Making the Case for Training

Proving the value of employee training in hard numbers has been difficult. By Ed Frauenheim

The payoffs of training have long been considered tough-to-measure intangibles—such as improved morale or increased employee productivity.
But over the past decade or so, researchers have forged links between training investments and business outcomes. And they’ve been joined by others working to assign value to additional hard-to-quantify factors such as a company’s good will or innovation, says Pat Galagan, executive editor at the American Society for Training & Development professional group.
"In the last 10 years, there’s been a lot of progress," she says. Among the seminal studies in the field was a 1998 paper by Laurie Bassi and Dan McMurrer finding preliminary evidence that companies that invest more heavily in training and development are more successful and profitable. A follow-up study they did in 2004 on about 390 publicly traded companies confirmed a strong link between training expenditures and subsequent stock market performance.
Research firm Bersin & Associates has found that organizations that consistently spend within 10 percent of the industry average on training per employee are, on average, 12 percent more profitable over a four-year period than those that spend below these levels.
Despite such glowing results, there’s a fundamental challenge associated with tying training and other HR investments to business benefits, says John Haggerty, managing director of the executive education program at Cornell University’s Center for Advanced Human Resources Studies. It’s tricky to distinguish chicken from egg, he says.
"It is possible that companies that perform better invest more in [human capital]," Haggerty says. "There are lots of people working on better proof, but it has been a frustrating exercise." Bassi and McMurrer, though, say they dealt with "reverse causality" in their 2004 paper, where they found that training expenditures are not driven by past stock returns.
They also say related research they did this year controls for reverse causality, because it looks at changes in stock price rather than the level of the stock price. That paper finds that nearly half the change in banks’ stock performance relative to peers could be attributed to changes in annual training budgets during the prior year. Although the authors had 2007 training data on a very small number of banks, they say it appears training expenditures were a very strong predictor of stock prices even during last year’s market turbulence.
The paper concludes that training may have its intended effect of better corporate performance. Budgets for employee development also may indicate whether a firm is focused on the long term, Bassi and McMurrer argue. And training expenditures may act as a "window" into a firm’s future financial health, they say.
Citing Training Magazine figures, they say Wachovia slashed its training per employee by more than half from 2006 to 2007. In 2008, Wachovia shares fell as much as 95 percent before the bank agreed to merge with Wells Fargo.
Bassi and McMurrer have spent more than a decade researching the link between training and business results. Bassi says the bank study is particularly good evidence of a connection between training spending and stock performance: "That’s the cleanest, purest example we’ve had."
Workforce Management Online, August 2009

Thursday, May 14, 2009

Think Training - It’s Your Path to the Future

Column is by Kevin Price, Executive Director of Chenango-Delaware-Otsego Workforce.

Of late, every time the topic of the economy and the job market arises, I feel like the weatherman forecasting a high of 32 degrees and thunderstorms, when what everyone really wants to hear is sunny, clear skies and 80 degrees.

In the workforce development business (employment and training services), those of us at the CDO Workforce One-stop Career Centers who assist individuals who are unemployed, seeking alternative career opportunities, recent graduates, or businesses, the seriousness of this recession has taken on a whole new meaning in our work.

While the present economic picture is less than sunny, there are bright spots. Growth and job openings within segments of the economy do exist, and as with all economic downturns, new economic opportunities and jobs are created.

As to when we will emerge from this recession, and the economy will pick up depends on many factors. Our present day business environment, of which we have become dependent upon for our goods and services, has evolved into a complicated “vertically specialized” global supply chain. A global marketplace, which will most likely become more interdependent and further redefine the workplace.

What then is my advice for all of us? How do we position ourselves for the stability we naturally crave in our lives?

First, accept that the business and the job market as you know it has changed. Permanently!

Second, accept that you will have multiple careers in your life. In the 1980’s it was assumed that people entering the job market would have eight careers in their lifetime. In the 1990’s, this evolved into 14 careers, and now - well you get the picture!

In today’s workplace and the one to emerge from this recession, your brain is your greatest asset. The knowledge, competencies, skill sets and potential intellectual property you possess are your portable assets and worth everything. In economic terms, economists refer to our brains (collectively) as human capital. Numerically, intellectual capital is worth a lot. It is what drives the growth and emergence of economies. We as a nation would not be where we are today if it weren’t for our intellectual and creative prowess. We historically have been a leader in intellectual creativity and entrepreneurial development. Some of our most noted firms such as Microsoft, the Gap, Hewlett-Packard and Revlon were founded during recessions and depressions.

