HR
News and Information
June 21, 2005
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FROM IPMA-HR HR Bulletin
FROM IPMA-HR HR Bulletin NACE
Reports College Students, New Grads Most Desired Job Benefits Since 1994, NACE has been surveying soon-to-be college graduates through its Job Choices magazines to gauge student expectations and desires as they related to the job market and job search. This year, 761 usable surveys were returned by the Dec. 31, 2004 deadline, and according to survey results, college students and new graduates rate medical insurance as the most desired job benefit. Rounding out the top five benefits and policies offered by employers after medical insurance are yearly salary increases, 401(k) retirement plans, tuition reimbursement, and dental insurance. In an April 26 NACE press release, Camille Luckenbaugh, NACE research director, was quoted as saying, "Most of these benefits consistently rank at the top of the list. This year, however, respondents rated tuition reimbursement higher than dental and life insurance, but only by a fraction." NACE reported that "benefits are so valuable to students and new graduates that when asked about reasons for choosing an employer, they rated a good benefits package higher than the starting salary offer, opportunity for advancement, and job location." The National Association of Colleges and Employers (NACE) has been the leading source of information about the employment of college graduates. NACE maintains a virtual pressroom for the media at www.naceweb.org/press/. EPF
Study Finds FMLA Cost Employers $21 Billion in 2004 The direct costs of FMLA leave, according to EPF, include the net labor replacement costs, continuation of group health benefits, and lost productivity. Industries hardest hit are telecommunications and transportation paying 2.4 and 3.2 percent of their labor costs for compliance with FMLA leave, respectively. According to the survey, 14.5 of employees took leave in 2004 with 35 percent of those taking leave more than once during the year. "Employers face a significant financial burden in fulfilling their obligations under FMLA," said Janemarie Mulvey, EPF Chief Economist. "No one is upset about allowing employees time off for serious medical conditions, but the intermittent leave provisions are so flexible as to make FMLA subject to abuse by a small—but costly—group of employees. EPF’s survey found that the number of workers taking multiple episodes of leave has increased dramatically since 2000. "The proportion of leave-takers who took leave more than once in 2004 was almost 50 percent higher than the proportion who took multiple episodes of leave in 2000," said Mulvey. The survey found that 30 percent of FMLA leave is intermittent leave comprising shorter periods of leave, sporadically throughout the year and without prior notice to employers. An employee has up to two days after being absent from the workplace to inform their employer the absence was FMLA leave. This has led some to suspect that some employees are using the FMLA to protect against employer discipline for work missed for reasons other than serious medical conditions. Employers faced added difficulty, because often, they do not know when an employee is going to take leave. The FMLA envisioned that in most cases, employees would notify employers in ample time so the employer can better prepare for a leave period, requiring notice of 30 days for foreseeable treatment of a serious medical condition, birth, adoption, or foster care placement. However, in practice, the majority of leaves begin with little notice to the employer. "In 2004, nearly 50 percent of employees notified their employer of FMLA leave on the day the leave began or after. In fact, 30 percent of the time, notice was not provided until at least one day after the leave began," said Mulvey. While this may occur in emergencies or sudden illness, its frequency suggests that employees are not providing notice "as soon as practicable," as required by FMLA regulations. Without notice, employers must scramble to find workers to fill shifts, often bringing in workers to work a second shift or for overtime. If an employer is unable to find a co-worker to fill in, they may hire a temporary worker to fill the position while the employee is gone. All of these result in a loss of productivity and additional labor costs for the employer. EPF’s report is available online at www.epf.org/pubs/newsletters/2005/ib20050419.pdf. AARP
Study Finds Saving Rates Down, Reliance on Social Security High AARP's second annual quality of life index, The State of 50+ America 2005, examines the well-being of Americans ages 50 and older by analyzing 25 key indicators and tracking over time measurements on economic and health status, consumption/social/lifestyle, and independent living/long-term care. In short, AARP President Marie Smith said, "the study found that good is not always good enough." She added, "there were signs of improvement over the past decade and slight improvements over the past year in many areas, but incomes of Americans 50 and older were below their 1999 levels and reliance on Social Security has increased, not declined, in recent years." The report findings about lower income rates and a greater reliance on Social Security are of critical importance to the current debate about Social Security solvency. Among the key indicators, the report looks at health care costs, coverage, access and quality. Its special health section focuses attention on the challenges facing the U.S. health care system, especially the need to restrain the growth in health care spending while getting the most value for that spending. In particular, medical bills over the previous year were considered a problem for one in five older Americans. These bills were twice as likely to be a financial problem for individuals whose debt had increased from the previous year and more of a problem for people age 65+. While