HRviews

Always happy to share a debrief of the latest HR issues presented by the Corporate Leadership Council:

1. U.S. Labor Market Improves Slightly, but Insufficient to Combat Unemployment
Despite an improvement in economic conditions, the U.S. labor market improved only slightly during 2010. U.S. retailers indicated that holiday sales were higher in 2010 compared with 2009, and the manufacturing sector grew throughout the country. That said, Fed Chairman Ben Bernanke indicates that this pace of job growth is not enough to steadily reduce the unemployment rate. According to the December non-farm payroll report, only 103,000 new payroll jobs were created in December 2010, well below market expectations of about 175,000 new jobs.

2. Retirement Benefits Increasingly Attract and Retain Employees
Economic uncertainty has increased the impact of retirement benefits on employee attraction and retention. Employees are attracted more toward employers with defined-benefit (DB) plans than those without such plans. In 2010, approximately 60% of new employees (less than two years of service) at organizations offering pension plans cited the retirement program as an important reason for choosing to work for the organization, compared to 27% in 2009. In addition, DB plans are also increasing retention rates, with 72% of employees citing them as an important reason for staying with their employer, up from 51% in 2009. Consequently, HR leaders should consider highlighting their DB plans as a way to attract and retain top talent.

3. Recruiters Reduce Use of Online Job Boards
As hiring gradually increases, recruiters are scaling back their use of online job boards due to the overwhelming number of unqualified leads they typically generate. Specifically, about 24% of companies plan to decrease their usage of third-party employment Web sites and job boards this year, while nearly 80% of survey respondents indicate plans to increase their use of job-board alternatives such as employee referrals and other Web sites like Facebook Inc. or LinkedIn.

4. Organizations Prohibit Employees from Using Mobile Phones While Driving to Minimize Liability
Allowing employees to use mobile phones while driving may incur significant corporate liability since drivers are four times as likely to have an accident while talking on a phone. Crash scenarios in which employers are often liable include employees who were driving while talking on the phone during work hours, driving to or from work appointments, driving in business vehicles, and driving while having business conversations. In 2011, top employers are taking steps to protect their employees; approximately 20% of Fortune 500 organizations have implemented a total ban on cell phones while driving.

5. Employers Fail to Support Volunteer Work Despite Skill Development Benefits
While 96% of organizations recognize that certain workplace skills such as self-confidence, understanding of social issues, and team collaboration can be gained through volunteer opportunities, a majority of employers do not offer sufficient support to employees who wish to volunteer. Six in ten managers admit that their organization did not provide an adequate level of HR assistance to employees who wished to spend time volunteering in 2010, although 58% of workers indicate that they would take advantage of such an opportunity if their employer supported them. Approximately 38% of managers indicate that lack of metrics to measure the benefits of volunteering was a barrier to encouraging employees to participate, while 31% believe that a lack of knowledge and capability to implement such programs within their organization limited volunteering opportunities.

6. Employees and Employers Fear the Effects of Health Care Reform
A recent survey reveals that employees fear the increased costs of health care coverage (50%), cancellation of benefits (13%), and new government taxes on medical benefits (13%). While 88% of employers increased their employee communications to address health care reform, many organizations are still worried about the effectiveness of these communications. Approximately 25% of employers are primarily concerned about the lack of federal guidance regarding the requirements, as well as future modifications in guidance that may change what has already been communicated to employees.

7. U.S. Organizations Consider Shareholders’ Interests to Gain Approval on Executive Compensation
Under the “Say on Pay” regulation, U.S. shareholders will regularly vote to approve executive compensation packages for their organizations. Investors are most likely to approve compensation plans that align executive pay with shareholder returns over time. To align the executives’ interest with that of shareholders’, experts suggest that the compensation structure should contain sufficient equity in the form of stock and options. Executive stock awards should have long vesting periods, and pay plans should reward executives for outperforming peer groups at other companies.

8. U.S. Wellbeing Hits 20-Month Low
The overall Gallup-Healthways Well-Being Index (WBI) fell to 66 (out of a possible 100) in December 2010 from 66.5 in November, the lowest measured score since April 2009. This decline was driven by the weakening of U.S. employees’ standards of life, emotional health, physical health, and lifestyle habits, as well as their access to food, shelter, healthcare, and a safe and satisfying place to live.

9. UK Organizations Reluctant to Hire Working Mothers
The number of UK organizations planning to hire working mothers has plummeted over the past year. Only 26% of UK organizations plan to hire working mothers in 2011 compared to 38% in 2010. These low figures are primarily because employers believe that working mothers may show less commitment and flexibility than other employees. Organizations also believe that they may leave shortly after training to have another child, or may have out-of-date skills.

10. UK Government Confirms Abolition of Default Retirement Age
The UK government has confirmed that the Default Retirement Age (DRA) will be phased out from April 2011, despite calls from business groups to delay the process. Currently, employers can use the DRA to compulsorily retire workers when they reach the age of 65, but from April 6, 2011 organizations will be unable to issue new notifications of retirement, and the DRA will be completely abolished on October 1. While this regulation has been passed to retain older workers with valuable knowledge, skill, and experience within the workforce, organizations are still unclear about the necessary policy and procedural changes they are required to make.