years, but organizations need a clear picture of whether managers are receiving the skills they need most. After all, with over half of i4cp respondents saying their overall organizational management is so-so or worse, there seems to be considerable room for improvement.

Managers should be trained, among other things, to provide both support and motivation to those with whom they work. Some of the attributes of so-called "servant leadership" seem to be particularly attractive to employees. By contrast, leaders who seem self-serving or overly controlling are seen in a negative light.

But this makes management sound easier than it is. In the course of day-to-day leadership, things are seldom so clear. The desire to empower can be viewed as indecisiveness, and the desire to hold people accountable can be seen as micro-management. So, managers need real-world experience, proper guidance, and the wisdom to know when they can't please everyone with a decision. Management will always be a tough job, but knowing how to do it well will make it more fulfilling.

Don't Be Like Brett Favre

In the classic comedy There's Something About Mary, Ben Stiller's character asks Mary, played by Cameron Diaz, about her former love interest. "What about Brett Favvvvv...ruh," he asks in a memorable line, butchering the pronunciation of Favre's last name (pronounced "Farve").

In the future, Favre may be fortunate to have only his last name misconstrued.

After a career with the Green Bay Packers in which Favre established himself as indisputably one of the greatest quarterbacks in NFL history, his legacy is now tainted. And it's all due to one reason: his inability to let go. With one mediocre season behind him after "unretiring" last year, the sports world is now alive with speculation that Favre will unretire for a second time and - much to the horror of die-hard Packer fans - take the offensive helm for their primary rival, the Minnesota Vikings. The average fan asks a simple question: Why?

"Far too many leaders (as well as athletes, actors and other professionals) just cannot let go," observes best-selling author and i4cp's Chairman Emeritus Marshall Goldsmith in his latest book, Succession: Are You Ready? "They hang around until they are asked to leave - then they have nowhere to go."

"Successful transition," advises noted leadership expert Frances Hesselbein, "is the last act of a great leader."

So why do so many previously great leaders fail miserably at this last act? In a phrase: It is painful. "Is there any evidence in the history of the world that shows when human beings are given incredible amounts of money, perks, status and power they begin to act completely sane and rational?," asks Goldsmith. "Millions of leaders throughout history have had trouble letting go of (those things). If you cannot make peace with giving up some of this stuff, you will never be able to make a smooth handoff." Goldsmith has observed firsthand many times that, while the theory of stepping down from a role is easy, the practice of letting go is a lot harder.

While organizations worldwide may have the best intentions for succession plans, their execution often leaves a lot to be desired. In a study i4cp conducted last year, we found that over 85% of large companies (more than 10,000 employees) have a formal program in place. Yet, that doesn't mean that these programs are as effective as they should be. In fact, a survey done by the National Association of Corporate Directors (2007) found that only 16% of directors agree that their board effectively plans for CEO succession. And that is despite the fact that succession planning is a priority: It topped CEOs' list of their top five challenges for last year, according to the Society for Human Resource Management, ahead of other hot-topic areas such as recruiting, retention and healthcare costs.

Why is succession so important?

"A good succession plan is good for productivity," according to former General Electric CEO Jack Welch and former Harvard Business Review editor Suzy Welch (2008), who assert that succession planning avoids disruption and employee trauma when the CEO leaves, whether the departure is anticipated or not. They contend that succession planning should be company policy, dealt with openly and deliberately by corporate boards.

The Welchs' contention that productivity benefits from solid succession planning is partly supported by the "Most Admired Companies" (MACs) survey, annually conducted by the Hay Group on behalf of Fortune magazine. In 2007, it found that MACs consistently outperform their peers at planning CEO and executive succession. This same group also leads their peers in identifying key competencies for leaders and developing internal talent. The Hay Group found that the MACs' leaders devote as much as 30% of their time to coaching and managing their talent.

Developing talent from within seems to pay dividends. "There is no research that shows external CEOs to be superior to internal CEOs in producing long-term returns to the corporation," states Goldsmith, and "hiring a name brand CEO from outside the company who fails is usually a disaster." But before a leader identifies and anoints an internal candidate as his or her successor, it's important to think about acceptance. "Ask an important question," advises Goldsmith. "Will this candidate be given a fair chance, not only by me, but also by the stakeholders who are critical to her future success?"

Goldsmith notes that, after involving stakeholders in the succession process, a leader can encourage them to help the successor by asking them to:

Be open-minded - and not stereotype the potential successor.
Focus on the future - not the past.
Be helpful and supportive - not cynical, sarcastic, or judgmental.
Tell the truth - and avoid sugarcoating reality.
Pick a behavior that the stakeholders themselves should improve - as opposed to just working on improving the successor.

Succession planning needn't be for just the CEO. i4cp's study found that over 71% of large companies have succession plans at the director level, while 41% do so at the manager level. Meanwhile, a Novations Group survey of U.S. senior executives found that, of the major firms that conduct succession planning, 46% extend it to mid-management (Gurchiek, 2008).

But, no matter who the plans are aimed at, there's that persistent problem of proving or measuring program effectiveness. Most companies simply don't know how well their succession plans are working, according to i4cp research. Only about one-sixth (16%) of all survey respondents with succession plans claimed that their organization measures the effectiveness of its succession plan, and just a third of large companies did. That is a critical oversight, considering the importance attached to succession planning and the relationship (based on research from the Hay Group and others) between succession planning and performance.

Technology might help. Succession management software has improved and become easier to use, but its cost-effectiveness is mostly realized by larger companies, maintain Buck Consultants' business experts Bruce Barge, Elizabeth Marshall and Peter Albert. They claim that using succession management software is an effective way of containing and managing data and of "auto-populating relevant data from other management systems" such as performance and learning. Large firms may benefit the most because of the greater number of potential successors and the sheer quantity of data involved (Behan, 2008).

But the best plans and the best technology won't overcome the leader who resists the concept of succession. Some may go through the motions but never really plan to exit. "Try to avoid the ‘return from the grave' syndrome that is becoming far too common for CEOs," says Goldsmith. "Get over your own ego."

That's a secret to success that CEOs - and even famous quarterbacks - should take to the grave.

Documents used in the preparation of this TrendWatcher include the following:

Behan, B. (2008, January 24). Shareholder proposals on CEO succession planning. BusinessWeek. Retrieved from businessweek.com
Goldsmith, M. (2009). Succession: Are You Ready? Harvard Business School Press.
Gurchiek, K. (2008, April). Succession planning not limited to the C-suite. HR Magazine, 16.
Hay Group (2007). America's most admired companies favor internal CEO candidates. Retrieved from haygroup.com
National Association of Corporate Directors. (2007, October 15). Strategic planning and CEO succession top list of director concerns for 3rd year in a row, 2007 public governance survey shows. Retrieved from nacdonline.org
SHRM Foundation. (2007, October). Strategic research on human capital challenges. Human Capital Challenges Report, 10-21, 24.
Welch, J., & Welch, S. (2008, March 9). Planning for succession low on corporate list.

Time to Tighten Your Social Networking Structure?

Most organizations see the potential of social networking technologies, but they also face concomitant risks - risks for which they may not yet be adequately prepared, suggests new research conducted by i4cp.

Yes, social networking can be a boon to an organization by encouraging knowledge sharing, fueling innovation, and boosting productivity. But unfettered social networking on the part of employees can also be calamitous, sending the wrong kind of messages to the world, creating confusion for customers, and potentially compromising the company brand.

Most of today's firms use social networking technologies. The i4cp survey found that over half (58%) of respondents said their companies use these technologies, a number that climbs to 61% among the largest companies (those with 10,000 or more employees). And it's quite possible that even those that say their companies don't use these technologies have employees who are informally using social networking Web sites, collaborating via instant messaging, or otherwise engaging in some sort of technology-facilitated social networking.

Even in companies that knowingly use these technologies, however, there are some serious concerns about the security issues. When asked about the potential risks that are of concern to a high or very high extent, 38% cited leaks of confidential information, 36% cited damage to the organization's reputation, and 33% cited loss of employee productivity.

Leaking of confidential information especially worries large companies, with over half (54%) reporting it as a risk to a high or very high extent. Likewise, large companies are more fearful that social networking will result in damage to their reputation, with 47% considering it a risk from a high to very high extent.

Survey respondents brought up other risks as well, such as the permanency of content uploaded to social networking cites. Another problem is the proliferation of so many social networking sites and the accompanying challenge of monitoring the content, as well as the potential for information to be spread unevenly or inaccurately over many sites. And some participants expressed concern about networking sites that enable individuals to ask others to provide them with job recommendations. Such recommendations might be erroneously perceived as an endorsement by an organization.

"Big companies are big targets and so have higher risks," said Mark Vickers, VP of research at i4cp. "They're more likely to have a well-known brand to protect, and there are plenty of competitors that would love to glean their trade secrets. At the same time, the big ones probably need these technologies more. That's assuredly because there are more people whose ideas can be leveraged for greater productivity, and also because internal communication is harder. The trick is how to solve this conundrum of greater need and greater risk."

