Since 2000, Adam Fuller has seen his business grow about 11 percent a year — in an industry that grows about 5 percent a year. Fuller, along with his partner, operates 26 Express Oil Change & Service Center locations with 235 employees. So with that kind of growth, he’s come to realize that people are his most important asset. As such, he used to spend about 60 percent of his time focused on the employee component, but now that’s at about 95 percent.
“Given the fact that we’re in the automotive services business, I still think we’re absolutely in the people business at the end of the day,” he says.
Smart Business spoke with Fuller about how he manages his greatest asset — people.
How do you manage your employees?
We look at four areas in particular on our people — their mindset, discipline, teamwork and composure.
When I say mindset, what’s their critical-thinking like? What’s their effective judgment like, and are they willing to continuously improve, and are they pushing to be better tomorrow than they are today?
As for discipline, how customer-focused are they? Will they plan and execute to that plan? Will they hold their standards as high as they possibly can and try to bring everybody up to their standards?
On the teamwork side, how are we treating other team members? How are we communicating with each other? Are we coaching the individuals that work for us?
On the composure side, do our employees know what their strengths and weaknesses are? Are we delivering trust? Do we need to be acting more technically? Are we sharing information? Are we remaining calm in adverse situations? Where are we on conflict resolution? Are we fair-minded? Are we open-minded?
How did you decide on those four things specifically?
So much today, we operate in an environment of, ‘Where are we today; where are we this week?’ The hardest thing is trying to link those short-term actions to long-term strategy, so we try to look at all the issues that we have on a long-term basis and break it down into what should we be doing in the short term to hit what our long-term strategy is.
The biggest thing is, we’re trying to optimize, not maximize, our employees. In other words, what is the best niche for them or the best role in our company for them where they can reach their highest potential, not where we’re just trying to maximize their potential in a particular role. That’s different. Everyone looks at trying to just maximize the individual instead of optimizing the individual.
How can leaders figure out what to focus on with employees?
The biggest thing is determining what your critical success factors are, and then how you can determine what things to measure that will ensure that you hit those critical success factors. Understand that things change, you change and people change, and if we don’t embrace change, it’s very difficult to perform at the highest level year in and year out.
The big thing is to not have people getting stuck in ruts and being open and willing to change and to grow and develop. The day that stops, we’re in trouble. If we’re not changing and challenging and growing our people, it’s going to hurt our business.
With that, do our current people have the ability to take us to the next level? If not, then we need to change and find new roles for the existing people. We have found that people respond better to the challenges of growth and development if we’re open and clear in our communication.
So much of it depends on developing trust and being willing to share more than you typically would otherwise. If I’m continuing to do something that bothers you and you don’t tell me, then you’re not being fair to me. If we’re not treating our people with the absolute utmost respect, it’s not fair to them. If they’re doing something they shouldn’t be doing, to be fair to them, we have to be open and honest with them. Those are very hard conversations, and sometimes they don’t go well but we have to at least try to every day.
How to reach: Express Oil Change & Service Center, (770) 752-0932 or www.expressoil.com
Most every CEO has made the statement that "our people are our greatest asset." I do believe that most companies realize that their people are their greatest asset. However, to sustain this value, companies need to continually evaluate, measure and evolve their strategies for talent acquisition and retention. After having completed several successful searches for Parker Hannifin and working with numerous executives, it is clear they "Walk the Talk" and their track record speaks for itself.
Recently, I had the opportunity to discuss talent acquisition and retention with one of Parker Hannifin’s HR executives, Nate Jackson. Nate is a vice president of human resources for Parker Hannifin’s Instrumentation Group and one of the primary stakeholders in the execution of Parker’s workforce planning strategies. Parker Hannifin has continuously demonstrated success in attracting and retaining top talent globally. In a time where employee tenure is shrinking, it is common to see tenure with their employees of 10-, 20- and even 30-plus years. This success is a direct result of corporate culture and values, competitive wages and benefits, and career growth and succession strategies.
The following are some of the insights Nate Jackson shared with me regarding Parker’s efforts.
What steps does Parker take to ensure that senior level talent fits the culture?
We view the hire of a senior level manager or executive like bringing someone into our family. We want to get to know them and be certain that this person will take care of our customers and employees the Parker way. Senior level candidates will meet with numerous executives in the interview process to ensure we really know the candidate and evaluate the fit effectively. At certain levels, we will engage the services of industrial psychologists who conduct in-depth assessments of the candidates. References are checked with an emphasis on management style. We look for people who can influence others versus those who just exert authority.
Parker has locations in 46 countries, 132 divisions and approximately 55,000 employees worldwide and growing. What is different about Parker’s talent acquisition process in various regions in the US and the world?
As a corporation, Parker will continue to drive efficiencies through global processes and procedures as it relates to our talent. We have developed Parker Leadership Business Skills which serve as a universal standard for Parker employees and consists of values, behaviors, attributes and skills. With that said, we realize that being a growing, global business, we need to empower our divisions to create best practices for their specific location based upon both Parker values, as well as, regional cultures.
Parker has regional VP’s of HR who are then supported by divisional HR managers within their region. These professionals are experts in the local culture, hiring practices and regulations. They are empowered to execute strategies for talent acquisition and retention which are aligned with Parker’s values and goals.
Experts keep talking about the talent shift. What is/has Parker done to retain talent during the recession and as the economy picks up?
As we entered the recession, Parker took major steps to minimize reductions in our workforce and save as many positions as possible. We started with a top down approach where senior level executives made the first sacrifices. Ultimately, we took a team approach to the sacrifices being made to weather the economic storm. This approach strengthened employee loyalty to the business.
During this time, we realized that we were asking employees to do more with less to get us through this time. Parker has and will continue to execute programs that incentivize our employees for their performance within the business. We offer a profit sharing program, equity programs and strategies for our employees to be rewarded and grow through globalization of our business. Parker continues to think outside of the box by expanding our medical coverage including alternative medicine. We also have a goal to have a workout facility in every Parker location. This is an obvious convenience to our employees and helps to increase the overall health of our people.
