HR Update

May 1, 2002

HR Magazine, May 2002​Employers Still Plan Some Belt-Tightening in This Year’s Economy

Although signs of economic recovery have put HR on notice to plan for new challenges (see the April HR Magazine cover story), one recent survey suggests that business planners aren’t finished cutting costs and restructuring their organizations to cope with last year’s downturn.

In the “Global HR Trends” web survey conducted in January by William M. Mercer Inc., a New York-based HR consulting group, more than 450 U.S. employers were asked what economy-related changes they had made or plan to make in their business and human resource strategies.

Nearly 65 percent said they had cut costs last year, and nearly 15 percent said they expect to do so this year. About 52 percent said they restructured their organization in light of last year’s economic downturn, and 16 percent said they foresee some sort of organizational restructuring this year.

“During the second half of 2001, employers moved quickly and aggressively to cut their overall labor costs through layoffs, without making any draconian changes to their actual pay rates,” says Steven E. Gross, who heads Mercer’s U.S. compensation consulting practice. “Many employers trimmed back their planned pay increases, but very few cut pay outright. And even when companies did institute wage freezes, it was often targeted at certain groups of employees, such as executives, and not the overall employee population.”

—Bill Leonard

The Word on Workplace Safety—in Spanish

To expand the accessibility of job-safety information, the U.S. Department of Labor has added a Spanish-language web page on its site for the Occupational Safety and Health Administration (OSHA). The new page, now available and soon to be expanded, is described as a one-stop service for Spanish-speaking employers and employees. It contains, among other things, instructions on filing complaints and an overview of OSHA.

Labor Secretary Elaine Chao said the new Spanish-language page will give millions of workers who speak Spanish but little or no English “access to information they can use to make their workplaces safer.” Workplace deaths among Hispanics jumped to 815 in 2000 from 730 in 1999, led by a 24 percent spike in construction fatalities, the Bureau of Labor Statistics reported.

—Terence F. Shea

Job-Hunting Professionals Rank Networking Over Internet

Recruiters who view the Internet as the top source of professional-level candidates may be surprised to discover that many candidates don’t see it that way.

The surest route to re-employment for professionals remains the time-tested strategy of networking, according to results of a recent survey by Drake Beam Morin (DBM), a global outplacement consulting group based in New York.

Networking was cited as the best “job-source mechanism” by 60 percent of the employment-seeking professionals in the DBM survey, while the Internet was the choice of 6 percent, one point behind search firms. The figures indicate a disconnect between job seekers and employers. Some recent studies have shown that nearly two-thirds of employers say they believe the Internet is the best resource for attracting new employees and plan to expand their Internet recruiting efforts.

The results of the 2001 survey show some shifts from the year-earlier survey, when 61 percent cited networking, 6 percent chose the Internet and 12 percent chose search firms.

“Despite the increase in the number of Internet job sites, we continue to underscore networking as a vital factor in successful job hunting,” says Tom Silveri, president and chief executive officer of DBM. “In the process of networking, job seekers uncover potential opportunities before they ever get listed on a site.”

According to DBM’s findings and Silveri’s assertions, networking opportunities such as job fairs, conferences and local business group meetings probably provide the best opportunities for job seekers and corporate recruiters alike.

DBM’s findings came from its research on job transitions, conducted with a survey sample of 4,639 professionals who took part in outplacement services. The sample was drawn from more than 48,000 employees who changed jobs in the United States. The survey respondents’ median age was 45, with an average tenure of seven years in their prior position, and 70 percent were men.

The research also showed that 80 percent of all separations nationwide in 2001 resulted from some form of corporate restructuring, merger or acquisition, or cutback, which was an increase from 74 percent the previous year.

As the economy softened during 2001, the median time it took to find a new job increased to 3.23 months, up slightly from 3.07 months in 2000. Workers over 50 years old and senior executives took longer to transition, with a median search time of four months and 5.3 months, respectively.

—Bill Leonard

A Benefit to Live For: Time Off for Transplants

The latest twist in benefits at Piedmont Hospital in Atlanta is paid time off for employees’ uncommon generosity—live donation of an organ for transplant. Under an arrangement that could become a model for other employers, Piedmont has established a policy of giving up to 30 days of paid leave to any employee who donates an organ. Bone-marrow donors receive up to seven days.