people age 65 and older have the benefit of access to Medicare coverage, the premiums for Part B Medicare have been rising at double digit rates for the past several years. AARP Director of Policy and Strategy John Rother explained, "Income stagnation may also explain the fact that one-third of those aged 50 to 64 express concerns about their ability to pay for future health expenses." The report finds the "youngest" (50-64) age group's fortunes improved over the past decade on 10 indicators and declined on five. Overall, the "middle" (65 to 74) and "oldest" (75+) age groups did better-each improved on 12 and declined on only three indicators. However, progress, where it existed, was often slow or uneven. For example, although incomes grew in the past decade and in the past year, incomes in 2003 were actually lower for people aged 50 to 64 than they were in 1998 and lower than in 1997 for people aged 75 and older. Real growth in Social Security benefits coupled with real declines in total income mean that people aged 62 and older were even more dependent on Social Security for their retirement income than they were a decade ago, underscoring the need to strengthen Social Security's guaranteed benefit, and not subject beneficiaries to any increased risk. Over the most recent year, the total 50+ population improved on 12 indicators and declined on six-three each in the economic and health areas. This is a turnaround from last year's edition, which reported deterioration in all but two important economic and health indicators among the total 50+ population. In the most recent year, the "youngest" group experienced more losses than gains, and the two older subgroups showed roughly equal gains and losses. According to the report, despite only 15 percent (a smaller percentage than last year's 19 percent) saying they were better off economically than a year before, the percent who feel confident about their retirement future shot up by nine percentage points, and the extent of confidence increased with age. Rother continued, "while we see some marginal economic improvements, many still lag behind—half still have no pension and one-third of those aged 65 to 74 and nearly half of those 75+ are below twice the poverty line. Health vulnerability is not improving. Fewer than half report 'very good' or 'excellent' health status; 13 percent of those 50-64 are without health insurance; 43 percent of 65+ lack stable drug coverage, and only a quarter are physically active." Several new health indicators were added this year. A new mental health measure in this year's report improved for all segments of the population. Another new indicator suggests an unhealthy trend toward obesity in the older population and a looming health problem. In the area of independent living/long-term care, the percent having no functional limitations increased modestly which is consistent with other findings of declining disability rates. And in the area of consumption and lifestyle trends, not surprisingly, Americans age 50 and older are increasingly active online, as over half now use the Internet. "If current trends continue many in the 50+ population can expect steady improvements in the quality of their lives and bright prospects for the future. However, uncertainty remains because of the greater responsibility people are required to take for their own retirement," Rother said. "The decline in traditional pensions, reductions in retiree health benefits, weakness in personal income and job growth, uncertainty in the stock market, and threats to the Social Security system posed by proposals to partially privatize the system, all pose challenges to the 50+ population." AARP is a nonprofit, nonpartisan membership organization that helps people 50 + have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. The organization produces AARP The Magazine, published bimonthly; AARP Bulletin, a monthly newspaper; AARP Segunda Juventud, a bimonthly magazine in Spanish and English; NRTA Live & Learn, a quarterly newsletter for 50+ educators, and a website, www.aarp.org. AARP Foundation is AARP’s affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Random
Drug Testing of State Employees in Corrections Upheld Michigan state employees who regularly have contact with prisoners became subject to a random drug testing policy in 1999. Employees subject to testing included those who carry firearms, healthcare workers in prisons, corrections officers, probationers, parolees and any employee with access to controlled substances. The International Union, United Auto, Aerospace and Agriculture Implement Workers of America sued, arguing that the drug testing of employees who are not authorized to carry weapons is a violation of the Fourth Amendment prohibition on unreasonable searches and seizures. The Sixth Circuit disagreed, finding instead that the random testing of employees who have frequent contact with prisoners or access to controlled substances are in a unique position of responsibility and that if their drug or alcohol problems could disrupt the state’s ability to protect the public. In addition, these employees work in a highly regulated field with a diminished expectation of privacy. Source: BNA, Inc. Daily Labor Report, May 3, 2005. HR