Parker continues to engage in strategic workforce planning initiatives. Talent challenges are a result of retirement, expansion & acquisition, new product launches and increasing globalization of our business. We are constantly looking for better ways to increase our talent flow into the business and talent growth once inside the business.
If you would like to learn more about Parker Hannifin, you can visit their website at www.parker.com for more information.
This article was brought to you by Chris Carmon, president of The Carmon Group. You can find out more about The Carmon Group at www.carmongroup.com
While the overall number of workers’ compensation claims has decreased over the past few years, insurance industry studies show medical treatment costs are continuing to grow at an alarming rate with prescription drugs being one of the major contributors.
The impact, however, isn’t solely driven by the price of the drugs, but instead, in large measure, it has been due to the increased utilization — more drugs are being prescribed, more frequently, and for longer periods of time. In many cases there are more appropriate and cost-effective treatment alternatives — but, in order to better manage this process, more focus and expertise is required than what is provided in most Pharmacy Benefit Management (PBM) programs, especially when comparing workers’ compensation benefits to group health.
“One of the major challenges workers’ compensation insurance programs encounter with controlling medication costs is ensuring injured workers are being prescribed the most effective and appropriate drugs to treat an injury or work-related illness,” says Daryl Corr, president of Healthesystems. “Since the complexity of injuries and patient medication tolerances can vary so significantly, combined with the challenge of widescale use of pain medications, treatments can’t be a one-size-fits-all approach. Therefore, it’s critical to incorporate more clinically focused strategies to ensure prescription drug treatments are being managed appropriately, especially in the most complex cases.”
Smart Business spoke with Corr about the uniqueness of workers’ compensation prescription benefits and how clinically focused tools are impacting medication costs and the quality of care.
How can a clinical services program help reduce the costs associated with complex workers’ comp pharmacy claims?
At the most basic level, a clinical services program helps customers design and maintain the pharmacy program’s medication plan (formulary) around the specific prescription medications or classes used to treat workers’ comp related injuries. These rules can help determine whether a drug requires a prior authorization before dispensing.
However, on a more targeted level, a successful clinical services program can have a big impact when focused on the most complex workers’ comp cases. These complex cases may represent a small percentage of an insurance payer’s injured worker patient population, but they have a tendency to drive most of the cost. In a lot of situations, this goes well beyond the typical 80/20 business rule axiom. For many insurance payers, less than 10 percent of the claimants receiving prescription drugs are driving over 70 to 80 percent of their overall drug treatment costs.
So, focusing more attention on this narrow group of claims maximizes the opportunity to significantly reduce drug spend. However, it requires a lot more expertise and commitment from the PBM to achieve the best results. You need a highly skilled and knowledgeable staff of PharmD clinicians focused on examining individual cases, analyzing drug therapies and identifying alternate treatment options — subsequently interacting with prescribing physicians and claims professionals to educate them about more appropriate alternatives when they are available. This approach focuses on the claims where the largest dollars are being spent in order to maximize the potential savings impact.
What is the best way for a PBM to integrate clinical services into a pharmacy program?
The most successful clinical tools are highly integrated into a PBM’s overall pharmacy program. There are critical pharmacy program functions necessary to make this happen, namely powerful technology and proactive communications. Incorporating powerful technology takes pharmacy management to the next level by proactively identifying problematic prescription trends through systems edits and evidence-based medical guidelines. A proactive communication process is key, especially when it comes to interactions between the PBM, the prescribing physician and the insurer’s claims professional.
A PBM’s team of PharmD professionals needs to actively interact with physicians to provide education and insight into the specifics about the prescribed drugs and the injuries they are treating. Depending on a physician’s specialty, they may have limited knowledge about the effectiveness of a particular drug or alternatives available — or, frequently a physician may not be aware of all medications being prescribed to an injured worker if they are being treated by multiple physicians. Clinical education and outreach is imperative and must occur quickly in order to be most effective.
Are these targeted clinical services applied universally to all workers’ comp claims?
Not necessarily. Usually, these types of services are focused on the most complex claims. All clients and their individual claims are unique — just like each diagnosis is unique to each injured worker. In addition, rules and regulations differ from state to state and may affect how or if you can interact with physicians, or whether there are specific mandated treatment guidelines in place. A PBM must be aware of these rules and work with customers to ensure everyone maintains compliance. With these added issues, it becomes even more crucial for a PBM to take a proactive role in educating its clients about what is occurring in the market as it relates to applying best treatment guidelines and clinical best practices.
There is also a need to proactively monitor the pharmaceutical industry to identify new drugs that are entering the market, which may have an impact on a workers’ comp pharmacy program. The key is to help clients make the right decisions by factoring both treatment effectiveness and cost. It isn’t solely driven by the price of one pill. It’s about applying the right treatment to achieve the optimal outcome, which typically means lower costs over the life of the claim.
DARYL CORR is president of Healthesystems. Contact Healthesystems at (800) 921-1880 or email@example.com. For more information about Healthesystems, visit www.healthesystems.com.
Ron Roma believes in redundancy.
It’s a commonly used word for engineers, architects and other professionals who need to ensure that fail-safe systems are in place for the buildings, transportation systems and vehicles that we rely on every day.
But it’s an applicable word in the world of business, as well.
At Healthesystems LLC, the pharmacy benefit management company where Roma is the founder, owner and CEO, he has had to build redundancy into his work force. He needs to build a team of people with overlapping skill sets and an ability to step into new roles on short notice.
“When we started the company, I hired and brought a guy on, Daryl Corr, who is currently our president,” Roma says. “He started out as vice president of operations, and I promoted him to COO; now he’s president. Our biggest challenge was finding a successor to Daryl, and subsequently, finding successors for other key employees. When you’re a smaller company, you might attract some very talented people, but often, it’s hard to replicate their skill sets.”
