SHRMS HR Trendbook 2012

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SPECIAL SUPPLEMENT TO
ECONOMIC OUTLOOK
COMPENSATION & INCENTIVES
BENEFITS
TECHNOLOGY
STAFFING MANAGEMENT
EDUCATION, TRAINING & DEVELOPMENT
RELOCATION
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THE WORLD’S NEWSSTAND®
CONTENTS
54 Economic Outlook
To dip or double dip? That is the economic question.
58 Compensation & Incentives

2011 salary increases; rewarding top performers; more.
66 Benefits
Health and wellness; changes resulting from health care
reform; managing costs; more.
78 HR Technology
Security in the cloud; social media mania; more.
82 Staffing Management
Recruiting with social media; retiring Baby Boomers;
pre-employment screening; more.
54
86 Education, Training & Development
Leadership development; how we learn; more.
96 Relocation
Reluctance to relocate; creative solutions to cost pressures;
more.
98 Workforce Trends
U.S. workforce demographics; job openings; unemployment;
U.S. compensation costs; women’s earnings; more.
Online Resources
See each 2012 HR Trendbook section for links to additional material at
SHRM Online. And let us hear from you at the SHRM Publishing and
E-Media Group on SHRM Connect, where members may interact with
78 SHRM publishing staff and see what we’re working on. Go to http://
community.shrm.org/?q=node/1416 and click on “Join this group.”
Contributors
The following SHRM editors and writers contributed to the 2012 HR Trendbook:
Chris Anzalone; Steve Bates; Erin Binney; Jennifer Chinworth; Nancy M. Davis;
Joanne Deschenaux, J.D.; Kathy Gurchiek; Rebecca R. Hastings, SPHR; Gretchen Kraft;
Bill Leonard; Roy Maurer; Dori Meinert; Stephen Miller, CEBS; Theresa Minton-Eversole;
Beth Mirza; Desda Moss; Leon Rubis; John F. Scorza; Allen Smith, J.D.; Aliah Wright; and
SHRM’s Manager of Workplace Trends and Forecasting Jennifer Schramm. SHRM designers
were Shirley E. Raybuck and John R. Anderson Jr. Other contributors include freelance
writers Eric Krell and Joanne Sammer, and John T. Mooney, principal of the training and
consulting firm Consultive Source.
HR Magazine’s 2012 HR Trendbook (ISSN 1047-3149) is published by the

Society for Human Resource Management, 1800 Duke St., Alexandria, VA 22314;
96 (703) 548-3440; ______
Hrmag@shrm.org. ©2011
52 HR Magazine • HR Trendbook 2012
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ECONOMIC OUTLOOK
Feels Like Recession, But ...

By Jennifer Schramm, GPHR
Though economists say we are now recovery with judicious fiscal policies, increased pessimism as other countries
well into our third year of recovery from authors of the Outlook predict global across the continent, especially Italy,
the 2007-09 recession, high rates of growth will be much lower. And, another Ireland, Portugal and Spain, struggle with
unemployment, continued economic spate of shocks—a major natural debt consolidation—and social unrest,
uncertainty, volatile markets and disaster or rising political unrest in key as austerity measures are implemented.
debt-burdened national economies have nations—could lead to market volatility
made many around the world feel like that will hinder global recovery. They Another Jobless Recovery
the Great Recession never ended. These warn that strong coordinated action Poor performance of the job market is
factors are prompting many leading worldwide will be needed to avoid a keeping pessimism high in the United
forecasting bodies to readjust their decade of stagnation and lost growth in States. A September CNN/ORC Interna-
views of what lies ahead in 2012. Most the advanced economies. tional poll found that 90 percent of
predictions are less optimistic now than On the global stage, while emerging Americans surveyed said economic
they were when 2011 began. markets are growing, there is strong conditions remain poor.
uncertainty in Europe. If, for example, World leaders and economists
Slower Growth Greece ultimately defaults on its debt, agree that job growth is the critical
In its fall World Economic Outlook, the Merrill Lynch estimates that the shock factor in improving the global economy.
International Monetary Fund predicted to growth in Europe will contract overall “Inclusive, job-creating growth must
only a 1.6 percent rate of gross output by 1.3 percent in 2012. This be our goal. But today, we risk losing
domestic product growth in advanced uncertainty in Europe, led by Greece, the battle for growth,” the International
economies by the end of 2011. Even is driving volatility in the markets and Monetary Fund’s Managing Director
this anemic forecast was Christine Lagarde said during a recent
qualified by caveats. If speech. “With dark clouds over Europe,
European policy-makers and huge uncertainty in the United
are not able to contain States, we risk a collapse in global
the euro-zone crisis demand.”
or U.S. policy-makers Revised estimates for global and
cannot balance support U.S. growth was the central theme at
for economic the annual fall National Association
of Business Economists (NABE)
conference. The association’s October
NABE Industry Survey found that
84 percent of respondents expect gross
d
domestic product to grow at a pace of
jjust 2 percent or less from fourth-
q
quarter 2010 to fourth-quarter
2
2011, up from only 23 percent
w forecast such a low level
who
o
of growth in July.
“Labor market
cconditions are expected
tto improve only gradually
as job growth remains
tepid. Unemployment
is expected to remain
above 8 percent for the
next four years,” FedEx
Chief Economist Gene Huang
said at the conference. “Full
The author is SHRM’s manager of workplace trends and

forecasting.
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THE WORLD’S NEWSSTAND ®
ECONOMIC OUTLOOK
employment is not expected to return until Risk of Long-Term Unemployment

2015.”
Pessimism around job growth is The recession affected different demographics of workers in a number of ways. For example,
exacerbated by growing fear that policy- an analysis of U.S. Census data from the Social Science Research Council found that during
makers are incapable of reaching the the recession, women’s earnings took less of a hit than men’s. Women’s earnings fell $253
needed consensus to effectively counteract on average compared with a drop of $2,433 for men, across all education levels. While men
medium- and long-term weaknesses in still out-earn women by a large margin, this trend narrowed the gender wage gap slightly. One
the U.S. economy. According to the fall explanation for the difference is that sectors dominated by men, such as construction, lost
NABE Outlook Survey report, the two main jobs disproportionately from 2007 to 2010. Women are outpacing men in obtaining higher
challenges for economic growth are: education, and this is likely to influence future wage trends; individuals who never completed
• Low consumer and business high school saw a loss of earnings more than three times greater than those with a graduate
confidence. or professional degree. However, many state and local government jobs that will be lost in
• Uncertainty about the ability of policy- 2012 due to spending cuts are likely held by women.
makers to agree on effective strategies. Throughout the recession and continuing today, the young are more likely to be
“We are dealing with an unprecedented unemployed or underemployed. Furthermore, an extended jobless recovery or rise in long-
situation,” said Donald Kohn, senior fellow term unemployment may influence wage growth. Entering the job market during a time of
at the Brookings Institution and a former elevated unemployment has been shown to have a lasting impact on lifetime earnings, so
vice chairman of the Federal Reserve, the extended period of joblessness could have a far-reaching influence on Millennials. At the
speaking at the conference. “It cannot be same time, older workers who are laid off are more at risk of long-term unemployment.
a coincidence that the drop in household “In a downturn this deep and this long, no one is sheltered. There is no broad group that
and business confidence coincided with the hasn’t seen rising unemployment,” says Heidi Shierholz, an economist at the Economic Policy
debt-ceiling debate.” Institute.
Political leaders “need to work through
One of the most striking changes in the U.S. employment situation since the recession
their differences to reach sensible
began has been the increase in the number of long-term unemployed. It’s “like nothing we
solutions,” Kohn said.
have seen since the Great Depression,” Shierholz says.
Despite gloomier revised growth
Before the recession, long-term unemployment was often viewed as a problem that,
projections, most economists surveyed by
unlike many of its European counterparts, the United States had somehow managed
the association said they did not expect
a double dip: Only 13 percent of the to evade. While the United States still has lower long-term unemployment rates than
respondents expect the economy to slip other developed countries studied by the Organisation for Economic Co-operation and
back into recession. Development, it is starting to catch up and had a huge increase in this category of
In addition, the U.S. trade deficit unemployment from 2008 to 2011.
declined sharply in July and remained
unchanged in August. As a result, Goldman Percent Share of All Unemployed Out of Work 12 Months or More
Sachs upgraded its 2011 third-quarter 53
2008 2011
gross domestic product forecast. 47.3
40.5 39.8 40.5
The Institute of Supply Management’s 30.4 33.5 34.9
26.2 24.8
closely watched nonmanufacturing index, 18.8
while still weak, showed that activity in the 9.5
nonmanufacturing sector grew in October
U.S. OECD U.K. Spain France Germany
for the 23rd consecutive month. Its Source: Organisation for Economic Co-operation and Development (OECD).
manufacturing report showed that activity
in that sector expanded during October for “The way to bring long-term unemployment down is to get jobs back in general,”
the 27th consecutive month. The overall Shierholz says.
economy grew for the 29th consecutive The U.S. unemployment rate stood at 9 percent in October, according to the U.S. Bureau
month. of Labor Statistics. The number of long-term unemployed—those jobless for 27 weeks or
“Business investment is the bright spot
more—was 5.9 million in October and accounted for 42.4 percent of the unemployed.
in the forecast,” Huang said. “We expect
Once out of work beyond six months, job seekers’ prospects for finding work at wages
spending on business equipment and
comparable to those at their previous jobs declines. The risk of the development of a
software to increase by 9.2 percent in 2011
permanently large population of long-term unemployed and underemployed makes the rise in
and 7.7 percent in 2012.” The downside:
the U.S. long-term unemployment rate from 2008 to 2011 very worrying indeed.
Many business leaders are investing in
capital expenditures such as equipment or
technology rather than adding to payrolls.
HR Trendbook 2012 • HR Magazine 55
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ECONOMIC OUTLOOK
New Skills Required?

