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<b style="color: blue">Human Resource Associates</b>
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<h2>HR - On The Job</h2>
<h3>The Three Major Changes in 21<sup>st</sup> Century HR</h3>
<p>Twelve years into the 21<sup>st</sup> century we can see so many changes coming to the way we manage our workforce that they already make the revolutionary changes of the 20<sup>th</sup> century seem pale by comparison. 20<sup>th</sup> century changes that took us from an industrial, male centered, Caucasian, union influenced workplace to an information based, female centered, growing minority predominant, non-union and multi-located workforce may not have been as revolutionary as the changes now underway. The new health care regulations, union re-emergence, more heavily regulated work environment, the global scope of employment and the conceptual changes coming in how we view retirement are all part of those 21<sup>st</sup> century changes advancing on us today. These changes will have a significant impact on how we manage our workforce and the future of the Human Resources (HR) profession.</p>
<p>But these are all somewhat external forces that we will have to engage. There are however, three major changes that will, in a more internal manner, affect the way we will be dealing with those forces; new technology, the number of people in HR and the way HR and the workforce will be measured, hi-tech, staff size and analytics.</p>
<p><b>Hi-Tech:</b> Employing new cloud based Human Resource Management Systems (HRMS) HR departments can automate employee records, payroll, time records, benefits administration, recruiting, training, performance management, regulation requirements and almost any employment related needs. Although relatively few HR departments are as yet cloud based or using HRMS, virtually every company has some form of HR function being managed through technology. It is estimated that by 2017 over 90 percent of all employers will be using them.</p>
<p><b>Staff Size:</b> One of the oldest axioms in HR is that you don't need a full-time HR person until you grow to about 60 to 75 employees and then one HR person for each one hundred employees after that. For decades the profession has been campaigning for larger staff sizes like 1.5 to two HR staff per hundred employees. It's becoming more apparent that they were both right and wrong.</p>
<p>As a result of the growth in employment regulations, higher demand for technology and the need for HR to become more of a corporate partner, the need for a full time HR person may occur at only 40 to 50 employees depending on the industry. However, as a result of the advancements in hi-tech, employees today can access their personnel files, benefit packages, pay history, employee handbooks, job assignments, time records, employee surveys etc. by kiosks, hand held devices, social media, on-line and the cloud. That means lesser need for a human HR staff person doing face-to-face and hand-to-hand processes. The need for HR staff for larger companies may be more like one HR staff to 300 or even 400 employees. Indications are for a more highly trained, skilled and business oriented professional, using outsourcing services for small to mid- size companies.</p>
<p><b>Analytics:</b> Many professions have historically required extensive analytics just to get through a day at work. The HR profession has come to the world of analytics more recently. Today, HR leaders are merging analytics and metrics. It actually all starts with the metrics. HR professionals are borrowing what ar commonly referred to in the financial profession as “key ratios”, and calling them ‘metrics'. Metrics for HR purposes is the science or practice of applying solid, measurable numbers to the most important accountabilities in the HR job description. The intent is to show a cause-and-effect relationship between an action and the re-action (because we did that, this happened). Once it is determined what will be measured (cost of hire, effect of benefits, productivity as a result of raises, ROI of HR programs etc.) a metric (key ratio) is designed to calculate that answer. Once the metrics have been produced, the analytical process begins that can give us the answers we're looking for.</p>
<p>Common metrics or “key ratios” used in HR include:</p>
<ul>
<li>To measure the Return on Investment (ROI) of all human capital:<br />(Revenue − Expenses − Pay + Benefits) ÷ (Pay + Benefits)</li>