It’s a call that must be answered through recruiting and training of new staff members. Roma and his staff have worked with recruiters in both the Tampa and Phoenix markets to find new blood, also relying heavily on referrals.
“We’re very much in an industry of relationships, so we’re continually reaching out to people we know,” Roma says. “Our HR department once told me that 85 percent of our new hires have come from referrals, either internal or external.”
But to get plugged in like that, Roma has had to focus all executives at Healthesystems on team building and the constant pursuit of the new talent that has allowed the company to grow to nearly 300 employees and $214 million in 2009 revenue.
Recruit for redundancy
The key to attracting good people is maintaining good people. It’s a concept that Roma enforces throughout the management levels at Healthesystems.
You don’t just maintain good people for their potential recruiting connections. You maintain good people because your work force is the most critical element in determining your company’s atmosphere and how your company is perceived by outsiders.
“When you’re doing the interview process, it’s really a two-way street,” Roma says. “It’s not just us interviewing prospective new employees; it’s the employees interviewing us to determine if this is a place they want to work. So the company has to have a very pleasant, attractive look and feel to it. You know what it’s like when you walk into a place and it feels all starchy and stiff. The people aren’t very open. You have a difficult interview and you don’t get a warm feeling from the cohesive group. That’s not how we want to be.”
Start by reaching into your coffers and giving your human resources department the backing it needs to build an ideal staff.
“You have to be willing to spend the money,” Roma says. “Three or four years ago, one of our corporate objectives was to double payroll. It is an expense that if you can afford it, every company would be well served to do it. We’re trying to avoid a situation where one person is so vital to what we do each day, if that person left, it would create a lot of problems in that area of the company. That is what we’re trying to avoid, and that is why a couple of years ago, we decided that this was an investment we were willing to make.”
Of course, not every company is in immediate shape to begin shoveling money into recruiting or payroll. But as your company evolves and changes, you need to invest whatever you can in hiring the people who will help provide you with talent reinforcements down the road. The position for which you hire a person this year might not be the position you need filled in four years. If your company is growing, chances are even better that will be the case.
“The redundancy you put in place is really about succession planning,” Roma says. “In our case, we’re so young as a company, it’s really not a matter of losing somebody. It’s that if a new opportunity comes up, we want to have that extra flexibility with the people on staff.”
If you have multiple locations in your company, you need to make sure you’re recruiting and maintaining adequate talent and skill sets at all locations. It’s particularly true if you serve customers with any type of phone-based or Internet-based help desk. If your help desk on the East Coast is knocked offline, you need to have capable talent and staff numbers at another location.
“When we were looking at people and locations, it’s one thing to say that we have help desk backup in North Carolina, with systems and people trained there,” Roma says. “But if you shut everything down in Florida due to a hurricane, it might impact the Carolinas, as well. With that in mind, we made our redundant help desk site in Scottsdale, Ariz., and even put a backup data center there, as well. It’s redundancy in people, facilities and systems. It all works together. You need all three.”
Find the cultural fit
You need to hire for talent and skills or you won’t create the team that will allow your company to flourish. But if your company is in growth mode, it is imperative that you find employees who can help support and advance your culture.
At Healthesystems, Roma operates a high-growth, entrepreneurial company and looks for people who can flourish in that environment.
“High-growth companies can be difficult for many people to fit in,” he says. “A lot of it depends on their work experience. If they have been out in the workplace with an IBM or a really large company, they’re used to a lot more structure, definition and rigidity day to day. I describe our company as entrepreneurial and opportunistic, and that means we’re always looking for that next entrepreneurial opportunity with whatever happens to fit us. People tend to get concerned if they have that big-company perspective of wanting to know what their job is and what are the 15 things they need to get done today. And 15 years from now, they’ll still be responsible for those 15 things.
“That’s not how we operate in a smaller, entrepreneurial company. You have to be light on your feet, take what you learned on the last project and transfer it to a new project.”
You try to find the right fit through your hiring process, and use your training process as a kind of proofreading system for your hires.
“Basically, you have multiple layers of interviewing,” Roma says. “We bring in and define the selection process for people in significant, key positions. They might interview with five to 10 people in the organization, and it is in all kinds of disciplines. It might be accounting, IT, account management. I even get involved in some of the more significant hires myself.”
From there, Roma and his leadership team use the training classroom to find the people who will grow with the company. In a high-growth environment, not every hire will be a home run. Some might not even get you a base hit. Out of every round of 10 to 15 hires performed by Healthesystems, up to one-third might leave the course, deciding the company isn’t a good personal fit.
“In my mind, failure in the training program is the result of failure in the hiring and recruiting process,” Roma says. “In most companies, the help desk is usually the highest area of turnover. We were told by our HR department that the help desks in most companies have a 100 percent turnover rate in a year. We have been more in the 15 to 20 percent area, which I think is phenomenal. To me, when you bring someone in and they fail in the first six to 12 months, it’s as big of a failure for the company as it is for the individual, because obviously you missed something in the interview process.”
The key to success in an interview and training process boils down to one word: involvement. Management has to be active and engaged in exchanging feedback and ideas with the human resources staff. You don’t want to micromanage your HR department or perform the jobs assigned to your HR professionals, but you do want to concern yourself with the overall process and whether it is delivering the results you want.
“Back in 2001, I had a client that I did some consulting for,” Roma says. “The company was producing enough revenue that the owner had the lifestyle he wanted. But it really wasn’t doing as well as it should be. The biggest problem was lack of sales.
“The owner tells me, ‘Ron, I get so upset when I look at our books and realize that 90 percent of our customers are still the ones I brought on.’ Then I told him ‘Well, you need to get off your butt and go sell some more.’ You get tired and you get a little conceited, thinking, ‘I’m above that now.’ But you don’t want to create a culture of superiority. You want a culture where any task that needs to be done, you or any other person is willing to do it, willing to take a look at what is going on and educate yourself. You never want to be in a position where people are saying, ‘This isn’t worth my time.’”