Organizations that were hiring full-time staff for “completely new positions” were asked, “Do new positions you are hiring for require new skills?”
Construction, Federal Finance Health Manufacturing State and Services - High-tech Total
mining, oil and gas government local government professional
Number of respondents 72 28 71 12 78 38 85 83 467
Approximately the same types of skills 29% 43% 28% — 21% 42% 29% 23% 28%
A mixture of new skills and the same 61 39 59 — 65 50 48 64 57
types of skills
Completely new and different skills 10 18 13 — 14 8 22 13 15
Percentages may not total 100 percent due to rounding. A dash indicates that the sample size was too small for analysis.
Source: SHRM Poll: The Ongoing Impact of the Recession.
Economic Variables said: “The economy remains fragile in into some of the key labor market trends
Economic forecasting has become more the aftermath of the housing bust and preoccupying economists. One insight
difficult because the variables, and financial crisis. Consumer confidence addresses the question of whether the
economic players on the global field, has fallen recently, and, on top of that, aftermath of the recession has led to
have expanded. Some factors that will state and local governments continue mainly a cyclical or demand-based jobs
influence prospects for economic growth to pare spending. That’s an ongoing crisis or to a more-lasting structural
during 2012 include: negative contribution” to the recovery. problem.
Interest rates. A little over a month Housing and construction. In its If there is just not enough aggregate
after announcing a plan to hold interest November report, the U.S. Commerce demand in the economy to provide
rates near zero through at least mid- Department said construction spending the majority of job seekers with work,
2013, Federal Reserve Chairman Ben rose 0.2 percent in September after employment levels should improve
S. Bernanke announced in September reaching 1.6 percent in August. Depend- once the overall global economy
that the Fed would sell $400 billion ing on the market sector, analysts offer strengthens. But if the problem is
worth of shorter-term securities and varying predictions for growth in real more structural—if, for example, new
buy longer-term ones. The strategy is estate sales during 2012. According to a technologies have automated and
intended to boost the economy by help- September Reuters poll of economists, eliminated entire categories of jobs, or
ing to lower long-term interest rates there were mixed views on whether the industry skill demands have changed
on mortgages and corporate borrowing worst would be over for the U.S. housing substantially—there could be a growing
and thus encourage investment. Both market by the end of 2011. Overall, problem of skills shortages even while
Fed plans were considered somewhat the economists surveyed forecast that unemployment rates stay high.
controversial. Unfortunately, if these existing home sales would improve It is a fair bet that aggregate demand
approaches do not work well, there are only modestly and most predicted a remains the main problem while pockets
few options left for the Fed to boost weakened housing sector for at least a of skills mismatches persist, despite
growth. few more years. the high number of job seekers. “It’s
Inflation and consumer spending. Global trade. In September, faced primarily demand, because we see high
According to Towers Watson, employees with increasing risks and uncertainty, unemployment across many industries.
will get an average salary increase of the World Trade Organization revised It looks very broad-based,” Shapiro says.
about 2.8 percent in 2012. This was up downward its estimate for growth in The key: “Not to allow it to turn into a
slightly from the 2.6 percent employers global goods trade in 2011 to 5.8 percent structural problem.”
said they planned for 2011. Unfortu- from its previous forecast of 6.5 percent. Surveys of HR professionals indicate
nately, these increases are considered Emerging markets’ growth. The that there could be at least some areas
unlikely to keep up with inflation for International Monetary Fund continued in the economy where skills shortages
the majority of employees. If consumer to predict robust growth in real gross may be a factor. For example, data from
costs outpace wage gains, U.S. domestic product of 6.4 percent in the Society for Human Resource Manage-
consumer spending is unlikely to be a emerging and developing economies. ment’s (SHRM) Leading Indicators of
major engine for revving up the economy. Rising employment, a young population, National Employment show that even as
The costs of key goods such as fuel, a growing middle class and rising employment expectations started to level
education, housing and health care will consumption are propelling the growth. off in 2011, recruiting difficulty generally
be critical factors influencing consumer continued its slow rise. The recruiting
spending. In a recent speech, Carl Weak Demand, Skills Shortages difficulty index is based on the difficulty
Shapiro, a member of President Barack Throughout the recession and recovery, HR professionals report in finding
Obama’s Council of Economic Advisers, HR professionals have provided insight candidates for strategic positions—
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ECONOMIC OUTLOOK
Employment Expectations Are Leveling Off

This line graph denotes the employment expectation index figures generated each month by the Society for Human Resource Management’s Leading Indicators of Employment
report. Each index figure reflects the percentage of HR professionals who expect employment at their organizations to increase in the following month minus the percentage who
expect employment to decline.
60
50
40
30
20
10
0
-10
-20
-30
Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Nov-11
Manufacturing employment expectations Service sector employment expectations
Recruiting Difficulty Is Trending Up

This line graph denotes the recruiting difficulty index figures generated each month by the Society for Human Resource Management’s Leading Indicators of Employment report.
Each index figure reflects the percentage of HR professionals who say recruiting difficulty of candidates for the jobs of most strategic importance at their organizations increased
in the previous month minus the percentage who said it declined.
20
15
10
5
0
-5
-10
-15
-20
-25
-30
-35
-40
Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Nov-11
Manufacturing recruiting difficulty Service sector recruiting difficulty
Source: SHRM Leading Indicators of National Employment historical data, www.shrm.org/line.
generally, jobs with higher and special workers. Finally, a November survey of Staffing Management Special Expertise
skill demands. HR professionals shows that in many Panel. “Even if your company’s balance
Similarly, the SHRM Jobs Outlook industries, new jobs require new skills— sheet looks good, there is so much
Survey report for the final quarter of in some cases, almost completely new uncertainty.” According to Hasna, this
2011 shows that even as HR profes- and different skills compared to jobs lost uncertainty is making many potential
sionals’ optimism about the job market in the recession. job candidates much choosier about
has gone down, they still report having HR and staffing professionals have accepting job offers. Even unemployed
problems filling skilled jobs. Only 34 per- noticed the irony of having a harder time candidates are more reluctant to
cent of respondents have some level recruiting while unemployment levels relocate. “We’re getting, ‘Maybe at a
of confidence in the U.S. job market for remain so high. The more specific the later time when things are more stable.’
the fourth quarter, a steep drop from skills requirements, the more difficult They’re not willing to take the risk.”
the second quarter, while 57 percent recruiting has been. “For entry-level Until hiring rates improve and the
expressed some level of optimism about jobs, it’s completely different. But from global economy gains sustainable
job growth. Three-quarters of respon- a skilled jobs perspective, people are in momentum, this lack of confidence
dents said the workers they had the lockdown. They are fearful to make that in the future job market is likely to
most difficulty hiring in the third quarter change,” says John Hasna, manager of influence both employers and job
were overwhelmingly skilled profession- talent acquisition at TD Ameritrade in seekers. Says Hasna, “There’s a cycle
als, distantly followed by skilled manual Omaha, Neb., and a member of SHRM’s that needs to be broken.”
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Trends
Companies will continue to take a rewards into strategic planning so that Executive perks trimmed. On the
conservative approach to pay, as pay-for-
_____ compensation planning takes place as the other side of the pay-for-performance
performance
_____________ strategies and executive strategic vision is crafted, not after the fact. coin, Dodd-Frank rules and shareholder
compensation take center stage. Here are Variable pay re-examined. Given pressure are driving executive compen-
some key compensation and incentives economic volatility and tight budgets, more sation planners to reduce the use of
trends to look for in 2012, according to HR professionals will take a hard look perquisites. These might include excise tax
______
surveys and experts: at variable pay programs in the general gross-ups and severance multiples—cash
Salaries rise, barely. Base salaries workforce to determine if they truly severance payments that may be equal to
for salaried exempt employees are motivate desired performance or if they two or three times an executive’s annual
projected to increase 2.9 percent in 2012, simply represent deferred salary. base compensation, for example—and other
according to Aon Hewitt. This marks a Cash is king. Volatile economic nonperformance-based elements that often
slight improvement over the 2.7 percent conditions during the past year have garner negative headlines.
increases in 2011 and the third year of elevated the importance of base pay Executive compensation communi-
increases, albeit small ones, since the among all employees, even top performers cations. Overall compensation for chief
record-low bump in 2009 of 1.8 percent. who, like the rest of the workforce, rate executive officers has risen roughly
In 2012, salary increases are expected to job security and base pay as the top two 20 percent in the past three years. Their
remain more than 20 percent lower than attractions to new jobs, according to pay should rise, perhaps considerably,
the pre-recession increases of 3.7 percent Towers Watson. Additionally, executive again in 2012 due to equity-based
in 2007 and 2008. compensation designers expect the long-term incentives granted in 2008
Differentiation deepens. Rewards portion of cash in executive compensation and 2009 when most stock prices were
professionals will seek to gain more bang packages to increase during 2012. at historic lows. Perceptions about the
for their compensation buck by granting Keep it simple. After years of disparity between executive pay and
higher salaries and higher salary increases engineering complex compensation compensation for the general workforce,
to top performers and workers in positions
_________ programs designed to make sure the as well as shareholder demand for pay-for-
that deliver greater value to their organi- right compensation goes to the right performance accountability, are driving
zations. To that end, many HR professionals people, rewards professionals are more publicly listed companies to avoid
will focus on carving out higher portions of simplifying. Business-unit managers seek legalese in their proxy statements. This,
variable pay for top performers. more-flexible compensation programs in turn, is drawing more communi-
Claw-backs. On the compliance front, that can be adapted to cations and HR profes-
HR professionals will help institute—and meet strategic needs sionals into the
influence—claw-back
___________ policies on executive as business proxy-drafting
compensation as officials at the U.S. conditions process.
Securities and Exchange Commission quickly
finish writing the claw-back rules required change.
by the Dodd-Frank Wall Street Reform and
Consumer Protection Act.
Compensation goes “global.” With
global-leveling efforts under way to
systemically establish the relative value of
jobs and their corresponding pay ranges
worldwide, rewards professionals are
tailoring local compensation packages to
better reflect country- and region-specific
economic conditions and labor markets.
Rewards as a strategy. Most rewards
professionals have traditionally sought
to align compensation programs with
business strategy; however, leading
companies are beginning to integrate
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THE WORLD’S NEWSSTAND ®
‘The Entitlement Era Is Over’

The Great Recession and sluggish
economic growth in its aftermath have
caused employers to rethink their
approaches to pay. One result: Renewed
emphasis on rewarding top performers
even if overall pay-raise budgets are
smaller.
According to Myrna Hellerman, senior
vice president at Sibson Consulting,
much can be learned from best-practice
companies where base pay increases
must be earned, based on demonstrated
individual achievement. Pay raises “are not
an entitlement; the entitlement era is over,”
she maintains.
Other characteristics of the new pay
mind-set:
• If there is no budget for increased base
pay, some high achievers might still get but delayed until a company returns to if the company instead carves out 0.5
increases. profitability, notes Jim Kochansky, a senior percent of the budget for top performers
• If there is a base pay increase budget, vice president at Sibson. and communicates that the general budget
some employees will get nothing while In addition, companies are carving for pay increases is 2.5 percent, then the
significant amounts will be given to the out a portion of their merit budgets to expectation among average workers will
highest achievers. be set aside for top performers. “If you be for a 2.5 percent raise. “Carve-outs
• Executives are thinking more creatively have a 3 percent budget for increases, should be done early in the budget
about incentive compensation. Instead of employees are going to expect to receive process” so money is set aside and kept
annual plans, payouts might be earned a 3 percent raise,” Kochansky says. But distinct, he recommends.
Beyond Alignment
In the telecommunications industry where innovation reigns, T-Mobile has moved on
to the next generation of total rewards management.
Vice President of Employee Engagement and Rewards Bruce O’Neel reports that
rewards represent a “core element in how T-Mobile thinks about the rollout of new
devices. We pick the best and the brightest to participate in our launches.”
So, stores with the best performance are the first to launch products.
The rollout of new devices becomes a nifty nonfinancial reward for top
performers. And, the process of how the wireless company rewards
employees on a new product initiative is conducted during strategic
planning.
Alignment after strategy setting is so yesterday.
Integrating rewards into strategy planning is a leading practice likely
to gain momentum in 2012 and beyond, notes compensation consultant
Juan Pablo González. He cites T-Mobile as a shining example in Shockproof: How to
Hardwire Your Business for Lasting Success (Wiley, 2010), co-authored with his Axiom
Consulting Partners colleagues.
“Traditionally, rewards professionals would seek to align pay with business
strategy,” González notes. “That’s very valuable. The leading practice is managing
rewards as an element of the business strategy.”
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Three Tough Questions