<li>To measure the Return on Investment of pay and benefits the metric formula is:<br />(Revenue − Non-human Expenses) ÷ (Pay + Benefits)</li>
</ul>
<p>HR metrics can be used to measure such things as: time to fill a vacancy, cost per hire, cost of turnover, percentage of employees performing above average by the end of the year (or after wage/benefit increases), measured results from annual employee surveys, effect of training programs, dollars spent on attorney's fees as a percentage of total employment relations cost etc.</p>
<p>Of course metric formulas are not the only tools or methods used as the wide span of analytics available is growing. The Society for Human Resource Management (SHRM) is proposing a human capital set off standards to measure the effect of all HR activities. They intend to include input from individual social media to build the data.</p>
<p>It's a brave new world for the future HR professional. It's going to be a lot more than carrying watermelon to the picnic.</p>
<hr />
<p align="center"><b><i>Have an employment question?</i></b></p>
<p align="center">Send it to <a href="mailto:[email protected]?subject=From HR On The Job">[email protected]</a>.</p>
<p align="center">Please include Company Name and Association in your e-mail. Company identification will be kept confidential.</p>
<hr />
<h2>Hitchhiking on the Information Highway</h2>
<h3>Just Who Should Have “The Right To Work” Anyway?</h3>
<p>Most of us have heard a lot about The Right To Work Law just passed in Michigan. But we sometimes receive calls from members who confuse the regulations on The Right To Work with the regulations on Employment at Will. Here's a quick comparison:</p>
<ul>
<li><i>The Right to Work Law</i> states the no citizen can be forced to join a union in order to have a job.</li>
<li><i>The Employment at Will Doctrine</i> says that both the company and the employee have a right to cease employment at any time and for any reason.</li>
</ul>
<p>These seem like laws that everyone would agree to and want to have as the law of the land. So what's wrong with these two laws?</p>
<p>Let's start with the <i>Employment at Will</i> (EAW) doctrine. The primary entity that opposes EAW is the Equal Employment Opportunity Commission (EEOC). In order to protect individuals from illegal discrimination the EEOC forbids using Employment at Will to terminate employees due to their race, age, religion, sex or for any other such discriminatory reason. Of course this also applies to whistleblowers. The company may not terminate an employee for ‘blowing the whistle” on company wrongdoing. Such opposition to the EAW sounds reasonable and something I assume most of us support.</p>
<p>But let's take a look at the issue of Right To Work (RTW). Now who could be against that? The primary (and possibly the only) entity opposed to RTW are unions. Unions feel that once they have unionized a company, then the company should be responsible for unionizing every new employee for them. They feel that no one they do not approve of should ever be allowed to work there. Further, they require the company to enforce their position by automatically deducting the union dues from every employee's paycheck and sending it to the union and, to terminate anyone who should ever get behind in his dues (due to refusal to allow the deduction or long leaves with no paycheck etc.) That way, no employee can ever decide to quit the union or to neglect paying his union dues on time. As a point of interest; If companies would refuse to deduct the union dues from the employee's paycheck, unions would likely lose most of their members in short order.</p>
<p>Unions from all over the country were in Michigan to fight against the RTW law, even those unions that have no members in Michigan. Auto workers, truck drivers and state employees called in sick from all over the state to show up for the big protest. They lost the battle and the law passed which now says:</p>
<p>No individual can be required to do any of the following to obtain or continue employment:</p>
<ul>
<li>Become a member of a union</li>
<li>Remain a member of a union</li>
<li>Resign their membership in a union</li>
<li>Refrain from financially supporting a union or paying dues</li>
<li>Pay to any charity or third party the dues equivalent required of union members.</li>
</ul>