Although much of the organ-donation program nationwide focuses on persuading people to permit use of their organs after death, living donors can play an important role in shrinking the long lists of patients awaiting transplants.

The program at Piedmont—and at its affiliated Fayette Community Hospital—applies to donation of a single kidney, a lobe of a lung, a segment of a liver or a portion of a pancreas. The span of paid leave approximates the time it takes a donor to recover from surgery, says Piedmont spokeswoman Nina Montanaro.

Live donors’ medical costs typically are paid by the recipient’s health insurance, but some potential donors have hesitated because they stood to lose income during their recovery. “We hope that [the paid-leave program] will make donations an easier choice,” Montanaro says.

The National Kidney Foundation of Georgia has a leave policy for kidney, liver and bone-marrow donors, and a bill offering benefits the same as Piedmont’s for state employees is in the Georgia legislature. Piedmont, which does kidney and pancreas transplants, is a member of the Workplace Partnership for Life, an organ-donation initiative spearheaded by U.S. Health and Human Services Secretary Tommy G. Thompson.

—Terence F. Shea

See Spot Jump: Even in a Down Economy, ‘Spot’ Bonuses Went Up

Although the threat of losing employees doesn’t loom as large now as it did when the economy was booming, companies still recognize the need to retain key players through recognition tools, such as “spot” bonuses.

The share of companies awarding spot bonuses rose slightly to 53 percent in February from 50 percent in July, according to a new survey by WorldatWork, an association of compensation and benefits professionals based in Scottsdale, Ariz. More respondents handed out between $1,000 and $2,499 to middle managers on down, while higher-level executives received $10,000 or more.

Spot bonuses are unscheduled, “on the spot” rewards that recognize employees for going the extra mile or for successfully completing a one-time project. “This is a tool that can be used on a more personal level,” says Kay Sandvik Schmitke, manager of surveys and research at WorldatWork. “It strengthens the dedication to get continuous good work from the individual.”

Schmitke says she was a little surprised that the results showed an increase, but mostly she was “pleased.” She adds: “Even when the economy is down, you still need to reward those quality performers that will help you when the economy turns up again. I know of an airline that was doing pay cuts but still gave out spot bonuses. The company recognized that if you lose those key employees, it would cost you an arm and a leg to get anyone back and up to the same level [of productivity].”

But, like any reward program, spot bonuses have the desired effect only when they’re done right. The most common mistake, respondents noted, was making the award amount too low, followed closely by managers not knowing the tool was available and by managers who didn’t feel comfortable using it.

“Managers need to understand the value of spot bonuses on how they work to retain star performers,” says Schmitke.

One thing managers need to be aware of is timing. “It is critical to provide the reward as close to the desired behavior as possible,” says a storage area networking (SAN) analyst at a technology company in Phoenix, who recently received a bonus and recognition for successfully completing a project on budget and on time. “The meaning is diluted the longer it takes to deliver the reward.”

While he adds that his award was well-timed, he says the reward—in and of itself—is not significant enough to retain him.

—Adrienne Fox

Where Immigrants Find Friendly Welcomes or Cold Shoulders

Your diversity efforts may be a little easier to implement if your company is in one of the cities that two Penn State University researchers say are most open to immigrants. Atlanta, Baltimore, Detroit, Miami, Minneapolis, Philadelphia, Phoenix, Seattle and Washington, D.C., lead the researchers’ list of cities with native-born residents expressing the most receptive attitudes toward immigrants.

Urban areas with large concentrations of immigrants—and with a higher level of education—typically spread the welcome mat for newcomers more readily than smaller towns and rural areas that have little experience dealing with immigrants, according to Penn State’s Gordon F. De Jong, a professor of sociology and demography, and doctoral candidate Quynh-Giang Tran.

Chicago, New York, Pittsburgh and St. Louis are also open to immigrants, the researchers say, but Boston, Houston and Los Angeles are less open, and Dallas, San Diego, San Francisco and Tampa are the least receptive.

Negative attitudes can crop up if residents think illegal aliens are taking unfair advantage of health and social services, Tran says, and receptivity falls as unemployment rises among the nonimmigrant population.

—Terence F. Shea


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