Networks are often a loosely woven lattice through which the most valuable of an organization's assets - information - can slip. Yet, among those who say their companies have adopted these technologies, over a third (37%) don't have a policy in place that defines what information is permitted to be shared. And, when asked, "How does your organization validate that the [social networking] technology is secure enough for users to participate?", 41% said they didn't know. Without clear parameters, the odds increase that content an organization would rather not be made public will be posted somewhere in cyberspace.

It is, of course, easier to safeguard information when the organization itself controls the technology. Among the companies that have protections in place to safeguard confidential information, most (61%) cited the use of firewalls to guard against external breaches, and half said they have policies that forbid the sharing of regulated content. But just 38% provide training that spells out what should and should not be shared, and just 34% said they task individuals with monitoring content. What's more, when it comes to validating how secure technologies are, only 36% say there's diligent internal testing, and even fewer (24%) conduct a risk analysis.

Of course, simply restricting workplace social networking altogether may not be the best way to go. As one survey participant noted, there might be more risk involved in not embracing social networking, since forbidding or tightly restricting access can create backlash. Employees may feel compelled to communicate outside the organization's structure, which can create a boomerang effect and manifest in decreased internal communication. Developing a structure that employees can work within is more likely to net positive results.

i4cp Recommendations

In consultation with an expert, consider establishing a policy on workplace social networking and communicating it often with employees. Distributing a user agreement that employees must read and sign may be a good place to start.
Consider creating guidelines that define sanctioned venues so that there is no question about what's acceptable and what is not in your company.
Define goals and purposes of using social networking in the organization's day-to-day business.
Ensure that social networking done in the course of business is professional and consistent with branded messaging.
Maintain regular communication with employees on developments in social networking and any changes in policy, ensuring that everyone is mindful that this is an evolving medium that will require adjustment and sometimes compromise.

Living Up to Your High Potential(s)

We didn't expect it. After all, who has time to worry about high-potential employees these days? It takes considerable effort, patience and planning to focus on HiPos, and a lot of companies are otherwise preoccupied with the day-to-day urgency of surviving in a tough economy.

But good companies have a way of going against the conventional wisdom, and several i4cp member organizations recently came to us with ideas for pulse surveys that focused primarily on the selection and development of future leaders.

There are various reasons for this. First, in tough times, the need for effective leadership is greater than during the good times, when established organizations practically run themselves. If current leaders don't succeed in times of trouble, someone needs to be standing in the wings. Second, as many organizations conduct layoffs, they must identify and retain the people they most urgently need in order to run their businesses. And, in an era of tight budgets, management needs to know who to compensate at higher levels.

Then, of course, there's the matter of the enormous Baby Boom generation getting ready to retire, even as the almost equally large Millennial generation enters the workforce in earnest. Yes, many Boomers may need to put off retirement due to their badly eroded 401(k)s, but if the stock market and the economy continue to recover, this trend might not have a lot of long-term punch, especially when it comes to top talent.

So it shouldn't really be a surprise that i4cp members want more research done in this area, since these companies often take a more future-looking, performance-oriented view of things than others do. One i4cp member company, for example, wanted to gather more information about high potentials in general and "early high potentials" more specifically.

We defined high potentials (aka, HIPOs or HiPos) as those employees for whom there is an expectation of outstanding performance and an aspiration for significant advancement. They show a willingness to do what it takes (travel, relocate, etc.) and an ability to learn and grow from learning experiences. Furthermore, management should have confidence that these individuals can successfully compete for significant advancement, and HiPos should demonstrate the organizational leadership qualities. We further defined early career HiPos as "employees with high potential for leadership, with fewer than 10 years of work experience." Most (88%) respondents agreed with those HiPo definitions, with the number rising to 93% among firms that report higher market performance.

But how are companies actually identifying these workers? As would be expected, the most common criterion is performance. Fully 86% of all organizations and 95% of larger ones (10,000 or more employees) look at the past performance record of workers, and 77% consider "management confidence" in a candidate's ability to compete for advancement. Sixty-nine percent also reported that employee aspirations for advancement make a difference. In short, performance, managerial confidence and worker aspirations all tend to play a role in most programs.

Senior leaders are critical to the process. A full 89% of all participants say senior leadership is involved in the identification of HiPo candidates, a figure that rises to 95% in large companies. Managers and HR are also likely to play a role in the process, with 83% and 72%, respectively, pointing to their involvement in identification of HiPos in large organizations.

But the very involvement of senior leaders, while crucial, can present problems when it comes to early-career HiPos. The most widely cited stumbling blocks to implementing programs for HiPo employees are a lack of talent information-sharing among functions and a difficulty in forecasting future talent needs. The lack of talent information-sharing among functions is particularly a problem for large companies, with over half citing it as a concern.

This problem stems from the sheer size and diversity of large organizations, where standardizing and communicating information can be a major headache. As in any information process, garbage in equals garbage out. So senior leaders might not have the data they need to make the best possible choices about relatively new employees with whom they have little day-to-day work experience. This could be disastrous to a HiPo program and, potentially, the future quality of leadership in an organization.

This is likely one of the reasons many large companies look for a standardized way to evaluate talent. In another recent member-requested survey, i4cp asked, "Does your company use a matrix (e.g., a nine-box performance and potential matrix) to evaluate the organization's talent pool?" Whereas just 36% of overall respondents said yes, the proportion among participants from large companies was nearly two-thirds (64%).

i4cp Recommendation: Organizations should recognize that their competitors are not necessarily going to stumble when it comes to identifying and developing high potentials, even in a lousy economy. Given the relatively low voluntary turnover rates caused by hard times, some leadership talent pools are going to gain in both quality and quantity. Therefore, organizations should work hard on identifying ambitious top performers who can become tomorrow's stars. Large organizations, in particular, need to work out better ways of sharing talent-related information among different business units and functions. Until this problem is addressed, a HiPo program will never live up to its own potential.

Editor's Note: i4cp member companies who are interested not only in reading more about these surveys but also in "slicing and dicing" the data themselves should go to i4cp's Survey Results section, located under the Library tab at the top of the i4cp member homepage. The High-Potential and the HR Matrix studies are available for download in survey portfolios, which include a full survey results report, a survey analysis report and Interactive Data. Interactive Data is a new i4cp offering that can be used to filter data by factors such as company size, organizational performance, job level of respondent and industry of respondent organization. Instructions for the use of Interactive Data are provided with the download.

Forget One-Size-Fits-All HR

One-size-fits-all HR is a thing of the past. A new study from i4cp indicates that HR functions are adapting to today's global business environment and morphing to meet their organizations' unique needs.

So, what's the one best way of structuring a company's HR organization or of formulating major HR initiatives? It turns out there's no single right answer, but size definitely plays a role.

The study found that the most common way of structuring HR is by having HR generalists cover all functional areas, with about two-fifths of survey respondents saying their HR functions are set up this way. But, that finding needs to be taken with a sizable grain of salt because this mostly applies to smaller organizations, those with fewer than 1,000 workers. For midsized companies (between 1,000 and 9,999 workers), the most common way of setting up HR is by having functional areas - which contain specialists - working in coordination with HR partners/generalists located in business units, regions, etc.

Meanwhile, the largest of organizations - those with 10,000 or more employees - are most likely to use a combination of Centers of Excellence (COEs), shared services, and HR generalists. Half of respondents for large companies say their firms are set up this way, while another 35% use the model of HR functional area plus HR partner/generalist.

The study, which is based on April 2009 survey responses from 463 participants, also found that there's no single best answer for global firms. In fact, there's a lot of diversity in terms of how global HR leadership teams are structured. Among small and midsized firms, there's a tendency to centralize the HR leadership team, but among large organizations the most common structure (45.5% of respondents) is to decentralize by region.

Then there's the question of to whom HR reports. Some experts say that if HR doesn't report directly to the CEO, then it's not as likely to have a major impact on strategic decision-making. If that's true, then there's good news in this study, with a majority (63%) of companies of all sizes saying HR reports directly to the CEO; the second-most-common answer is that HR reports directly to some other officer-level position.

HR is clearly not some stand-alone fiefdom in most organizations. In fact, it's likely to act like a team player when formulating major HR initiatives and projects. When such initiatives are created, the most common structures adopted are the following:

having an HR leader temporarily work with other executives (38% of all respondents)
using a multifunctional temporary team-based structure (33%)
ensuring that initiatives are owned by a Center of Excellence, whose leaders work with business units and other managers as needed (15%).

But, again, size plays a key role. The largest organizations are more likely to use multifunctional temporary teams or COE-based structures than to have a single HR leader work with other executives. That's probably because large companies often have many initiatives that are too complex for any one HR leader to keep track of. Temporary multifunctional and/or expert teams are often the way to go for those organizations.

Although i4cp's research does indicate some relationships between HR structure and overall market performance, it's clear that structure alone doesn't determine HR's success. An HR director at one midsized i4cp-member company attributes much of his HR organization's success to excellent communication. The firm relies on HR generalists who work with its Centers of Excellence when necessary.