<p>So why did the state of Michigan, one of the founding states of the labor movement, decide to go to battle against the unions with this new law? There are two primary reasons:</p>
<ol>
<li>
The 24 states that have Right to Work Laws have a much better economic standing. Examples include:
<ul>
<li>Over the last 20 years, of the top 10 performing states, 9 were RTW states. (The 10th Washington state, ranked high because it has neither state sales tax nor state income tax.)</li>
<li>Of the lowest 10 ranking states, none are RTW states.</li>
<li>The average unemployment rate across the country is 7.7% The average unemployment rate in RTW states is 6.9% The average unemployment rate in non-RTW states is 8.7%</li>
<li>The cost to employee someone in a non-RTW state is almost 20% higher than in RTW states. That's why companies are leaving those states and moving to RTW states, and employees are moving there because that's where the jobs are.</li>
</ul>
</li>
<li>The states of Wisconsin and Indiana, also founding states of the labor movement, recently became RTW states while their neighboring state, Illinois, one the most unionized states in the country refused to consider it. Hundreds of companies packed up and left Illinois and moved to Wisconsin and Indiana, who are now experiencing economic growth and state debt reduction.</li>
</ol>
<p>And that's why Michigan did it.</p>
<p class="quote">
“Reality is the leading cause of stress,<br />
for those in touch with it”<br />
– Jane Wagner</p>
<h3>What You Don't Know Can't Hurt Me</h3>
<p>For some of the information in the article above, we accessed the government reports that show the tax rates and economic standings of states. Those reports also show the movement of companies and individuals between states. It allows everyone the ability to track the migration of companies and people out of states that are non-RTW states, have high labor costs, high taxes and even overly burdensome labor restrictions. It also shows which states they are migrating to, those that are RTW, have more reasonable labor costs, tax rates and labor regulations.</p>
<p>But once the government agencies began noticing those migrations, they realized that their records were being used to identify that activity. In December that information was not available. When contacted they announced that the data was no longer being provided.</p>
<p class="quote">
“Safe upon the solid rock, the ugly houses stand.<br />
Come and see my shining palace built upon the sand”<br />
– Edna St. Vincent Millay</p>
<hgroup>
<h3>Unemployment Is A Numbers Game</h3>
<h4>(And Someone's Not Very Good With Numbers)</h4>
</hgroup>
<p>Uncle Sam keeps telling us the economy is improving and people are slowly going back to work. They say that over 5,000,000 new jobs have been added since January 2008. Last year at this time the unemployment rate was 8.7%. This year it's down to 7.7%. Who could argue with that? Well the numbers they report tell a different story.</p>
<p>The unemployment rate is calculated using a complicated process of incoming reports, outgoing phone calls and some mystifying legerdemain. Such machinations include no longer counting people as unemployed once their unemployment benefits run out, counting an employee who loses his full time job who later finds a job working 2 days a week as a gain in employment, and forgetting to count the unemployment numbers of our largest state thereby lowering the unemployment rate.</p>
<p>But there's a pretty simple method to knowing whether the unemployment rate is higher or lower. Here's an example: The number of people unemployed is reported monthly by the Bureau of Labor Statistics (BLS) as is the unemployment rate. By their reports:</p>
<table>
<th>Number of People Unemployed</th>
<tr><td>January 2008</td><td>8,221,000</td></tr>
<tr><td>January 2009</td><td>11,616,000</td></tr>
<tr><td>January 2010</td><td>14,852,000</td></tr>
<tr><td>January 2011</td><td>13,863,000</td></tr>
<tr><td>January 2012</td><td>12,758,000</td></tr>
<tr><td>November 2012</td><td>12,829,000</td></tr>
</table>
<p>In January of 2008 there were 8.2 million people unemployed. In November of 2012 there are 12.8 million people unemployed. There are 4.6 million fewer people working today than in January 2008.</p>
<p>But Uncle Sam is trying to do his part. Since January 2008, the federal government has hired 101 new federal employees … every day. 10,000 new federal employee were hired one month before the election. The average wage for federal workers is now $84,000 annually, that's $13,000 more than in the private sector.</p>
