HR Magazine, February 2001: HR Update

By Bill Leonard Feb 1, 2001

HR Magazine, February 2001Vol. 46, No. 2

Contract workers; quality of online recruiting sites; more

Employers' and Employees' Benefits Priorities Differ

While double-digit increases in health care costs are cause for concern among U.S. employers, most workers are focusing on personal savings and retirement benefits, according to a recent survey conducted by the human capital advisory practice of the New York-based management consulting firm of Deloitte Touche Tohmatsu.

“We don’t see employees widely concerned with rising health care costs yet,” says Debora Karstetter, president of the International Society of Certified Employee Benefits Specialists, which partnered with Deloitte to conduct the survey.

According to Karstetter, em-ployers are reluctant to pass the higher costs of health benefits to their workers because of the extremely tight labor market. Employers may choose to pass along the cost increases in the near future, but right now employees have not been directly affected by the higher costs, says Karstetter.

Nearly 300 benefits specialists from a wide array of industries and all regions of the United States responded to the survey. For the second year in a row, 70 percent of respondents said that controlling rising health care costs was their top priority for 2001. Other top priorities included implementing, evaluating or expanding Internet or intranet applications; expanding employee self-service technology for communications and administration; and providing financial and retirement planning tools to workers.

Researchers for the survey also asked employees at the responding companies to list their top benefits concerns. The responding employees ranked retirement-related issues at the top of their list for this year. “These results definitely reflect the aging of the nation’s workforce, and employers can expect this interest in retirement benefits to only grow stronger,” Karstetter adds.

Web Site Puts Your Reputation Online

It used to be that only Santa Claus would make a list of who’s been naughty or nice, but RepCheck Inc. of Los Angeles may have changed that by launching a web site ( that allows people to rate the character of acquaintances.

“Let’s face it; it’s hard to tell whether or not someone is feeding you a line. People want to be as informed as possible, especially when it comes to things like evaluating a prospective employee, day care provider, money manager, or even a potential mate,” says Andrew Maltin, founder and CEO of RepCheck. “Up until now, credit history has been the primary source for gauging an individual’s reputation, but credit information doesn’t necessarily reflect a person’s character. RepCheck was created with the intention of letting people know whom they’re getting into bed with.”

The web site features an interactive and searchable database of “reputation files” and allows users to evaluate and view scores, comments, rebuttals, descriptions and other useful reputation information. According to Addie Bua, a spokesperson for RepCheck, the web site has a set of guidelines that users must follow, and if a person posting comments steps over the line, the post will either be removed or edited. Bua says that people can post their comments anonymously; however, the posters will be anonymous only to web site visitors.

“To be able to post on the site, a person has to supply their name, ad-dress, e-mail and credit card information, so we know exactly who they are,” Bua says. “We also tell the users right up front that anything they post can be subpoenaed and that they must follow the web site guidelines.”

Bua says that RepCheck operates in total compliance with the Communications Decency Act and that, as a distributor of information created by others rather than a content publisher, RepCheck’s responsibilities are no different from those of any Internet service or chat room provider. She also adds that during the first two months of operation more than 5,000 people posted information on the RepCheck site.

“The prospect of being rated and evaluated on will help to discourage unethical, illegal and irresponsible behavior,” says Maltin. “RepCheck could function in much the same way small towns do, with people hesitating to do anything that might reflect negatively on them because everyone might find out.”

Contract Workers Make the Grade

Employers seem to believe that hiring freelance or contract workers is worth their while and that these workers actually can be more productive than their own employees, according to a recent study conducted by the management consulting group Towers Perrin. Even though employers believe contract workers do a good job and are very productive, the study also found that most employers believe they are ill-equipped to adequately manage freelance workers.

The nationwide survey, commissioned by Vivant! Corp., found that 56 percent of the respondents believe independent contractors are more productive than their employees, but at the same time only 34 percent feel their processes for managing freelance workers are effective. The respondents cited quality of work, tracking and approving time as the three biggest stumbling blocks in managing contract or freelance workers.