You stay engaged with your team, your HR department and the process by which you are adding to your team by never taking your eye off the ultimate goal of achieving and maintaining a winning culture and profitable balance sheet, and everything that entails.
“Always keep your eye on the ball,” Roma says. “There is always someone out there trying to divert your attention from running the company, and when those activities happen, the only thing I’ll remind people of is keep your eye on that ball, maintain those customer relationships and employee relationships.
“Ultimately, as a businessman, that is why you are there — to maintain your customers and maintain your employees.”
How to reach: Healthesystems LLC, (800) 921-1880 or www.healthesystems.com
The Roma file
Founder, owner and CEO
History: My dad was in the Air Force, and we moved to Oklahoma when I was a year old. My parents were from Montana.
Education: Chemistry and math degrees from the University of Oklahoma
First job: When I was 14 or 15 in Oklahoma, there were a bunch of old rail beds on land that was going to be recycled, so I had a job clipping the old railroad ties there.
What is the best business lesson you’ve learned?
Don’t quit; don’t stop. It doesn’t matter what happened 10 to 15 years ago. You stick at something.
What is your definition of success?
At 20 years old, success is a paycheck. At 52 years old, I expect that a company has to produce in other ways for its employees. You have to help meet the career objectives of your employees. And you have to meet the needs of your customers and investors.
There are two main ways to modify existing labor law: through legislation or through the National Labor Relations Board.
“The Employee Free Choice Act appears to be dead in the water,” says Mike Stief, a partner with Jackson Lewis LLP. “It is unable to be enacted in any form in the foreseeable future.”
Therefore, any change would have to come through the current NLRB.
Smart Business spoke with Stief about the new labor board and how it will impact union-free employers.
How can the makeup of the board affect labor law?
The current NLRB is made up of three Democratic appointees. There are supposed to be two appointees by the Republican Party, but there is one open seat. So you have a majority of the labor board who are very beholden to organized labor. The chairperson of the board, Wilma Liebman, was a minority member of the board during President Bush’s presidency. The most controversial member of the new labor board, Craig Becker, is a recess appointment. He is one of the more controversial figures on the labor board in recent memory.
Becker believes employers should be stripped of any legal cognizable interest in their employees’ election of representatives. He takes the position that we shouldn’t even have union elections anymore. He wants to restrict or eliminate an employer’s right to communicate with its employees during an election campaign. His views are very extreme; some even are in direct violation of the current National Labor Relations Act, which permits employers to communicate with their employees on this topic. Those rights have been in place since 1947.
Are any of those extreme changes realistically going to happen?
President Obama appointed the majority of the labor board. He owes a lot to organized labor, which helped get him elected. I’m not suggesting every one of Becker’s views will be adopted, but the board majority may take a close look at a lot of those issues.
How does the new labor board impact employers?
The board can affect change and impact non-union employers in two distinct ways: one is adjudication, which is developing a new body of case law.
The second way is rulemaking: the labor board can adopt rules that also could change the labor landscape. Just recently, the labor board proposed creation of a rule which would require every employer in this country to post in the workplace a notice of employees’ right to join a union. Right now, that only applies to certain federal contractors and subcontractors through an Executive Order signed by President Obama. If adopted, this proposed rule would require it for every employer. You may have to post it electronically, as well, if that is a way you customarily communicate with your employees.
This would be a constant reminder to the work force of the right to unionize, and therefore make it more likely that you will be the subject of organizing in the future.
Other potential rules that we might see deal with expedited elections, the more frequent use of mail ballots and/or e-voting.
Historically, people have voted in elections by elections being conducted at the worksite during work time. The NLRB does a very good job of running elections. Having an election on-site is beneficial to employers because it ensures the maximum number of employees vote. Statistics show in elections where the ballot is mailed to your home, voter turnout is less than elections that occur manually.
How may the board affect labor law through adjudication?
There are cases that are going to be decided by this labor board that will be very union-friendly. Among them: making it easier for temporary employees from a temp agency to vote in union elections along with the company’s regular employees.
This labor board will most likely overturn a decision issued by the previous labor board, which found it lawful for a company to prohibit the use of its computer systems for the purpose of organizing.
This labor board may also go back to a decision from the President Clinton-era board that provided non-union employees the right to have a co-worker witness present during an investigatory interview that could lead to discipline. Usually, those types of investigations involve highly sensitive matters. It might be a harassment, theft, or substance abuse issue, and an employer usually tries to keep those investigations as confidential as possible. That confidentiality could be compromised if there is a co-worker witness present.
What are some things union-free employers can do to minimize the impact of these potential changes?
They need to really examine their whole philosophy of remaining union-free. They need to make it an ongoing process. The best way to remain union-free is to eliminate or reduce the issues that cause people to look elsewhere for help.
The keys are a well-trained management staff, selecting supervisors with good people skills, not just good technical knowledge, training those supervisors, and regularly conducting vulnerability assessments to understand which issues exist in the workplace in an effort to correct them.
What should employers be doing now?
On February 17, 2011, from 8:30 to 10:30 a.m., Jackson Lewis LLP is conducting a complementary seminar titled: Surveying the New Labor Law Landscape: 11 Changes in 2011: Tips for Employers. Business owners that are interested should contact our offices to register.
Mike Stief is a partner with Jackson Lewis LLP. Reach him at (412) 232-0138 or firstname.lastname@example.org.
Despite the “shellacking” — to borrow a turn of phrase from President Obama — the Democrats took in the midterm congressional elections in November and the divided government those election results will bring, 2011 still promises to be a year fraught with challenges for employers both within California and across the nation. From new legal mandates contained in obscure provisions of health care reform to new enforcement initiatives undertaken by various government agencies and the continued increase of wage and hour claims, business owners will have to remain vigilant to ensure compliance with the various legal and administrative changes coming in 2011.