<p class="quote">
“What experience and history teach us is…<br />
that people and government have never learned anything from history”<br />
– George F. Hegel</p>
<hr />
<p style="text-align: center"><sub>© William J. Cook</sub></p>
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<span class="heading">Labor Stats</span>
<hr />
<b>Federal Minimum Wage</b>
<hr />
<p align="center">
<b>$7.25</b>/hour<br />
</p>
<hr />
<b>Average Income</b>
<hr />
<table>
<tr><td /><td class="u">November 2012</td><td class="u">November 2011<td></tr>
<tr><td class="i">Hourly</td><td class="b">$23.63</td><td class="b">$23.23</td></tr>
<tr><td class="i">Weekly</td><td class="b">$799.11</td><td class="b">$812.87</td></tr>
</table>
<hr />
<b>Federal Povery Level</b>
<hr />
<table>
<tr><td class="i">one person</td><td class="b">$10,956</td></tr>
<tr><td class="i">family of four</td><td class="b">$21,954</td></tr>
</table>
<hr />
<b>IRS Mileage Allowance</b>
<hr />
<p>July 1, 2011 through December 31, 2012</p>
<table>
<tr><td class="i">business</td><td><b>55.5</b> cents/mile</td></tr>
<tr><td class="i">medical or moving</td><td><b>23.5</b> cents/mile</td></tr>
<tr><td class="i">charitable</td><td><b>14.0</b> cents/mile</td></tr>
</table>
<p>January 1, 2013</p>
<table>
<tr><td class="i">business</td><td><b>56.5</b> cents/mile</td></tr>
<tr><td class="i">medical or moving</td><td><b>24</b> cents/mile</b></td></tr>
<tr><td class="i">charitable</td><td><b>14</b> cents/mile</td></tr>
</table>
<hr />
<b>Postage</b>
<hr />
<table>
<tr><td class="i">1 oz</td><td><b>45</b> cents</td></tr>
<tr><td class="i">postcard</td><td><b>32</b> cents</td></tr>
</table>
<p>On January 27, 2013, the 1 oz rate will increase to <b>46</b> cents and the Postcard rate will increase to <b>33</b> cents.</p>
<hr />
<b>Population</b>
<hr />
<table>
<tr><td class="i">world</td><td class="b">7 billion</td></tr>
<tr><td class="i">U.S.</td><td class="b">314.9 million</td></tr>
</table>
<p align="center">
<i>one birth every </i><b>8</b><i> seconds;</i><br />
<i>one death every </i><b>14</b><i> seconds;</i><br />
<i>one new immigrant every </i><b>44</b><i> seconds;</i><br />
<i>net gain of one person every </i><b>13</b><i> seconds.</i>
</p>
<hr />
<b>U.S. Civilian Workforce</b>
<hr />
<table>
<tr><td /><td class="u">November 2012</td><td class="u">November 2011</td></tr>
<tr><td class="i">Total</td><td class="b">155,291,000</td><td class="b">153,937,000</td></tr>
<tr><td class="i">Employed</td><td class="b">143,262,000</td><td class="b">140,614,000</td></tr>
<tr><td class="i">Unemployed</td><td class="b">12,829,000</td><td class="b">13,323,000</td></tr>
<tr><td class="i">Want A Job</td><td class="b">6,817,000</td><td class="b">6,595,000</td></tr>
<tr><td class="i">Unemployment Rate</td><td class="b">7.7%</td><td class="b">8.7%</td></tr>
</table>
<br /><hr />
<b>U.S. Workforce Productivity</b><br />
<sub><i>(The amount of goods produced, divided by the number of work hours it took to produce it)</i></sub>
<hr />
<table>
<tr><td class="i">1992</td><td class="b">3.7%</td></tr>
<tr><td class="i">1993</td><td class="b">0.5%</td></tr>
<tr><td class="i">1994</td><td class="b">1.3%</td></tr>
<tr><td class="i">1995</td><td class="b">0.9%</td></tr>
<tr><td class="i">1996</td><td class="b">2.5%</td></tr>
<tr><td class="i">1997</td><td class="b">2.0%</td></tr>
<tr><td class="i">1998</td><td class="b">2.6%</td></tr>
<tr><td class="i">1999</td><td class="b">3.3%</td></tr>
<tr><td class="i">2000</td><td class="b">3.4%</td></tr>
<tr><td class="i">2001</td><td class="b">2.9%</td></tr>
<tr><td class="i">2002</td><td class="b">4.6%</td></tr>
<tr><td class="i">2003</td><td class="b">3.7%</td></tr>
<tr><td class="i">2004</td><td class="b">2.8%</td></tr>
<tr><td class="i">2005</td><td class="b">1.7%</td></tr>
<tr><td class="i">2006</td><td class="b">0.9%</td></tr>
<tr><td class="i">2007</td><td class="b">1.9%</td></tr>
<tr><td class="i">2008</td><td class="b">1.8%</td></tr>
<tr><td class="i">2009</td><td class="b">+5.8%</td></tr>
<tr><td class="i">2010</td><td class="b">+3.6%</td></tr>
<tr><td class="i">2011</td><td class="b">+0.7%</td></tr>
<tr><td class="i">1st quarter 2012</td><td class="b">(-0.9%)</td></tr>
<tr><td class="i">2nd quarter 2012</td><td class="b">+2.2%</td></tr>
<tr><td class="i">3rd quarter 2012</td><td class="b">+2.9%</td></tr>
</table>
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