“The study results are a wake-up call for organizations,” said Tom Davenport, a principal in the San Francisco office of Towers Perrin. “With increasing reliance on contractors to supplement the full-time workforce, organizations face two challenges. The first is to raise the productivity of their own employees. The second is to raise the productivity of contractors.”

Forty-two percent of the respondents reported an increase in the number of contractors they used during the past year. The survey revealed that contractors were hired to tackle specific projects 46 percent of the time, while a skills shortage among existing workers triggered 28 percent of job opportunities for contractor opportunities.

“It’s clear that while contractors are highly productive and are making a significant contribution in the workplace, companies see real opportunity to improve the process of managing them,” says Davenport.

Quality of Online Recruiting Sites Varies Widely

Some employers have mastered online recruiting while most haven’t. And the gap between the best and worst online recruiting sites operated by employers is pretty sizeable, according to a study of recruiting web sites by Cambria Consulting, a Boston-based human resource management consulting firm.

For the study, re-searchers selected companies from Fortune mag-azine’s list of the best and most admired employers and, according to the researchers, the widely divergent quality of re-cruiting web sites among these employers was actually a bit unexpected.

“It’s surprising to find great companies with recruiting web sites that offer candidates little more than a post office box to which to send their resumes,” says Bernie Cullen, a Cambria Consulting partner who led the research team. “Clearly, some companies don’t realize how big the stakes are. It’s estimated that more than two thirds of employers hiring college graduates are recruiting via the Internet, and by 2003, 100 percent of the Fortune 500 companies are expected to be recruiting via the Internet. With this technology, companies can reach a worldwide pool of potential candidates and cut costs to find new employees by nearly 90 percent.” á

Cullen says that high-tech companies are among the best at online recruiting and have set some benchmarks that other employers should examine closely.

“The people who helped create the Internet are using it to scour the world for outstanding job candidates,” he says. “They don’t just tell candidates to send in resumes. They question them interactively on the web site about their experience and interests and then direct them to the specific jobs for which they are best qualified. So, instead of reading through stacks of resumes, recruiters can go directly to a short list of the most qualified candidates.”

For more information on the study, visit

Health Care Employers Slow to Jump on E-recruiting Bandwagon

While high-tech firms are setting the pace for online recruiting, some industries, such as health care, have been much slower to move their recruiting vehicles onto the information superhighway. A recent study sponsored by of Salt Lake City and conducted by Wirthlin Worldwide attempted to identify emerging trends in health care employment and staffing. More than 700 health care professionals responded to the survey.

The survey found that a majority of health care professionals say that they would consider using the Internet to find a job today, while only one-quarter of the employers have budgeted for online recruiting efforts. Many health care employers also may be missing a golden opportunity to attract job candidates online. The survey found that while 63 percent of health care employers have a corporate web site, nearly 40 percent don’t use their sites for recruitment purposes. Yet at the same time, the survey found that 65 percent of health care professionals say they visit employer web sites to look for job opportunities.

“The results of this study are insightful and reveal distinct differences in behavior and should help employers better understand where and how health care professionals are looking for jobs both on and off the Internet,” says Michael Weinholtz, president and CEO of

More information on the study is available online at

Training Can Be a Valuable Job Perk

Many employers may not view training and development opportunities as job perks, but a recent survey by Inc., an online resource network for technology professionals, found that many employees think that employer-provided training is the best job perk around.

In a recent poll of visitors to the web site, 96 percent of the respondents said that the opportunity to learn new skills was very important when they evaluated a potential employer.

“Considering it can cost companies thousands of dollars to replace just one high-tech worker, our data suggests that hiring managers should consider providing training as a tool for hiring and retaining these valuable employees,” says Doug Berg, founder of “Technologists are as driven by the desire to take on new projects and skills as they are by dollars. It makes sense to make training an important component of a company’s perks package.”

The web site also surveyed visitors on other topics related to technology training, and found that the majority of high-tech professionals view training as an opportunity to get another job.

“With this in mind, it’s important for HR managers to be strategic with the training that they offer. Be sure the skills acquired from the training can be used within your company. Otherwise, you run the chance that techies may take these new skills elsewhere,” Berg advises.

More information on the survey is available online at

Bill Leonard is senior writer for HR Magazine.


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