Posted tagged ‘SHRM’

The Compliance Times are a Changin’, and your HRO Provider can Help

June 15, 2010

Keeping up with changing regulations, laws and reporting requirements across many jurisdictions is hard to do. In fact, it is far too easy to inadvertently fall afoul of the latest changes. And one of the benefits of HRO is to have a vendor partner in your corner on compliance issues.

Although some HRO contracts place some level of responsibility for certain regulatory oversight – with included liability and damage clauses – in the hands of the provider, at the end of the day the client remains responsible and accountable when grievances, law suits or governmental audits concerning the company occur. So who better to warn the buyer of changes in wage and hour laws in California, or deduction rules for social benefits in China, than an expert payroll service provider?

HRO buyers should, if not already doing so, make it a practice to have regular vendor conversations on trends and pending regulatory changes and discuss how they might impact their company, its PR policies and the outsourced HR services. Also discuss who will need to do what, at what cost and what lead time, if the changes do occur.

Some trends are so large and visible it is easy to have the conversations. For example, in the U.S., aren’t we all talking about, assessing and planning for the impacts of health care reform? Other changes can sneak up on you and it is important to know the areas the vendor monitors as part of its provided service, where you may need separate consulting, or simply know that you must address some areas on your own.

Everyday interactions and governance activities are often at the operational team level. Changes that may impact client policy, as well as processes or technology, need to include the appropriate HR leadership strategy and planning experts. Depending on the client culture, employment brand and risk tolerance, some may want to adapt to changing trends, while others prefer to wait until required to change.

Background checks are a current example of a trend that may lead to changes in regulations. Almost 60 percent of employers are having credit background checks run on candidates for at least some positions, according to a recent Society for Human Resources Management (SHRM).  Although use of credit checks for even positions without financial or fiduciary responsibilities has been growing, it remains a controversial practice. Due to the economic downturn the practice has now risen to lawmaker scrutiny in more than 15 states in the U.S. Yet, what evidence is there that a less than stellar credit report is a relevant hiring criteria compared to the duties of the position? With millions out of work for an extended period of time, combined with more millions caught up in the housing crisis, should a downgraded credit rating be another block on the road to getting a job?

Of course we don’t have the time or space here to tackle this particular issue in full. The bottom line – credit  checks aside –is that being proactive as a client/HRO service provider team is one of the advantages in the ever changing compliance landscape. When was the last time you had a trend summit? Head’s up, the times they are a changing!

Linda Merritt, Research Director, HRO, NelsonHall

Employment Optimism: Clear Signs of Increase in Temp-to-Perm and New Hires

March 10, 2010

According to a USA Today article published on March 8, 2010, a growing number of businesses are converting temporary workers to permanent employees, signaling the start of an improved job market. According to the article, temporary jobs increased by 48,000 in February 2010 to two million, and are up 284,000 since September 2009. And an increase in temporary hiring is a usually a leading indicator that permanent hiring will be on the rise.

In a normal economy, one in three temporary workers is ultimately made a full time employee. That ratio plunged to well under 10 percent during the recession, according to Jonas Prising, head of Manpower’s Americas division. But about 30 percent of the temporary workers placed by Employco’s Carlisle Staffing unit have become permanent hires in recent months. That’s up from 2 percent during the downturn. And Tig Gilliam, CEO of Adecco North America, stated the company has recently seen a whopping 50 percent rise in its temporary placements who go full time. All this bodes well for temporary workers.

In terms of new hires, a Manpower Employment Outlook Survey of 18,000 U.S. employers revealed that 16 percent anticipate increasing staff levels in 2Q 2010, 73 percent expect to keep staffing levels the same, and eight percent expect a decrease. These findings net an increase of eight percent and +five percent when seasonally adjusted. And approximately half the firms surveyed by the Society for Human Resource Management (SHRM) are boosting hiring in March 2010, the most in two years. While these findings don’t signal a rousingly positive increase, any increase in today’s job market is good. 

Globally, there is much more optimism according to the Manpower survey. Employers in most job markets expect hiring levels in 2Q 2010 to at least equal (or in some cases exceed) those in the same period last year, signaling a long-time-in-coming return to positive job growth. The Asia Pacific region has the strongest job outlook, led by India and Taiwan. While the outlook for job growth in the Americas is modest, Europe is mixed. Although European companies may not be ready to return to year-over-year-growth, the view is that hiring will at least keep pace with the Q4 2009.

What does this indication of hiring increases mean for the recruitment process outsourcing (RPO) industry? Not reason yet for providers to jump for joy, but certainly good news for them as many RPO contracts have been restructured to pay on a more variable basis, i.e., per hire. And going back to statements targeted to potential RPO buyers in a couple of my previous blogs…with staffing levels in many cases cut to the bone and with employee satisfaction at extraordinary low levels, if companies don’t step up their hiring activity – and obviously RPO can assist here – at least modestly, quality of work will suffer and top performers will jump ship to better opportunities on dry land.

Gary Bragar, Lead HRO Analyst, NelsonHall