Given the way the economic and regulatory
environments are shaping up in 2012, HR and
rewards professionals likely will confront some
tough questions during the next 12 months,
including the following:
Question: What is our return on investment in
people?
Driver: Executives outside of HR may still
think that compensation represents a cost rather
than an investment. This outlook “likely drives
behavior in terms of how much sweat equity
and care organizations place in the design and
execution of their rewards programs,” notes Tom
McMullen, reward practice leader at Hay Group.
To help counteract this attitude, HR leaders
should work on this difficult return-on-investment
calculation.
Question: What is happening with Dodd-Frank?
Driver: Delays by the U.S. Securities and Exchange
Commission in translating the expansive Dodd-Frank Act
U.S. Salary Increases
into specific provisions, an activity originally scheduled
2007 2008 2009 2010 2011 Projected
to conclude in August, has some executive compen- – Record Low for 2012
sation experts privately questioning how the law will be Executives 4.0% 3.9% 1.4% 2.4% 2.8% 2.9%
implemented. HR professionals at publicly listed companies Salaried exempt 3.7 3.7 1.8 2.4 2.7 2.9
must decide whether to wait and see or to make changes Salaried nonexempt 3.6 3.7 1.9 2.4 2.8 2.9
before the commission Nonunion hourly 3.6 3.6 2.0 2.4 2.7 2.9
finishes the regulations; Union 3.3 3.4 2.2 2.5 2.6 2.7
For additional coverage of either way, corporate
Source: Aon Hewitt U.S. Salary Increase Survey findings, September, based on responses from 1,494 large
compensation surveys and compliance capabilities U.S. companies.
incentives, see the online should be primed and ready
version of this section of the to respond.
2012 Trendbook at www.shrm Question: Are our Projected Pay Increase by Performance Level, 2012
.org/hrmagazine/12Trendbook.
rewards professionals Performance Percentage of Workforce Average Pay Increase
totally empowered and Highest-rated 8% 4.8%
accountable? Next highest-rated 28 3.8
Driver: More organizations are adopting a total rewards Middle-rated 55 3.1
approach to more effectively attract and retain top Low-rated 7 1.1
talent. However, compensation consultants report that Lowest-rated 3 0.3
many HR professionals who manage rewards programs
Source: Mercer 2011/2012 US Compensation Planning Survey, based on responses from more than 1,200
are responsible for compensation and benefits, but not mid-size and large U.S. employers.
accountable for nonfinancial rewards.
Three Carve-Out Models

Top 5 Pay-for-Performance Objectives The table below illustrates how the percentage of employees designated as top performers
1. Attract, retain or reward talented employees. might affect the salary increases they receive. It assumes an overall 3 percent budget for
pay increases with a 0.5 percent carve-out for top performers.
2. Drive specific behaviors or results.
Percentage of performers Percentage increase
3. Encourage employee engagement.
Performance culture Low Average High Low Average High
4. Motivate employees to work harder. Many high performers 5% 55% 40% 0 2.63% 3.88%
5. Best way to allocate limited funds. Typical distribution 10 65 25 0 2.78 4.78
Fewer high performers 15 70 15 0 2.94 6.27
Source: Mercer 2011 Next Generation of Pay for Performance Survey report, based on responses
from 349 North American organizations. Source: Sibson Consulting’s How to Use ‘Carve Outs’ to Truly Pay for Performance, 2011.
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Shareholders Say Performance Matters, Too

The say-on-pay votes are in. The majority of shareholders say they
approve of executive compensation plans. A deeper analysis of
these votes, however, indicates that pay for performance—at least
as currently defined—may be more important than ever.
Say on pay is a Dodd-Frank Act provision that requires a
nonbinding shareholder vote for or against executive compen-
sation plans. Of the more than 2,300 Russell 3000 companies
whose say-on-pay votes were analyzed in August by Institutional
Shareholder Services Inc.,
a business management
98.4% consultancy, only 1.6 percent

failed to receive a majority of
Percentage of U.S.-listed Russell shareholder support for their
3000 companies surveyed executive pay practices.
that received majority support Pay-for-performance
in shareholder say-on-pay concerns were a primary
votes regarding executive
cause of “no” votes.
compensation
It appears that
performance, perhaps even
more than executive pay, is pivotal: Nearly 50 percent of the
companies that failed their say-on-pay votes reported negative
total shareholder returns in the double digits during the past three
years.
Twenty-five percent of the negative say-on-pay votes occurred
at companies in the energy sector. Homebuilders and real estate
development companies—sectors that have underperformed in
recent years—figured prominently among the 37 organizations
that suffered majority dissent on say on pay.
Don’t Miss Reading
2012 Multistate Payroll Guide, by John F.

Buckley (Aspen Publishers, 2011). This book is
designed to keep payroll professionals informed
about all the complex rules that govern state
92%
Percentage of U.S. companies with at
least one type of variable pay plan in
payroll matters, including wage and hour rules,
2011
reporting and recordkeeping requirements, and
unemployment taxes.
Fair Pay, Fair Play, by Robin A. Ferracone

(Jossey-Bass, 2010). The author combines her
own 20 years of experience with interviews
with executives and compensation committees
78%
Percentage of U.S. companies with at
least one type of variable pay plan in
to provide clear guidance on determining 2005
appropriate pay packages, actions and designs.
Source: Aon Hewitt U.S. Salary Increase Survey findings, September, based on
responses from 1,494 large U.S. companies.
Both are available at http://shrmstore.shrm.org
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BENEFITS
Benefits Summaries Deadline Delayed
Trends
Several of the foremost employee benefits on employees’ tied to meeting
trends of 2011 are likely to remain W-2 forms; obtainable
significant in 2012. Here are a few of them, this reporting health goals,
according to authoritative surveys and the becomes not just to
views of experts and employers: mandatory participation.
Health care costs. U.S. employers for large Defined
estimate that their health care benefits employers in contribution
costs will increase an average of 2013. Starting plans. Along
7.2 percent in 2012, according to a survey on March 23, with automatic
by the National Business Group on Health. 2012, plan enrollment in
Employers will continue using various administrators 401(k) and similar
tactics to limit health care spending, will be required plans and automatic
including increased cost-sharing by to issue employees contribution escalations,
employees and value-based plan designs standard, multipage employers are providing
that promote cost-effective, evidence- summaries for each plan more retirement planning
based treatments. Consumer-directed option. Throughout the year, guidance, including financial
health plans with health savings accounts HR will be charged with keeping education, independent investment
or health reimbursement arrangements up with new legal requirements and advice and fee disclosure reporting. More
supported by employer contributions are communicating what the changes mean employers are arranging fund offerings in
likely to continue to managers and tiers with investment options that better
gaining favor. employees. match a participant’s risk tolerance and
Health care
reform. Another
year means another
round of health care
7.2% Percentage by which
U.S. employers expect
Family health.
Employees are being
encouraged to improve
and manage their
desire to control investments.
Flexible workplaces. More HR profes-
sionals are deploying flexible workplace
programs and policies to recruit and retain
mandates under the health and thereby top talent, enhance engagement, reduce
employee health
Patient Protection care benefits costs to hold down long-term turnover costs, and increase productivity.
and Affordable increase in 2012 costs through Employers are adopting policies that
Care Act, despite wellness programs allow telecommuting, flexible work hours,
lingering questions that use incentives compressed workweeks, phased retirement
about the act’s constitutionality. In 2012, such as plan premium discounts. These and other practices that allow employees
employers will have the option of reporting initiatives are expanding to include family to better manage work, leisure and family
the cost of employer-provided health care members. Incentive payments are being responsibilities.
W-2 Requirement’s Silver Lining

The health care reform law’s W-2 reporting requirement is “an opportunity
________________
to better inform employees about their health and wellness benefits,”
according to Jennifer Benz, chief executive officer of Benz Communications.
“The intent of requiring the value of employer-provided health care to
be reported on employees’ W-2 statements is to help people understand
the true cost,” she explains. “Many companies have not communicated
this information before, and their employees are going to have sticker
shock when they see how much the cost of their health care really is. But
this should be used as an opportunity to talk about why health care is so
expensive”—raising issues such as unnecessary overutilization of low-value
services—“and the investment that the company is making in employee
benefits.”
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BENEFITS
2012 Health Care Reform Mandates

The following mandates under the Patient covered individual for all policy years
Protection and Affordable Care Act are that end on or before Sept. 30, 2013.
effective Jan. 1, 2012, unless otherwise
noted. All are subject to change based
on regulatory, congressional or judicial
action.
After that, the fee will increase to $2 per
policyholder.
Standard health plan summaries.
As early as March 23, 2012, under
$1
The fee, per covered individual,
that insurers and self-insured
Employer reporting on W-2s. U.S. a proposed rule, all health plans and
health insurance plans will
employers may begin reporting the issuers must provide a summary of pay to fund comparative
cost of employer-provided health care benefits and coverage, along with a effectiveness research on
coverage on their employees’ W-2 uniform glossary of terms, to enrollees medical treatments
forms. This reporting is optional for all and potential enrollees upon request and
employers for the 2011 Form W-2. For before coverage is selected. In addition,
small employers—those filing fewer than health plans and issuers must provide department announced that the health
250 W-2 forms—this reporting remains notice at least 60 days before making care reform law’s program to provide
optional for tax year 2012 and later, until any significant modification to a plan or long-term care insurance through the
further guidance is issued. coverage during the plan or policy year. workplace was unworkable and would not
Comparative effectiveness fees. Long-term care. The U.S. Department be implemented. Critics charged that the
Insurers and self-insured plans will be of Health and Human Services was program, intended to be self-funded, was
required to pay a fee to fund research expected to release further details of the financially unsustainable without major
comparing the effectiveness of medical Community Living Assistance Services government subsidies in addition to
treatments. The fee will be $1 per and Supports Act. But in October, the premium collections.
U.S. Employers Revamping Health Care Benefits

With the cost of employee health care ben- much more aggressive
efits expected to increase by 7.2 percent in their use of cost- Cost-Sharing Strategies
in 2012, large U.S. employers are planning sharing techniques and To help control cost increases and begin driving costs down, employers are planning to
use a wider variety of cost-sharing strategies in 2012. Some examples:
to have workers share more of the cost, cost-control programs
according to a survey by the National Busi- and are making certain Strategy Percentage of
survey respondents
ness Group on Health. “Employers are facing that employees have
Increase the percentage that employees contribute to their premiums 53%
a multitude of challenges posed by rising more reasons to be
Increase in-network deductibles 39
health care costs, the weak economy, and cost-sensitive health
Increase out-of-network deductibles 23
the financial and administrative impact of care consumers.”
Increase out-of-pocket costs 22
complying with the new health care reform Employers are
Source: National Business Group on Health survey, based on
law,” says Helen Darling, president and chief shifting to consumer- responses from 83 of the nation’s largest corporations, June.
executive officer of the nonprofit association
of mostly large U.S. employers based in
Washington, D.C. “Employers are being
directed health plans
(CDHPs) that combine
a health plan with a tax-advantaged
account enrollees can use to pay
53%
Percentage of employers that plan
to increase the amount employees
for health care. According to contribute to their health
the survey, 73 percent of insurance premiums in 2012
employers will offer
employees at least
one CDHP in 2012, plan with a health savings account.
a sharp increase To promote family members’ health, 57
from 61 percent percent of respondents said they provide
that offered such a plan in 2011. employees’ spouses and domestic partners
In addition, 17 percent will pro- access to telephonic or online weight man-
vide or plan to provide a CDHP as agement coaches. Approximately one-third
the only plan in 2012. The most of employers make these resources avail-
common type is a high-deductible able to employees’ children.
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PRUDENTIAL GROUP INSURANCE
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Contact Bob Patience, Vice President, Voluntary Benefits,

