Tag Archives: employment

‘War for Talent’ Is Not Necessary

Everyone is talking about the war for talent. Must there be a war? Or can your organization accomplish what it wants to (needs to) by fighting the battle for retention quietly, within its own borders?

There’s only so much a company can manufacture with its brand to catch the attention of top talent. Smart candidates understand that the truth about you is displayed by your existing employment base. Your employment brand is much less the result of intentional messages created for an external audience than it is the result of the vibe your existing employee base creates in the marketplace. Social media has increased the volume of this voice exponentially.

To retain the talent you have and to make that social voice work for you, you should:

  1. Make sure existing talent knows it’s being treated fairly in terms of pay and recognition.
  2. Make sure each employee leaves work for the day, week, month with a sense of achievement.
  3. Make sure your processes continue to improve. Smart people don’t like working with dumb processes.
  4. Make sure each employee has at least a small sense of camaraderie.
  5. Relate all work to the customer experience. Most employees would rather work for customers than bosses!

Brilliant people or brilliant processes?

In some cases, employers believe they need brilliant employees because they are the only ones who have been proven to find their way through the maze of terrible processes. Often, employers don’t even realize this is the reason they’re looking for talent. A well-known Japanese company’s leader once said, “In America, you have brilliant people working with average processes; in Japan, we have average people working with brilliant processes.” Something to think about.

Lets face it. There are only so many brilliant people to go around. Most of us are closer to average. Given this, is it really smart to fight a war for talent? Or would it be smarter to work on processes — remove waste (things customers wouldn’t pay for), minimize the things customers do have to pay for but would rather not (things normally required by law) and spend time working on processes that create value? It’s about the customer.

The focus of everyone’s work must be on creating value for customers. The message should be, “Shoot for referrals, settle for retention.” The entire workforce should be motivated by this. Common purpose builds workplaces worth working for.

Unfortunately, it has been my experience that it is easier to convince a janitor of this than it is most executives. Executives make a lot of money. There’s a lot of temptation to protect their domains, their technical areas of work, their lines of business, their territories, etc. What these executives need to understand is that customers flow horizontally through the spectrum of work performed by each executive’s area of influence. The thicker the borders between those areas of influence, the harder it is for employees who want to satisfy customers to get their jobs de. These employees, especially the smart ones, eventually leave the organization. They definitely don’t recommend their own workplace to people they care about.

What if you actually won the war?

So before you begin to fight a war for talent, my recommendation is to think internally. If you did win the war for talented people, what kind of environment would they be working in? What kinds of processes would they be forced to work with? Are your best employees already recommending others to work at your company? If not, why not?

Don’t just sit there, ask them!

Obesity as Disease: A Profound Change

The obesity rate in the U.S. has doubled in the past 15 years. More than 50% of the population is overweight, with a BMI (body mass index) between 25 and 30, and 30% have a BMI greater than 30 and are considered obese. Less than 20% of the population is at a healthy weight, with a BMI less than 25.

On June 16, 2013, the American Medical Association voted to declare obesity a disease rather than a comorbidity factor, a decision that will affect 78 million adults. The U.S. Department of Health and Human Services said the costs to U.S. businesses related to obesity exceed $13 billion each year. With the pending implementation of ICD (International Classification of Diseases) 10 codes, the reclassification of obesity is is fast becoming a reality and will dramatically affect workers’ compensation and cases related to the American Disability Act and amendments.

Before the AMA’s obesity reclassification, ICD-9 code 278 related to obesity-related medical complications rather than to obesity. The new ICD-10 coding system now identifies obesity as a disease, which needs to be addressed medically. Obesity can now become a secondary claim, and injured workers will be considered obese if they gain weight because of medications, cannot maintain a level of fitness because of a work-related injury or if their BMI exceeds 30. The conditions are all now considered work-related and must be treated as such.

The problem of obesity for employers is not confined to workers’ compensation. The Americans with Disability Act Amendment of 2008 allows for a broader scope of protection for disabilities. The classification of obesity as a disease now places an injured worker in a protected class pursuant to the ADA amendment. In fact, litigation in this area has already started. A federal district court ruled in April 2014 that obesity itself may be a disability and will be allowed to move forward under the ADA (Joseph Whittaker v. America’s Car-Mart, Eastern District of Missouri).