Smart Business spoke with M. Alim Malik and Jonathan M. Werner of Jackson DeMarco Tidus Peckenpaugh about what labor and employment law developments are on the horizon for business owners in 2011.
How will the recent congressional elections impact employers in 2011?
From an immediate standpoint, a divided political landscape will mean that business owners should not have to worry about any new significant legislation impacting the workplace coming out of Congress in 2011. However, while Congress may be deadlocked, the Obama administration will remain busy implementing the various laws that were passed in the most recently adjourned Congress and initiating new enforcement initiatives to achieve the administration’s political objectives by executive fiat. Several areas of particular concern warrant discussion.
What is the discussion surrounding employers’ use of credit checks?
On Dec. 21, 2010, the U.S. Equal Employment Opportunity Commission announced that it was suing Kaplan Higher Education Corp. for refusing to hire a class of job applicants based on their credit history. While refusing to hire applicants with poor credit does not in and of itself constitute unlawful discrimination, such a practice can be illegal if it has a ‘disparate impact’ on a protected category of individuals, and if an employer cannot show that the practice is job-related and justified by ‘business necessity.’
Having just emerged from the deepest economic slump since the Great Depression, and with unemployment still hovering above 10 percent, it stands to reason that a significant percentage of applicants for any job are going to have poor credit. Moreover, it is not always clear what relevance an applicant’s credit history has in making a hiring decision for most categories of jobs. Given its negligible utility in the hiring process, and the EEOC’s renewed interest in its use by employers, business owners should refrain from using the results of credit checks to justify hiring or promotion decisions in most contexts. Such information should only be used when employers can show a strong ‘business necessity’ for applicants to possess good credit (for example, in jobs where employees handle large amounts of cash or other financially sensitive positions).
Why is the Department of Labor encouraging hourly employees to keep a separate record of hours worked?
Wage and hour law is one of the most active areas of labor and employment law nationwide. Perhaps because of this, the U.S. Department of Labor is actively encouraging hourly employees of private businesses to keep a separate, daily log of the hours they work and the breaks they take in order to ensure that business owners’ timekeeping methods are fully recording all employee work time. The Department has even created a free, downloadable ‘Work Hours Calendar’ for employees to use to track their own time. In view of this, business owners should take the time to audit their timekeeping practices to ensure that they are accurately and completely recording all hours worked by their employees.
What new accommodations do employers need to make in light of health care reform?
Congress included a provision in the Patient Protection and Affordable Care Act requiring employers to provide a reasonable amount of break time to employees to express breast milk as frequently as needed by the nursing mother. Additionally, employers must provide a separate, private space (restrooms don’t qualify) for these employees that is free from intrusion by fellow employees or the public.
While California has had a similar law on the books for several years, employers should nevertheless take this opportunity to review their internal procedures for accommodating nursing mothers.
How is businesses’ use of interns changing?
Both the Obama administration and the state of California are cracking down on business owners’ use of unpaid interns. Generally speaking, under federal law, unpaid interns are only permissible in situations where the internship is similar to the training given in a vocational school or academic institution, the intern does not displace regular paid workers and the employer derives no immediate advantage from the intern’s activities. Business owners considering internships should seek competent legal counsel.
What new provisions in wage and hour law should employers look for?
In California, 2011 should see the resolution by the California Supreme Court of perhaps the most significant wage and hour issue since Gov. Gray Davis signed legislation restoring daily overtime in 1999.
In recent years, hundreds of class-action lawsuits have been filed over the issue of whether business owners must ‘ensure’ that employees take their mandated meal and rest breaks or merely make such breaks ‘available’ to employees. The California Labor Code provision on this issue is ambiguous, and parties on both sides are eagerly awaiting the court’s ruling in a landmark case currently before it.
Regardless of what the court decides, prudent business owners in 2011 should review their meal and rest break policies to ensure that employees are taking the breaks afforded them under California law.
M. ALIM MALIK is a shareholder with Jackson DeMarco Tidus Peckenpaugh and chair of the Employment and Litigation Groups. Reach him at (949) 851-7458 or email@example.com.
JONATHAN M. WERNER is a senior counsel with Jackson DeMarco Tidus Peckenpaugh. Reach him at (949) 851-7422 or firstname.lastname@example.org.
When other leaders opted for layoffs and furloughs to combat the recession, Ingrid Lamirault called for reinforcements.
“It didn’t make sense to make wholesale changes in the employees,” says the CEO of Alameda Alliance for Health. “They knew what they were doing and, more importantly, they understood our mission. It made more sense to bring in someone to support the organization. This was about making people see their own potential, boosting people’s self-confidence and helping people understand how to behave corporately.”
Lamirault hired a business coach, bringing Anna Scott on board to develop some of the 130 employees at the nonprofit managed care health plan, which had $227.5 million in revenue for the fiscal year ending in June 2010.
“If you’re going to develop somebody, it really sends a positive message to the company as a whole that they value their people,” Scott says. “It really helps the morale. It develops loyalty by the employees (because they see), ‘This company is investing in me and helping me grow.’”
Initially, Lamirault picked several employees with untapped potential.
“I recognized that there were some people I could promote, but they would need support in the beginning, because they’d never supervised a team of people before,” she says. “There were other people who had a really good work skill but they ran into a lot of interpersonal conflict. There were a couple who had really good potential, but they would make mistakes and wallow in them instead of learning from them.”
You may not be able to forecast someone’s potential but, as Scott says, you can tell when employees are getting in their own way of growing.
“Danny,” for example, was a high-level employee in the Alliance’s IT department. He was good at his job but didn’t handle interpersonal conflict well. On top of that, Lamirault worried Danny wouldn’t get any further in his field without a college degree. She suggested he attend both coaching and college.
