Lost Talent: Job Candidates Reject Job Offers

Friday, June, 29 2012

The leading sentence from a recent CareerBuilder survey read “Despite high unemployment rates, more than half (56 percent) of employers who recruited new employees in the last year reported that a candidate rejected their job offer.” While there are a number of reasons why any given candidate would reject an offer, it does beg the question as to how the hiring organization got to the point of making an offer without an understanding if the candidate would accept or reject the offer. The organization must have felt confident that the candidate processed the necessary skills if they were ready to extend an offer. The survey went on to dispel a number of myths including that the outcomes of candidate recruitment has no impact outside of the recruitment process. Consider that a candidate is in fact a “consumer”, and as a consumer their “experience” will be shared with other similar consumers, both good and bad. Their experience will influence whether or not others, with similar skills will seek employment with an employer. Yes, we are still in the middle of high unemployment, and job candidates should be lining up at your front door willing to take any job, at any salary, and under any conditions with no questions asked. However, apparently a number of candidates did not get that message.

We have seen these headlines for several years now. “A Sea of Job-Seekers, but Some Companies Aren’t Getting Any Bites”, “HR Staffs, Recruiters Overlook Qualified Job Seekers”, and “Jobs for skilled workers are going unfilled”. The story is the same for hundreds of employers who simply cannot find qualified job candidates with the necessary skills. And while it is true that many candidates are willing be to be trained, most employers are not set up to train a person who lacks the basic skills required.

It is easy to look to our school systems as not providing the basic skills required in today’s work place. However, many individuals recognize that they are missing, math, computer, communications, and other skills and take action to correct those deficiencies through self-development on their own. It is easy for most job candidates to expect employers to provide training and skills development. However, the truth is that for most jobs employers expect and require candidates to arrive on the job with basic and job skills in place. Even though most businesses have been using at least word processor and spreadsheet software since the late 1980’s, employers are still seeing candidates who cannot setup basic business letters or simple spreadsheets.

The real issue is that many candidates who go from application to application and who have the skills required are being overlooked or are turning down job offers. Candidates who have had bad experiences during the application process reach a negative conclusion about the employer long before an offer is extended. Organizations that look at candidates as a commodity with the expectation that they can treat candidates as such may find themselves with fewer applicants and lost opportunities to acquire the talent needed.

Background Checks: Potential Risk

Friday, June, 22 2012

Background checks are commonplace for most organizations as a means of verifying employment, education, licensing, credentialing, credit, and criminal histories. In an era when COE’s (Scott Thompson), coaches (George O'Leary), and even medical doctors (Dr. Paul Shrode) misrepresent themselves on resumes and other official documents; background checks are a powerful tool to validate qualifications.

As an organization, hiring or even promoting someone based on falsified qualifications could lead to a nightmare of public relations, unnecessary and excessive expenses, and potential legal actions. On the surface it seems like a straightforward process, you search the court records, educational institutions; licensing and credentialing boards, run a credit report, and check out the various social media sites. So, does your organization’s application process provide the appropriate disclosures and permissions granting your organization authority to take these actions? If you find a questionable item, what is the organizational process to authenticate your initial findings? When do you run background checks, before an offer, upon a conditional offer, after hire? How do you address a situation with a background reference that develops well after an employee has been hired? Have you vetted your process and action steps with your internal or external counsel? Do you periodically review and update the organization’s background verification process? Has your processes been validated in every state and city in which your do business? Have you vetted your process and action steps with your internal or external counsel? Even if you outsource the process, your organization could be at risk for any disparate actions.

Consider, in a number of states it is currently considered legal to reject an applicant who users tobacco products. How do you authenticate the applicant’s tobacco use status? Do you use a written attestment from the applicant or do you perform a chemical analysis? What do you do if you somehow discover that 1 year after hire the applicant is found to be smoking? Do you offer a smoke cessation program, refer them to your EAP, and take disciplinary actions?

TechMediaNetwork operates a website which reviews various services including background checking services under the banner, TopTenREVIEWS. As with any vendor, you should thoroughly vet anyone providing services to your organization. Remember, even if you outsource background checking services, your organization may still have exposure if the background checks are found to be invalid or in error. There are a lot of John Smiths out there!