Obesity as an impairment

Severe obesity is a physical impairment. A sales manager of a used car dealership was terminated for requesting accommodation and won $128,000. He was considered disabled, and the essential function of the job was walking, so he was terminated without reasonable accommodation.

The judge ruled that obesity is an accepted disability and allowed him to pursue his claim against his employer. This could have substantial impact for employers as injured workers could more easily argue that their obesity is a permanent condition that impedes their ability to return to work, as opposed to a temporary life choice that can be reversed.

The Equal Employment Opportunities Commission (EEOC) has recently chimed in on obesity. According to the EEOC, severe [or morbid] obesity body weight, of more than 100% over the norm, qualifies as impairment under the ADA without proof of an underlying physiological disorder. In the last year, we have seen an increasing number of EEOC-driven obesity-related lawsuits. Federal district courts support the EEOC’s position that an employee does not have to prove an underlying condition, especially in cases where there is evidence that the employer perceived the employee’s obesity as a disability or otherwise expressed prejudice against the employee for being obese.

Workers’ compensation claims are automatically reported to CMS Medicare with a diagnosis. When the new ICD-10 codes take effect, an obesity diagnosis will be included in the claim and will require co-digital payments, future medical care or continued treatment by Medicare.

There is good news on the horizon. Reporting of a claim only happens if there is a change in condition not primarily for obesity. It is recommended that baseline testing for musculoskeletal conditions be conducted at the time of hiring and on the existing workforce. In the event of a work-related injury, if a second test is conducted that reveals no change in condition, it results in no reportable claim and no obesity issue. In the event of ADA issues, the baseline can serve to determine pre-injury condition or the need for accommodations.

What does this mean to employers?

Obesity is now considered a physical impairment that may affect an employees’ ability to perform their jobs and receive special accommodations pursuant to the ADA.

An increasingly unhealthy workforce will pose many challenges for employers in the next few years. Those that can effectively improve the health and well-being of their employee population will have a significant advantage in reducing work comp claim costs, health and welfare benefits and retaining skilled workers.

Recent studies

In a four-year study conducted by Johns Hopkins with an N value of 7,690, 85% of the injured workers studied were classified as obese. In a Duke University study involving 11,728 participants, researchers revealed that employees with a BMI greater than 40 had 11.65 claims per 100 workers, and the average claim costs were $51,010. Employees with a BMI less than 25 had 5.8 claims per 100 workers, with average claim costs of $7,503. This study found that disability costs associated with obesity are seven times higher than for those with a BMI less than 30.

A National Institute of Health study with 42,000 participants found that work-related injuries for employees with a BMI between 25 and 30 had a 15% increase in injuries, and those with a BMI higher than 30 had an increase in work-related injuries of 48%.

The connection between obesity and on the job injuries is clear and extremely costly for employers. Many employers have struggled with justifying the cost of instituting wellness programs just on the basic ROI calculations. They were limiting the potential return on investment solely to the reduction in health insurance costs rather than including the costs on the workers’ comp side of the equation and the potential for lost business opportunities because of injury rates that do not meet customer performance expectations. Another key point is that many wellness programs do not include a focus on treating chronic disease that may cause workers to be more likely to be injured and prolong the recovery period.

Customer-driven safety expectations

There are many potential customers (governments, military, energy, construction) who require that their service providers, contractors and business partners meet specific safety performance requirements as measured by OSHA statistics (recordable incident rates) and National Council on Compensation Insurance (NCCI) rating (experience modifiers) and, in some cases, a full review by 3rd party organizations such as ISNet World.

Working for the best customers often requires that your company’s safety record be in the top 25th percentile to even qualify to bid. To be a world-class company with a world-class safety record requires an integrated approach to accident and injury prevention.

Challenges of an aging workforce

The Bureau of Labor Statistics projects that the labor force will increase by 12.8 million by 2020. The number of workers between ages 16 and 24 will decline 14%, and the number of workers ages 25 to 54 will increase by only 1.9%. The overall share of the labor force for 25- to 54-year-olds will decline from 68% to 65%. The number of workers 55 and older is projected to grow by 28%, or 5.5 times the rate of growth in the overall labor force.

