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Staffing Management: Up Front

   7/1/2007
 

Vol. 3, No 3

Job board code of ethics created. Entry-level job credential launched. Growth expected in contingent workforce. More. 

National Council Launches Entry-Level Job Credential

The National Work Readiness Council (NWRC) this summer is ramping up the marketing of its first national standards-based assessment for entry-level workers.

The National Work Readiness Credential has been developed to provide a national, portable certification that affirms that individual job seekers have demonstrated the knowledge and skills needed for successful performance as entry-level workers.

The credential was developed through a national consensus-building process that included businesses, unions, chambers of commerce, education and training professionals, and state workforce investment boards in Florida, New Jersey, New York, Rhode Island, Washington and the District of Columbia, as well as with Junior Achievement Worldwide.

It is based on the nationally validated Equipped for the Future learning standards, which were created as part of the National Institute for Literacy’s 10-year standards development initiative. It is not intended to replace academics or high school or postsecondary education credentials. Instead, it is designed to help address the ability of an individual to perform entry-level tasks required of jobs defined as non-supervisory, nonmanagerial and non-professional positions (whether unskilled or skilled) for which the required work-specific skills can be learned while on the job.

The assessment includes four modules situational judgment, oral language, reading and math usageand can help determine whether the testtaker can use nine skills that businesses from across industry sectors have identified as critical for entry-level workers. Among the skills assessed:

  • Speak so others can understand.
  • Listen actively.
  • Solve problems and make decisions.
  • Cooperate with others.
  • Resolve conflicts and negotiate.
  • Observe critically.
  • Take responsibility for learning.
  • Read with understanding.
  • Use math to solve problems.

Initially, the credential will be administered through public workforce systems in the six founding areas, as well as through part of the Junior Achievement Worldwide high school curriculum. Because the assessment will be available through a web-based delivery system, it can be administered by community colleges, other education and training providers, and employers.

Code of Ethics Introduced For Job Board Industry

In an effort to distinguish legitimate employment sites from potentially fraudulent ones, the International Association of Employment Web Sites (IAEWS) has introduced the first code of ethics for job boards and career portals.

Representing more than 1,000 members worldwide of the online employment services industry, the IAEWS is open to any organization that owns or operates a job board or that provides products and services to those sites. Its members include commercial enterprises, professional associations and societies, newspapers and trade publications, radio stations, and affinity groups.

The job board industry is one of the fastest growing, most successful segments of e-commerce and currently generates almost $3 billion in advertising revenue annually, according to IAEWS. That success, coupled with a low barrier to entry, has led to a continuous influx of new sites online. While many of these new entrants strengthen the industry, some do not. They engage in unethical practices, such as selling the contact information of job seekers to marketers without individual permission and not accurately representing the traffic their site generates for advertisers.

So the organization has created a code of ethics for its membership to help consumers tell the difference between those job boards that are committed to the highest standards of business and those that are not.

“With 40,000 job boards now in operation in North America alone, it’s important that employers be smart consumers, ” says IAEWS Executive Director Peter Weddle. ”The key to making a sound investment in recruitment advertising on a job board is a site’s practices. For example, does it provide a means by which an employer can verify the site’s claims regarding traffic, and does the site sell or barter the contact information provided to it by job seekers?

The code stipulates that job boards and career portals address confidentiality, fairness, honesty, responsibility and self-regulation.

The code of ethics can also be used as a guide for corporations’ employment sites.

Among the practices that Weddle says typically turn off job seekers

  • Failing to acknowledge and thank job seekers for their application.
  • Posting job openings with so little detail that it’s impossible for candidates to make an informed judgment about them.
  • Failing to take job postings down when the openings have been filled, causing job seekers to waste their time on fruitless applications.

Still, codes of ethics for any industry are difficult if not impossible to monitor and enforce. When asked what if any influence this code is expected to have on industry standards and quality, Weddle said, “Our members have set a standard for themselves and their industry. As such, they’ve created an expectation of service for our customers. If we fail to measure up, therefore, our customers will move their business elsewhere. In our view, there’s no more powerful form of enforcement.”