Prudential Group Insurance at 973-548-6233.
Download our “Fifth Annual Study of Employee Benefits:
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BENEFITS
Survey: Telecommuters
Are Happier, Healthier
Telecommuters
__________ are more loyal and
more productive employees than
those who work in offices, according
to a survey from Staples Advantage,
the business-to-business division of
Staples Inc., based in Framingham,
Mass. The survey found that
86 percent of telecommuters said they
felt better and were more productive
when they work from home.
The survey was conducted in May
among more than 170 office workers
who work at least one day per week
from home for U.S. companies of
various sizes and across industries.
Telecommuters said they were:
Happier and healthier. Telecom- 80 percent said with telecommuting Employee data for the WorldatWork
muters said their stress levels have they maintained a better work/life report was collected in December
dropped 25 percent on average and balance. 2010 via interviews with 1,002
their overall happiness has increased Telework 2011, a report from randomly selected U.S. adults age 18
28 percent since they started working WorldatWork, says the U.S. and older.
from home. Seventy-three percent said teleworking population was
they ate healthier. 26.2 million in 2010, representing
More loyal. Seventy-six percent of nearly 20 percent of the U.S. adult
telecommuters were more willing to put
in extra time on work and said they are
more loyal to their company.
Better balanced. More than
working population. That year, 84
percent of workers who telecommuted
did so one day per week or more, up
from 72 percent in 2008.
26.2M
Number of U.S. workers who
telecommuted in 2010

2011 Employer’s 2012 Multistate
Guide to Health Care Guide to Benefits
Reform, by Brian Law, by John F.
M. Pinheiro, Jean C. Buckley (Aspen
Hemphill, Clifford J. Publishers, 2011). If For additional coverage of ben-
Schoner, Jonathan you oversee benefits efits surveys and a timeline fea-
turing future health care reform
M. Calpas and Kurt in more than one
mandates, see the online version
R. Anderson (Aspen state, this book
of this section of the 2012 Trend-
Publishers, 2011). covers every kind book at www.shrm.org
This step-by-step practical guide is for of state-specific question about health /hrmagazine/12Trendbook.
employers struggling to keep up with benefits, life insurance, disability and
the rapid pace of changes affecting their leave benefits, and more.
health benefits plans.
Both are available at http://shrmstore.shrm.org.
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BENEFITS
Employers Reducing Prescription Drug Coverage

As employee benefit budgets remain tight, U.S. restrict coverage of specialty
employers are adopting plan design changes that pharmaceuticals under the
reduce drug benefit coverage and improve pricing, medical benefit, up from
according to the Pharmacy Benefit Management 12 percent in 2010.
Institute, a provider of industry research and • Pharmacy benefits management
education. pricing pressure is mounting on
The institute’s 2011 survey was completed by mail delivery programs as the averagee
drug-plan sponsors representing 5.2 million covered discount from the average wholesale
employees, spouses and dependents. The findings or
price rose by 10 percentage points for
revealed that: generics dispensed through the mail,, increasing
• Plans using a four-tier design increased from from 58 percent in 2010 to more thanan
17 percent to 25 percent from 2010 to 2011. 68 percent in 2011.
Nearly 50 percent of large employers—more than
20,000 covered persons—now have a four-tier Managing Specialty Drug Benefits
efits
plan design, typically providing the most generous A 2011 national survey by the nonprofit fit Midwest
coverage for generic versions of brand-name Business Group on Health, representing ing private
prescription drugs. and public employers, shows that most st U.S.
• Specialty drug co-pays increased by 37 percent efit design
employers are using a traditional benefit
in 2011. Specialty drugs are high-cost and highly rmularies,
for specialty drugs, including tiered formularies,
complex pharmaceuticals, often developed through co-payments and co-insurance, instead ad of
biotech research, that increasingly are being value-based benefit designs that might ht be more
used to treat serious medical conditions including harmacy
appropriate for biologic or specialty pharmacy
cancer, multiple sclerosis, rheumatoid arthritis and Value based
medications, according to the group. Value-based
other diseases. The average specialty drug co-pay designs might include lowering, rather than
grew from $61 in 2010 to $84 in 2011. Nearly increasing, co-pays for specialty drugs deemed
one in four employers now place specialty drugs necessary for patient treatment and providing
on a fourth tier, requiring the most cost-sharing. health coaching to ensure compliance with medical
• Reduced coverage of specialty drugs is on regimens and proper use of these drugs—to avoid
the rise as well, as 24 percent of employers now hospitalization and other costs down the road.
The Future of Retiree Benefits

Business leaders are revisiting and retirees if they intend to be globally have access to affordable coverage.
rethinking their strategies for managing competitive,” says Paul Kersting, a But most companies are not waiting
retiree medical benefits. principal with Buck Consultants in New until 2014 when the exchanges are
Employers have been easing away York. “More employers will move away slated to begin operating, according to
from offering these benefit plans since from sponsoring plans if they can.” the survey. Employers are rethinking the
the early 1990s. That’s when they were Roughly 60 percent of employers need to provide retiree prescription drug
first required to account for future retiree are reconsidering their approach to coverage in light of enhancements like the
medical benefit liabilities on their balance providing retiree medical benefits or closing of the Medicare Part D doughnut
sheets. Now that health care reform is plan to do so within the next two years, hole.
taking hold, the landscape for retiree according to a 2011 survey of 248 “Health care reform can serve as a
medical benefits is changing once again. companies conducted by Towers Watson catalyst for employers to rethink their
The health care reform law includes and the International Society of Certified benefit strategies in a way to create as
provisions to help employers manage their Employee Benefit Specialists. Many much predictability in their health care
retiree medical plans. But it may not be employers see health care reform as a for retirees as possible,” says Jim Parker,
enough to stem the tide away from these way to exit plan sponsorship by relying president of Health Market Strategies, an
benefits. on state health insurance exchanges Indianapolis-based health consulting firm.
“It is difficult for companies to keep and other innovations in the reform law “Some provisions of the reform law will
their past promises to pre-65 and post-65 to ensure that their companies’ retirees actually facilitate that.”
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BENEFITS
Regulations and Costs Shape Future 401(k) Plans

Under ______
final rules issued by the U.S. “Fees should have been communicated promote trust and encourage employees to
Department of Labor, those providing clearly to employers and employees 20 use their employer-provided plan to save
services to defined contribution plans must to 30 years ago,” says benefits communi- for their retirement needs.”
begin providing fee disclosure reports cations consultant Dennis Ackley, Continued scrutiny by U.S. regulators
to plan sponsors by April 1, 2012. Plan president of Ackley Associates in Lee’s and legislators on the fees and outcomes of
sponsors, in turn, must begin providing Summit, Mo. Despite past omissions, defined contribution retirement plans will
quarterly fee disclosure reports to plan he adds, “starting now to be clear and help to shape the future of this market,
participants by May 31, 2012. forthright about fund and plan fees can new research indicates.
“Government regulations have had
a profound and varied effect on defined
contribution plans and administrators,”
says Leslie Prescott, a consultant and
author of a 2011 report on retirement
trends for Boston-based Financial
Research Corp.
As a result of the new fee disclosure
requirements as well as evolving
economics, sponsors of defined contri-
bution retirement plans are focusing on
total plan costs and how they can be
reduced. “Enhanced fee information is
becoming available to plan participants,
and there is heightening competition
among recordkeepers,” Prescott says. “The
spotlight on plan costs is causing plan
sponsors to seek out and use benchmark
data more frequently to uncover
opportunities to reduce plan costs, often
through plan redesign or change in plan
providers.”
As always, “change leads to both
opportunities and challenge,” Prescott
continues. “With more information
available about the costs of their plans
to plan sponsors and participants, plans
of all sizes will soon be able to evaluate
plan management in a way only the
largest plan sponsor could before. Asset
managers, advisors and recordkeepers
must take stock of their own situations and
will need to develop fitting strategies.”
May 31, 2012

Date when defined
contribution plan sponsors
must begin providing
quarterly fee disclosure
reports to plan participants
__________________________
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BENEFITS
Promoting Health Care Consumerism

More employers’ efforts to manage their addition, it means that whenen employees do
health care costs are focused on getting use health care services, theyey are aware of
employees to become better health care the cost and have an incentive
tive to reduce
consumers. However, “employers have the cost. “It all comes downn to plan design,
realized that they can’t just encourage incentives, a communication n strategy and
workers to be better consumers,” says facilitating right behaviors,”” Swenson
Devon M. Herrick, senior fellow at the notes.
National Center for Policy Analysis in For example, education can help
Dallas. “They have to give employees the employees make better choices ices when it
tools and an incentive to become better comes to pharmacy benefits. s. Drug prices
consumers.” vary. Physicians often provide
ide samples
The practice of health care consumerism of more-expensive drugs thathat can lead
is multifaceted. “Health care consumerism individuals to forgo similar but less
means that employees are making healthy pricey options such as generic
eric versions of
choices throughout their daily life—eating brand-name prescriptions.
right, exercising, not smoking, monitoring Explaining to employeess how smarter It means that when
their health numbers and doing everything pharmacy shopping can benefit them employees do use health
they can to change those numbers if they financially by saving funds in their care services, they are
are out of line,” says Joann Hall Swenson, health savings account (HSA) or health
aware of the cost and
health engagement best practice leader for reimbursement arrangement (HRA)
consultancy Aon Hewitt in Minneapolis. In can help them embrace health care
have an incentive to
reduce the cost.
consumerism. “If someone takes a certain

drug to treat allergies and realizes that
his out-of-pocket cost will use up his
Organizations of all sizes, in every industry, entire HSA balance, that employee has an
incentive to look for a cheaper alternative,”
turn to ADP’s proven expertise and Herrick says.
technology for all of their employer needs – Providing Incentives

In many ways, efforts to move employees
from recruitment to retirement – including toward greater health care consumerism
are similar to the push employers
payroll, tax, HR and benefits administration. have made to get employees to save
for retirement using 401(k) and other
Find out how ADP can help you focus on defined contribution plans. In both cases,
more responsibility has been shifted
to employees, and employers are using
what you do best. incentives to reward desired behavior. Just
as 401(k) plans provide matching contri-
butions to reward retirement plan partici-
Call 800.CALL.ADP or visit www.ADP.com pation, employers are using incentives,

such as contributions to HSAs and HRAs,
to spur greater employee engagement in
health care decision-making.
Even as incentives become more
common, these employers are adding
penalties to the mix, such as higher
premiums for employees who do not
participate in wellness programs designed
to boost employee health.
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BENEFITS
Nonfinancial Factors Improve Motivation and Engagement