“It’s not that he doesn’t have interpersonal conflict anymore, but he handles it in a very healthy way,” she says. “If someone’s not respecting him, he knows how to deal very directly and tell them that this is what he feels and this is what he thinks he brings to the project.”
When you approach those employees with the coaching opportunity, you have to frame it as just that – an opportunity. It’s not an assignment or a requirement.
“It’s a positive,” Scott says. “It’s a way to say, ‘I really believe in you, and we see that you have something to offer. We also see that there are ways that you’re getting beside yourself and we want to help you.’ It has to be mutual. (We) want to invest, but if they are not interested, (we) won’t force it on somebody.”
Coaching relationships at the Alliance begin with manager-imposed goals to help employees perform their jobs better. But you can’t separate your business initiatives from their personal motives.
“I get really clear about, ‘Here’s what Ingrid has said she’d like you to develop,’” Scott says. “Then I go, ‘What would make it worth it to have you do this? What else do you see in yourself that you would like to develop?’ It’s one thing to do something for somebody else, but when you’ve got your own skin in the game, (you’re) more willing to fully participate.
“If they don’t do those things that Ingrid wants, bottom line is, they’re not going to have a job. But if they’re not satisfied with who they are and what they’re achieving, they won’t do a very good job. By being able to focus both at the same time, people are so much more satisfied. When people are struggling in their personal lives, work really does suffer.”
What’s in it for you?
Investing in employees strengthens the overall organization, but who would have thought your leadership skills would benefit from the effort? Ingrid Lamirault, CEO of Alameda Alliance for Health, learned that when she focuses attention on her employees, she reaps some benefits herself.
“Anna had started telling people to be more direct and to say what they feel,” Lamirault says, referencing Anna Scott, who coaches her employees one-on-one. “It makes me have to speak very directly with them or she’ll tell me, ‘You seem to have some indecision about some changes you’re making, and it’s making people very nervous.’
“A couple of times, she’s told me the way I’m handling something is creating turmoil so it’s made me recognize how I need to improve my own leadership skills. It makes me aware of some of the language that I use. And so … I have changed, too.”
Be conscious of how you can grow along with your employees, because their development doesn’t happen in a vacuum removed from your leadership.
“No action is by itself,” Scott says. “If I’m not being clear, then my employee will not produce the results I want. If I’m leading and I need you to do something, then it behooves me to go, ‘What is it that I need to do to be effective with you?’”
Legislators were undoubtedly well-intentioned when they set out to reform the nation’s health care system, but the lawmaking process often creates collateral damage, and this time the silent casualties may include your company’s absence and disability programs. The bill mandates specific provisions that weaken an employer’s ability to manage employee health, and ultimately their attendance and productivity. Because HR professionals are focused on revising the company’s current health plan and mitigating the upcoming cost increases, there is little time and focus remaining to manage absence and productivity.
“Employers can take some simple steps now to protect productivity while their attention is diverted between now and when the law takes full effect in 2014,” says Skip Simonds, practice leader for Absence and Disability Management for the Western Region at Towers Watson.
Smart Business spoke with Simonds about the impact of health care reform on employer absence and disability programs and the action steps that will help keep employee productivity intact.
How does health care reform weaken existing absence and disability programs?
The primary goal of health care reform was to provide benefits to a broader segment of the U.S. population and control costs, but it’s created additional administrative burdens for employers, and limits their ability to manage employee health by allowing employees to opt out of the company plan or purchase coverage in state-run pools. Employers have been able to drive substantial gains in productivity, because they’ve designed plans that influence and reward specific employee behaviors. And data shows that taking a holistic approach and creating complementary health, wellness, absence, workers’ compensation and disability programs is the best way to control costs while limiting abuses and absenteeism. If you remove a few pieces of the puzzle, you diminish the efficacy of the entire program. To make matters worse, the changes come on the heels of recession-induced staff reductions, so HR has limited resources to deal with the problem.
How should employers adapt current programs to drive productivity?
Switch to a paid time off (PTO) plan instead of allotting specific time for sick leave or vacation. PTO plans shift the burden and cost of managing incidental absences onto employees and boost productivity by reducing the use of unplanned sick days for questionable reasons. Studies show that employees are more likely to work through marginal illnesses and avoid taking ‘mental health’ days so they can save their time off for vacations. If you don’t switch to PTO, consider boosting the effectiveness of your current program by offering a bodacious prize for perfect attendance. One company increased perfect attendance from 10 percent to 50 percent of the employee population by entering the names of perfect attendees into an annual drawing for a new car. The car cost $40,000, but the incentive reduced lost time expenses by $450,000.
What other changes should employers consider?
Create an economic incentive for employees to return to work by reducing the short-term disability benefits from 100 percent to 60 percent or 66 percent of income. Simultaneously if supervisors are resistant to providing transitional work, charge the costs of that light duty to their cost center regardless of who provides it. The best way to reduce absenteeism and disability costs is by making sure that everyone has some skin in the game.
How can employers focus on this problem with limited HR staff?
Outsource the management of FMLA to an insurance company or third-party provider. Engaging a knowledgeable partner is like getting a free staff member, and an outsider has the freedom to quiz medical providers and find alternate treatments that reduce the need for missed time. Outsourcing also allows HR to focus on more important issues, and our experience shows that it increases compliance with a very cumbersome law that allows employees to take time off intermittently. This is especially true in California with its myriad of mandated leaves. A recent three-year study showed that intermittent benefits accounted for 19 percent of all FMLA taken, and employers with integrated FMLA/disability administration had lower costs than employers without integration that included 22 percent fewer lost work days and 36 percent fewer repeat users.
How can employers use data to boost the effectiveness of absence and disability programs?