This HR director sees some unique advantages springing from his HR organization's setup. "One of the things that makes us effective is that we're all together," he notes. Although generalists are often assigned to specific leaders or business units, HR professionals nonetheless work in the same physical space, making communication with one another easier and more robust. Managers in the field have substantial autonomy, and HR professionals travel out to other locations as needed.

As the director of one of the COEs, he notes, "We're real good from a communications standpoint. I purposely go out to work with [HR generalists] closely." He notes that his company's system is "not an overly complex model," which actually helps make it more effective.

One of the primary lessons learned from the i4cp study, HR Organization Structure, is that HR functions are not structured to accommodate some single standard. They're designed to meet the specific organizational and cultural needs of their companies. If HR is not working effectively in an organization, it has various models from which to draw. The goal is to find the model that is best suited for the company, delivers strategic value, and makes the organization as effective as possible.

Labor Initiative Gains Momentum Under New Administration

"Everything old is new again" may be considered an appropriate catchphrase for the Obama administration's labor policy. During his first few weeks in office, President Obama voided three of President Bush's executive orders pertaining to labor, and more sweeping changes are on the horizon (Meckler, 2009).

At the signing ceremony for the executive orders, Vice President Joe Biden said with a smile to the 100-plus labor leaders in attendance: "It's good to see so many of our good friends in organized labor - welcome back to the White House!" (Jackson Lewis, 2009).

For labor unions and workers, this acceptance hearkens back to the 1970s, to the days before the 1981 air traffic controllers' strike, when then-President Ronald Reagan fired 11,350 air traffic controllers. This had a chilling effect that caused organized labor to lose much of its mojo (Pells, 1995). But now it looks like union influence in Washington could see a resurgence.

The first executive order from Obama voids one that Bush signed requiring federal contractors to post a notice telling non-union employees of certain rights, including the right not to join a union and the right to opt out of paying the portion of union dues that are unrelated to the administration of a collective bargaining agreement. Under the new executive order, beginning in May 2009, federal contractors will be required to post a notice advising employees of their rights to form and join a union and to bargain collectively (Jackson Lewis, 2009).

In a second executive order, federal contractors may no longer seek government reimbursement for costs incurred persuading employees not to exercise their right to unionize. Employers will have to pay their own bills for printing leaflets, consulting with legal counsel, and otherwise trying to influence worker votes (Jackson Lewis, 2009).

And the third executive order provides that federal contractors who take over an existing contract must offer the prior contractor's workers the right of first refusal for their jobs (Jackson Lewis, 2009).

Congress has also passed another pro-labor initiative: an expansion of the Davis-Bacon Act that requires contractors on certain federally funded projects to pay employees the local "prevailing wage" rather than the federal minimum wage, which is often lower. The Davis-Bacon Act was originally enacted in 1931, in response to contractors' recruiting workers in Alabama and bringing them to New Jersey to work on public works projects while continuing to pay them Alabama wages. The amendment will require contractors participating in wastewater-improvement work to conform to the bill, and "Democrats and labor unions are pushing to expand their reach to more kinds of projects that receive some form of federal assistance" (Conkey, 2009).

While these initiatives all affect a limited number of employers, Congress is considering legislation that some believe to be "the most sweeping rewrite of federal labor law in 70 years" (MacIver, 2009). The Employee Free Choice Act (EFCA), also known as the "card check" law, would amend the National Labor Relations Act by allowing the National Labor Relations Board to certify a union if a majority of the employees sign valid authorization cards or, once 30% sign, would allow unions to petition for secret ballot elections. Under the EFCA, parties unable to reach a first contract within 90 days would be referred to the Federal Mediation and Conciliation Service. If a contract still cannot be reached, the dispute would go to binding arbitration. The new law would also penalize employers for unlawful discrimination or retaliatory discharge for unionizing activities by providing for triple back pay to employees, as well as civil fines of up to $20,000 if employers repeatedly violate employees' rights to engage in collective bargaining activities (Amber, 2009).

The bill passed the House in 2007 but died in a Senate filibuster. Now the Democratic majority has given the bill new life, and it is receiving heightened attention from both sides - those who hate it and those who love it. There's just no one in between - except, perhaps, for the potentially deciding vote in preventing another filibuster, Senator Arlen Specter, whose recent defection to the Democratic Party may not be enough to reverse his stance opposing the bill (Specter, 2009).

There is heated debate over many issues in the bill. Proponents argue that the EFCA is part of the economic stimulus plan, ensuring living wages and health insurance to workers, as union members earn 30% more than non-union workers and are 59% more likely to have health insurance. They also allege that, under the current process, employers harass and intimidate workers involved in union organizing. Those opposed claim that employees would be coerced and intimidated by unions and that it would destroy small employers, who are the primary source for many jobs. The U.S. Chamber of Commerce's Workforce Freedom Initiative calls the EFCA an attack on employers' free speech, because the employer would be unaware of unionizing activity until the process is nearly complete (Amber, 2009).

The money is flowing freely. In 2008, the business group Center for Union Facts spent $20 million on ads opposing the bill, while labor-backed American Rights at Work spent $10 million to muster up support (Amber, 2009).

There appears to be a growing sense among both labor and management groups that the EFCA will pass this time around. We already saw a slight uptick in union membership in 2008, from 12.1% to 12.4%; this was expected due to an increase in the number of government employees, who are more likely to be represented by unions, and the shedding of private-sector jobs, where union membership is not as likely. It's possible that as workers continue to fear losing their jobs, unions will be able to take advantage of this insecurity to increase membership in 2009 with or without the EFCA, but it's difficult to tell yet whether this will be offset by the current difficulties being experienced by the highly unionized auto industry.

Documents used in the preparation of this TrendWatcher include the following:

Amber, M. (2009, January 12). With Congress poised to act, both sides are gearing up for major battle over EFCA. Human Resources Report, 27(1), 5-6.
Conkey, C. (2009, March 15). Labor-backed contract rules advance. Wall Street Journal.
Jackson Lewis. (2009, February 2). President Obama issues trio of pro-union executive orders; significant impact on federal contractors.
MacIver, D. (2009, May 10). Workers' rights threatened by Employee Free Choice Act. Inforum.
Meckler, L. (2009, January 30). Obama to reverse Bush labor policies. Wall Street Journal.
Pells, R. (1995). The pressures of PATCO: Strikes and stress in the 1980s. Essays in history. Corcoran Department of History, University of Virginia.
Specter, A. (2009, March 24). Senator Specter speaks on Employee Free Choice Act/card check.

Staying Well While Waiting for the Healthcare Revolution

Get 100 or so people in a room and ask them for their opinion on an issue. You're likely to get 100 different opinions. After all, we're human and all have our own ways of looking at things. But when it comes to the U.S. healthcare system, various studies indicate there's general agreement on one major point: The system needs fixing (Harris Interactive, 2008; Hewitt Associates, 2009; U.S. Department of Health and Human Services [USDHHS], 2009).

Part of what needs fixing is high costs. Even though the rate of health spending has slowed, it's still going up, and, especially with the economic downturn, companies continue to be worried about costs and ways to hold the line (Centers for Medicare & Medicaid Services, 2009; Hewitt Associates, 2009; Watson Wyatt, 2009). In fact, healthcare costs are one of the most important workforce-related issues companies are facing today. Of 580 HR professionals surveyed by i4cp in 2008, virtually all - 95% - agreed that healthcare costs were an extremely important or important issue then and would continue to be in the future (i4cp, 2008a).

Of course, if you listen to or read news reports, Washington appears ready to ride to the rescue.

Barack Obama won the presidency by promising to fix, among other things, the healthcare system. His transition team held more than 9,000 community meetings in all 50 states and the District of Columbia at the beginning of this year. Thousands participated. The discussions focused on "concerns about a ‘broken' health system, access to health insurance and services, rising premiums and drug costs, ‘being uninsurable,' medical mistakes, and the system not being for them." The results of those discussions were said to weigh heavily in the way Obama crafted his proposed reforms (USDHHS, 2009, p. 5). And the U.S. Senate Finance Committee has opened hearings to look into public plan options (Vanden Heuvel, 2009).

But the road ahead is going to be rough and long. Already activists have disrupted the hearings, and members of both political parties, insurers, doctors and others have begun fighting for the reforms they think are best (Alonso-Zaldivar, 2009; Bellantoni & LoBianco, 2009; Condon, 2009; Pear, 2009; Yoest, 2009).

That's no surprise to anyone who knows the long history of U.S. healthcare reform. It has been on the agenda for decades, and little has come of it.

Of course, that leaves consumers and the employers who pay a significant portion of the cost burden (USDHHS, 2009) left wondering what to do. Wait for reform that might never come? Make decisions that could be overruled by reform if and when it does come? Or even fight reform efforts? (An i4cp study conducted last December found that 38% of responding business professionals believed the Obama administration would wind up causing higher healthcare costs for companies.)