Employee loyalty is dropping in the U.S. employment deal—such as attracting, a rewards program. A 2011 study of
and worldwide, according to Mercer’s retaining and rewarding employees— more than 500 professionals conducted
What’s Working survey report. The but they are considered less important by WorldatWork, Hay Group and Dow
research—conducted from the fourth by employees when Scott, a Loyola University
quarter of 2010 through the second it comes to their Chicago professor of
32%
quarter of 2011 in different global day-to-day motivation human resources,
regions—shows that the percentage of and engagement at found that three of
workers seriously considering leaving work. the top five concerns
their organizations has risen since “Employee Percentage of U.S. regarding the fairness
the start of the worldwide economic engagement reflects workers seriously of rewards focus on
downturn. In the U.S., the increase was the total work considering leaving nonfinancial aspects
their organizations
9 points, from 23 percent in 2005 to experience, and a big of the total rewards
32 percent in 2011. part of it is how you offering, including career
The analysis reveals that nonfinancial are treated; what kind development opportu-
factors play a prominent role in of work you do; and how you feel about nities, nonfinancial recognition, and
influencing employee motivation and your co-workers, bosses and the general employee development and training.
engagement worldwide—a finding work environment,” says Colleen O’Neill, “We typically see more emphasis
that could prove useful to employers a senior partner at Mercer and the of nonfinancial reward programs when
facing budget constraints. Workers say company’s talent leader in the United times get tough,” says Tom McMullen,
being treated with respect is the most States and Canada. “When financial Hay Group’s North American reward
important nonfinancial factor, followed by resources are limited, organizations can practice leader. “But these programs
work/life balance, type of work, quality of leverage these nonfinancial factors to also tend to be sustained as the
co-workers and quality of leadership. effectively boost employee commitment economy improves.
Among financial factors, base pay and productivity.” “Reward professionals view career
ranks highest. Benefits and incentive pay In the U.S., the importance of development opportunities as the
can be important to other aspects of the financial and nonfinancial factors top reward fairness concern because
closely mirrored the growth opportunities are in high
global findings. Two demand by employees,” McMullen
areas that scored continues. “At the same time, career
Factors Influencing Motivation And higher among U.S. development processes are not partic-
Engagement at Work
employees than ularly developed in many organizations,
Scores near 100 are of middle importance, scores above 100 are more important and scores
below 100 are less important. the global average even though career development
were benefits and a concerns are the No. 1 retention issue
Global United States
working environment for employees.”
Being treated with respect 119 123 that enabled workers How effective companies will be as
Work/life balance 111 112 to provide good they attempt to shore up nonfinancial
The type of work that you do 110 111 service to others. rewards remains to be seen. “This is still
The quality of the people you work with 107 111 U.S. employees virgin territory for a lot of organizations,”
The quality of leadership in the organization 107 112 rated learning and McMullen says. The career development
development opportu- infrastructure in many organizations
Base pay 106 104
nities, promotion is often informal and does not provide
Working in an environment where you can provide 104 112
good service to others opportunities, and a clear path for employees. In this
Long-term career potential 92 91
incentive pay or environment, an entry-level employee
bonuses lower than might not know about her career path
Having flexible working arrangements 91 91
the global average. options for the next five years of her
Learning and development opportunities 90 81 work life.
Benefits 90 106 Fairness “Organizations still have a lot
Promotion opportunities 89 77 Concerns of work to do in terms of equipping
Incentive pay and bonuses 84 71 Nonfinancial their managers with the tools and
Key to colors: Over 100 Under 100 rewards can impact data necessary to effectively manage
perceptions of the nonfinancial rewards,” McMullen points
Source: What’s Working survey report, Mercer, 2011. overall fairness of out.
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HR TECHNOLOGY
Trends
e
Kep an eye out for these trends identified Going social. Social media tools will technology decisions that impact their work
by the Society for Human Resource Manage- become an integral and core component and their departments.
ment’s Technology and HR Management of virtually all HR functions, including Virtual conferencing. HR professionals
Special Expertise Panel: employee relations, benefits management, will increase reliance on videoconferencing
User experience. Ease of use will and training and development. Employees as well as help business leaders adopt this
become more important to employees when will continue to find uses for social technology in appropriate ways.
it comes to HR technology solutions. networking for work and other purposes. Into the cloud. Software-as-a-service
_____________
Customization. nOe-size-fits-all Leverage. HR profes- as well as cloud-based
solutions will decrease in popularity and sionals will continue to software solutions will
effectiveness. move away from viewing For more information about become the preferred
Integration. Employees will expect their role in social media HR technology, see the online direction for HR
a more integrated digital experience as a policing function version of this section of the technology.
when it comes to their interactions with and more toward 2012 Trendbook at www.shrm Getting linked. HR
HR departments. Examples of integration helping business leaders information systems
include single sign-on features and leverage social media solutions will offer
one-stop shopping for benefits. for maximum employee integration with social
Mobile access. Employees will expect engagement. media tools like LinkedIn.
HR departments to provide mobile access to Autonomy. HR managers will gain
core HR functions. more autonomy and flexibility in making
Wanted: HR Professionals with Social Media Skills

Between May and August, more than human resource candidates who can: Bruce Murray, chief executive officer
1,000 new ads for HR positions • Direct web traffic to corporate career of WANTED Technologies. “Facts are
included requirements for social media sites through social media channels. showing that forward-looking companies
skills, nearly a 160 percent increase • Proactively identify and attract are now expecting their recruiters to
above the same period in 2010, passive talent through inexpensive have mastered this core competency.
according to WANTED Technologies. sources such as social media. Social recruiting has moved beyond
Firm researchers, who collect • Build and maintain a pipeline of ‘buzz’ and is definitely mainstream.”
detailed hiring-demand data using prospects through
WANTED Analytics, say those skills networking and
include being able to develop recruiting social media
strategies and source talent by using research while
the Internet and social networking maintaining a “robust
sites. Candidates looking for HR jobs LinkedIn profile.”
that include social media components • Create Boolean
need to be abreast of new, innovative search strings, and
sourcing techniques and recruitment use advanced search
best practices and need to know how techniques.
to utilize web searches, apps, job • Assist in placing
boards and social media sites to create employment ads with
community and generate leads. Simply appropriate sources,
knowing how to tweet job openings or including websites
scour LinkedIn or Facebook pages to and social media.
find talent is not enough. “We’ve heard the
According to the researchers’ buzz about social
analysis, companies are looking for recruiting,” says
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© 2011 Sage Software, Inc. and its aƋliated entities. All rights reserved.
4BHF)3.4FRVJQTZPVXJUIUIFUPPMTBOESFTPVSDFT
JUUBLFTUPJNQSPWFQSPEVDUJWJUZBUFWFSZMFWFMPG
UIFPSHBOJ[BUJPO
When your people grow, your business prospers. That’s

why employers everywhere rely on Sage HRMS to boost
their return on employee investment. As a complete, fully
integrated HR solution, Sage HRMS streamlines day-to-
day processes by automating payroll, beneĂts, employee
self-service, attendance, recruiting, training, workforce
analytics, and more. Make your work life easier. Visit
4BHF)3.4DPN and make your business Sage.
__________
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HR TECHNOLOGY
Cloud Computing and Security

Cloud computing is all the rage. But should
_________ Due Dil
Diligence
sensitive HR data reside on the Internet? Brian R Richards, vice president of Client Technologies
Cloud computing refers to storing, for SIRVA Inc., says that with data security
developing or processing data on vendors’ “There’s
“ no silver bullet. If you’re evaluating
servers running on the Internet, or “in a vendor and are concerned with data
the cloud,” rather than on company security, look internally and see if they can
computers. The subset of cloud do it better than your IT department. Do due
computing most familiar to HR leaders is diligence.” He adds that, in many ways, a
software-as-a-service. cloud computing provider has to demonstrate
cl
Most experts say the advantages are that it has good data security—more “than your
many. But are they worth the risks? IT department,
de because if they have a data breach,
they’re out of business.”
Pros and Cons Dev Chanchani, president of INetU, a cloud computing
Cloud hosting takes up less space, saving companies thousands provider, says there are three broad categories to consider when
of dollars by allowing them access to expensive technologies selecting a cloud computing provider: physical, technical and
but requiring them to pay only for the services they use. And by administrative.
“renting” rather than buying software to house payroll, benefits Adds Grady Summers, principal, information security, at Ernst &
or recruiting data on vendors’ servers, managers can relieve Young: “You’ll want to access logs, tour the data center, go through
themselves of information technology maintenance burdens. data center questionnaires and see who has the administrator’s
It’s convenient, too. “Cloud computing makes an IT investment password. Make sure that the service provider can meet regulatory
more efficient, flexible and faster, and allows access to data anytime, requirements as well.”
anywhere, anyplace and with any electronic device,” says Jose
Granado, a security expert with Ernst & Young.
But ubiquitous access to that data makes it more prone to theft.
“The more connected we become, the more exposed we are,” Don’t Miss Reading
Granado says.
Many cloud providers would have their customers believe that Smart Policies for Workplace Technologies: Email, Blogs,
using cloud storage is completely safe. Cell Phones & More, 2nd edition, by Lisa Guerin (SHRM/
“There’s no way to know unless you assess the cloud you’re Nolo, 2011). This book provides the tools HR professionals
going to put your data in,” says Damon Petraglia, director of forensic need to assess their current policies’ effectiveness, along
and information security services for Chartstone LLC. with information on how to draft or revise, then distribute,
Experts say that people looking to use cloud computing— communicate and enforce, new custom policies.
especially HR departments—need to do their homework before
putting their faith in the cloud. According to International Data Corp., Groundswell, by Charlene Li and Josh Bernoff (Harvard
the cloud computing market could hit $72.9 billion by 2015. Business Review Press, 2011). If your organization is dashing
Although cloud computing services are gaining acceptance, headlong toward new social media, tossing up Facebook
organizations still must address the potential risks before moving pages, creating corporate wikis and throwing customer
business applications to the cloud. A recent Ernst & Young survey surveys online, hold on a moment. Did the technology seduce
shows that nearly half of respondents are engaging in, evaluating or you first, or did you stop and think about the relationships
planning to use cloud-based solutions. However, the top risk most you want to forge with the technology?
concerning businesses about using the cloud is compromised data.
Not knowing the exact location of the data is a fear as well. The e-HR Advantage, by Deborah Waddill and Michael
“When you put data into a cloud, you may not know where it Marquardt (Nicholas Brealey, 2011). The 21st century
is,” Petraglia says, as some Amazon customers discovered on Aug. 7 workplace thrives on Internet-enabled connectivity and
when a power outage interrupted Amazon’s only European data technology, and new applications allow HR professionals to
center in Dublin for two days, leaving the company struggling to make the work of developing and managing the workforce
restore customers’ data. faster, easier and more effective. The book explores the
Data in the cloud, Petraglia pointed out, is only as safe as the positive impact of technology on the workplace—how we
company hosting it. “So, when it goes into the cloud and you let work, learn and manage ourselves and others.
someone else be responsible for it, you’re taking a risk,” he says. If
the information is compromised or hacked, the company will be on The first two are available at http://shrmstore.shrm.org.
the legal hook, not the service provider.
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THE CASE OF: T he E ag e r Se e ke r
Shrmlock Holmes at your service.