Employers must recognize the challenge that an aging workforce will bring and begin to prepare their workforce for longer careers. A healthy and physically fit 55-year-old worker is more capable and less likely to be injured than a 35-year-old worker who is considered obese.

Treating chronic disease

Employers who want a healthy work force must recognize and treat chronic disease. Many companies have biometric testing programs (health risk assessments) and track healthcare expenditures through their various providers (brokers and insurance carriers).

The results are quite disappointing. On average, only 39% of employees participate in biometric screenings even when they are provided free of charge. For those employees who do participate and who are identified with high biometric risk (blood pressure, glucose, BMI, cholesterol), fewer than 20% treat or even manage these diseases.

This makes these employees much more susceptible to injury and significantly lengthens the disability period. The resulting financial impact on employers can be devastating.


Best-in-class safety results will require a combined approach to reduce injuries and to accommodate new classes of disability such as obesity. It is important that employers focus on improving the health and well-being of their workforce while creating well-developed job descriptions, identifying the essential functions, assessing physical assessments and designing job demands to fall within the declining capabilities of the American workers. It is important for an employer to only accept claims that arise out of the course and scope of employment. This is especially true with the reclassification of obesity as a disease. Baseline testing will play an essential role in separating work-related injuries from pre-existing conditions in this changing environment.

recruiting millennials

The First Step in Recruiting Millennials

Now that your efforts have made some Millennials flock toward working in the insurance industry, you need to start recruiting them for your open positions. (If they aren’t yet flocking, read my past article to get some ideas on how to get them to do so: Thoughts From an Insurance Millennial.)

But if you are waiting to recruit Millennials until you have a job opening, this may be too late.

Let’s face it, unless you’re a well-known, direct personal lines carrier with a lizard mascot or a catchy jingle to make your agents magically appear when your clients need them, most young people won’t know who you are. This is one reason to reinforce continuous, conversational efforts in recruiting high-potential Millennials.

Your first contact with your possible candidate can’t be advertising to apply for your full-time position. It is essential to build relationships with these potential employees before they hit the full-time job market. You can do this through a variety of ways:

1.      Temporary Employment (Internships, Part-Time Jobs, Summer Employment)

This isn’t a revolutionary idea by any means. Employers have been using young people for temporary work for decades. But internships can be a great way to build relationships with high school and college students looking to reinforce their learning with real-world responsibilities. This is a great way for employers to teach these students about their business practices and products and services. It is low risk and a way to evaluate the skills of an applicant before the company is tied to a full-time position. If handled right, interns can blossom into top candidates for future job openings. But this is also a chance for employers to ruin their brand with the youth population. I’ll expand on the do’s and do not’s of internships in a future article.

2.      ‘Externships’ (Job Shadowing, Career Days, Seminars)

If you don’t have the work, budget or resources to employ people in temporary positions, you can host job shadowing opportunities or travel places for “career days” and seminars. These opportunities are usually called “externships” because they look at careers and the industry from an external and broad view. Interested students could be paired with professionals in your company to ask questions, observe daily workflow and build a relationship for the day. Trusted, intelligent employees could speak at seminars or career days to give insight to an audience. Externships are another great way to market your company to interested students and begin connecting with potential employees. Many college career centers could help you link up with students interested in learning more about the industry or instructors who teach classes related to the business.

3.      Challenges and Projects

As discussed in my past article, challenges and projects could help spark some curiosity in students pursuing careers in the industry. You can continue advanced challenges and projects for young Millennials to evaluate skills and maintain a relationship. Partner with professors teaching risk management and insurance classes to develop real-world projects. Many professors would be more than willing to help with this. Get creative, and make it a valuable learning exercise.

4.      Strategic Social Media Usage

Interacting with students via social media is no longer a competitive advantage; it’s a must for companies and an effective way to continuously connect with Millennials. Companies can have accounts on Facebook, Twitter, YouTube, LinkedIn, etc. that have material relevant to young, interested users. Many businesses have created separate accounts just for Millennials. The key is to provide material this generation wants to read. Millennials don’t need more bland product marketing shoved down their throats. We’ve gotten pretty good at being able to skim over ads. Potential posts could include:

But with great power comes great responsibility. Make sure all accounts are up to date, complete and responsive. Put a face to the account, and make it easy to navigate. But don’t overdo the activity with insignificant post, tweets, videos and blog articles.