Some companies have simply decided to get out of the healthcare benefit business. A 2009 survey by Hewitt Associates found that 19% of respondents intended to eliminate the benefit in the next five years. That was almost five times more than the 4% who said in Hewitt's 2008 survey that they planned to drop their healthcare benefits. "In today's environment, employers are under pressure to cut healthcare expenses, but they realize that short-term management tactics do not address the underlying drivers of healthcare cost," said Jim Winkler, head of Hewitt's North America health management consulting practice. "This leaves them with two options: making a firm commitment to improving the health of employees and their families, or exiting healthcare altogether" (Wojcik, 2009).

A 2009 Watson Wyatt survey found that 62% of respondents said they thought they'd be able to provide the benefits 10 years from now, an 11-percentage-point drop from the 73% who said in 2008 that they thought they'd be able to continue providing healthcare benefits to employees (Watson Wyatt, 2009).

Of course, many business professionals still espouse the advantages of offering healthcare programs. The argument is that providing healthcare and wellness benefits improves productivity, recruitment and retention while reducing absenteeism and "presenteeism," the phenomenon of sick people coming to work because they can't afford to stay home (Bestwick, 2009; Matisonn, 2008).

Given that, companies are trying various strategies to hold down costs while still providing a worthwhile benefit. The strategies range from passing on costs to employees to making employees more responsible for their health and spending (Gerencher, 2008; i4cp, 2008b).

But the biggest focus these days might be on wellness issues. The logic is that if people don't get sick, they don't use the benefit, which drives the cost down as the demand drops. And, if some conditions are caught early, then the cost of curing them can sometimes be minimal compared with the price of treating a disease that's gone untreated (Gallagher, 2009).

Grinnell Mutual Reinsurance Co., for example, has a 21-year-old initiative that has concentrated on basic wellness services that include programs that promote health and those that change behavior. As part of that general thrust, Grinnell has created a pilot program that aims at the personal goals of its 730 employees. Workers set goals, such as attending Weight Watchers classes, going to the gym, or losing 10 pounds. The company provides credits to employees who try to reach their goals. The credits, which are capped at $300 per year, are applied to a worker's health insurance or medical spending account (Eller, 2008).

Jay Packaging of Warwick, RI, has developed a wellness program that has become a part of its corporate culture. The culture and program encourage individual responsibility for health care at all levels of the company through many initiatives, including two safety and wellness committees (one of which is headed by the firm's president), the employment of a full-time wellness coordinator, the establishment of wellness programming, and quarterly reports on the results of the wellness program at company meetings. The corporate vision statement, displayed throughout the workplace, mentions wellness as a component. "We all take responsibility for wellness at Jay, and we seek to continually improve our approach by incorporating employee feedback and experience into our wellness initiatives," said Dick Kelly, president of Jay (Gallagher, 2009).

Although wellness programs have been proven successful at many levels, the ultimate goal of an improved bottom line can take time to show up (Gallagher, 2009). But faced with a long, bumpy road to a national solution, employers are left to fend for themselves for the time being. In this environment, one of the best approaches may be to create stronger ties between the concept of wellness and the corporate culture.

Documents used in the preparation of this TrendWatcher include the following:

Alonso-Zaldivar, R. (2009, May 5). Health insurers try to head off public plan. Associated Press.
Bellantoni, C., & LoBianco, T. (2009, May 6). Fractured majority ties up Obama's agenda. Washington Times.
Bestwick, A. (2009, January 15). Healthy competition will be crucial. Employee Benefits.
Centers for Medicare & Medicaid Services. (2009, January 6). CMS reports lowest rate of overall growth in national health spending since 1998.
Condon, S. (2009, May 4). Doctors' group backs Baucus' health care strategy. CBS News.
Eller, D. (2008, August 31). Firms consider switches to find which health plans work best. Des Moines Register.
Gallagher, A. (2009, January 1). Building the budget for wellness. Employee Benefit News.
Gerencher, K. (2008, August 14). Hammering out health-care benefits. MarketWatch.
Harris Interactive. (2008, July 2). Health care systems in ten developed countries: The U.S. system is most unpopular and Dutch system the most popular.
Hewitt Associates. (2009). Challenges for health care in uncertain times 2009.
Institute for Corporate Productivity. (2008a, April). Major issues survey 2008.
Institute for Corporate Productivity. (2008b, September). Taking the Pulse: Healthcare.
Matisonn, S. (2008, January 2). Partial cure for absence. Employee Benefits.
Pear, R. (2009, May 5). Schumer offers middle ground on health care. New York Times.
U.S. Department of Health and Human Services. (2009, March). Americans speak: Report on health care community discussions.
Vanden Heuvel, K. (2009, May 5). The battle for healthcare begins. The Nation.
Watson Wyatt. (2009, February 19). Health care benefit cost increases to remain at 6 percent in 2009.
Wojcik, J. (2009, March 6). Survey finds nearly 20 percent of employers plan to drop health benefits. Workforce Management.
Yoest, P. (2009, May 5). Single-payer health-care advocates disrupt Senate hearing. Dow Jones Newswires.

Swine Flu: From Pandemic Panic to Workplace Preparedness

Considering all the global and economic crises in recent weeks, the initial reports were overshadowed and even easy to ignore. That was especially true for busy managers preoccupied with the current economic downturn.

Local officials in the Mexican town of La Gloria declared a health alert because 400 people had sought help for a respiratory disease; an estimated 60% of the town's 3,000 residents were affected, according to a report from the Associated Press (AP). Eleven days later, U.S. officials confirmed that two children in adjacent California counties had become ill with swine flu the month before. And five days later - April 22 - officials confirmed there were three more cases in California and two in Texas ("A Timeline," 2009).

By April 27, Mexico had seen the disease spread to 943 people. Officials there reported at least 20 deaths directly attributable to the disease, while swine flu was suspected in another 40 deaths. The U.S. had reported 20 cases in five states, and Canada had confirmed six cases. The World Health Organization (WHO) raised its pandemic alert status to four and then to five on April 29th - six is an official pandemic ("A Timeline," 2009; "WHO Raises," 2009). In the U.S., the number of swine flu cases was 114 as of April 30 (Grady & Cowell, 2009).

Now, suddenly, there's a great deal of reporting on swine flu, though most of it is not focused on the workplace.

In fact, some of the reporting has had more than a tinge of panic. But when we're talking about a flu that is proving to be fatal among some of those infected, it's not easy to avoid the creeping anxiety that comes along with all the media coverage.

Some have done their best to encourage calm by tracing the history of flu epidemics. The epidemic of 1918 was devastating, but a lot has changed since then in the area of infection control and containment. Others point out that there's still not enough information to judge the CFR, or Case Fatality Rate, associated with this flu. As that information becomes more readily available, employers will get a better understanding of how serious this virus is.

San Francisco doctor Rahul K. Parikh notes that, although this disease has some unique factors, "So far, symptoms of swine influenza are similar to other strains of influenza: fever, chills, aches, cough and congestion. The only thing that's being reported as out of the ordinary is some vomiting and diarrhea as well" (2009). Parikh offers this advice: "So, as you did last January, wash your hands and cover your mouth with the crook of your elbow if you cough or sneeze. If you get sick, yes, call your doctor, but treat yourself with rest, fever reducers (not aspirin for children) and plenty of fluids" (2009). In other words, take precautions, be prepared, but go on about your life.

Those are sentiments that HR executives might do well to heed these days. Most HR execs are already besieged by all the problems that go with downsizing and reorganization - the last thing they need is a pandemic hampering the already lean workforce many companies have been able to retain. It's not just absenteeism that could be a problem in a pandemic. It's also presenteeism (those employees who insist on coming to work while ill because they need the money or for other reasons), the emotional fallout of a pandemic that makes it hard for those who aren't ill to focus on work, the failure of some workers to seek health care, and the possible need to create alternative work arrangements (Anderson, 2009).

HR has a legal obligation to provide a safe place to work. At the same time, HR can't keep workers from becoming ill. But they can take steps to minimize the damage if a pandemic strikes.

A communicable disease policy is essential, says employment attorney Megan Anderson. The policy should make it clear that those with the flu should stay home. Also important are employee education efforts about ways to stay healthy and avoid spreading disease. If necessary, Anderson says, the employer should be ready to restrict travel and establish alternate methods of work, such as telecommuting, to prevent contagion in the workplace (2009).

For HR leaders who want even more guidance, the U.S. government has plenty of information available online.
For example, there's the "Business Pandemic Influenza Planning Checklist." This list was compiled for big business by the U.S. Department of Health and Human Services (HHS) in conjunction with the Centers for Disease Control and Prevention (CDC). The checklist has six main sections that include reminders to establish policies and to educate employees (Pandemicflu.gov, 2009).

HHS and the CDC aren't the only government organizations that have come up with ways to help businesses cope. The Occupational Safety and Health Administration (OSHA) has also studied the matter. OSHA has a 47-page guide available on its Web site. The guide discusses the differences between the various types of flu and helps distinguish between pandemic influenza and other types. It sets out the possible effects of a pandemic on business as well as providing clear guidance on handling the fallout from a pandemic.