Top detective in the job search game...
My investigations reveal so many doggone job boards with
HR positions. But there is only one SHRM’s HR Jobs. The
evidence shows SHRM’s HR Jobs has the best qualified
candidates searching for the most attractive jobs.
Plus, with the searchable resume database, job hunters get

noticed and employers can easily find them. Why would
anyone search or post anywhere else? This is an open
and closed case.
HR Jobs is the #1 place where

HR Professionals Find HR Professionals.
I wish all detective work was this easy!
SHRM’s HR Jobs
Where HR Professionals Find HR Professionals
10-0717
www.shrm.org/jobs
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STAFFING MANAGEMENT
Trends Social Media’s Recruiting Powers Get a Boost

The use of social media as a recruiting system. Behind the push was a desire
tool is moving far beyond creating to shift from reactive to proactive
company Facebook pages and tweeting hiring strategies and a desire to
Keep an eye on these trends identified job openings. better manage the employment life
by the Society for Human Resource Recruiters at an increasing number cycle, says Sarah White, principal
Management’s Staffing Management of companies are using social recruiting analyst in talent acquisition for Bersin
Special Expertise Panel: and candidate videos, enabling & Associates, an HR research and
Retention attention. Despite more stakeholders to comment on consulting firm.
increases in companies’ productivity and a particular candidate’s responses, As the economy improves, organi-
profits, there have not been increases says Mollie Lombardi, a human capital
in personnel, building pressure on management analyst with Boston-based
retention. Aberdeen Research.
War for talent. Recruiting activity
has increased among companies trying
to fill current openings.
Employee value proposition.
Others are integrating social
recruiting tools with applicant tracking
systems to help build connections with
passive job candidates and those who
56%
Percentage of organizations
currently using social
Younger workers are looking for more might have already applied for one media to recruit potential
nonmonetary returns such as higher position but could be better suited for job candidates, up from
engagement, social impact and work/ another. 34 percent in 2008
life fit. Once a document management Source: Social Networking Websites for Identifying and Staffing
Potential Job Candidates, SHRM survey, June 2011, based on
New fishing spots. Increased use system, today’s applicant tracking 541 responses.
of social media for applicant pools has system has morphed into hubs for
shifted recruiting strategies away from services such as video interviewing,
job boards. background checking, assessment zations that moved to decentralized
Limiting commitments. Full-time testing and onboarding—and a link to recruiting models during the
employees are being replaced by social media sites. recession—by shifting hiring responsi-
contingent workers, including interns, as Almost half of the 450 companies bilities to regional or local operations—
companies look to limit labor costs. surveyed by Bersin & Associates are turning back to centralized models,
Polishing the brand. Companies are earlier this year were considering says Elaine Orler, president of the
putting an increased focus on candidate replacing their applicant tracking Talent Function Group.
care and user experience for applicants.
Sifting among plenty. Use of
assessment tools has increased as Retiring Baby Boomers
companies look to hire the best talent
from a larger pool of applicants.
Cost Large Manufacturers
More than half of the largest U.S. manufacturers—those with $1 billion
or more in revenue—will be the hardest hit by skills shortages due
to the retirement of current workers, costing each $100 million or
For the latest news and in-
more during the next five years, according to a tracking survey
formation on staffing manage-
of 100 senior manufacturing industry executives completed in
ment, see the online version of
this section of the 2012 Trend- August by The Nielsen Co. for Advanced Technology Services Inc.
book at www.shrm.org Forty-five percent of the companies are encouraging their older
/hrmagazine/12Trendbook. workers to stay on the job. Half of the respondents had 11 or more
open positions for skilled workers at the time of the survey, and 53
percent said they were likely to outsource the positions.
Maintenance and information technology positions were
cited as most likely to be outsourced, with 48 percent of
the respondents indicating that they would consider
doing so. Another 27 percent reported that they
might outsource HR as well.
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THE POWER OF
THE PERFECT MATCH
We believe that when the right person is matched with the right job, great things happen. Businesses
prosper. Friends and neighbors succeed. Communities grow. SOS Staffing brings nearly four decades
of experience to the task, as well as a seasoned staff, proprietary technology tools, effective workforce
management programs, and a tireless passion for—the perfect match.
Staffing Services · Applicant Tracking Services · Managed Service Programs · Reemployment Services
www.sosstaffing.com/shrm
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STAFFING MANAGEMENT

2012 Guide to Bold New Ideas for Making
Work Work, by SHRM/Families and Work
Institute (SHRM/FWI, 2011). This book profiles
promising and innovative practices from 262
employers that are creating effective and
flexible workplaces to make work “work” better
for both the bottom line and employees. All
employers featured received Alfred P. Sloan
Awards for Business Excellence in Workplace
Flexibility in 2011.
The Essential Guide to Federal Employment

Laws, 3rd edition, by Lisa Guerin and Amy
DelPo (SHRM/Nolo, 2011). This guide covers
Criminal, Credit Checks Face More Scrutiny 20 of the most important federal employment
Some employers that use criminal background checks in hiring decisions are laws, providing plain-language explanations
finding themselves the targets of lawsuits. A surge in disputes regarding credit of what each law allows and prohibits; which
reports also may be in the offing. businesses must comply; recordkeeping,
At least five major civil rights lawsuits challenging the use of criminal posting and reporting requirements; penalties
background checks were filed in 2010 against large employers, according to a for violating the law; and more.
March report by the National Employment Law Project.
While the U.S. Equal Employment Opportunity Commission (EEOC) has stated From Hello to Goodbye: Proactive Tips for
that it’s illegal to bar someone from employment just because the individual has Maintaining Positive Employee Relations,
a conviction, Title VII of the Civil Rights Act of 1964 doesn’t wholly bar the use of by Christine V. Walters (SHRM, 2011). You
criminal records in employment decisions, the report noted. may start at the end of the book, which is the
The EEOC has provided a framework for assessing criminal records when beginning of the employment relationship,
making an employment decision. An employer’s consideration may pass muster or you may start at the beginning of the
under Title VII if an individual assessment takes into account: book, which is the end of the employment
• The nature and gravity of the offense or offenses. relationship. Either way, when you finish this
• The time that has passed since the conviction or completion of the book, you will have new insights, practical tips
sentence. and ideas for ensuring that the door does not
• The nature of the job. hit you on the employee’s way out.
In addition, employers need to be alert to changes in state laws that might
restrict the use of criminal background checks in hiring. All are available at http://shrmstore.shrm.org.
Employers’ use of job applicants’ credit histories in making hiring decisions
has been attracting attention as well. For example, the EEOC last year sued
Kaplan Higher Education Corp., a nationwide provider of post-secondary
education, alleging that it discriminated against black job applicants by refusing The Top 10 Hardest U.S. Jobs to Fill
to hire people based on their credit histories. 1. Skilled trades.
In light of the struggling economy, consumer advocates have criticized 2. Sales representatives.
employers’ use of credit reports, saying the practice unfairly keeps the 3. Engineers.
unemployed out of the workforce. To date, at least six states—Connecticut, 4. Drivers.
Hawaii, Illinois, Maryland, Oregon and Washington—have passed laws limiting 5. Accounting and finance staff.
the use of credit report data for employment decisions. 6. Information technology staff.
At the federal level, U.S. Rep. Steve Cohen, D-Tenn., earlier this year 7. Management and executives.
reintroduced a bill that would restrict employers’ use of consumer credit reports.
8. Teachers.
Meanwhile, an amendment to the federal Fair Credit Reporting Act places
9. Secretaries and administrative assistants.
more disclosure requirements on employers that use credit scores. Most
10. Machinists and machine operators.
employers don’t use third-party scores; instead, they order background checks
and credit reports. But if they do obtain credit scores, they must disclose to Source: ManpowerGroup 2011 Talent Shortage Survey, based on
applicants the score and the name of the agency that provided the score. responses from 1,300 employers.
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OUR POLICIES
MUST ALIGN
WITH NEW
LAWS.
THE SOLUTION IS SHRM.
I somehow need to balance internal policies with state and federal
statutes, while enforcing complex compliance regulations.
As a leader in my organization, I’m the one people turn to for
KYMHERGIFYX[LIR-RIIHWTIGM½GWSPYXMSRWXSXLIGLEPPIRKIW
I encounter, I turn to SHRM. I regularly use webinars and
weekly email alerts to remain current with HR standards.
With SHRM, I know I’ll have access to accurate and reliable
legal and regulatory resources. I consider my membership to be
absolutely indispensable. Find out how SHRM can help you at
SHRMSOLUTIONS.ORG/COMPLIANCE
________________________________________
Ann M. Jackson, SPHR

New York, NY
Member since 2005
11-0562
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Trends
With a sluggish economic recovery, who wants to can participate in leadership improve the skills of all workers.
companies are being more selective about programs—but leaders are having problems Interns, apprentices, sponsorships
which employees get training and turning grasping some competencies, according and mentors. Consider programs that
to new and low-cost training methods. Look to the American Management Association match senior employees with entrants to
for the following training and development and The Institute for Corporate Produc- boost skills for both. Coaching by managers
trends in 2012: tivity. Emerging will accelerate the
Self-directed training. Companies are leaders struggle with development of
telling employees, “You’re on your own” managing change, For more training trends, see the employees and advance
when it comes to training that advances their exhibiting agility and online version of this section of the managers’ careers, says
careers. Employees must take the lead and developing global 2012 Trendbook at www.shrm Michael Noble, managing
align the skills they want to develop with the strategies, researchers partner at Camden
opportunities offered by the company. found. Consulting Group.
Technology and social media. No need Flexible career Talent profiles.
to rush into delivering mobile learning— management. As companies have Compile data—from recruitment, payroll,
mobile is still evolving. When the market reduced head count and employees work learning management, performance
settles down, you’ll be able to act, according longer, there are fewer opportunities for management and HR information systems—to
to Mobile Learning: Learning in the Palm of promotion. To engage employees, consider get a picture of each employee’s skills and
Your Hand, from the American Society for internal development—find roles, career work history. The compilation can show
Training & Development. paths and rotations that help employees where your workforce needs to brush up on
Leadership development. In learn on the job. Walgreens’ employees skills and if they can meet challenges. Create
high-performing companies, any manager created an internal training program to a central repository.
Rise to the Challenge

Corporate leaders are preparing to increase productivity,
but are employees ready?
As executives coped with the Great Recession, employee training

and development initiatives were among the first cuts made,
according to SHRM Workplace Visions (Issue 2, 2011). Then came
layoffs. Despite reduced head count, remaining employees—among
the highest-performing and experienced workers—maintained or
increased productivity.
As the economy slowly improves, business leaders are looking to
increase productivity even more. Training is coming back, especially
as managers realize that their most senior workers will soon be
retiring and that incoming employees may not be up to par.
Managers worry about finding skilled employees, particularly in
the science, technology, engineering and math fields. The rising
cost of higher education and attaining graduate degrees may deter
students, or at least prolong the time it takes them to complete their
degrees. It may be more beneficial to train employees than to wait
for better-educated students to finish school.
At the other end of the spectrum, workforce entrants with only
high school diplomas aren’t ready to take on jobs, according to
Society for Human Resource Management surveys. Employers will
face the challenge of retaining a few skilled and educated employees
while investing in basic skills training for new workers.
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Discover The Nation’s Top HR Program

