HR Challenges in Virtual Worlds

Claus Nehmzow, a member of PA Consulting Group’s management team, was testing the voice functions in the online community Second Life when he read an interesting response from a virtual employee.

Nehmzow typed a message to one of the virtual greeters his firm hired to interact with visitors to PA Consulting’s Second Life offices, asking her if she could hear his voice. “She typed back, ‘Sorry, I cannot because I am deaf,’ ” recalls Nehmzow, who leads the organization’s applications of virtual worlds. “I didn’t know she was deaf until that point, and it didn’t matter.”

The exchange explains why Nehmzow describes virtual worlds such as Second Life as “the ultimate nondiscriminatory medium.” Like a growing number of firms, PA Consulting taps the medium to recruit real-life employees, foster collaboration among a geographically dispersed workforce, collaborate with customers and hire “in-world” Second Life employees, who are paid in the realm’s currency of Lindens, currently trading at an exchange rate of 270 Lindens to one U.S. dollar.

Although Nehmzow has not encountered any HR-related problems with his virtual team of Second Life greeters, he is now researching the firm’s responsibilities should a greeter experience real problems on the virtual job.

As he should, says labor and employment law attorney and HR consultant Dave Elchoness. “An employment relationship with a greeter in Second Life is almost more complicated than the relationship with a regular employee who might go online any time someone enters the company’s virtual offices,” says Elchoness. “You may be hiring someone … you don’t know anything about.”

Hardly a Luddite, Elchoness operates a virtual law office in Second Life and says that virtual worlds eventually “will be used as a communications medium that is the next best thing to visiting in person.”

But he insists that HR managers should not let their companies enter virtual realms blind to potentially serious risk.

“On one hand, this medium opens a huge number of opportunities,” Elchoness says. “On the other hand, unless you go into it with your eyes wide open, you can run into some unsavory characters and situations.”

Endless Opportunities

IBM refers to Second Life and its ilk as “virtual social worlds.” PA Consulting uses the broader term “participatory media,” while others prefer “massively multiplayer online role-playing games,” “multiplayer online games,” or the “3-D Internet.” The variance reflects the fact that the maturation of virtual worlds is just a few seconds into what will be a long journey, according to IBM.

In virtual worlds, participants use and often create online characters or avatars as proxies to explore the world and interact with other characters. Business users of these worlds should pay close attention to two crucial characteristics of any virtual world:

• The degree content within the online world is user-created.
• The degree access to the virtual world, and specific locations within the virtual world, are public or private. Many virtual experts would refer to Entropia Universe, for example, as a game rather than a virtual world because participants or players do not create content. Second Life, on the other hand, looks much like an online video game with existence almost entirely shaped by participants. A change an individual avatar makes within Second Life potentially affects the virtual experience of other Second Life participants.

Although Second Life, overseen by Linden Labs, has recently developed more usage guidelines, users have much more free rein in what they can and cannot do compared with other virtual worlds, such as There.com. Partly for that reason, There.com has attracted educational organizations and commercial users, such as MTV, presumably drawn to the world’s provisions on acceptable behavior and intellectual property protection.

Even so, Second Life remains by far the largest virtual world in terms of user population—2 million and growing at last count—and companies can and do restrict access to their private spaces within Second Life.

Software firms, such as Forterra Systems of San Mateo, Calif., also produce virtual world platforms that companies, such as IBM and others, can operate privately behind their corporate firewalls.

Although some large companies, such as Toyota, Circuit City and Sears, made headlines when they unveiled offices and offerings in Second Life that were mainly marketing initiatives, business users now seem more excited about uses that, as Nehmzow says, “can have very positive effects in HR situations.”

Characters Welcome

Some companies already realize the benefits of doing business in a virtual environment. PA Consulting analyst Alex Kingsbury joined the firm in September 2006, several months after attending a recruiting session in the firm’s Second Life offices. His avatar impressed PA Consulting’s staff with sharp questions and playful wit. The event took place in a tree-lined skybox perched 1,300 feet above PA Consulting’s Second Life office.

A greater number of senior-level PA Consulting staff attended the virtual recruiting session than could attend a traditional, in-person event. Kingsbury says the experience reinforced his impression of PA Consulting as “innovative and high-tech.” He also appreciates that he was able to interact with a variety of PA Consulting staff in an informal, anonymous atmosphere where he could “ask all the questions I wanted to … and get real answers from real people.”

IBM also uses proprietary and public virtual worlds as recruiting tools—and as collaborative spaces for current and former employees. Some meetings take place in virtual worlds; others take place partly in virtual worlds and partly in person.

Elchoness, a former Qwest executive, wishes he had Second Life at his disposal when he managed the telecommunications company’s information technology outsourcing relationships, many involving offshore arrangements. “We really struggled to work out kinks in our methodologies and processes in those outsourcing partnerships,” he recalls.

“You want to send your people overseas to meet the outsourcing partner’s people in person, but that’s extremely expensive and disruptive to family life. … If I had this when I was managing outsourcing, I could have had these people get to know each other in a fun way. Virtual worlds can be a tremendous team-building tool.”