Outsourced providers generally offer robust data collection, which illustrates the close link between employees’ utilization of sick time, short-term disability and workers’ compensation. Review the data on a quarterly basis to spot trends and hold vendors accountable to provide recommendations that will improve your program and results. Only 11 percent of employees that file medical claims also file lost time claims, but those employees drive 53 percent of medical and disability benefit dollars; so a decrease in disability costs can yield an even larger decrease in health care costs. But what’s most troubling is that 96 percent of CFOs say they understand the connection between employee health, lost time and productivity, but 78 percent don’t receive any meaningful data to help them analyze or manage the situation. Suffice to say that employers stand to reap tangible savings by simply collecting data and reviewing it on a regular basis.
Skip Simonds is the practice leader for Absence and Disability Management for the Western Region at Towers Watson. Reach him at (818) 623-4576 or email@example.com.
Zack Schuler was reading a book about leadership when a stat struck him — 25 percent of a CEO’s time should be spent recruiting.
Schuler can’t argue. Hiring is crucial as his company, Cal Net Technology Group, continues growing. In 2007, he added nine people to the then 40-person IT consulting company, spurring 20 percent growth in one month.
“Unequivocally, the No. 1 challenge is finding the right people,” says Schuler, founder, president and CEO. “If you have the wrong people, it’s devastating to the organization. You cannot achieve sustainable growth without paying a lot of attention to your recruitment process.”
Cal Net, which has offices in Northridge and Anaheim, almost doubled its revenue between 2005 and 2009.
Create a process. We’ll screen 200 resumes [for a network engineer position]. We’ll boil that down to 10 people that we talk to on the phone. We’ll boil that down to three or four people that we bring in for an in-person interview. Then we’ll boil that down to one or two people to send through our lab, where the engineer spends eight hours building a small network environment.
We’ve implemented similar practices within (other) parts of the company. For example, when it came to hiring our controller, we hired our CPA firm to administer an accounting exam, which took three or four hours to complete.
If they don’t score well on the exam, you can take them out of the race. It actually shows somebody’s interest in the position if they’re willing to go through hours of interviewing and test-taking in order to come on board with us.
Several candidates have said, ‘Are you going to pay me to go through the exam?’ at which point, we chuckle and say, ‘No, we’re not, and as a matter of fact, you’re not even going to be taking the exam now for asking that question.’ When you tell somebody, ‘You’ve got to take an exam,’ you can gauge their attitude. [If] they’re like, ‘Great, I’d love to show you how well I can perform,’ that’s the kind of person we want to hire.
Inspect resumes. If somebody says something [on their resume] like, ‘Possesses experience with server operating systems,’ that’s not good. I want to see: ‘Expert in Windows Server 2008 R2.’ I want them to list out their skill sets in detail. (Frequently,) the candidate could be qualified for the position, but their resume is just too thin to attract my attention.
Another thing I love to see is where somebody will have received promotions and they’ll have dates listed like, ‘From March of ’07 to February of ’08, I was at this company in this position. Then from February of ’08 to December of ’09, I was at the same company but in this position.’ First, I like the fact that the person was promoted. The second thing that I like about it is that they remembered when they were promoted, and if they remember that, it means that job growth is important to them.
If somebody shows up and they have a list of references ready instead of, ‘References available upon request,’ that’s a positive. It’s like, ‘Hey, I’m good. Call these people and ask them.’ I also love to see references of former bosses as opposed to a peer. It’s like whatever the departure was, it wasn’t bad.
Start conversations. They can be the best technical people in the world, but if they don’t know how to interface with our client, it’s just not good. The skills come through in our exam. But if they don’t have the attitude, they won’t even make it to the exam. The first thing that we’re going to hire on is attitude.
It all boils down to, when they show up for the interview, if they’re a good conversationalist. One of the questions that we ask is, ‘Tell me about your last vacation.’ We want to ask a question that they don’t have a prepared answer for. It gives us an opportunity to see what their dialogue skills are like. They don’t have a canned answer for it because nobody asks that question. We’re able to figure out how well this person’s going to do [with clients] just through their process of communicating with us through the interview.
How to reach: Cal Net Technology Group, (866) 999-2638 or www.calnettech.com
When Camille Cheney Fournier was 10 years old, she was already well established as a vital part of the family business.
“We used to have three-part commissions, and we had to tear them and get them all sorted out,” she says. “I was pretty little, because I remember I couldn’t reach far enough to put the checks in numeric order.”
But even in such a seemingly small role, she learned a valuable lesson that has stayed with her through the years and helps her as she now leads the family business, SWS Re-Distribution Co. Inc., as owner and CEO.
“It takes everybody to make the business work,” Fournier says. “It really does. Some of those tasks that I was doing, like putting checks in numerical order or sorting salesmen commission reports, all that had to be done, and somebody had to do it. It was something that even a kid could do so that the employees at the office could do something they had the skill to handle.
“It goes to show that there are so many jobs at a company, and they’re all important, and they’re all needed, and they all need to be appreciated.”
By encouraging teamwork and valuing every job at the company, which sources and redistributes food service products globally, people know how important their roles are. This has helped employees work together to increase efficiencies internally as well as for their customers, which has allowed the organization to grow from $159.3 million in revenue in 2006 to $253.5 million in 2009.
“Without everybody doing their part, it doesn’t work,” she says.
Hire and train team-oriented people
For Fournier, having the right type of people who will be willing to work collaboratively with other team members and customers has been critical to the company’s growth over the past few years. That happens by making sure she hires the right people.
“You have to have the right people that care and are proactive and ask questions that go beyond what is just expected,” she says.
It starts in the interview process by clearly laying out how SWS operates and what the company’s philosophies are regarding customer service, teamwork and collaboration.
“By talking to them, you can really feel that they would be the right person,” she says. “If they ask good questions in the interview process, they’re probably going to be a questioning kind of person to begin with.”
The questions people ask can vary depending on the job, but she says that if they ask about how people stay sharp in their positions and how they make sure they do the best work possible, no matter what the situation, that can be an indication of a good fit.