“MOST PUBLISHED & CITED HR FACULTY...”
The Rutgers Master of Human Resource The Rutgers MHRM program features:
Management program is a great choice for a
wide range of individuals. Whether you are Rutgers MHRM faculty members are more frequently
published and cited in the leading HR journals than
an experienced HR professional looking to those of any other school.
advance your career, a prospective graduate

student in search of a highly regarded Students can attend classes on a part-time or
full-time basis during the day or evening.
program, or an individual seeking to broaden
your knowledge of cutting-edge HR research
The Rutgers MHRM program focuses on the
and practice – the Rutgers MHRM program is connection between effective HR strategy and
the place for you! measurable business success.
Dave Ferio, Graduate Director, and members of

RU SHRM, the Rutgers Student Chapter of SHRM
For more information,

visit our website or contact: 848-445-0862
Dave Ferio, Graduate Director ferio@smlr.rutgers.edu
_______________________________
mhrm.rutgers.edu
__________________________________
Rutgers, The State University of New Jersey
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Use Individual Development Plans to Guide Employee Learning

The changing nature of economic competition and globalization
requires knowledge workers to expand their knowledge, skills
and abilities continuously. Self-motivated learners can accelerate
their professional growth through self-directed, lifelong learning.
To accelerate the pace of employees’ learning, corporations
can use an _________________
individual development plan. The plan details an
employee’s intentions and learning outcomes as well as support
necessary to meet his or her
tangible growth goals.
The plans should
How We Learn incorporate components
Adults learn differently from of adult learning, organi-
children; what worked in zational development
elementary school won’t work and corporate culture.
on the job. John T. Mooney, They should include an
SPHR, principal of the individual’s formal course
training and coaching firm work and educational
Consultive Source in Dallas/ programs of study as well
Fort Worth, Texas, says when as the formal and informal
teaching and training adults, development of professional
know that they: skills the employee picks up more self-aware of weaknesses and strengths. Such growth
• Are self-directed. on the job. incorporates fear, worry, anxiety and stretch as a normal part of
• Need to understand Adults learn well any change cycle.
context and why they are through case studies and The proverb “Give a man a fish and you feed him for a day;
learning something. role-playing. Deliberate teach a man to fish and you feed him for a lifetime” fits neatly
• Learn through role modeling, coaching into today’s emphasis on individual learning, self-development
problem-solving. and mentoring support and career resiliency.
• Learn best when the topic plan development. As
is of immediate value. the employee learns and By John T. Mooney, principal of the training and consulting firm Consultive Source, based in
grows, he or she becomes the Dallas/Fort Worth area.

Make Talent Your Business, by Wendy Axelrod performance while turning negative energy
and Jeannie Coyle (Berrett-Koehler Publishers, around?
2011). How do exceptional managers keep
employees challenged and get them to take Changemaking: Tactics and Resources for
risks while also getting good performance out of Managing Organizational Change, by Richard
them on their daily tasks? The authors discuss Bevan (CreateSpace, 2011). Sometime during
five practices they tend to use. their careers, business leaders—including HR
officers—can expect to plan or manage a change
Fully Charged, by Heike Bruch and Bernd Vogel process of some kind. Yet many change efforts
(Harvard Business Review Press, 2011). The falter, and some fail entirely. This book uses short
authors urge organizations to ramp up their case histories to illustrate the key attributes of
energy. Energy means the extent to which successful change initiatives. Chapters focus
the organization uses its potential to pursue on what managers and others must do to guide
its goals. How employees think, act and feel change in a proactive, constructive way.
all are key to organizational energy. How can
employers harness positive energy to improve All are available at http://shrmstore.shrm.org.
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INNOVATIVE
EDUCATION
AT ASHFORD
A MAJORITY OF OUR STUDENTS IPHONE and ANDROID APPLICATIONS:

Students can access their course schedule
ATTEND CLASS THROUGH and discussion forums on the go.
ASHFORD’S ONLINE PLATFORM, ELECTRONIC TEXTBOOKS:
SO WE CONTINUOUSLY STRIVE Designed specifically for Ashford’s
TO FIND WAYS TO IMPROVE THE five week undergraduate courses,
STUDENT EXPERIENCE. digital materials are available for
instant download.
WAYPOINT OUTCOMES:
Customizable and interactive rubrics are
Ashford’s accessible learning platform can foster aligned with learning outcomes and help
greater efficiency in your workforce. To learn faculty members provide exceptional
about Ashford’s partnership program, which feedback for students.
provides valuable benefits to you and your
employees, please contact us at
partners@ashford.edu or call 800.507.1655.
____________________
partners.ashford.edu/SHRM
________________________
400 North Bluff Blvd., Clinton, IA 52732 /1@>'"AC-0255
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Employees Are
On Their Own
As leaders and employees continually
are asked to do more with less,
employees are taking responsibility for
their own training instead of depending
on a manager to develop them.
Jason Corsello, vice president of
products and technology for Knowledge
Infusion, a Minneapolis-based human
capital consulting firm, says employees
are interested in taking control of their leader for Hoover’s Inc. “Your boss them to scan for candidates for new
own careers rather than expecting won’t necessarily know what it is, but assignments.
employers to care for them for life. HR you do.” Business leaders who encourage
professionals are encouraging this HR professionals are creating talent employees to take control of their
change. profiles that pull information from own learning and to “learn to learn”
“Career development is something multiple sources to paint a picture of can create a continuous learning
you own. You have the most vested an employee’s skills, education and culture, improve work processes, build
interest in making sure you are achievements. Employees can update efficiencies, increase productivity and
developing and growing,” says Robin these profiles to showcase their advance innovation, according to SHRM
Hamel Pfahler, SPHR, human resources expertise, and HR recruiters can use Workplace Visions (Issue 2, 2011).
Looking for a way to stand out from the crowd?
Better teamwork. Higher employee satisfaction.

Increased product quality. Improved time management.
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Hard Lessons
The percentage of companies that report
having leadership development programs
has remained stable since 2010,
according to an American Management
Association (AMA) survey report.
However, the study shows that key global
leadership competencies—agility and the
ability to manage change and implement
global strategies—are proving to be The most widely taught competencies Managing change, exhibiting agility
difficult for executives to master. were: and developing global strategies were
Approximately one-third of the 1,750 • Critical thinking, problem-solving. identified in the report as areas that
organizations surveyed reported that • Change management. need improvement.
they conduct leadership development, • Leading cross-cultural teams. Senior executives are becoming
notes Developing Successful Corporate Multicultural skills and global more directly involved in leadership
Leaders: The Second Annual Study of workplace management skills topped development programs, notably
Challenges and Opportunities 2011. the list of competencies that will regarding business needs and
The study was sponsored by The be required during the next decade. communicating how the program
Institute for Corporate Productivity, Working collaboratively and remotely relates to business goals. Such
Training magazine and AMA Enterprise. as well as using data analyses and the involvement “significantly correlated to
Respondents represented companies latest virtual technologies were also overall business performance.”
with headquarters in 56 countries. cited as important skills.
YOU HAVE THE POWER 85%

Percentage of HR profes-
sionals who said their
t3FHJPOBMMZBDDSFEJUFE business leaders were
either currently increasing
t/POQSPmUQSJWBUFVOJWFSTJUZ expectations of employee
productivity or planning
to do so
t#BDIFMPSTBOENBTUFST
EFHSFFTXJUI)3.FNQIBTJT
75%
organizations would be
implementing training
programs
77%
organizations would
expand the use of
e-learning
Source: SHRM Workplace Forecast, 2011, based on
tXXXVJVFEVTISN
tXXXVJVFEVTI ______________________
responses from 1,247 HR professionals.
_______
0O$BNQVTt0OMJOFt*OEFQFOEFOU4UVEZt64*OUFSOBUJPOBM$FOUFST
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Learning Executives Pessimistic

On Funding Sources Responding to demographic and social trends such as the impending
retirement of Baby Boomers and a global shortage of skilled workers,
Learning executives said funds for are U.S. companies investing more in training and development to
learning and development will be hard to boost skills levels of employees?
come by in 2012 and more companies
will turn to e-learning, according to Plan to
research by the American Society 22%
for Training & Development. For the
Learning Executives Confidence Index,
tives
researchers surveyed 332 learning executives
in the third quarter, finding that:
Yes
• 57 percent said funding for learning and nd 53%
st
development will not improve until the first
quarter of 2013 or later.
• 73.2 percent said the current economic mic No
ng.
situation will increase the use of e-learning. 25%
• About 70 percent said the availability of
Source: SHRM Workplace Forecast, SHRM, 2011.
resources required to meet learning needs ds in
the next six months will stay the same orr get
moderately better.
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Learning Techniques Differ Around the Globe

Differences abound in how the coaching by line managers
United Kingdom, United States and almost twice as much as
India practice learning and talent respondents in the United
development, according to research States and India. U.S.
from the Chartered Institute of Personnel respondents preferred job
and Development in the U.K. rotation, shadowing and
In collaboration with the Society for on-the-job training, while
Human Resource Management and respondents from India
SHRM India, the Institute’s researchers chose on-the-job training
examined the effectiveness of learning and action sets most
programs, coaching, leadership frequently.
development, talent management,
e-learning, evaluation and how the rocky Leadership
economy has affected these practices. Development
Similarities and differences illustrate The most effective practices
how people in each country like to learn, for developing
____________leaders
and how businesses in each country like included, for all three
to instruct their employees. countries:
Respondents in the three countries • Coaching by external
agreed that in-house programs were practitioners.
among the most effective practices, • External conferences,
with U.K. respondents favoring it workshops and events.
above all other practices. They favored • Internal knowledge-
sharing events.
U.S. respondents also
What will be the focus of leadership development chose formal education
activities within your organization in the next courses to help develop
12 months?
leaders. Respondents in
Producing a common standard of behavior for those in all three countries agreed
leadership roles.
that trends coming up in
U.K. 29%
leadership development
U.S. 26%
are helping leaders fulfill
India 29% organizations’ strategic goals, act in a such as time management, advanced
Developing high-potential individuals valued by the “strategic and future-focused way” and skills such as project management and
organization. develop high-potential employees. finance, language learning, product
U.K. 36% development training, business
U.S. 41% E-Learning development, and coaching and
India 45% U.S. and U.K. respondents reported mentoring.
using e-learning more often than those Respondents in each country are
Improving the skills of leaders to think in a more strategic
and future-focused way. in India, but companies in India that using new media and Web 2.0 tools to
U.K. 38% offer e-learning use it for more purposes deliver e-learning, with India adopting
U.S. 46% than their U.S. and U.K. counterparts. more of these tools. Indian respondents
45%
U.K. and U.S. companies reported using were far more likely to report using
India
e-learning for induction and onboarding, online virtual learning-management
Enabling the achievement of the organization’s strategic compliance, technology training and systems, learning libraries and wikis,
goals. awareness-raising on workplace and and e-books to deliver e-learning. U.S.
U.K. 43% social issues such as diversity and respondents favored webinars and
U.S. 33% drug and alcohol abuse. Respondents virtual classrooms and blended learning
India 42% from Indian companies said they programs, while U.K. respondents said
Source: Learning and Talent Development, Chartered Institute of used e-learning for all those purposes they used blended learning programs
Personnel and Development/SHRM, 2011, based on responses from and more, including professional and online virtual learning management
952 practitioners.
development, basic skills development systems.
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RELOCATION
Trends
M
Many recent changes in corporate relocation Relocation reluctance. Given the still-
policies and practices reflect the results of the taxing housing market as well as longer-term
post-recession economy, according to survey growth in the number of two-income
research and industry experts. families, more workers are declining
More benefits for high-level hires. relocation offers.
Despite high unemployment, top talent Audit activity. In response to economic
remains difficult to find amid a growing uncertainty, taxing authorities will likely
global skills gap. Given their bargaining intensify their audits of companies with
power and the challenging housing market, expatriate populations, an activity that can
high-level new hires are becoming more provide additional sources of government
expensive to relocate. Some recruiters offer revenue. A September survey of attendees
new executive hires the same relocation at the Global Mobility Summit in Chicago
benefits packages that veteran executives found that 23 percent of respondents’
receive. companies had been subjected to recent visa
Creative solutions to cost pressure. or immigration audits.
Cost-containment needs are driving mobility More-strategic job duties. Mobility
managers to offer innovative alternatives to professionals must address complex and
traditional expatriate assignments, such as diverse risks—such as international tax,
extended business travel that typically lasts immigration and human capital issues—
one to three months. So-called “flexpat” that have far-flung strategic implications
programs offer perks beyond core benefits on organizations’ current and future
that may be added based on length or performance.
purpose of an assignment.
By the Numbers Flexibility Through Policy Exceptions

