Workforce Dynamics

The one constant in human resources is constant change. Employers and their human resources managers are continually challenged to respond to changes in what we call workforce dynamics. Gone are the days when people made permanent career choices at an early age and stuck with them until they received their guaranteed pension at 65. Just as businesses have been carried into the technology revolution they will also be swept into the workforce revolution.

Your People Professionals is in a unique position to track and evaluate the emergence of workforce trends and challenges. Serving as the human resource partner for hundreds of businesses and their employees over more than 20 years has given us the opportunity to constantly monitor changes in workforce dynamics and the impact on employers and employees.

This is the first in a series of articles on some of the most significant trends we see affecting workforce dynamics. Over the next several months we will give you brief summaries of some of the most compelling issues being evaluated by YPP's team of HR professionals. These brief issue introductions will culminate in the spring 2008 when YPP will host a Workforce Dynamics Seminar. We will bring business owners, CEO's and top level managers together to explore Workforce Dynamics and provide practical tools to better understand and capitalize on these challenges and opportunities.

We will begin the series with two of the major trends confronting managers, workforce fluidity and Generation Y.

Fluidity

If you are an employer dealing with workforce fluidity it may feel more like a very bumpy ride than a manageable employment trend. There was a time when employees were cautioned employers would view too many jobs or too many career changes on a resume as a serious negative. Often employees stayed at jobs just because they were afraid of looking like a job hopper.

Faced with the power of the Internet, fast-paced changes in technology, overseas outsourcing and a shrinking workforce, employees found themselves in uncharted territory. Many employees began viewing their careers from a new perspective. Not as a static choice to ride out to retirement but rather as a fluid ebb and flow with the opportunity to make adjustments as needed to best suit an employee's personal needs at different phases of their careers. These employee choices can leave employers coping with employees who do not hesitate to move on at the slightest provocation or when presented with even a marginally "better" opportunity. The advent of the internet means there is instant information access and entrepreneurial opportunities abound. Want to know what your counterpart in another city makes, or what benefits the company across town offers? Log on and chances are the information can be easily obtained.

Gone is the fear that too many jobs on a resume will doom employees to failure. On the contrary, some recruiters may view loyal and stable employees as too risk averse or likely to have dated skills. Every internet job search site abounds with articles encouraging employees to take charge of their careers and move on to better opportunities. Employees can even quit their jobs electronically, just go to http://www.iquit.com/ and someone will handle your resignation for you.

Challenging workforce dynamic for employers? Of course, but with some management savvy, employers can get ahead of the curve.

First, the obvious: make sure you offer salary and benefits in line with your local area and industry. Nothing guarantees constant turnover like below market wages and sub par benefits. It can be hard for employers to measure the real cost of high employee turnover, but factor in training time, customer service challenges, and recruiting expense and you will start to see your "salary savings" evaporate.

Second, no matter what the size, every business has a corporate culture. Make sure that you utilize every available tool to ensure that the employees you hire are a good "fit" for both the job and your organization. YPP recently introduced our innovative SmartSource Recruiting System to respond to marketplace conditions and employer needs. If you want improve your workforce stability you need to make the pre-hire investment to make sure the "fit" is right.

Over the next several newsletters leading to the Workforce Dynamics Seminar we will also explore some of the more creative employee perks and management strategies that can help stabilize your workforce.

Generation Y

We have all read the headlines about Generation Y moving into the workforce and the changes they will bring. Who are Gen Y workers? Definitions vary but essentially they are the more than 70 million Americans born from 1977 to 2002 and according to a recent USA Today article they are the fastest growing segment of the American workforce at nearly 32 million workers.

Watch out employers, Gen Y is rocking the workplace. These employees are often tech savvy, high performance and high maintenance. Often the product of a child centered household, they have a strong sense of their own self-worth and little tolerance for the status quo of business as usual. High tech isn't something new or challenging; it has always been part of their lives.

Y-ers are the first generation raised with the positive reinforcement and self-esteem building that became popular in parenting during their formative years. "Generation Y may need help with accepting constructive criticism and managing conflict," says Linda Gravett, senior partner of Cincinnati, OH-based HR consulting firm Gravett & Associates and co-author of "Bridging the Generation Gap" (Career Press, 2007).