This brings me to my last words of advice. Invest in your human capital, or as Stephen Covey, author of 7 Habits of Highly Successful People said, “sharpen the saw”. Regardless of your level of education or years of workplace experience, in this hyper speed and evolving business environment, survival will depend on you taking the responsibility and time to sharpen your intellect, “skill sets”. The reality is, that regardless of your intellectual and educational level, skill sets, particularly core “skill sets” needed to build new knowledge fade over time due to lack of use. Learning new skills or brushing up on old ones is essential.

Obtaining an education, a technical or college education is the smart move. Having one in or related to a field of work in demand is even better. The more you build “skills” prized by business the more likely you will remain in the game. The challenge going forward, for all of us, is continuously building and keeping our skills current to meet the changing workplace demands. It’s like a football game! Games are won in yardage, seldom as a result of a “Hail Mary” pass.

Regardless of your present circumstances or educational level, I strongly urge you to do some planning. It is not just about job-hunting, it’s also about thinking about what type of work you are capable of doing, what will be available in the future, and developing the skill sets needed to keep pace one yard at time.

To stay on top consider continuing education. There is no time like the present! CDO Workforce and its Partner Programs have access to a variety of funding sources to assist you. If you need assistance identifying the type of training, or a direction you should focus your efforts, staff at the Career Centers can help!

Consider classes to refresh your core academic skill sets, computer and information technology skills, or proficiency in another language. Classes that will lead to certifications or to a degree are always helpful. If you can't attend a class, consider online training. CDO Workforce has free on-lines courses (over 5000) covering a wide range of industry sectors and disciplinary topics. Additionally, many educational institutions offer a range of on-line certificate and degree programs.

Whatever it is you do, “think training”! Build your intellectual capital to make yourself as marketable and competitive as you can. It’s a matter of survival!

If you have any questions about CDO Workforce and the range of services we offer, contact our offices. Oneonta – 432-4800, Sidney – 561-7550, Delhi – 746-7477, Norwich – 334-2201; or visit www.cdoworkforce.org.

Friday, December 26, 2008

Shared Work Program – The Layoff Alternative

Shared Work Program – The Layoff Alternative

By John Hausler, Associate Unemployment Insurance Review Examiner
New York State Department of Labor

Maybe your company’s sales are down. Maybe your firm just lost a big contract. Whatever the reason, your company is facing some tough economic times. You know the situation is temporary. But you can’t afford to keep the employees you value on payroll at this difficult time.

What’s a human resources manager to do?

Consider applying for the New York State Department of Labor Shared Work program. It’s a smart alternative to layoffs – and it makes good business sense.

Under an approved Shared Work plan, you can reduce the number of hours of all workers, or just a particular group. Employees may collect an equivalent percentage of unemployment insurance benefits for up to 20 weeks. Also, under the current Federal Extended Benefits plan, the 20 weeks of Shared Work benefits may be extended to 40 weeks. For instance, if your company receives approval to reduce the number of hours of a group of workers by 40% for ten weeks, these employees could receive 40% of their weekly benefit during that time (after serving an unpaid waiting period of one week).

Shared Work can help to maintain employee good-will, since it signals that workers’ contributions are appreciated and their services are valued despite difficult business circumstances. When business picks up again, they’re more likely to still be around when you need them most, instead of working for your competition. You’ll not only retain your skilled employees, you’ll save the considerable cost of finding, hiring and training new workers.

What does the Shared Work plan require?

To apply for a Shared Work plan, you must contact the State Labor Department Liability & Determination Section at least two weeks before you want to start the program. Your firm must have at least five full-time employees that work 35-40 hours per week, and you must have paid Unemployment Insurance tax contributions for at least four consecutive calendar quarters before filing your application. The Liability & Determination Section may be contacted by phone at 518-457-2635 to request an application.

In addition, a Shared Work plan:
- must include a reduction in work hours of between 20 – 60%
- may not be used to subsidize part-time employees
- may not reduce or eliminate fringe benefits
- cannot exceed 53 weeks
- must be approved by the New York State Department of Labor Unemployment Insurance Division, Liability & Determination Section before implementation
- does not allow an employer to hire additional full- or part-time employees for the workgroup covered by the plan
- must be in lieu of a layoff of an equivalent percentage of the workforce
- must include all employees in an affected unit, and their hours must be reduced by the same extent (although different units can be reduced by different percentages)
- must have the agreement of a collective bargaining unit, if there is a collective bargaining agreement in effect, to participate in the Shared Work Program

A Shared Work plan will have an effect on your company’s unemployment insurance tax rate, since the benefits will be charged against your firm’s experience rating account. However, participation in Shared Work may result in a more favorable experience rating than would otherwise occur during a full layoff. The Liability & Determination Section can answer any questions you may have about how Shared Work may impact your tax rate.