Outsourcing Continues at Record Pace Ninety-four percent of survey participants said they outsource at least one HR function or activity, usually outplacement services, employee assistance programs, or retirement plan administration, and by 2008 many of the surveyed companies plan to outsource leave management, learning and development, payroll, recruiting, health and welfare and global mobility—in that order. The top reasons for outsourcing include access to expertise, quality, and the ability to focus on core business. "The growth of HR outsourcing will continue to gain momentum as organizations reap the benefits, including significant cost savings, new capabilities and services for employees, and enabling HR to focus on more strategic work that is integral to the business," said Bryan Doyle, president of Hewitt’s HR outsourcing group. Only 23 percent of companies have brought an outsourced function back in-house. Most did so because of poor service or because they did not achieve anticipated cost savings. More information is available online at: http://www.hewitt.com. Hewitt Associates (NYSE: HEW), with more than 60 years of experience, is the world’s foremost provider of human resources outsourcing and consulting services. The firm consults with more than 2,300 companies and administers human resources, health care, payroll and retirement programs on behalf of more than 300 companies to millions of employees and retirees worldwide. Located in 35 countries, Hewitt employs approximately 19,000 associates. For more information, please visit www.hewitt.com. College
Hiring Up 13 Percent for Class of 2005 Employers responding to NACE’s Job Outlook 2005 Spring Update survey, a national forecast of the hiring intentions of employers that also examines other issues related to the employment of new college graduates, confirmed hiring projections they gave earlier in the 2004-05 academic year. "We’ve polled employers about their hiring projections throughout the academic year, and they have consistently reported plans to increase their college hires by about 13 percent," said Camille Luckenbaugh, NACE research director. Overall, 61.4 percent of respondents expect to hire more new college graduates in 2004-05 than they hired in 2003-04. This is also a positive sign, according to Luckenbaugh. "In comparison, in 2003-04, just a little more than half of employers expected to increase their college hiring," she said. Given the positive hiring projections, it’s not surprising that 75.2 percent of employers reported that competition for hiring new college graduates has increased over the last year. "We’ve seen evidence of increased competition in terms of starting salary offers," Luckenbaugh said. "About half of employers told us that they had raised or would be raising their starting salaries, and we’ve seen average starting salary offers rise this year in a number of disciplines." In addition, although NACE did not survey on the subject this year, Luckenbaugh said historically about 45 percent of the class will have jobs at the time they graduate. "We’ve seen this figure in 1993, 1997, and 2004," she said. "Our studies also show that within six or seven months following graduation, about three-quarters of new grads will have gotten jobs and about 20 percent will have opted for graduate school or additional education. What our Job Outlook Spring Update study shows us is that there will be more opportunities out there for new grads to choose from this year." According to NACE, there are signs that competition will carry over to next year’s class of college graduates. "It’s early, but signs are positive for the next class of college graduates," Luckenbaugh said. "For example, almost 36 percent of employers said they are already planning to hire more new grads for full-time entry-level positions in the fall of 2005 than they did in the fall of 2004." NACE will poll employers about hiring for the college Class of 2006 in late summer and will report results in early September. The National Association of Colleges and Employers (NACE) has been the leading source of information about the job market for new college graduates since 1956. For more information about NACE, go to www.naceweb.org. Many
Companies Revamp Executive Compensation, Says Hewitt Hewitt’s survey of more than 115 large U.S. companies reveals that nearly three-fourths (71 percent) are revising or plan to revise their long-term incentive program design in anticipation of mandatory stock option expensing.* Many organizations are shifting a portion of their long-term incentive mix from stock options to restricted stock (43 percent) and performance-based shares/units (33 percent). What’s more, 35 percent of companies are limiting the number of employees eligible for long-term incentive plans. Hewitt’s study also shows that many companies (42 percent) aren’t fully replacing stock option grant values as they move to other forms of equity incentives. In fact, approximately 40 percent of companies are using a three-to-one value ratio when converting to restricted stock, and a four-to-one ratio when converting to performance-based shares. Only a minority of companies are fully replacing stock option values in shifting to other forms of incentive compensation. Executive
Base Pay and Bonuses As for executive bonuses, more companies (68 percent) are awarding at or above target this year (for 2004 performance), compared with last year (46 percent). Specifically, 47 percent of organizations are paying between 100 percent and 149 percent, and 21 percent of companies are paying 150 percent or more of targeted bonus. Hewitt’s "Hot Topics in Executive Compensation" study is based on 117 companies with a median market cap of more than $11 billion. More than half of these companies are members of the FORTUNE 500®. About
Hewitt Associates EPF