More ‘Red Flags’ Popping Up In Background Checks

Companies are digging deeper, and an increasing number of “red flags” are popping up in job candidate background checks, according to Kroll.

The risk consulting company’s annual Hit Ratio Report and Industry Analysis, released in May, reveals another yearover- year increase in criminal record hits (from 8.5 percent to 9.1 percent), discrepancies in past employment verifications (from 36.5 percent to 49.4 percent) and education verifications (from 14.1 percent to 21.6 percent).

The report (www.kroll.com/about/ library/hit_ratio) provides hit ratios for the most common employment screening criteria, plus detailed analyses of industry-specific hit ratios for 16 industries.

Barry Nadell, a senior vice president of Kroll’s background screening division and author of the report, attributes the upward trend to four key factors:

  • Today’s background checks include more complete data. “Employers [are] digging deeper than ever before,” he says. Employers should choose a screening provider that builds a reliable address history based on Social Security number, he says, rather than relying on an applicant-provided residence history.
  • Companies are screening all employees. “Clients that used to only require background checks for managers are now realizing that hiring risks exist at all levels of an organization,” says Nadell. Companies are also increasingly screening temporary employees, vendors and consultants, all of whom could pose a threat to their business.
  • Smaller companies are recognizing the importance of screening. “Hiring risk exists regardless of the size of your organization,” says Nadell. Large, complex companiesand those in regulated industrieshave traditionally been more concerned about employee screening. Today, small and mid-sized organizations are also making background screening a standard part of their hiring processes.
  • Screening methodology is growing more sophisticated. Risk consulting companies “are consistently looking for new and better ways to serve our clients,” says Nadell. “What are the potential liabilities in an applicant’s background? How can we find them?” As the scope of services offered by background screening providers expands, he says, providers often discover previously unseen adverse information.

Portions of Recruiting Function Likely To Be Outsourced

More than a third (34.4 percent) of companies surveyed in March 2007 by the Institute for Corporate Productivity (i4cp, formerly HRI), have outsourced portions of their recruiting function, compared with 15.4 percent in 2005. The positions leading the way in third-party sourcing are executives (56.5 percent) and experienced professionals (43.5 percent). The least-outsourced function is supervisors, at 14.5 percent.

While outsourcing has doubled, the survey found that the total number of staff devoted to recruitment after outsourcing did not decrease. In fact, in most cases it increased.

“This actually makes a lot of sense,” says Jay Jamrog, senior vice president, research, at i4cp. “We’ve all heard about the ‘war for talent’ and seen the demographic projections. As talent becomes a scarce commodity, companies are naturally applying more resources, both internal and external, to solve the problem.

Survey respondents were asked to rate vendors on a 1-5 scale, with 5 being “most satisfied.” DDI garnered an average rank of 4, with Ceridian coming in second at 3.86.

The survey also found that most companies today identify which recruiting measurements are most valuable and regularly report on them. However, the majority do not bother to benchmark their recruiting metrics vs. those of similar companies, their vertical industry or globally. When measurement is conducted, the study found, 75.5 percent of responding companies feel that measuring total job openings is most valuable, and more than 71 percent report on their metrics either monthly or quarterly. Almost 66 percent use their measurements for planning and budgeting purposes.

“It’s surprising to see that while so many organizations are able to identify and report on key metrics, they fail to benchmark them against other organizations in their industries,” says Jamrog. “Tracking historical data and benchmarking the efficiency and effectiveness of the function is critical when it comes to identifying and fixing the problem areas within your recruiting process. And, measurement of the recruiting process is becoming even more critical, given the tight labor market today and the looming skill crisis.”

The Recruiting Function Practitioner Consensus Survey was conducted by i4cp, in conjunction with HR.com.