The message is clear: Now is the time to take a look at business continuity plans and be ready to adjust to a possible spike in employee absenteeism. If one isn't already in place, it's not too late to establish an action plan. Considerable information and resources are available, so don't panic: Plan.

Documents used in the preparation of this TrendWatcher include the following:

Anderson, M. (2009, April 27). Preparing your workplace for a possible swine flu pandemic. HR Specialist.
Di Justo, P. (2009, April 28). The last great swine flu epidemic. Salon.
Grady, D., & Cowell, A. (2009, May 1). Swine flu continues to spread - but slowly. New York Times.
Mickle, P. (n.d.). 1976: Fear of a great plague. Retrieved April 28, 2009, from The Trentonian.
Pandemicflu.gov. (2009). Business pandemic influenza planning checklist.
Parikh, R. (2009, April 28). Swine flu: Don't panic! Salon.
A timeline of events in the swine flu outbreak. (2009, April 28). Associated Press.
WHO raises swine flu alert. (2009, April 30) Forbes.com.

Gen Y, Which Will Rule the Global Workforce Tomorrow, Takes Lumps Today

Today's economic mess is a watershed for workers in every age bracket. But for Millennials (aka, Gen Y) - those born from about 1980 to 2000 - this crisis is more than a time of joblessness. It coincides with their coming of age, setting the blueprint not only for individual lives and careers but for a new era in the global workplace.

Right now, recession-driven unemployment numbers don't look good for young job hunters around the world. Jobless rates have skyrocketed to as high as 24% for the youngest in Australia's job market, and they're up to 12% for that age group in the U.S. In Colorado alone, current unemployment rates for young people have increased by 66%.

These numbers might be driven, in part, by employers who are reportedly hiring more seasoned workers to cut training and development costs for new entrants to the workforce. Gen Y's slow response in crafting strategies to overcome a poor job market might be another contributing factor (Harris, 2009; Tahmincioglu, 2009).

As a result, fast-tracking career plans for most young people appear to be thrown into reverse. Instead of engaging in job hopping, many are simply trying to hang on to what they have. A 2009 survey from Experience Inc., which is an organization focused on Generation Y recruitment, found 67% of 1,650 young respondents saying that, in the interest of increasing their job security, they plan to hold onto their current job by extending their work hours (33%) and taking on more job responsibilities, including helping their fellow workers (30%).

In fact, as many as 44% ranked job security above career-advancement issues, and 35% are not counting on as many career openings as in the past ("Gen Y Insights," 2009). In addition, younger workers responding to a Randstad online poll were more likely than older respondents to say they would do something to impress their bosses: take on additional work and responsibilities, work overtime and stay late or come early to show extra face time, for example (Laff, 2008).

Reaction to the plight of young people launching careers in the middle of a recession has varied. Some older workers exasperated with Gen Y's perceived impatience, sense of entitlement and unorthodox work styles have expressed a bit of "serves-them-right" schadenfreude. Organizations may also be relieved to see improved retention for new young hires, even as they employ more older workers as a short-term fix for retaining knowledge. But forward-looking planners, who emphasize the potential of Millennials - their ability to multitask, master tech-driven projects and organize for efficiency - are concerned about delayed skill, leadership and career development for this generation.

Some experts suggest that employers should actively hire and train young workers now in anticipation of ballooning talent and skills demands when the recession ends. They argue that passing over younger candidates and excluding them from training and career tracks could leave organizations severely short-handed, as waves of older workers are bound to leave during an economic upswing. Considering the current economic volatility, hiring students and recent graduates for short-term and part-time assignments, they say, is a less risky, more cost-effective way to maintain essential operations while building teams that will have enough experience to handle a rebounding economy ("Get Your Workforce," 2008).

This strategy would dovetail with Millennial enthusiasm for growth and development, says expert Tamara Erickson (2008), who asserts that many objections to Gen Y behavior in the workplace are misguided. Their push for constant feedback, for example, is more about development and growth than neediness, she says. Rather than resisting, criticizing and devaluing Gen Y behaviors, many recommend using Gen Y efficiency skills to optimize organizational change (Healy, 2009). Others point out that multitasking is "second nature" to Gen Y, so allowing young workers to mix work time with occasional personal texting and Internet surfing is actually good for productivity ("Status Update," 2009).

While young people continue to express optimism about their career prospects, coaching expert Marshall Goldsmith (2008) counsels them not to take a sabbatical from career-building during the downturn. On the contrary, he says, they should strive to become "tougher," by continuously honing and upgrading their skills while developing the entrepreneurial mindset needed to compete in a global marketplace. During a recession, successful entrepreneurs rely on innovation, flexibility and efficiency - talents and skills that Goldsmith says will be increasingly necessary for young job seekers who want to compete globally (Gergen & Vanourek, 2008). Globalization, he points out, has created a new set of rules in which more and more highly trained international candidates will be competing for the best jobs.

Generation Y is the first truly global generation, says Erickson (2009), and it comprises a third of the world's population. Connected by advancing technology, young people on every continent share common values and a similar sense of what the future holds. Just 5% of more than 4,000 recent graduates from 44 countries responding to a PricewaterhouseCoopers survey said they expect the government to look after them in 30 to 40 years. More than half said they expect to rely on personal savings and investments (Schofield, 2009). If they are right, Millennials will be major workplace players very soon. Organizations that develop strategies for effectively accepting and integrating them into their workforce now will be a step ahead of the game.

Documents used in the preparation of this TrendWatcher include the following:

Erickson, T. (2008, November 25). The double meaning of "feedback." Harvard Business Publishing. Retrieved from blogs.harvardbusiness.org
Erickson, T. (2009, February 18). Wise words about work for Generation Y. The Globe and Mail. Retrieved from globeandmail.com
Gen Y insights: Gen Y bullish with attitudes on the economy, education and careers. (2009). Experience, Inc. Retrieved from www.experience.com
Gergen, C., & Vanourek, G. (2008, August 26). Why entrepreneurs love a downturn. Harvard Business Publishing. Retrieved from blogs.harvardbusiness.org
Get your workforce "right" in a volatile world. (2008). White paper. Brill Street + Company. Retrieved from brillstreet.com
Goldsmith, M. (2008, October 27). In tough times, young workers need to toughen up. Harvard Business Publishing. Retrieved from discussionleader.hbsp.com
Harris, P. (2009, March 14). Generation Y enjoys a last hurrah before recession hits. Guardian News and Media. Retrieved from guardian.uk.co.com
Healy, M. (2009, February 22). Generation Y wants it now. Globe and Mail. Retrieved from theglobeandmail.com
Laff, M. (2008, December). Gen Y proves loyalty in economic downturn. T+D, 18.
Schofield, W. (2009, February 1). Generation M. The Moscow Times.com. Retrieved from themoscowtimes.com
Status update: Why ask Gen Y? (2009). White paper. Brill Street + Company. Retrieved April 20, 2009, from brillstreet.com
Tahmincioglu, E. (2009, January 16). Under 30? Looking for a Job? You're not alone. MSNBC.com

The Time to Plan Is Now

Why is it so hard to be proactive - to actually plan for those workforce needs?

Maybe companies are so busy trying to survive the moment, they just don't have time. Research conducted by i4cp (2008a) found that only about a quarter of responding firms said they had formal plans for their future hiring needs, although the figure was 50% for large organizations.

Or perhaps planning just isn't the forte of a lot of U.S.-based companies. When Watson Wyatt polled organizations in 37 countries in late 2008, the results showed that more than eight out of 10 UK firms had workforce plans in place to help them deal with staffing issues resulting from economic fallout. In Ireland, the percentage was 85%. Even in Italy, which often doesn't fare well in employment issues, 82% of firms had contingency plans.

Meanwhile, businesses in the world's Asia-Pacific region - where India and China seem to have the globe's only thriving employment outlook anyway - are prepared for workforce issues, too. Eighty-four percent of firms in the region are active planners (Paton, 2008; Watson Wyatt, 2008a, 2008b).

U.S. organizations are less likely to be prepared. The same study found that only about 67% had a contingency plan for what to do if the economy continues to fail.

The Impact on Performance

"You don't just stumble onto a high-performing organization," says i4cp SVP of Research Jay Jamrog. "It takes planning, and this is an area where many organizations stink."

Jamrog argues that such planning can have a large impact on performance and success, and other sources agree. Hewitt Associates (2008) notes, "The costs of inaction - or inadequate action - can be detrimental." Delays in new product development, interference with market expansion, inability to leverage talent well, higher costs for contract employees and adverse effects on learning and development are just a few of the poor-planning pitfalls that can sabotage organizational productivity and growth.

Research from Aberdeen Group (2008) suggests that leaders in best-in-class companies are more likely than leaders in other companies to support workforce planning.

A Dearth of Integrated Data - and Other Barriers

A major stumbling block for workforce planning may well be the same monkey wrench that gets thrown in the works of talent management and other strategic initiatives: The data needed to do the job well is not available. Or, it might be available, but collecting and comparing it is time-, labor-, and cost-prohibitive. After all, siloed organizational and functional structures interfere with the meaningful flow of data. HR may have one piece of the puzzle, accounting another piece, and sales still another. Bits of the big picture emerge from these various functions, but there's no magic blender available to whip them into a meaningful whole.