Employment Snapshot: April 2005 Payroll employment growth picked up pace in April. Payrolls grew quickly in April, adding 274,000 jobs. Revisions to previous months also show that the hiring pace has picked up. February’s gain, previously reported at 243,000, was revised upward to 300,000 in April. March’s gain was initially reported last month at 110,000, but was revised upward to 146,000. The last three months now show the strongest three-month gain in payrolls since May 2004. Household employment also shows strong growth. Excluding months with adjustments due to Census population controls, April was the second largest monthly gain in household employment since January 1990. Total employment, as measured by a survey of individuals, surged by 598,000 in April, building on strong growth of 357,000 in March. Surge in labor force participation keeps unemployment rate level. The unemployment rate remained at 5.2 percent in April. The rate marks the first time since September 2001 that two consecutive months have reported a rate below 5.3 percent. The nation’s labor force participation rate moved up 0.2 percentage points to 66.0—the first time it has reached that level in 2005—as the labor force swelled by 605,000 persons. The employment to population ratio, which measures the percentage of the population that is employed, also increased 0.2 percentage points to 62.6 percent—the highest level since October 2002. Median duration of unemployment fell in April. The median duration of unemployment accelerated the steady decline that began in December 2004—falling nearly half a week. In April, half of all unemployed persons were unemployed for fewer than 8.9 weeks, while half were unemployed for a longer period. April’s duration ties with two previous months for the shortest median duration since March 2002. Fewer workers are working part time for economic reasons. The number of workers working part-time due to slack work or could not find full-time work declined by 6.4 percent compared to a year ago. At the same time, the number of workers working part-time for non-economic reasons, which could include childcare and caring for aging parents, increased 2.3 percent over the past year. Payrolls grew in most industries in April. Payroll growth was widespread in April, with only manufacturing showing a slight decline. The construction industry added 47,000 jobs in April, building on an increase of 29,000 in March. Leisure and hospitality also showed the strongest growth, increasing 58,000 in the month. The professional and business services sector added 36,000 payroll jobs in the month, while education and health services added 35,000. Average hourly earnings rose in April. Average hourly earnings increased by $0.05 in April, building on a March gain of $0.04. Average weekly earnings increased by $4.88, as average weekly hours rose by 0.2. Overall, average weekly earnings stood at $542.40 in April. Education is a strong predictor of labor market outcome. Unemployment rates in April showed little change when broken out by educational attainment, except for those with less than a high school diploma. The unemployment rate for those with at least a four-year degree was nearly unchanged at 2.5 percent in April, while the rate for those without a high school diploma rose by 0.6 percentage points to 8.4 percent. Unemployment rates for those with only a high school diploma and those with some college or an associate degree were 4.4 percent and 3.9 percent, respectively. The Employment Policy Foundation (EPF) is a nonprofit, nonpartisan public policy research and educational foundation based in Washington, D.C. that focuses on workplace trends and policies. Its mission is to shape the direction and development of U.S. employment policies by providing policymakers, the media and the public with timely, high quality economic analysis and commentary. Federal and state executive branch officials and legislators, corporations, think tanks, universities, media and the public use EPF as a primary source of unbiased, reliable data, research and knowledge on employment and labor issues. EPF believes that achieving sound employment policy requires objective research, strategic analysis and prudent forecasting. To that end, EPF has created a body of research and competitive knowledge on human resources and employment issues. The press release, "EPF Employment Snapshot: April 2005" is available online in its entirety at http://www.epf.org/pubs/snapshots/empsnap.asp. EBRI
Study Shows How Benefit Levels in Social Security Could be Affected Among other things, the study found that workers with low incomes could expect higher annual Social Security benefits under a system of individual accounts (structured to follow a 2001 presidential commission model) than through three other policy options that also were studied. But the study warns that individual account benefit levels would vary widely, even among people of the same age. The full report, "Comparing Social Security Reform Options," is published in the May 2005 EBRI Issue Brief and is available online at www.ebri.org. Established in 1978, EBRI is a nonprofit organization committed exclusively to data dissemination, policy research, and education on economic security and employee benefits. The Institute’s mission is to advance the publics’, the media’s, and policymakers’ knowledge and understanding of employee benefits and their importance to the nation’s economy. U.S.
Chamber of Commerce Commends New Health Savings Account Incentives Proposals
Will Expand Participation Recent market studies show 37 percent of new individual HSA owners were formerly uninsured. The legislation introduced by Senators Rick Santorum (R-PA) and Jim DeMint (R-SC) and Representatives Sam Johnson (R-TX), Eric Cantor (R-VA), Paul Ryan (R-WI) and J.D. Hayworth (R-AZ) provides an above-the-line tax deduction for individuals as well as a tax rebate for small business owners who contribute to employees’ health savings accounts. In addition, the bills provide a refundable, advanceable tax credit for low-income individuals who purchase health coverage of any type, and the ability to use any remaining tax credit funds for a health savings account if they purchase high-deductible health coverage. The U.S. Chamber of Commerce is the world’s largest business federation representing more than three million businesses and organizations of every size, sector and region. More information about it can be found online at www.uschamber.com. Job
Growth Counters ‘Soft Patch’ Worries, But Reflects China Currency Manipulation
- NAM Economist Says Manufacturing’s High Productivity is Limiting Sector