Elchoness also suspects that virtual worlds will soon serve highly valuable roles in compliance, corporate governance and business-continuity management. If a disaster closes a real office, for example, a virtual office will enable companies to maintain their business presence and carry on key processes.

Real Risks

The qualities that make virtual worlds business opportunities--the fun, gaming aspect; anonymity; and the fact that interaction can be documented and scored--also pose risks. Imagine if employees attended trade shows in disguise. Benjamin Duranske, an intellectual property attorney writing a book on virtual law and serving as co-chair of the recently formed American Bar Association Committee on Virtual Worlds, says employees may feel “like they really are in a different world where some rules might not apply.”

In response to fellow lawyers seeking advice on extending their practices into the virtual realm, Duranske emphasizes caution. He offers the same advice to other businesses: “From a human resource perspective, you have a similar problem if you’re interviewing someone or providing references for someone you don’t actually know. You’re definitely running some risks.”

Virtual worlds have no inworld mechanisms for enforcing employment agreements. If an avatar or a virtual design firm does not show up for work, there is little the hiring company can do if no formal contract exists in the real world.

Employees entering public virtual worlds for the first time may also encounter potentially offensive images and behavior. When Duranske first guided his avatar around the Second Life property he purchased, he saw two other avatars engage in lewd behavior on a nearby rooftop.

Those and other risks, along with a growing number of questions, inspired IBM officials to adopt a set of virtual guidelines earlier this year (see “Guiding Employees in the Metaverse” under Web Extras). Chuck Hamilton, director of IBM@Play, the learning organization that uses virtual worlds and reports through the corporation’s human resource function, says the guidelines were developed through a collaborative process that played out“bottom-up, top-down and from both sides of the organization.”

As to whether the guidelines reflect the same employee code of conduct applied to a real-world setting, Hamilton answers, “yes and no.” The company’s virtual guidelines clearly reflect, align with and even refer to the company’s business conduct guidelines; however, they also contain specific guidance, for example, on avatar appearance and behavior, and on intellectual property protection.

Finding a Balance

Some companies that operate in virtual worlds are in the process of developing specific usage guidelines, but existing conduct guidelines may be sufficient. “While individual communications channels--such as in-person communications, e-mail, blogs and virtual interactions, etc.--each have their own special protocols and etiquette, we find that it’s more important to use, and easier to manage, a more distributed communications approach, irrespective of channels, that relies on fellow professionals to always speak and act in ways that reflect positively on the organization and on the brand,” says Sara Lancellotti, senior human resources coordinator with Bain & Co. in New York.

Human resource managers whose companies venture into virtual reality can support those efforts by taking the following steps:

Sensitize new users. In public virtual world spaces, many avatars are suggestively, or scantily, clad and say or text provocative comments to other avatars. “From a legal perspective, is that harassment? Probably not. But employees need to be sensitized to what they might see in a virtual world,” says Elchoness. A participant should also know, for example, that an avatar will fall asleep if the user doesn’t touch a mouse for more than 15 minutes during a virtual meeting using proprietary virtual world software.

Understand public vs. private boundaries. Employees should be aware that everything they say, text and do in public virtual worlds can be recorded and stored on servers. IBM restricts employees from carrying on company business in public virtual spaces unless a customer specifically requests it. Company officials who open offices in public virtual spaces may gain recruiting and marketing benefits, but they cannot control the language and behavior that takes place there.“If I don’t have somebody in that space from my company at all times, I would not know that a conversation took place,” says Nehmzow. “Someone from one of our competitors could pose as an avatar and speak badly about our firm. … If I have someone there, I can at least enter into that discussion.”

Point to a policy. Elchoness advises company officials to refer to new or existing written policies to communicate acceptable behavior to employees when they enter virtual worlds.

Validate in-world hires. If managers hire greeters, designers or other contractors within public virtual worlds, they should validate who they’re hiring. “Are they processing the appropriate paperwork for those people?” Elchoness asks. He advises that companies confirm a prospective employee’s identity, age and country of residence.

Consult legal counsel. While Elchoness emphasizes that his points should not be considered official legal advice, he is among the most knowledgeable virtual legal experts--and even he does not know the answers to some important questions. “Just because the person is hired in-world for an in-world function, I’m not sure why they couldn’t be considered an employee, in which case there may be benefits issues,” he says. “When is a [Second Life contract] greeter not an employee? I don’t know the answer.”

Don’t get overwhelmed. “Just because there are endless possibilities with this medium does not mean you have to try or work with them all,” cautions Hamilton. Instead, “use the most advantageous qualities.”

The majority of problems officials encounter in their virtual worlds have yet to play out. Until precedents occur and knowledge can be gleaned, it pays to proceed prudently. That approach should include HR’s early involvement, says Nehmzow. “Otherwise, HR [professionals] tend not to fully understand the positive elements and instead focus more on all the concerns and negatives.”

Eric Krell is a freelance writer based in Austin, Texas.