Bruce Tulgan, of RainmakerThinking, considered one of the leading experts on Gen Y summarizes Gen Y workers as follows:
High Expectations of self: They aim to work faster and better than other workers.
High Expectations of Employers: They want fair and direct managers who are highly engaged in their professional development.
Ongoing Learning: They seek out creative challenges and view colleagues as vast resources form whom to gain knowledge.
Immediate Responsibility: They want to make an important impact on Day 1.
Goal-Oriented: They want small goals with tight deadlines so they can build ownership of tasks.

A recent survey conducted by careerbuilder.com in June of 2007, titled "Gen Y at Work", identified real generational gaps in communication styles and job expectations when they gathered data from more than 2,500 hiring managers and HR professionals across all industries. A startling 87% of all hiring managers and HR professionals say some or most Gen Y workers feels more entitled in terms of compensation, benefits and career advancement than older generations.

Another critical issue employers need to address when managing Gen Y workers is the concept of work-life balance. There is a much higher value placed on self-fulfillment. Corporate success at the expense of health, relationships, and quality of life just isn't their idea of what matters most. Career may be important but it does not define them or their self-worth.

There are a number of excellent books on emerging generational management issues. Managing Generation Y by Bruck Tulgan and Carolyn Martin is a good place to start if you are interested in a more in-depth exploration of this workforce dynamic. Gen Y will be a feature topic of YPP's Worforce Dynamics seminar next spring.

Next month we will discuss creative employee perks, sometimes called Lollipops, that employers are utilizing to help keep the talent they need to compete. We will also examine the other end of the employee spectrum, Older Workers and the expanded role they will play in the American workforce.

New Law Requires Employers to Send Additional Notification with W2's

A new law, AB 650, which many employers are just finding out about, requires employers to send language out to all employees receiving W2's about their eligibility to file for Earned Income Tax Credit. The law is effective 1/1/08, and the notice must be sent out within one week of the W2 itself, and must include the following language:

"Based on your annual earnings, you may be eligible to receive the Earned Income Tax Credit from the federal government. The Earned Income Tax Credit is a refundable federal income tax credit for low-income working individuals and families. The Earned Income Tax Credit has no effect on certain welfare benefits. In most cases, Earned Income Tax Credit payments will not be used to determine eligibility for Medicaid, Supplemental Security Income, food stamps, low-income housing or most Temporary Assistance for Needy Families payments. Even if you do not owe federal taxes, you must file a tax return to receive the Earned Income Tax Credit. Be sure to fill out the Earned Income Tax Credit form in the Federal Income Tax Return booklet. For information regarding your eligibility to receive the Earned Income Tax Credit, including information on how to obtain the IRS Notice 797 or Form W-5, or any other necessary forms and instructions, contact the Internal Revenue Service by calling 1-800-829-3676 or through its web site at http://www.irs.gov/."

For YPP PEO and HR Services clients, we will take care of mailing out this new notice to employees and former employees receiving W2's this January, so if you are a current YPP HR client, there is nothing you need to do!

The Dark Side of Corporate Culture

In a historic decision published today by the Ninth Circuit Court of Appeals, class status was granted to 1.5 million current and former female employees of Wal-Mart. In Dukes v Wal-Mart, Patricia Dukes and other similarly situated women are suing Wal-Mart for gender discrimination. While the merits of the case are still to be determined in the trial, this decision allowed the female employees to move forward with their class action suit. One of the primary arguments of the plaintiff was that because Wal-Mart has such a strong corporate culture, that anything the central office declares is policy is carried out by the individual stores. And because the plaintiffs are alleging that Wal-Mart's broad corporate policies discriminate against women, including paying them less than men and promoting them more slowly, that's bad news for Wal-Mart.

The message this case carries for employers, so far, is that despite all the hype and fads, a strong corporate culture isn't automatically a good thing. Make sure, with your executive team and including your senior HR executive, that your corporate culture is positive, equitable, and promotes compliance with the law.

You can read the actual decision and learn more about the case at: http://caselaw.lp.findlaw.com/data2/circs/9th/0416688op.pdf.