Free Preventive Health Care Is Not Free

Friday, June, 15 2012

While everyone wants something for nothing, that something is never free. In order to encourage the use of preventative health screenings such as annual well-health physicals, check-ups, and exams many organizations provided such coverage with no or reduced out-of-pocket co-pays, co-insurance, and/or waived the deductibles. As applied to preventive screening, most health care professionals would argue that when appropriate, both children and adults should be screened for those illnesses for which they are at risk. This includes vaccinations as well as screenings.

Under the Patient Protection and Affordable Care Act (PPACA), preventative screenings listed as class “A” or “B” by the U.S. Preventive Services Task Force (USPSTF), an agency of the U.S. Department of Health & Human Services, are to be provided at no out-of-pocket cost to most insured members. In a periodic publication of nearly 300 pages, the USPSTF reviews and recommends or discourages the use of various medical procedures designed to provide “preventive” health care for adults and children. While individual physicians are not mandated to follow such guidelines, they frequently do unless the member’s age, gender, personal medical history or other factors indicate a deviation should occur. Prior to PPACA, most health insurance plans covered preventive services recommended by the USPSTF when considered “medical appropriate” but usually imposed an out-of-pocket co-payment, co-insurance, and/or deductible.

The theory behind providing for preventive services is simple; it is cheaper to prevent an illness than to cure it. Unfortunately, not all physicians agree on the use or frequency of all preventive screenings. One example is mammograms. The National Cancer Institute suggests that women age 40 and above should have a mammogram every 1 to 2 years. However, the USPSTF’s 2009 recommendation for females younger than age 50 is,”Clinicians may provide this service to selected patients depending on individual circumstances. However, for most individuals without signs or symptoms there is likely to be only a small benefit from this service.” Another example is the Prostate-Specific Antigen (PSA) test, used to identify males with highs levels of PSA as a possible indicator of prostate cancer or other prostate disorders. The American Cancer Society recommends men as young as age 40 should be screened for prostate cancer based on ethnicity, personal and family history. Men with an elevated PSA level should be screened every two years. However, in its October 2011 update, the USPSTF concluded, “that many men are harmed as a result of prostate cancer screening and few, if any, benefit.”

The theory of out-of-pocket cost-sharing arrangements such as member co-payments, co-insurance, and deductibles is to provide “skin in the game” for covered members by requiring those who actually use the services to pay a portion of their costs. This is true for auto, home owners, as well as for health insurance. Under a “fee-for-service” payment method, when out-of-pocket cost-sharing arrangements are removed, unnecessary service utilization increases which increases overall premium costs for all insurance members. A $20, $30 or $50 co-payment may seem insignificant, until it is considered that hundreds to thousands of those co-payments must be absorbed by members who never use the covered services. Finally, without some form of control, excessive utilization will without a doubt be seen in next year’s rate increases.

The Devil Inside the Boss

Friday, June, 08 2012

We have all had one or more bosses who, we knew must have been hatched from some demon spawn. No matter what you did, it was wrong, was not fast or soon enough or was just unacceptable. But you need a job and you have to learn how to deal with them. In order to do that you need to understand what drives this person to behave so badly. This is not just an issue between the subordinate and the mis-behaving boss. Loss of morale, productivity, production, sales, and even workplace law suits are just some of the fallout from bad bosses.

First, it is usually not the employee; of course there are exceptions to every rule. A bad boss got this way because their behavior was tolerated, rewarded, and maybe even admired by their superiors at some point in their career and for some time. Subordinates have little control over the rewards and admirations in this situation, but inappropriate behavior does not have to be tolerated. To make this point clear, a demanding, hard-driving boss does not necessarily make a bad boss; it’s all in the execution. There is nothing wrong with a boss who sets high expectations, demands quality work, and provides the supports and tools to achieve a high level of performance. Bad bosses, however are often accompanied by behavior such as threats, bullying, rude, crude, derogatory remarks, insults or public humiliation.

Second, many bad bosses lack the technical skills of their subordinates and are therefore dependent upon others to actually complete the assigned task. Subordinates who are masters at their role have the ability to build a relationship with even the worst boss. Even a bad boss understands that there is a quid pro quo between themselves and their most talented employees. An employee has to be careful not to over extend this relationship; nevertheless, a skillful and tactful employee can build a connection which clearly sends a strong message that they are a professional and expect to be treated as such.