Job Creation "Other recently released data have raised worries about an economic ‘soft-patch’ induced by high energy prices," Huether continued. "But today’s job numbers should help ease some of those worries. "Our economy has now created 2.2 million new jobs in the past 12 months, and 3.5 million since June 2003," he said. "The frustrating news is that manufacturing, with its economy-leading productivity growth, actually lost 6,000 jobs. "Manufacturing sectors shedding jobs are those still facing stiff import competition, particularly from Asia where currency manipulations keep many countries’ currencies low against the dollar. This is why the NAM considers it critical for the Administration to continue pressing various trading partners to remove their currency controls," Huether noted. "On a brighter note, high productivity throughout the non-farm economy is keeping inflation in check, and that bodes well for the long run. But policymakers can’t be complacent and stay on the sidelines," warned Huether. "Our manufacturing sector is being buffeted by extremely high energy costs as Congress continues to dither with partisan politics instead of passing a desperately needed energy bill. Investment and growth could also be bolstered by passage of asbestos and highway bills, and formulation of a 21st century telecommunications policy, too, to name just a few," he concluded. The National Association of Manufacturers is the nation’s largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. Headquartered in Washington, D.C., the NAM has 10 additional offices across the country. Visit the NAM’s award-winning web site at www.nam.org for more information about manufacturing and the economy. EEOC
Plans to Reorganize, to Deliver Better Service "Given the shifting demographics, changing business environment, explosive technological advancements, and budgetary considerations of our times, this plan will recast the Commission in a stronger and more viable position to carry out its mission," Dominguez said. "The proposal continues to advance the President’s expectations—of every executive-branch agency—to run a well managed, highly efficient, customer-centered, and results-driven organization." The Commission has been engaged in a comprehensive review of its organizational structure and operations for the past three years. This proposal is the second of three repositioning efforts. The first involved establishing a National Contact Center, on a pilot basis, as the agency strives to better serve members of the public. The third phase will involve a more streamlined Washington headquarters, with well-defined lines of responsibilities and clarification of roles. The proposal announced will:
The Equal Employment Opportunity Commission enforces the nation’s laws in the private and federal sectors prohibiting employment discrimination based on race, color, gender, religion, national origin, age and disability. These statutes include Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, sections of the Rehabilitation Act of 1973, the Equal Pay Act of 1963, Title I of the Americans with Disabilities Act of 1990, and sections of the Civil Rights Act of 1991. Further information about the Commission is available online at www.eeoc.gov. Recruitment,
Relocation, and Retention Incentives For further information, contact Jeanne Jacobson by phone at (202) 606-2858, by fax at (202) 606-0824, or by e-mail at pay-performance-policy@opm.gov. House
to Consider Workforce Investment Act Bill Senator Ted Kennedy, D-Mass., ranking member of the HELP Committee, co-sponsored the bill. Combined with the "Perkins Career and Technical Education Act," which the Senate passed in March, and the "Higher Education Act," which Enzi said the HELP Committee will consider in the next few months, S. 1021 will provide important resources that are needed to adequately prepare our workforce with the skills that are necessary for jobs and careers in high wage and high skilled occupations. The Workforce Investment Act Amendments of 2005 includes provisions to:
Women
in the Labor Force: A Databook, Published by the Bureau of Labor Statistics Women in the Labor Force: A Databook published by the Bureau of Labor Statistics, U.S. Department of Labor, presents data about women workers from the Current Population Survey, a monthly survey of about 60,000 households. This publication includes information on women’s labor force status by various characteristics, including age, race, marital status, presence of children, educational attainment, occupation, and industry. Data on women’s earnings by race, educational attainment, occupation, and industry also are presented. Some highlights follow:
Women in the Labor Force: A Databook is available on the Internet at www.bls.gov/cps/wlfdatabook2005.htm. Union
Members More Likely to Have Employment-Based Health Insurance The study, "Union Status and Employment-Based Health Benefits," published in the May EBRI Notes and available at the Institute’s Web site, www.ebri.org, reported that 86 percent of union members were covered by health benefits through their job, compared with 60 percent of nonunion workers, as of September 2003 (the most recent data available). Union workers in several private-sector fields had very high levels of health insurance coverage, as did union workers in public-sector jobs, the study said. Some 17.2 million workers were union members, accounting for 15 percent of all wage and salary workers ages 18-64, as of September 2003, the study said. Union workers were typically concentrated in jobs with high levels of employment-based health coverage. Union members accounted for 36 percent of public-sector workers, but 86 percent of union members had health benefits from their public-sector employers, compared with 68 percent for nonunion workers. Union membership also had a major impact on the probability of workers in small firms having health care benefits, the study said. Eighty-two percent of union members in firms with fewer than 25 employees had employment-based health benefits, compared