It is time to stop being reactive to job openings and start being proactive. Human Resources should have a handful of potential candidates for the start of each career ladder in the organization. Fill the talent pipeline by building the relationships early with this generation.

“The single biggest problem in communication is the illusion that it has already taken place.” – George Bernard Shaw

Employer Alert: 2013 Legislative and Regulatory Expansion under California FEHA

On June 28, 2012, Governor Brown signed a budget reconciliation bill that made widespread changes to the organization of many state agencies. Buried in the 160 page bill are very significant amendments to the California Fair Employment & Housing Act (FEHA), which is the comprehensive statutory framework for California’s prohibition on categories for discrimination, harassment and retaliation in employment and housing. The Department of Fair Employment & Housing (DFEH) is the agency that enforces these anti-discrimination standards.

Among the key administrative changes, effective January 1, 2013, the FEHA amendments will:

  • disband the Fair Employment and Housing Commission (FEHC), which was the agency that adopted regulations and acted as the judicial body that conducted evidentiary hearings for accusations of discrimination brought before the commissioners instead of in a civil court;
  • expand specified powers of the DFEH related to complaints, mediations and prosecutions;
  • eliminate a specified cap of actual damages under FEHA (in particular the cap of $150,000 on emotional distress damages when raised in an administrative accusation rather than a civil action);
  • mandate mediation of discrimination, harassment or retaliation charges, at no cost to the parties, but with beefed up penalties for violating any agreement reached by way of alternative dispute resolution;
  • require that certain actions be brought in court by civil action, rather than by “administrative accusations” previously heard by the FEHC;
  • transfer the responsibilities for adopting regulations to the DFEH, through an internal council;
  • shift the venue for claims for emotional distress damages that are pending before the Commission to be tried in Superior Court (subject to agreement of the parties, although how that will operate is ambiguous at this point). Other claims may be heard before an administrative law judge rather than the Commission;
  • New claims, filed on or after January 1, 2013, that the DFEH elects to bring on behalf of individuals or a class of aggrieved employees, may be brought to civil court by the DFEH.

These administrative changes will have potentially profound impact on how every charge of discrimination is investigated, mediated or prosecuted. It could also result in increased risks for hefty damage awards against employers. Consider the contrast between some recent FEHC administrative awards compared to damage verdicts assessed by jurors in civil lawsuits the FEHA:

Fair Employment & Housing Commission Administrative Awards

  • DFEH v. Air Canada — The Commission found violations of FEHA for terminating a customer service agent because of her disability; failing to provide reasonable accommodations; ignoring the employee’s attempts to communicate with the company to return her to work; and ignoring its own accommodations and leave policies. The Commission awarded $102,737.60 in back pay, $19,720 in lost benefits, reinstatement to the same or comparable position, front pay from the first day of the hearing to the date of reinstatement, $125,000 in emotional distress damages, and $25,000 administrative fine.
  • DFEH v. Avis/Budget — The Commission found in favor of a customer service representative at SFO airport because Avis failed to engage in the interactive process, delayed in communicating, made unlawful inquiries about the employee’s disabilities when it initially required her to release her psychiatric medical file or submit to a medical examination, placed her on involuntary leave and failed to reasonably accommodate. The award was $89,863.70 ($14,863.70 back pay & $50,000 emotional distress), plus a $25,000 administrative fine
  • DFEH v UPS — Commission found in favor of a UPS employee who handled customer calls and complaints on shipments. She was allegedly denied a reasonable accommodation and fired based on an inflexible maximum leave policy. FEHC awarded a total of $96,170 representing $31,170.00 in lost wages, $25,000 in emotional distress and a $10,000 administrative fine, plus interest and future wages.
  • DFEH v Acme Electric
    — This case is a notable exception for administrative awards being significantly lower than jury awards in comparable cases. In 2011, the DFEH obtained the largest-ever administrative award of $846,300 against Acme Electric for firing a sales manager who requested limitations on his travel requirements after returning from leave for kidney and prostate surgeries and while still undergoing treatment. The Commission found Acme failed to reasonably accommodate his known travel limitation due to his cancer treatments, failed to engage in a good faith interactive process and failed to take all reasonable steps necessary to prevent discrimination from occurring. The DFEH awarded the employee $748,571 for lost wages, $22,729 for out-of-pocket expenses and $50,000 for emotional distress.