Third, most business managers are not totally oblivious to how employees are treated by their bosses, especially if that treatment results in high turnover or lost production and sales. While it may take time, business managers will come to recognize that they may have placed the wrong person in a role as a supervisor. Even top performing bosses to have to account for high turnover rates. Excessive turnover can be an indicator that something is just not right within an organizational unit. Turnover often translates into excessive cost and lowered production, measures which normally captures the eye of higher level managers.

Alice Walton writing for The Atlantic on February 25 2012 in an article titled, "The Impact of Bad Bosses", related several studies which link the work environment to the health of employees.  In one study at Baylor University it was discovered that work related stress and tension impacted employee’s relationships outside of work, including every member of the family.  A Swedish study found a relationship between fatal and non-fatal heart attacks, angina and death from heart disease and a negative work environment while studying 3,100 men in research sponsored by Karolinska Institute's Department of Public Health Sciences.  Research at the University of Arizona, Department of Economics identified that unique areas of the brain are affected in different ways when individuals experience cooperation vs. guilt. The study concluded that most individuals want to please others and thus avoid feeling guilty.  Research at IBM and the University of Michigan found a relationship between the organizational culture and the overall health of workers and their families while studying 22,000 IBM employees and their families.

Finally, how an employee chooses to react to a bad boss or a negative work environment is partly under their control. Eventually, individuals will need to decide if to stay or quit.

US Health Care Treads Continue to Slow

Friday, June 01, 2012

Price Water House Coopers (PwC) reports that for the fourth year in a row the annual US health care rate is expected to trend lower. Since 2010, PwC’s Health Research Institute national survey of employers has indicated another year of relatively flat trend in health care plan costs.

Medical trend is significant since it makes up the most important factor in determine employer and employee health insurance premiums for the coming year. In addition, medical trend can be broken down into its constituent components allowing employers and policy makers to determine which aspects of health care are moving faster or slower. PwC attribute the slow-down in medical trend to:

                                  • Medical supply and equipment costs

                                  • New forms of primary care delivery

                                  • Price transparency

                                  • Generic drugs

                                  • Economic correlation

PwC believes the decrease in medical supply and equipment costs are related to an increase in the employment of physicians by hospitals, on-going consolidation of hospital systems, and governmental trenchancy rules. The result is that hospitals have been able to leverage their increased purchasing power to drive down costs, while governmental transparency rules have made physician honorariums more visible.

As deductibles for traditional and high deductible health care plans have increased, members have chosen alternative forms of primary care delivery. Care delivered in on-site and retail walk-in clinics are significantly less expensive than physician offices.

With the up-take in high deductible health care plans, price transparency has taken on added importance. Currently, over 75% of states have some form of health care price disclosure laws in place. Increasingly, organizations such as Health Advocate, Change Health Care, Castlight, and others are providing members with pre-procedure price information allowing members to informed decisions.

One area of high visibility is that of pharmaceutical costs. In the last several years and projected for the next several years the conversion of numerous brand name drug to generic equivalents is expected to have a significant cost impact. PwC expects the sales of brand name drugs to fall by over 30% between 2011 and 2014.

While not commonly considered discretionary spending, health care consumption does correlate closely to the overall state of the economy. The lingeringly and slow recovery has had a suppressive impact on some medical procedures, including preventative screenings.

While a medical trend rate of 7.5% is still several multiples of general inflation, compared to 9, 10, 11 or 12 percent, it does represent an improvement. However, even at 7.5%, health costs can be expected to double in just under 10 years. Which means that both employers and employees can see significant increases to come.

Talent Management in Manufacturing Industries

Friday May 25, 2012

American manufacturing has been making a quit but steady comeback since the 1980’s. While the US manufacturing base is certainly not at the levels of the 1950’s - 1960’s, it is currently enjoying a stronger recovery than the general economy. The US Federal Reserve Bank reported in April 2012, US manufacturing output expanded by over 4.8% as compared to April 2011. This expansion is partly fueled by increased productivity through the use of technology. Technology based on STEM knowledge, i.e., science, technology, engineering and math. STEM employment has the added value of paying higher than average wages and providing higher than average benefits.