with 36 percent of nonunion workers in firms of the same size. Overall, only 2.5 percent of union workers were uninsured in September 2003, compared with 15 percent of nonunion workers, the study said. EBRI previously reported that 44.7 million U. S. residents, or 17.7 percent of the non-elderly population (under age 65), were uninsured in 2003. In 2004, 12.5 percent of wage and salary workers were union members. The union membership rate in the United States has declined steadily for the past two decades, according to the Department of Labor’s Bureau of Labor Statistics. Established in 1978, EBRI is an independent, nonprofit organization committed exclusively to data dissemination, policy research, and education on economic security and employee benefits. The Institute’s mission is to advance the public’s, the media’s and policymakers’ knowledge and understanding of employee benefits and their importance the nation’s economy. Washington
Post Article Addresses New Laws Expanding Health Care in Md. The bills were only some of what was included in six measures signed by Ehrlich May 10. Aratani wrote, in part, that the bills, "will make it easier for small businesses and for individuals to get coverage by allowing them to tap into the state-run Maryland Health Insurance Plan and that will try to keep children from being returned to unsafe homes." To read the full text of the article, go to www.washingtonpost.com. Associated
Press Article Discusses Strategies When Pension Plan Is Changed Nowadays, companies stop offering defined benefits plans, which promised workers a set amount of money each month in retirement. Companies are replacing such plans with a 401(k) account, which requires employee contributions. Often, companies will match all or part of employees’ contributions. According to William J. Arnone, a partner in the human capital practice of Ernst & Young LLP, some companies offer 40-year-old and older workers a choice of staying in the old plan or shifting to the new one. Employees should weigh these issues:
Another alternative is that a company can modify its defined benefit plan, perhaps moving to a "hybrid" design such as a cash balance plan. Lynn Dudley, an attorney with the American Benefits Council trade group in Washington, D.C., said workers should contact their company’s human resources department with questions:
For more information, go to www.nytimes.com. Employers
Say Research is Key to Successful Job Search Employers participating in NACE’s Job Outlook 2005 survey cited research as a key ingredient to a successful job search. NACE’s Job Outlook survey is a national forecast of the hiring intentions of employers and examines other issues related to the employment of new college graduates. "Researching the company before the interview is perhaps the single most important step for a new graduate to take to stand out from others," said Marilyn Mackes, NACE executive director. "Despite the fact that information about organizations is easy to come by—through the Internet, in campus information sessions, and through company literature provided to the campus career center, for example—employers tell us that too many job candidates neglect to do their homework." Job candidates who take the time to research in advance of the interview are better prepared, according to Mackes. "In the interview, employers expect candidates to demonstrate interest in the organization and to show that they’ve taken some initiative; researching the company is a big piece of that," she said. "In addition, employers expect candidates to ask relevant and creative questions, not questions that could be readily answered by reviewing the company Web site. A question such as ‘what product does your organization produce?’ is a dead giveaway that the candidate hasn’t bothered to learn about the organization." NACE projects the job market for new college graduates to be better this year than it has been since the early 2000s, with employers indicating they’ll hire 13 percent more new college graduates from the class of 2004-05 than they hired in 2003-04. Regardless of the better market, Mackes said, "Finding a job is work, and new graduates need to devote time and attention to their job searches." The Job Outlook 2005 report is available from NACE. To order, contact NACE at 800/544-5272 or order online at https://store.naceweb.org/recbooks/default.aspx. Since 1956, the National Association of Colleges and Employers (NACE) has been the leading source of information about the college job market. For more information, visit them on the Web at www.naceweb.org. Avoiding
the Baby-Boom Bust: Survey Finds Majority of Businesses Concerned About
Losing Employees to Retirement Robert Half International Inc., the world’s first and largest staffing service, specializing in accounting, finance and information technology, developed the survey. It was conducted by an independent research firm and includes responses from 150 executives with the nation’s 1,000 largest companies. Executives were asked, "How concerned is your company about losing key workers to retirement in the next five to 10 years?" Fifteen percent were very concerned, and 40 percent were somewhat concerned, while 45 percent were not very or not at all concerned. Respondents were also asked, "What steps, if any, is your firm taking to compensate for the loss of baby-boom-age workers to retirement?" Of the 78 percent of executives who said their organizations are taking steps in this area, their responses included implementing/enhancing succession-planning programs (59 percent), providing employees training/professional development (53 percent), increasing employee recruiting and retention efforts (45 percent), implementing or enhancing mentoring programs (35 percent), inviting retirees/future retirees to be consultants/trainers (25 percent) and increasing compensation and bonuses (15 percent). (Multiple answers were permitted.) "Coming demographic