Nearly four in 10 companies made no changes to their relocation policies in
2011, according to a survey by Weichert Relocation Resources Inc. This marks
61% Portion of relocated employees who own a welcome surge in stability, as only one in 10 companies kept their policies
unchanged in 2010. However, volatile economic conditions, ongoing cost
homes
pressures and a growing talent crunch in many industries and job types have
53% Portion of relocated employees who are inspired many mobility specialists to make more exceptions to their relocation
new hires policies to overcome growing employee reluctance to accept assignments. The
following exceptions were approved most frequently in 2011, and their use can
45% Portion of relocated employees who be expected to increase in 2012:
have children
Extend temporary living arrangements 46%
37% Portion of relocated salaried employees
ages 36 to 40, the largest age group represented Extend assignment 12%
32% Portion of organizations that give Increase loss-on-sale protection 10%

employees one week or less to accept a
Extend home marketing time 9%
relocation offer, up from 7 percent in the 2010
survey Extend home purchase time 7%
19% Portion of relocated salaried employees Expand eligibility for loss-on-sale protection 3%
who are female
Allow more-frequent return trips 3%
14% Portion of relocation policies that
contain reimbursements for moving boats Increase the miscellaneous allowance 2%
Source: Atlas Van Lines Corporate Relocation Survey, 2011, based on responses from
400 relocation professionals. Source: Weichert Relocation Resources Inc., based on responses from 200 companies.
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Extending
Your Reach
Paragon’s unique approach to the relocation process

allows us to recognize and respond to all our customers
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trusted Paragon to manage their global mobility program
in the most efficient, cost effective manner possible.
We are a full service global Relocation Management
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Global Mobility Consulting Services

Domestic Relocation Services
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WORKFORCE TRENDS
A Snapshot of the U.S. Workforce, October U.S. Job Openings

Labor force: 154.2 million 4.5
Employed: 140.3 million 4.25
Unemployed: 13.9 million 4.0

3.75
Long-term unemployed (those jobless 27 weeks or more): 5.9 million
Millions
3.5
Marginally attached*: 2.6 million
3.25
Part-time for economic reasons: 8.9 million
3.0
Part-time for noneconomic reasons: 18.4 million
2.75
*These people are not counted as unemployed because they haven’t searched for work in the four 2.5
weeks prior to the survey. They include 967,000 discouraged workers, who are not looking for
work because they believe no jobs are available. 2.25
Source: U.S. Bureau of Labor Statistics. Dec. 2007 July 2008 Dec. 2008 July 2009 Dec. 2009 July 2010 Dec. 2010 Sept. 2011
4.4 million 3.4 million 2.7 million 2.4 million 2.5 million 3.0 million 3.1 million 3.4 million
(when the
recession
began)
Hourly Compensation Costs
Source: U.S. Bureau of Labor Statistics.
18.6%
Private-Sector Employment Costs
On average, private-sector employers paid $28.13 hourly in wages and benefits
as of June.
Retirement Supplemental Percentage of people with disabilities who were
and savings pay
2.8% employed in 2010. The employment-population ratio
3.7%
for people without disabilities was 63.5 percent.
Paid leave
6.7% Source: U.S. Bureau of Labor Statistics.
Insurance
8.1% U.S. Unemployment Rate, 2007-11
10%
9.5
Legally required 9.0
benefits 8.5
8.3% 8.0
7.5
7.0
6.5
6.0
5.5
Wages and salaries 5.0
70.4% 4.5
2007 2008 2009 2010 2011
State and Local Government Employment Costs Source: U.S. Bureau of Labor Statistics, October.
On average, state and local governments paid $40.40 hourly in wages and benefits
as of June.
Supplemental
Retirement pay U.S. Unemployment Rate, 2011
and savings 0.8% The official unemployment rate does not include discouraged workers and involuntary part-time workers.
8.2%
Total unemployment includes those officially unemployed plus discouraged workers who have given up look-
Paid leave ing for work because of job market conditions plus those involuntarily employed part-time.
7.5%
5%
Total rate Official rate
16.5%
Insurance 15.5
12% 14.5
13.5
12.5
Legally 11.5
required
10.5
benefits
6.1% 9.5
8.5
Wages and salaries Jan. Feb. March April May June July Aug. Sept. Oct.
65
65.4%
4%
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11.9%
Percentage of U.S. workers who
were union members in 2010,
down from 12.3 percent in 2009.
In 1983, it was 20.1 percent.
Access to Health Insurance

Percentage of workers with access to health insurance benefits.
Private industry 69%
State and local government 87%
Wage Disparity Persists Across Gender and Cultural Lines
In 2010, the median weekly earnings of Asian and white men and women working full time in manage-
Source: National Compensation Survey, U.S. Bureau of Labor Statistics, March. ment, professional and related occupations—the highest-paying major occupation group—were well
above the earnings of Hispanic and black men and women in the same occupation group.
Asian men $1,408

U.S. Employee Benefits Asian women $1,143
Percentage of full- and part-time workers with access to select paid leave
benefits. White men $1,273
White women $932
Paid sick leave
Full Time 75% Hispanic men $1,002
Hispanic women $789
Part Time 27%
Black men $957
Paid vacation Black women $812
Full time 91%
Part time 37%
Paid personal leave

Full time 45% Women’s Earnings
Part time 19% Women’s earnings as a percentage of men’s earnings, full-time wage and salary workers, 2010.
Source: National Compensation Survey, U.S. Bureau of Labor Statistics, March. Total, 16 and older 81.2%
Social workers 91.1%
Domestic Partner Health Benefits Editors 88.3%

Percentage of unmarried domestic partners with access to partner’s health Registered nurses 86.5%
care benefits.
HR managers 80.2%
Private industry
Same sex 29% Metalworkers and plasticworkers 78.9%
Opposite sex 25% Postsecondary teachers 77.3%
State and local government Lawyers 77.1%
Same sex 33%
Opposite sex 28% Medical and health managers 77.0%
Source: National Compensation Survey, U.S. Bureau of Labor Statistics, March. Accountants 74.9%
Chief executives 72.1%
Domestic Partner Retirement Benefits Financial managers 66.1%

Percentage of unmarried domestic partners with access to partner’s retire- Retail salespersons 64.7%
ment benefits.
Personal financial advisors 58.4%
Private industry
Same sex 7% Source: U.S. Bureau of Labor Statistics.
20.9%
Opposite sex 7%
State and local government

Same sex 50%
Opposite sex 49% The 2010 unemployment rate for young veterans, ages 18
to 24, who served in the military since September 2001.
Source: National Compensation Survey, U.S. Bureau of Labor Statistics, March.
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TRADITION. ACADEMIC EXCELLENCE. ONLINE CONVENIENCE.
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Contents | Zoom in | Zoom out For navigation instructions please click here Search Issue | Next Page

58 Compensation & Incentives

HR Magazine’s 2012 HR Trendbook (ISSN 1047-3149) is published by the

52 HR Magazine • HR Trendbook 2012

© 2011 ManpowerGroup. All rights reserved.

Feels Like Recession, But ...

The author is SHRM’s manager of workplace trends and

54 HR Magazine • HR Trendbook 2012

employment is not expected to return until Risk of Long-Term Unemployment

HR Trendbook 2012 • HR Magazine 55

New Skills Required?

56 HR Magazine • HR Trendbook 2012

Employment Expectations Are Leveling Off

Manufacturing employment expectations Service sector employment expectations

Recruiting Difficulty Is Trending Up

Manufacturing recruiting difficulty Service sector recruiting difficulty

Source: SHRM Leading Indicators of National Employment historical data, www.shrm.org/line.

HR Trendbook 2012 • HR Magazine 57

COMPENSATION & INCENTIVES

58 HR Magazine • HR Trendbook 2012

*Terms and conditions apply to GiftCards.

COMPENSATION & INCENTIVES

‘The Entitlement Era Is Over’

60 HR Magazine • HR Trendbook 2012

WONDERING WHY YOUR BENEFITS

DEFINED CONTRIBUTION | DEFINED BENEFIT | HEALTH SAVINGS ACCOUNTS

COMPENSATION & INCENTIVES

Three Tough Questions

Three Carve-Out Models

62 HR Magazine • HR Trendbook 2012

Introducing Best Buy ® e-Gift Cards

COMPENSATION & INCENTIVES

Shareholders Say Performance Matters, Too

98.4% consultancy, only 1.6 percent

Don’t Miss Reading

2012 Multistate Payroll Guide, by John F.

Fair Pay, Fair Play, by Robin A. Ferracone

Both are available at http://shrmstore.shrm.org

64 HR Magazine • HR Trendbook 2012

From St. Louis to St. Lucia.

See how issuing prepaid cards on Discover network can be your

© 2011 DFS Services LLC.

Benefits Summaries Deadline Delayed

W-2 Requirement’s Silver Lining

66 HR Magazine • HR Trendbook 2012

2012 Health Care Reform Mandates

U.S. Employers Revamping Health Care Benefits

68 HR Magazine • HR Trendbook 2012

PRUDENTIAL GROUP INSURANCE

CHALLENGE US TO HELP YOU

A robust portfolio of voluntary benefits—Life, Disability,

With 95 years of group insurance experience, Prudential

• Life-stage and educational communications

Contact Bob Patience, Vice President, Voluntary Benefits,

Don’t Miss Reading

Both are available at http://shrmstore.shrm.org.

70 HR Magazine • HR Trendbook 2012

The nation’s oldest and largest

Employers Reducing Prescription Drug Coverage

The Future of Retiree Benefits

72 HR Magazine • HR Trendbook 2012

Regulations and Costs Shape Future 401(k) Plans

May 31, 2012

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