One example of STEM knowledge is in the area of “additive manufacturing”, in this process, three-dimensional parts are built up from successive layers of mental powders using a machine that literal “prints out” the part. Morris Technologies in Cincinnati, Ohio, was an earlier US adopter of this technology and a world leader in additive manufacturing. A recent poll of CareerBuilder found 11 job openings at Morris with tiles and pay ranges like: 

• CAD Designer NX Unigraphics, $40k - $70k/year
• Lead Engineer (Design), $70k - $90k/year
• Lead Machinist, Pay: $25.00 - $32.00/hour
• CNC Machinists, $18.00 - $28.00/hour

So what are two issues with talent management in manufacturing, specifically as to recruitment? One,It is ithe perception of manufacturing as it was decades ago, rather than the high tech, high skilled environment that many manufacturers are today. Two, many point to the US education system as not producing high school graduates with a strong foundation in math and science. Consider the CAD Designer at Morris Technologies, this job typically requires a minimum of 2 years education and training often found at a community or technical college, several years of experience, and certification in CAD Software, yet has an above average salary.  

Jeff Schwartz, a principal with Deloitte Consulting LLP's Human Capital practice and writing for Business Finance on November 9, 2011 argues that manufacturers have taken innovative and fresh approaches to sourcing talent. He points out that branding, knowledge management, and phased retirement can all be applied to help address talent shortages when coupled with efforts that are more traditional.

Other approaches that some organizations have taken include cooperative education and training programs with local high schools, vocational, community, and even four-year colleges tied to the employer’s specific manufacturing needs. While these programs may address a manufacturer’s short-term needs, they may not address the softer skills associated with employability skills such as interpersonal communications, problem solving, and critical thinking.

What is needed for the long term is a pipeline of workers with strong technical, employability, and interpersonal skills who have the proper foundation in science, math, as well as communication skills. Traditionally, employers have relied on the US education system to produce employment ready workers. Regrettably, manufacturing may not be able to continue to rely on that system in the future. To compound manufacturers’ dilemma, most of the skills manufactures require are also in high demand by most other employers.

High Deductible Health Care Plans

Friday, May, 18 2012

High Deductible Health Care Plans (HDHPs) are coming of age. These are health care plans which meet the current IRS limits of an annual deductible of $1,200 or more for single and $2,400 for family coverage. In addition, the annual out-of pocket expenses, excluding premiums, cannot exceed $6,050 for single and $12,100 for family coverage. Such plans are often pared with either a Health Savings Account (HSA) or a Health Reimbursement Account (HRA). High Deductible Health Care Plans are now offered by over 40% of employers with 1,000 employees or more, according to a 2011 Kaiser Family Foundation survey. The survey reported that between 2010 and 2011, the uptake by employers with 1,000 employees or more grew by approximately 9% from 32% to 41%. A 2010 survey by the RAND Corporation estimated than 54% of large employers offered one or more high deductible health plans.

HDHPs produce savings to both employers and employees by requiring employees to pay for a significant proportion of the initial out-of-pocket expenses in the form of co-pays, co-insurance, and deductibles. As noted above, deductibles for IRS qualified plans start at $1,200 and with a cap of $6,050 for single coverage. Compare this to a typical PPO plan that might have a deductible of $500 to $1,000 and it is clear how the employer saves.

Employees have potential savings in the form of reduced monthly premiums. According to the 2011 Kaiser Family survey, employee premiums for single coverage for an IRS qualified HDHP with an HRA/HSA were $589 per year and $3,076 for family coverage. The employee premiums for single coverage for a PPO was estimated at $1,002 and $4,072 respectfully. In addition, many firms make contributions to an employee’s HRA or HSA accounts. Kaiser reports that, on average, employers contribute over $600 for single and over $1,000 to family HRA or HSA accounts.

A typical single employee in a HDHP could save an average of $413 or 41% over a PPO plan; for a family that translates into $996 or 24% annually. On top of that, add in the average annual employer HRA or HSA contributions of $611 and $1,069 for single and family coverage.

So it begs the question. Why are only 17% of employees enrolled in a HDHP? One answer is “risk”. Employees generally lack a tool which helps them understand their financial exposure to the risk of large out-of-pocket health care expenses. Consider a single young healthy employee with an office visit or two a year, maybe a couple prescriptions for a cold, the flu, allergies, or contraceptives. Now consider a family with a couple of kids, the employee and spouse on a 2-3 maintenance drugs, a child’s unforeseen broken arm, surgery or a battery of diagnostic tests.

The good news is that large proportions of most plan members never have a claim or never meet their annual deductible limits. The bad news is that this very group could stand to benefit financially the most from a HDHP.