shifts point to changes in the makeup of the U.S. workforce: As members of the baby-boom generation retire, shortages of skilled workers will likely start emerging," said Max Messmer, chairman and CEO of Robert Half International Inc. and author of Human Resources Kit for Dummies® (John Wiley & Sons, Inc.). "Tenured employees take with them valuable experience, industry contacts and knowledge of best practices that are difficult to replace." Messmer pointed out that managers should take steps now to groom their companies’ future leaders by instituting succession plans and providing professional development opportunities to high-potential employees. He added that organizations should also look for ways to keep those nearing retirement involved through consulting, mentoring or training roles. Robert Half International Inc. has more than 330 locations throughout North America, Europe, Australia and New Zealand, and offers online job search services at www.rhi.com. Cuyahoga
Community College Health and Wellness Program Pays Big Dividends "The assumption was that the fostering of a healthier employee population would translate into financial benefits that range from a less costly health benefit program and reduced absenteeism to an improved quality of life," explained Frank Reis, executive vice president, administration. "As an outcome-driven organization, it was critical that we established systems from the start that would enable us to document changes in employee health status as well as the financial benefits generated by those changes. Interestingly, when we embarked on this journey four years ago, data supporting that hypothesis was just beginning to surface," Reis continued. The
Creation of Bottom-Line Value In 2004, the HMRC team conducted an in-depth study of the effectiveness of Tri-C’s wellness program and its impact on participant health risk profiles. The study found that the program positively impacted the health risk profiles of employees on both ends of the spectrum: the low-risk health status (zero-two risks) of employees increased by 17.8 percent, while the high risk status (five + risks) of employees decreased by nine percent. More of an impact was the fact that 80 percent of low risk participants maintained their low risk health status accomplishing a major goal of the program—to keep the healthy people healthy. In addition, over a three-year period, the annual increase of health care costs for program participants increased by 5.9 percent annually, while non-participant health care costs increased by nine percent annually, demonstrating the effectiveness the program has had on managing health care costs. HMRC identified the value of each health risk as well as the financial benefits generated by positive shifts in employee health risk status. The center established the base medical cost for an employee of low risk status at $1,417. The study found that $3,004 could be saved for each high health risk employee that shifted to low health risk status (the cost attributed to the excess risk). The potential savings generated with each employee shift from medium to low-risk totaled $1,164. Cumulative savings generated as a direct result of positive shifts in health risk status and low risk maintenance totaled $324,934 for the first 3 years of the program. Without the wellness program, the College would have taken on these excess costs in the form of medical claims. The College is just now realizing the effect the program has played on employee productivity and absenteeism. According to HMRC, excess health risks accounted for 9.7 percent of the College’s absenteeism costs—considered to be an excellent achievement. What’s more, workers’ compensation data showed that for the five years ending in 2004, Tri-C achieved a significant reduction in lost time and medical-only claims, cutting total claims by over 44 percent over the previous five-year period. The College realizes that the cost of keeping employees healthy is much less than the greater cost of having unhealthy employees. HMRC determined the total cost of having unhealthy employees to the College is $968,317 (includes medical, pharmaceutical, sick absence and workers’ compensation). This is the amount that can be saved or moderated annually by controlling excess health risks. Herein lies the true opportunity for cost savings and the financial justification to continue offering a wellness program that will control health risk factors and play a roll in quality of life. The
Health and Wellness Program at Tri-C Student
Success Extends to Wellness "Healthy students enjoy a competitive advantage in the job market," Reis noted. "Potential employers recognize the increased productivity and reduced health care costs that a healthy job candidate offers." For more information about Tri-C’s health and wellness program and the Institute of Workplace Wellness, contact District Director, Health and Wellness Debra Dailey at (216) 987-5682 or e-mail at Debra.Dailey@Tri-C.edu. For more information about Cuyahoga Community College, visit www.Tri-C.edu. OPM
Acting Director Blair Releases 2004 Federal Human Capital Survey Data:
Commitment to Public Service Remains Strong but System Lacks Link between
Performance and Pay Nearly 150,000 employees responded to the 88-question survey that asked for employees’ views on leadership quality, performance culture, and talent capacity within the federal workforce. There was a 54 percent response rate to the survey. This is the second Federal Human Capital Survey OPM has conducted on the workforce. Along with the data from the 2002 survey, this is a tool OPM can use to monitor human capital management results, focus on key human capital management systems, and develop common metrics. The information will be provided to individual agencies and support agency-specific analysis and application of results. The survey demonstrates that Federal employees continue to be committed to working for America.