There are, however, various applications that organizations can use for workforce planning. A 2008 study by i4cp found that, among firms using workforce planning technology, most of them (58%) use a vendor solution of some sort, a percentage that is even higher (73%) for companies with 10,000 or more employees. The i4cp study also indicates that it is enterprise resource planning (ERP) systems that are most widely used for workforce planning. That makes sense given the fact that workforce planning requires a great deal of cross-functional information to be effective. The study indicates that the most widely used vendors in this area are Oracle/PeopleSoft, SAP, Oracle, ADP, and Kronos.

But just having access to integrated data is not enough. There are other workforce planning pitfalls. Right now, for instance, the poor economy (which makes planning more important than ever) makes it much harder to afford new or greater investments in the proper technologies. Aberdeen's (2008) Strategies in Workforce Planning names additional barriers, such as lack of staff to manage the planning function, limited knowledge of the skills employees possess, and a lack of vision around the organization's future.

A Job with No End in Sight

The other aspect of workforce planning that can make it hard for organizations to enthusiastically embrace is that it's never done. "Successful workforce planning is an active and continuous process," notes the state government of North Carolina through its Office of State Personnel (2008). "On-going evaluation and plan adjustments are the keys to continuous improvement and to achieving your targeted goals. You must continue to monitor and refine approaches." Some organizations are just not prepared to invest in that kind of open-ended endeavor, one that must look to some executives like a project or expense that never ends.

The Down Economy: Time to Plan

Now may actually be one of the best times to engage in workforce planning. Planning consultant Pat Chadbourne says that slow times enable firms "to build up bench strength and identify the 'sleepers' out there," referring to employees with potential for development or with skills that might contribute to the organization's survival and success (Wells, 2008).

Moreover, Watson Wyatt's Laura Sejen, global director of strategic rewards, says that the weakening of the economy would likely compel companies to "begin to evaluate their staffing levels, pay programs and overall organizational structures to implement some of their contingency plans," adding that "companies that have contingency plans in place will be in a much better position to weather the storm and bounce back when the economy improves" (Watson Wyatt, 2008a).

So, for many organizations, the downturn may well represent an opportune time to invest in better workforce planning.

Documents used in the preparation of this TrendWatcher include the following:

Aberdeen Group. (2008, August). Strategies in workforce planning. Retrieved from www.aberdeen.com
Hewitt Associates. (2008). Spotlight on strategic workforce planning: Taking action today to meet tomorrow's needs. Retrieved from www.hewittassociates.com
Institute for Corporate Productivity. (2008a, July). Taking the pulse: Succession planning. Retrieved from www.i4cp.com
Institute for Corporate Productivity. (2008b). Human capital management technology survey overview. Retrieved from www.i4cp.com
North Carolina Office of State Personnel. (2008). Workforce planning guide. Retrieved from www.performancesolutions.nc.gov
Paton, N. (2008, October 20). A year of warnings, but heads are still in the sand. Retrieved from www.management-issues.com
Society for Human Resource Management. (2008, December). Key priorities for the HR profession through 2015: Are you ready?
Watson Wyatt. (2008a, September 1). Asian employers better prepared for downturn compared to the United States. Retrieved from www.watsonwyatt.com
Watson Wyatt. (2008b). Workforce planning in an economic downturn.
Wells, S. (2008, May). Managing a downturn. HR Magazine, 49-53.
What does a recession mean for human capital planning? (2008, March). HRfocus, 85(3), 1, 13-15.

Is Innovation Fading Amid Crisis?

Many companies find it hard to simultaneously cut costs while bringing cool, new stuff to market. Even if they can get a new product onto the shelves, there's doubt that cash-strapped customers will buy it - at least for now.

Herein lies the conundrum and a potential trap for many organizations. They may put innovation on the back burner until markets improve, but finding new customers and markets usually means some kind of innovation.

So, today's leaders need to find the proper balance between tightening belts and innovating in their organizations, a task that's none too easy in a panicky economic environment often dominated by short-term thinking. This is a time when, according to i4cp research, cost cutting and making profits are among the chief concerns for organizations.

Consider the fiscal plight of entrepreneurs. Howard Anderson, a founding partner of Battery Ventures, notes, "We and others are funding start-ups as slowly as possible, or not at all." He points to the example of a hand-held device that restaurant patrons could use to order their meals, potentially boosting the productivity of wait staff, and he notes that "the prototype just sits there" (Uchitelle, 2009).

It isn't just entrepreneurs who are seeing changes in funding for innovation. Overall, R&D expenditures will be flat in 2009, following two consecutive years of growth, according to a survey of member companies of the Industrial Research Institute (IRI). The biggest problem IRI member companies expected to have in 2009 was "growing the business through innovation" (Cosner, 2009).

There could be something of a "bean counter" prejudice against innovation. That is, financial analysis tools traditionally used to evaluate investments in new initiatives can result in a "systematic bias against innovation," according to experts from Harvard Business School. For example, using discounted cash flow and net present value leads to "underestimat[ing] the real returns and benefits of proceeding with investments in innovation" and leaning on earnings per share "diverts resources away from investments whose payoff lies beyond the immediate horizon" (Christensen et al., 2008).

Some even think that the U.S. economy is losing its traditional strength in the area of innovation. Although the U.S. ranks sixth among 40 nations and regions in terms of innovation and competitiveness, its progress has slowed to a crawl in these areas, suggests a recent report by the Information Technology and Innovation Foundation. The study reports that "all of the 39 other countries and regions studied have made faster progress toward the new knowledge-based innovation economy in recent years than the United States" (Atkinson & Andes, p. 1).

That study looked at 16 indicators, such as corporate investment in R&D, venture capital investment, the number of science and technology researchers per 1,000 employed, the global share of scientific/technical publications, and productivity. The countries ranking ahead of the U.S., according to the study, are Singapore, in first place, followed by Sweden, Luxembourg, Denmark and South Korea.

"The trend is very troubling," said Robert D. Atkinson, president of the foundation (Lohr, 2009).

But not everyone buys into the idea that the situation is so dismal. Last year, the RAND Corporation published a study and argued that the U.S. continues to be the leader in science and technology. It noted, "The United States accounts for 40% of the total world’s spending on scientific research and development, employs 70% of the world’s Nobel Prize winners and is home to three-quarters of the world’s top 40 universities" ("U.S. Still Leads," 2008).

Even slow or no growth in R&D spending may be a good sign. The Battelle Memorial Institute forecasts that cumulative spending by "companies, government and universities will rise more than 3%" in 2009, according to the Wall Street Journal. A Journal analysis of large companies indicates that they spent about the same amount on R&D in the final quarter of 2008 as they had in the same period in 2007. Such flattened R&D spending could be a good sign in light of plummeting revenues, and the Journal reports, "Big R&D spenders say they've learned from past downturns that they must invest through tough times if they hope to compete when the economy improves."

Of course, not all R&D spending is created equal, and types of R&D spending are likely to change during this downturn. For example, the IRI research suggests that member companies are honing R&D to support new-business projects and cutting back on research targeted to existing businesses and to basic research.

So, organizations seem to be in a good news/bad news scenario. The good news is that there's a genuine effort to refrain from hacking away at R&D spending and a desire to focus on new business. The bad news is that, nonetheless, there's a "treading water" effect, with overall spending on R&D fairly stagnant and some signs that the great U.S. innovation machine is stalling in comparison to other nations.

Recommendations: First, even if organizations can't afford to throw a lot of new funds at innovation, they should nurture a culture of innovation. For example, they could allow employees to spend some time on invention. They may also want to name a chief innovation executive who helps develop an innovation strategy along with the processes, governance and measures to support it (Alon, 2009).

Second, firms should boost communication with their customers. Prof. Andrew Razeghi (2008) of Northwestern University believes companies should use recessions as a time to "get closer to your customers," providing them with greater value, relevant products, and increased communications. Innovations can take the form of things such as more effective CRM programs and better customer segmentation decisions.

Third, companies should keep in mind that innovation can be, in itself, a cost-reduction tool. That is, organizations can focus on innovations that provide quicker time-to-market, more effective operations or more efficient employees (Alon, 2009).

Fourth, where needed, they should invest energy in learning how to become better strategic thinkers. "Outthinking the competition is a learnable skill," according to Kaihan Krippendorff, president of Strategy Learning Center and a presenter at a strategy conference sponsored by i4cp. Krippendorff (2008) posits that "strategic advantage comes from seeing patterns and sources of advantage that others miss." If organizations can truly spot the advantages in the marketplace, they will have considerably more success at the innovation game.