Steady Growth Expected In Contingent Workforce

The contingent workforce is expected to grow strongly to 10 percent of the entire U.S. workforce within two years, with pharmaceutical, biotech and retail sectors experiencing the largest growth in temporary and contract workers, according to a Staffing Industry Analysts report.

The 2007 Staffing Buyers Survey found that the Fortune 1,000 will expand its use of contingent workers to manage variable or unpredictable workloads, to handle the strong overall growth at many companies, and to cope with the difficulty in finding quality workers in a low-employment environment. Among the report’s key findings:

  • Seventy-seven percent of the companies surveyed in the report expect to grow their contingent workforce.
  • As the expense of contingent labor reaches tens of millions of dollars, more companies will implement better management controls, including technology platforms such as vendor management systems (VMS). Tech/engineering, energy/chemical and pharmaceutical/ biotech will be the sectors most likely to add VMS systems.
  • Procurement managers, rather than human resource professionals, will increasingly control the management of contingent labor programs.
  • The retail/consumer sector, which has traditionally used less contingent labor than other segments of the economy, is likely to be among the fastest growing users of temporary workers in the short term.

“The 2007 Staffing Buyers Survey clearly shows that corporations plan to significantly expand the usage of contingent labor to an all-time high within the next two years,” says Barry Asin, chief analyst of Staffing Industry Analysts. “As the contingent workforce grows, corporations will need to be much more sophisticated in managing this increasingly large expense. To handle this growth, corporations must look closely at crafting a well-conceived contingent workforce program, leveraging technology and assigning talented managers to oversee this area of their operations.”

Large companies face a number of hurdles in improving their management of this expanding worker population. The report found that decision-making about the contingent workforce is currently dispersed across several different corporate levels. The typical manager with responsibility for contingent labor decisions spends only 20 percent to 39 percent of his or her time on this task.

The report also found that these challenges are being addressed. In the next two years, more companies will be centralizing control of contingent labor decision-making to manage costs and ensure quality. Moreover, companies are increasingly turning to technology to help with their contingent workforce challenges. While approximately 34 percent are using VMSs today, more than half will have a VMS in place within the next two years.

Global Exec Searches Up

New global executive searches increased 10 percent from the fourth quarter of 2006 to the first quarter of 2007, according to the Association of Executive Search Consultants (AESC) State of the Executive Search Industry report. The executive search industry remains robust with an 11 percent quarterly increase in global revenues, and a yearly increase of 25.8 percent (from the first quarter of 2006 to the first quarter of 2007), according to the report.

“Retained executive search is a significant barometer of the strength of the global economy, and it is reassuring to know that industry revenues and search activity continue to grow,” says AESC President Peter Felix.

North America experienced a significant quarterly increase of 16.8 percent in the number of searches started, European firms witnessed an increase of 17.8 percent, and the Asia-Pacific region was up 16.2 percent. The Central/South America region was the only region experiencing a decline in searches, down 3.2 percent from the previous quarter.

Yearly comparisons revealed a 14.1 percent rise in European executive searches. The United Kingdom accounted for the greatest number of European searches with 29 percent of the total market share in the first quarter of 2007. Germany followed with 14 percent and France came in third with a 10 percent market share.

Searches started in the first quarter of 2007 rose 10 percent against the previous quarter, with all industries experiencing a quarterly increase. Up 33.2 percent, the nonprofit sector accounted for the greatest increase in searches, followed by professional services (up 30.4 percent), financial (up 20.3 percent), technology (up 19 percent), industrial (up 15 percent), consumer (up 12 percent) and life sciences/health care (up 10.3 percent).

Consistent with previous trends, the financial sector captured the largest share in number of searches in the first quarter of 2007, totaling 24 percent of the market. The industrial sector followed with 22 percent, followed by consumer products (17.4 percent) and technology (15.6 percent).

The data was collected from a sample of AESC member search firms representing the activity of more than 1,200 executive search consultants in 42 countries worldwide.

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