The Federal Human Capital Survey can be found at the OPM web site at www.fhcs2004.opm.gov/ OPM oversees the federal work force and provides the American public with up-to-date employment information. OPM also supports U.S. agencies with personnel services and policy leadership including staffing tools, guidance on labor-management relations and programs to improve work force performance. Partnership
for Public Service Releases Report Based on Survey of the "Class
of 9/11": Survey Finds Patriotism Not Enough to Inspire New College
Graduates to Public Service The survey, commissioned by the Partnership for Public Service and administered to 805 graduating college seniors from May 2-5, 2005, finds that 83 percent of the members of the Class of 2005 describe themselves as patriotic and nearly half—43 percent—of them say that the events of 9/11 made them more so. However, while 84 percent of those made more patriotic were instilled with a greater love of country and 50 percent were inspired to display the flag, only 20 percent of students said 9/11 made them more interested in government service. The findings come at a challenging time for the federal government. Just over half of the 1.9 million people in the federal government will be eligible to retire in the next five years, including about 70 percent of employees in supervisory positions. At the same time, the government is struggling to attract and retain skilled employees in a wide variety of fields—from intelligence to law enforcement to healthcare. When asked which event had a bigger impact on their view of the United States, the students were split evenly between the attacks of 9/11 and the war in Iraq. However, while 69 percent of those citing the attacks of 9/11 said it gave them a more positive view of the US, 85 percent of those citing the war in Iraq said it gave them a more negative view. And, while the vast majority—69 percent—of the Class still expects a major terrorist attack in the next five years, as they prepare to leave school, a fear of being unemployed or going into debt far exceeds their fear of another terrorist attack. Perhaps because of the split over Iraq and these other concerns, a strong majority—60 percent—reject the idea that they should have been asked to do more to help fight the war on terror. In addition to the survey of 805 college seniors, the Partnership's research included 101 in-depth, one-on-one, chat sessions with selected survey participants The Partnership for Public Service is a nonpartisan, nonprofit organization dedicated to inspiring Americans to government service and transforming the way government works. For more information or to view The Class of 9/11: Bringing a New Generation of Practical Patriots into Public Service, go to www.ourpublicservice.org. New
Survey Results Focus on Vacation Benefits and Paid Time Off Banks This survey collected information from 432 corporate and public employers in the United States and Canada. Fifty-three-sample vacation and paid time off (PTO) bank policies were collected. The 53 samples included 34 vacation policies and 19 PTO bank policies.
The International Foundation’s Survey & Sample Series was created to provide survey data and samples on a variety of employee benefits topics to benefits professionals. This information allows them to benchmark their plans against others, to determine trends and costs and to better manage their plans. Also available in the series are Employee Benefit Attitude Surveys, Employee Benefit Consultants: Selection and RFPs, Multiemployer Plan Administration: Staffing and Job Descriptions, Annual Benefit Statements, Corporate Benefit Departments: Staffing and Job Descriptions and Severance Policies. For more information about the books in the series, see www.ifebp.org/bookstore/pbsurvey.asp. The International Foundation of Employee Benefits Plans is a nonprofit educational association serving the employee benefits and compensation industry. Total membership includes more than 35,000 individuals representing more than 8.600 trust funds, corporations, public employee groups and professional advisory firms in the United States and Canada. Legislative
Update Mandatory
Paid Sick Leave "Paid sick leave will provide needed support for 65.8 million working men and women whose jobs are threatened when they have to miss work because of illness in their family," said Heidi Hartmann, President of the Institute for Women’s Policy Research. On the other hand, small employers may be faced with difficult financial situations that limit their ability to pay for sick leave. The impact on the public sector is likely to be small: A 2001 Benchmarking survey by IPMA-HR revealed that only five percent of public employers do not offer sick leave and many of those offer other types of leave in lieu of the traditional sick leave policy. Pension
Preservation & Savings Expansion Act HR 1961 would make permanent provisions in the 2001 legislation that are due to expire in 2010, such as the portability rules, catch-up contribution provisions, and the increase to the contribution limits in various deferred compensation plans. For public employers, the bill would facilitate new pension designs for public safety workers and improve the purchase of service credit rules that allow employees to buy into a complete pension benefit in the jurisdiction where they finish their careers. Speaking on the bill’s introduction, Cardin said, "I want to continue the progress we've made since the 2001 pension reform bill. This new bill provides Americans with even greater savings opportunities. It’s a win-win for everyone." Windfall
Elimination Provision Upon the bill’s introduction, Hutchison said, "Teachers, first responders and public service workers in Texas carefully plan for their late years. They deserve to receive benefits that are calculated accurately." Public employees who earn a public pension (in a position not covered by Social Security) will have their Social Security benefits reduced by a law called the Windfall Elimination Provision (WEP). The WEP is now calculated using an arbitrary formula that has the greatest negative impact on low wage earners. The Public Servant Retirement Protection Act replaces the WEP with a new formula based on actual earnings, not an arbitrary formula. Equal
Pay Measures Introduced The Fair Pay Act (H.R. 1697, S. 840) was introduced by Senator Tom Harkin (D-IA) and Delegate Eleanor Holmes Norton (D-DC) and would go beyond the Equal Pay Act by requiring equal pay for jobs that are of comparable skill, effort, responsibility and working conditions. Certain professions such as teaching and nursing continue to be dominated by women and are "traditionally undervalued," Harkin said. While eradicating pay discrimination is a worthy goal, the bills pose problems for employers. Particularly the Fair Pay Act has the potential to subject employers to lawsuits because of the ambiguity involved in determining which jobs are comparable in skill, effort and responsibility.
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