To find out more about the Shared Work Program and how it might benefit your business, just call the Department of Labor at (518) 457-2635, or write to the following address: New York State Department of Labor, Unemployment Insurance Division, Liability & Determination Section, State Office Building Campus, Albany, New York 12240. You can also visit the agency web site at www.labor.ny.gov for information about Shared Work and other services that are available.

Thursday, December 18, 2008

Article 23-A of the N.Y. Correction Law

INFORMATION FROM COMMERCIAL INVESTIGATIONS LLC
Recently, New York State passed two laws designed to encourage employment of individuals with prior criminal convictions. The first law imposes new notice requirements on employers requesting criminal background checks. The second law provides additional protection for employers against negligent hire and retention claims. Legal Background - NewYork limits the circumstances under which an employer can deny employment based on an individual's prior criminal history. An employer may not refuse to hire (or fire) an individual because of a criminal conviction, unless the employer can demonstrate either: (1) a direct relationship between the criminal offense and the employment sought; or (2) that granting the employment sought would create an unreasonable risk to the property or safety of others.For these analyses, New York law provides various factors, which are found in Article 23-A of the N.Y. Correction Law ("Article 23-A").

These factors for consideration include the following: the public policy to encourage employment of individuals with prior convictions;the specific duties and responsibilities of the position; the bearing of the criminal offense on the applicant's fitness or ability to perform the duties and responsibilities of the position;the time since the crime was committed; the applicant's age at the time the crime was committed;any information the applicant has produced regarding rehabilitation; and the legitimate interest of the employer in protecting property and the safety and health of individuals or the general public.An employer may be liable for unlawful discrimination if the employer refuses to employ an individual without demonstrating a direct relationship between the offense and the employment sought or an unreasonable risk to property or safety based on these factors.

New Notice Requirement - New York will require employers to notify applicants of the anti-discrimination rule and an employer's obligation to consider the Article 23-A factors. Beginning February 1, 2009, employers obtaining criminal background checks must:provide a copy of Article 23-A to the individual about whom such a report was requested, and post Article 23-A and any related regulations in a conspicuous location at the employer's premises.The employer must provide Article 23-A to the subject: (1) prior to requesting a criminal background investigation and (2) when the consumer reporting agency (e.g., background investigation firm) provides the report (with criminal background information) to the employer. An employer must comply with these requirements beginning February 2009.

New Protection Against Negligent Hire Claims - The second law provides additional protection from negligent hire or retention claims. Negligent hire or retention claims arise when:an employee with a criminal conviction injures someone or causes other harm during the employee's course of employment;the criminal conviction demonstrates the employee had a proclivity to engage in the wrongdoing that caused the injury or harm;the employer knew or should have known of the employee's proclivity; and the employer could have prevented the injury or harm by refusing to employ the employee. For example, an employer who fails to conduct a background check may be liable for hiring an employee who is a convicted violent sex offender, if that employee later sexually assaults a third party during the course of his employment. The prior criminal history is evidence the employee had a proclivity to engage in violent sexual conduct. If the employer could have reasonably discovered this conduct (e.g., with an appropriate background check), the employer might have prevented that particular attack by refusing to hire the employee.

The new law excludes evidence of the employee's criminal background when the employer made a reasonable, good faith determination that the Article 23-A factors support hiring (or retaining) the employee.This new protection adds incentive for employers to conduct criminal background checks and conduct the Article 23-A analysis. If an employer learns of a conviction and conducts the Article 23-A analysis reasonably and in good faith, evidence of the conviction will not be considered in deciding whether the employer negligently hired or retained the employee. This could, in many cases, result in a dismissal of the claim. In practice...When assessing your screening procedures, the following are critical areas for review: Are we conducting appropriate background checks for each employee classification, with special consideration for those who have access to financial information, cash, or who work with little or no supervision? If the screening process reveals a criminal conviction, do we conduct an Article 23-A analysis? Do we comply with federal and state Fair Credit Reporting Acts authorization and notification requirements? Periodic review of your screening procedures will help ensure you are taking appropriate steps to protect your company from legal liability.

By Joanmarie M. Dowling, Esq., SPHR - Bond Schoeneck & King, PLLC, 518-533-3230, jdowling@bsk.com

INFORMATION FROM THE WEBSITE OF COMMERCIAL INVESTIGATIONS LLC Troy NY USA mailto:info@commercialinvestigationsllc.commmercialinvestigationsllc.com // Phone: 800-284-0906 // www.commercialinvestigations.net.