Once hired, cross-training them is critical to success.
“Staying sharp is really important,” she says. “We try to diversify through the type of job that each person has so their job is broken up a little bit more, they have a little bit different responsibilities so that when they come back to one that may be a little bit more monotonous, they can still be sharp doing that task.”
For example, a customer service person would primarily spend his or her day taking orders from customers and helping those customers build their truckloads of various products. The customer service people may take several of those orders and work with the customers back and forth to make the loads as efficient as possible, but they may also have to take a timeout and check someone else’s order to make sure that other customer service person made his or her order the correct way and in the most efficient manner possible.
“It’s kind of like a puzzle,” she says. “If you have a different set of eyes look at it, all of a sudden you go, ‘Oh, this could be done a little bit differently,’ so they make suggestions.”
Additionally, someone may pull an order for a customer, but then someone else will come through and check to make sure it’s all correctly pulled.
“We try to break up different people’s responsibilities, and then we throw someone in a totally different area of the company to do another task to show them what they’ve done is related to another area of the company, too.”
This approach to training helps not only avoid problems and errors, but it also eliminates silos from being built because employees are constantly doing tasks outside their main area and seeing every aspect of each order from different points of view.
“It’s nice for different areas of the office, whether you’re in customer service or accounts payable or accounts receivable or shipping or purchasing to understand how it all fits together,” she says. “When you understand that, you understand how important everything you do is and how important it is to do it correctly.”
While this approach helps the company, it also helps the employees, as well. As they learn different roles and aspects of the business, it makes them more versatile. One manager started in customer service and then went to shipping and then accounts receivable before landing her management position.
“She knows it from the ground up,” Fournier says. “We try to promote from within, because our business is somewhat complex, and it helps if our employees truly understand all the different aspects.”
Help employees build customer relationships
The greatest compliment that Fournier has received from a customer is that her team is always able to find solutions to any kind of situation or problem that a customer faces.
“Part of it starts within getting all of the people that work in your company to realize how important each of their areas of the company are and that we all make up a cog in the wheel to make it all work,” she says. “It’s important for me to meet with the customer and listen and understand what their needs are and be able to come to them with good proactive solutions and proactive ideas about what they might want to change in the future. It’s important that everybody in my company understand how important they are in making our customer satisfied and happy.”
This started with looking at how trucks were loaded. A typical truck will hold 26 skids of a product, but by being creative, SWS employees can get 35 or 36 skids on a truck.
“When they’re training, they go out and actually see the loads going out,” she says. “What we explain is, ‘This is a heavy product, and it can have something stacked on it. This is a light product, and it cannot, but it can go on top of something. This is really tall.’
“Just to understand what you’re selling when you’re sitting in an office is so important to being able to be a really good partner with your customer.”
One manager took the initiative to create a chart of which products were light, heavy and stackable to give to customers so that the customers could then maximize their orders as well to save money.
“It’s really being proactive,” Fournier says. “I’ve got a great group of people being very proactive that work here.”
That same manager also pulls her customers’ order history so she can see what their needs are and how fast they move through certain products and uses that information to make suggestions to them about what could be a good add-on to their order to create more efficiencies.
“You also have to know what your customers’ sales are and what their needs are and how fast they go through their products, because turns on the inventory is also a very important factor for the customer,” she says. “They have to be able to turn the merchandise fast enough that they want to get as much on the truck as possible so they’re not having to buy another truckload sooner because they’ve run out of a product.”
Beyond looking at their order histories, you also have to communicate with your customers. Fournier and her employees meet with customers over the phone and Internet daily and weekly and also meet with them in person two or three times a year.
“[It’s] communication — meeting with them and talking to them and finding out what their problems are and their concerns and working on solutions to correct any of the problems that their company is facing,” she says.
When she meets with them, she asks them what they like and dislike about different products that they’re currently using, but she also asks what they would like to see changed or made differently.
The approach of trying to save the customer money and time has built strong relationships that have helped fuel the company’s growth.
“We’re all on the same team trying to do the same thing,” Fournier says. “That’s a large, important part of our business — that everybody realized that we’re all on the same team. It’s not just my company that’s a team. The customers are part of the team. The end users are part of the team. We’re all in it together, and if the whole group of everybody isn’t happy and satisfied and saving money and working well, then we’re missing something, and we need to re-evaluate because that’s our job.”
How to reach: SWS Re-Distribution Co. Inc., (972) 466-9720 or www.swsco.net
The Cheney Fournier file
Camille Cheney Fournier
owner and CEO
SWS Re-Distribution Co. Inc.
Born: Dallas — born and raised; I’m a fourth generation.
Education: Bachelor’s degree in textiles and clothing, University of Texas at Austin
As a child, what did you want to be when you grew up?
I wanted to be a buyer in a clothing store. University of Texas didn’t have fashion merchandising — the closest thing they had was textiles.
What’s the best advice you’ve received?
Tell the truth, even if they don’t want to hear it. That’s probably the best. Always tell the truth, always be honest. You have to be fair — that’s another one.
What’s your favorite board game and why?
Monopoly because I like the strategy of trying to buy the different properties. I like the strategy of the different combinations of properties you can buy in your little portfolio. ... I think games keep your brain sharp, and it’s entertainment, and it’s distracting. It’s kind of like going on a mini-vacation, and it takes your mind off of what is going on in your life, and then you’re fresh to come back to it. It’s just like reading. When I read, I usually read fiction, because when I read, it’s a release and I enjoy it, and then I can come back to reality and life and have a fresh perspective. It’s important to have enough down time that you’re always positive and sharp in your business or your family or whatever you’re doing in life.
What’s your favorite book that you’ve read?
Recently, ‘The Kite Runner.’ I’ve read several books that I liked lately. ‘The Help’ was good, too. They’re just different. It’s real interesting to see different people’s perspective. ‘Same Kind of Different as Me,’ that’s probably one of the better books I’ve read.