Documents used in the preparation of this TrendWatcher include the following:

Alon, A. (2009). Investing to sustain high performance: Examining the two sides of the innovation coin. Accenture.
Atkinson, R.D. and Andes, S.M. (2009, February). The Atlantic Century: Benchmarking EU and U.S. Innovation and Competitiveness.
Cosner, R.R. (2009, January 1). Industry Research Institute’s R&D Trends Forecast for 2009. Research Technology Management
Christensen, C. M., Kaufman, S. P., & Shih, W. C. (2008, January). Innovation killers: How financial tools destroy your capacity to do new things. Harvard Business Review, 98-105.
Krippendorff, K. (2008, September 24-26). Outthink the competition. Creating the HR Leadership Agenda. Society for Human Resource Management Strategy Conference, Palm Springs, CA.
Lohr, S. (2009, February 25). In innovation, U.S. said to be losing competitive edge. New York Times.
Razeghi, A.J. (2008). Innovating through recession: When the going gets tough, the tough innovate.
Scheck, J. and Glader, P. (2009, April 7). Big companies spend in R&D to grab sales in recovery. Wall Street Journal Asia.
Uchitelle, L. (2009, April 7). Economy falling years behind full speed. Yahoo! Finance.
U.S. still leads the world in science and technology. (2008, June 12). News Release.

The Quest for Better Human Capital Metrics

We had a theory and wanted to test it. So we typed "HR holy grail" (no quotes) into a Google search box and, sure enough, what popped up on the first page were various articles about HR metrics and analytics. There was one result on determining the return on investment (ROI) in HR development, one on predictive analytics and another on measuring the value of human capital.

It's easy to see why attaching hard numbers to the notoriously soft and fuzzy issues of people management has become one of the secular "holy grails" - or elusive goals - of organizations. Metrics and analytics help organizations know where their strengths and weaknesses lie and allow them to plan for the future more effectively. They are particularly useful in times like these, when organizations need to carefully leverage scarce resources so they can emerge stronger than ever when the economy recovers.

There have been a string of excellent thinkers and "gurus" in the field. Back in the 1970s, the founder of the Human Resource Institute (i4cp's predecessor), William Pyle, helped to develop the idea of human resource accounting. And there have been other pioneers, such as Jac Fitz-enz, who founded the Saratoga Institute, and Donald Kirkpatrick, who developed the widely used four levels of training evaluation. In recent years, thinkers such as John Boudreau have worked to help HR distinguish among the concepts of efficiency, effectiveness and impact in the area of workforce analytics. And i4cp's own Senior VP of Research, Jay Jamrog, has become especially influential in the areas of organizational alignment, workforce planning and performance metrics.

Despite the efforts of these and many other contributors to the field, measuring and analyzing human capital well continues to be an elusive goal that often seems just beyond the reach of most organizations. But are they making serious progress in their quest?

A new 2009 i4cp study - the first in a series of metrics studies - suggests that it depends on what we mean by progress. There's a considerable emphasis on efficiency measures, which help HR decide how well it's doing certain activities. For example, the study shows that most companies measure things such as rates of turnover, voluntary termination and involuntary termination. But relatively few organizations are tracking the termination rates of high-potential employees or those in "pivotal" jobs. These organizations are more likely to measure how many employees "separate" than to analyze who is leaving the organization, especially when it comes to their skill levels.

Relatively few companies look at the quality of separations - that is, the effect that each termination has on the organization. Some terminations - even voluntary ones - can be good for a company. To determine whether it's a net gain or loss, however, companies need to examine the quality of those separations. They need to judge the true effectiveness of programs designed to keep needed talent and weed out those programs that don't fit the organization and its goals.

To this end, some firms have made more progress than others. The i4cp study looked at the differences in metrics/analytics usage among high- and low-performing organizations, as determined by self-reported market performance. Analysis of these results show that high performers are more likely to focus on talent-related metrics than are low performers. For example, high performers are far more likely to measure movement within the organization, quality of hire, quality of promotion and the cost of training/development resources invested in top performing employees versus poor performing employees.

Low-performing organizations generally stick to the basic efficiency measures. When comparing large organizations (10,000+ employees), for example, lower performers are about as likely as high performers to measure things such as hiring cycle time. But large companies that are classified as higher performers are considerably more likely to gauge talent-oriented recruiting efforts such as employee referral rates.

Ultimately, there's a need to focus metrics on organizational goals that go well beyond HR efficiencies. According to Jay Jamrog, HR departments in high-performing organizations often take an "outside in" or future-leaning approach to metrics and analytics. To do this, they start by identifying the business model, its components and what drives value in the organization. Then they develop an HR strategy to execute the business model. Only then do they implement metrics that gauge the degree to which they're successfully serving as a strategic partner.

Sometimes metrics are used to launch serious improvement efforts. Consider the experience of i4cp member organization WellPoint, Inc., a health benefits company that serves over 35 million members. In 2005, WellPoint discovered it had a problem with first-year voluntary turnovers in its service operations department - over one-third of new hires left within their first year of employment. Since it often takes a year to bring a new employee to full productivity, losing a high percentage of new hires can be extremely costly for an organization.

For a healthcare company in particular, high operating costs lead to greater costs for customers, lower reimbursements to providers and less competitiveness in the industry. WellPoint considered the costs of recruiting, onboarding and training, and decided to embark on a comprehensive analysis of the problem, its causes and solutions. WellPoint studied various HR processes and found it could make each more efficient and effective. As a result, the company saw a 13.5% improvement in first-year voluntary turnovers, a cost savings of almost $6 million ("WellPoint, Inc.," 2009).

WellPoint has also been focusing on predictive analytics and workforce planning. This focus has required HR to work closely with the finance function. David Ibarra, Director of HR Metrics at WellPoint, has noted, "We had to get our partners there grounded in the methodology first… We got our CFO to report our results to help with credibility. We were able to move forward with the body of work without question" ("A New Path," 2009).

Today's demanding economic times present new opportunities for human capital metrics to prove their worth. Such metrics can help organizations spot problems, move key workers to influential positions and to teach new skills and technologies to better position the company in the future. The quest for the perfect set of HR metrics and analytics continues, but i4cp's research suggests that some organizations are considerably further along than others.

Documents used in the preparation of this TrendWatcher include the following:

A new path to the holy grail: Workforce planning through predictive analytics with Ed Newman and panel (2009, March 10).
WellPoint, Inc: Early tenure turnover analysis saves $6 million. Retrieved February 6, 2009.

Are You Too Nice for Your Job?

As if things weren't hard enough in corporate America, now we've got a professor telling CFOs that most of their HR colleagues are misguided on the issue of employee engagement, not-so-hot at analytics, and maybe even poorly qualified as managers of strategic talent.

Oy. Just what we need at a time when it's more important than ever for people managers and financial managers to work together. But even before CFO.com published "Memo to CFOs: Don't Trust HR," you could see it coming.

When it's economic crunch time, you're always going to get tension between those focused on the bottom line and those focused on keeping employees' trust. Reductions in force (RIF) are awful tempting, and often necessary, where payroll makes up a huge portion of the balance sheet. So it's little wonder that top managers are going to be asking one another (and themselves), "Are we focused on the right stuff? Shouldn't we be tougher and smarter in these hard times? Are we just being too nice?"

The irony, of course, is that many organizations are already being so "tough" that they're hemorrhaging workers, with U.S. employment dropping in every month of 2008 and plummeting over the last four months. It's ugly, but you can't really argue that companies aren't making some tough decisions.

What you can argue about is whether the decisions are wise and whether "nice guys" are going to finish last in this ultracompetitive environment.

So let's look at some of the evidence. Rutgers University's Richard Beatty is quoted as saying, "HR wants to treat most employees the same way, and they spend considerable time trying to defend or fix poor performers, taking on the St. Bernard role" (McCann, 2009). Ouch. Even if you like saints and dogs, I don't think that statement is meant to be positive. But, let's face it, there's some truth to it. All the really "nice" managers - HR or not - want to try to fix poor performers, at least initially. Sometimes there are sound legal or logistical reasons for this, though sometimes it's just a matter of trying to be fair and humane.

But I seriously doubt that most HR professionals or other managers bend way too far in this direction. They know they should reward good performers and get rid of the bad ones. In fact, preliminary results from a new i4cp survey show that about four-fifths of all respondends (and 84% of those from really large corporations) tie pay to performance, and most of them use some kind of system that differentiates among performance ratings while trying to control for rating inflation. About half of large companies use either a forced ranking or forced distribution system.

Also, about half of respondents from large companies said that the economy has made pay-for-performance systems a higher priority, while 38% said it didn't (the rest said they didn't know). Another i4cp survey found that when employers are trying to determine who to include in an RIF, 59% look at performance reviews.

So, clearly, there's a lot of attention being paid to performance, often with an eye to figuring out who should get the top pay increases (or who should be let go) at a time when dollars are tight. It strikes me as possible that CFOs and their HR colleagues are working well and effectively together in a lot of organizations.

Then there's the issue of analytics. Beatty is quoted as saying that while "the language of organizations is numbers, HR isn't very good at data analytics" (McCann, 2009). Again, there's historically some truth to this, but I suspect it's less true than in the past. Another new i4cp survey looks at HR metrics and analytics, and it reveals that there's a lot going on. Most companies look at the basics, such as labor expense as a percentage of total operating costs or total compensation as a percent of revenue. Fewer look at certain quality indicators, such as quality of hire (42%) or quality of separation (27%), but the survey indicates that many oganizations are considering or developing those measures.

And then there's the employee satisfaction issue. Beatty is right that HR often places a lot of emphasis on this. "HR people try to perpetuate the idea that job satisfaction is critical," he's quoted as saying. "But there is no evidence that engaging employees impacts financial returns" (McCann, 2009). Well, it's true that the issue is widely measured, with 69% of i4cp respondents saying their companies use satisfaction surveys and 66% saying they use employee engagement/index surveys. But those two measures aren't really the same, and there's evidence that engagement, in particular, makes a difference.

Companies with high levels of employee engagement saw their earnings per share grow at more than twice the rate experienced by firms with low engagement levels, according to Gallup researchers. They compared organizations that had four or more engaged workers for every disengaged employee with firms that had fewer than one engaged employee for every disengaged one. The companies with high levels of engagement “saw 2.6 times more growth in earnings per share”(Ott, 2007). And a major study by the American Society for Training & Development (2008), conducted in partnership with i4cp, found that a whopping 83% of respondents said that, to a high or very high extent, they considered enhancing customer service and helping to drive customer satisfaction as a reason for seeking a more engaged workforce.

And then there's i4cp member company 3M, an organization renown for its innovations, which found a signficant correlation in its laboratories between innovation and employee engagement , according to a recent i4cp webinar on the subject.

As long as companies are finding solid evidence confirming the performance-engagement link, they shouldn't be afraid to measure or make it a high priority, especially in tough times. This applies not just to HR but to all managers.

I think part of the problem is that some people conflate "engaging employees" with "always being nice" to them. The truth is, not only are they not the same, but they can sometimes be opposed to one another. In U.S. News & World Report, Alison Green (2009) lists reasons to beware managers that are just too nice, such as their relunctance to make hard decisions, have hard conversations, set consistent standards, impose consequences when those standards aren't met, and send consistent messages. "Ironically, too-nice managers eventually end up with the very thing they're seeking to avoid: disgruntled, dissatisfied employees," she notes.

In other words, being "nice" is sometimes a code word for being afraid to do the right thing as a manager, and this can lead to disengaged workers. A person can still be a nice boss, as long as he or she isn't afraid of being a good boss. A manager can't be afraid of dealing with problems, setting goals, making distinctions between types of performance, and holding people accountable for results. Making these tough decisions is one of the hallmarks of not only good managers but of good HR professionals. If those good leadership characteristics aren't present and accounted for, maybe then CFOs will have good reason to complain.

Documents used in the preparation of this TrendWatcher include the following:

American Society for Training & Development (2008). Learrning's role in employee engagement. Retrieved from astd.org
Green, A. (2009, March 16). 4 reasons to beware the too-nice manager. U.S. News & World Report.
McCann, D. (2009, March 10). Memo to CFOs: Don't trust HR. CFO.com. Retrieved from cfo.com
Ott, B. (2007, June 14). Investors, take note: Engagement boosts earnings. Gallup Management Journal.

As Crime Rises in a Poor Economy, Is It Rising in Your Organization as Well?

We've all seen the news: another failed bank, mounting debt, mass layoffs, record foreclosures, a $50 billion dollar Wall Street Ponzi scheme and a stock market that has sunk to its lowest level in more than a decade. So here's another news flash: As a result of the deteriorating economy, theft and property crimes are on the rise, a trend that doesn't exclude the workplace.

In late 2008, i4cp conducted the Workplace Theft Pulse Survey in conjunction with HR.com. The survey found that since the economy soured, nearly a quarter of the nearly 400 respondents have noticed an increase in the theft of non-monetary, company-owned items such as ink cartridges, office supplies, electronic items and the products that their organization produces or sells. For large organizations - those with more than 10,000 employees - that figure increased to more than 30%. Monetary theft, such as the padding of expense accounts, the disappearance of petty cash, suspicious accounting irregularities and other fiscal crimes had also increased. Eighteen percent of respondents overall had seen an increase in such criminal activity and nearly one-quarter of large organizations had witnessed a similar rise.

But thieves aren't stealing only from "The Man." Twenty-five percent of overall respondents and 31% of respondents from large organizations reported an increase in the victimization of employees while at work, such as individuals having their cars broken into and personal items being stolen from workstations. And external criminal activity - such as theft from job sites, break-ins and external computer threats - saw one of the highest increases, with 32% of large organizations reporting an uptick.

These patterns reflect larger social trends. Cyber-criminals, in particular, have found opportunity in the downturn. Law-enforcement officials who track Internet crime say that, over the past six months, they have seen an intensification of scams as criminals take advantage of people's anxiety and confusion about the economy. Avivah Litan, vice-president of Internet-technology research company Gartner, notes that clients are reporting that cyber-attacks on many banks have doubled over the past six months, both in the U.S. and abroad. In January 2009 alone, more than 800 complaints were logged by the congressionally funded non-profit National White Collar Crime Center. Not only have cyber-attacks increased in number, but they have also grown in sophistication, including fake Websites masquerading as banks and even as government agencies such as the FBI and the FDIC (McQueen, 2009).

Property crime is escalating as well. A survey of 233 police departments conducted by the Police Executive Research Forum (PERF), found that 43% reported an increase in what they believed to be recession-related crimes. Forty percent of respondents said that thefts had increased over the past few months, 39% said robberies were up and almost one-third responded that burglaries had increased by 20%. Richard Rosenfeld - a sociologist at the University of Missouri, St. Louis who studies crime patterns - is not surprised. "There's little question that crime rates peak during or, on occasion, immediately after a recessionary period." He noted that it has happened during the last five recessions (Pugh, 2009).

Across the Atlantic, the news is no different. As predicted by the British government, the recession has spawned a surge in property crimes. According to an analysis of official police figures conducted by British weekly The Observer, burglaries across England and Wales have increased as a result of the recession; in most cases by more than 5% and in many cases by double digits (Doward, 2008).

Compounding the problem, the economy is also responsible for a decrease in the resources used to combat crime. Police officers in Atlanta are taking unpaid days off every two weeks. Tim Kaine, the Governor of Virginia, has proposed a $72 million cut to state and local law enforcement. Two hundred Boston police officers face layoffs for the second time in the city's history, the only other time being during the recession of the early 1980s. Miami Chief of Police and PERF president John Timoney notes, "The fact that most police departments currently are being asked to make cuts is an indication of how badly this recession is affecting local tax bases" (Pugh, 2009).

The news isn't all bad, however. Steps are being taken in both the public and private arenas. A 2007 National Bureau of Economic Research report found that spending under the New Deal in the 1930s "lowered property crime in a statistically and economically significant way." Based on that precedent, the stimulus package that was recently passed is expected to help by providing about $1 billion to hire 5,500 local police officers and allocating $2 billion for local and state crime fighting programs and initiatives (Pugh, 2009).

Organizations are taking measures as well. Almost 30% of respondents to i4cp's survey said that they are communicating with employees more on the issues, 20% are conducting audits more frequently, 19% are being more careful when conducting background checks and 17% say they have added extra security measures. But while theft is up as a result of the recession, the only job creation stemming from it seems to be for the criminals. Only about 3% of respondents to i4cp's survey said that they have added extra security personnel (i4cp, 2008).

i4cp Recommendation: Companies should review current policies and clearly define what the organization considers to be theft via company-wide meetings, bulletin board postings and internal communications. Leadership should be actively engaged and stress the importance of the issue. Visible security measures can be an effective deterrent. A sign indicating the presence of surveillance equipment can be as effective as surveillance itself. Another effective strategy is to increase control measures and to conduct both internal and external audits regularly and rigorously. According to the Computer Security Institute, a laptop is stolen every 53 seconds and only 3% are ever recovered (Cohen, 2008), so consider using theft recovery systems, which can provide daily updates on the whereabouts of an organization's laptops. Also, ensure that all confidential files - such as personnel records - are kept in a secure, locked environment that is only accessible by the appropriate personnel. As a related measure, organizations should consider a protocol for storage devices such as flash drives, which can be tempting to steal and just as easy to use for the purpose of data theft.

Theft probably isn't going diminish as a concern anytime soon, but these measures may help to keep crime from taking a bite out of your organization.

Documents used in the preparation of this TrendWatcher include the following:

Cohen, A. (2008, November). To catch a thief. Fast Company, 60, 62.
Doward, J. (2008, September 21). Figures confirm fear of ‘recession crime wave.' The Observer. Retrieved from www.guardian.co.uk
Institute for Corporate Productivity. (2008, November). Workplace Theft Pulse Survey Analysis. Retrieved from www.i4cp.com
McQueen, M.P. (2009, January 30). Cyber scams up in the downturn. Wall Street Journal. Retrieved from www.wsj.com
Pugh, T. (2009, February 19). Rising crime could be the recession's next effect. McClatchy. Retrieved from www.mcclatchydc.com