Note: FEHC had power to award damages for emotional distress up to $150,000 per aggrieved person under Govt. Code section 12970(a)(3). In contrast, employees suing in civil court can — and do — often obtain hefty awards for their emotional distress, pain and suffering. Likewise, civil litigants who sue and prevail under FEHA may recover their reasonable attorneys’ fees and costs, even if their “win” is for a lot less than they asked from the jury. Until now, DFEH, which prosecuted administrative actions on behalf of employees before the commission, did not recover attorneys’ fees and/or litigation costs, because all of the matters were handled internally within the agency. This new legislation changes this system and authorizes the DFEH to pursue civil lawsuits on behalf of aggrieved parties and seek comparable remedies. The amendments do not change the remedies and requirements for individuals whom the DFEH elects not to represent; but may choose to expand on investigations and mediations in many of those matters prior to issuing a Right to Sue Letter, which is the trigger for the individual to engage counsel for their own civil lawsuit.

Contrasting Jury Verdicts in Civil Lawsuits

  • Wysinger v Auto Club: The jury found that the employer failed to engage in an interactive process when an employee requested a transfer to a different office that would limit his commuting time, due to his disability, although it also concluded that the requested transfer would not have been a reasonable accommodation. The jury award that was upheld on appeal: $2.26 million: (representing $204,000 in economic damages for lost wages; $80,000 non economic damages; $1 million punitive damages; and $978,791 reasonable attorneys’ fees as an item of damage.
  • Schermerhorn vs. Los Angeles Unified School District: a teacher had hip replacement surgery for an industrial injury. He asked to return to work with temporary restrictions before he had reached his maximum medical improvement, but was repeatedly rebuffed. He prevailed on his claims for disability discrimination and failure to engage in the interactive process to consider reasonable accommodations. The award, also upheld on appeal (in an unpublished decision) was $971,750 (representing $380,306 compensatory lost income and emotional distress; $21,836 costs and $568,108 in plaintiff’s attorneys’ fees as an item of damage.
  • Jones v Lodge at Torrey Pines: Jones brought an action against his former employer and his former supervisor for harassment and discrimination based on sexual orientation and retaliation. After his harassment claim was dismissed, the jury returned a verdict on the discrimination and retaliation claims, awarding compensatory damages of approximately $1.4 million against the Lodge and $155,000 against the supervisor individually. The judge set aside the verdict against the supervisor, holding that she could not be held liable for retaliation under the FEHA. The Court of Appeal reversed and the Supreme Court overturned that appeals court. The Supreme Court noted that individual supervisors can avoid engaging in harassment and, therefore, it is fair to subject them to personal liability for harassment. However, in the case of discrimination and retaliation, which involve job actions, supervisors cannot avoid making the personnel decisions which are allegedly discriminatory or retaliatory. These are often joint decisions made by more than one person such that it would be difficult to apportion blame. Nevertheless, the jury’s award against the Lodge was upheld on appeal.
  • Cuiellette v. City of Los Angeles: a jury awarded a Los Angeles Police Department officer $1,571,500 on his claim that he was denied a reasonable accommodation after he asked to return to a lighter duty position following the resolution of his workers’ compensation claim.
  • Bradley v. Department of Corrections: A licensed social worker who was assigned temporarily by a hiring registry to a state prison, where she was subjected to sexual harassment and retaliation, was an employee of the state for the purposes of FEHA even though she was not a state employee under civil service and benefits standards. A jury found that she was subjected to sexual harassment by the prison chaplain and that the prison officials failed to investigate her claim, failed to take corrective action and retaliated against her by firing her in response to her complaints. The jury awarded her $744,000 in damages and attorneys’ fees, which were upheld by the Appeals Court. ($300,000 non economic damages; $87,000 past economic damages; $50,000 “non-duplicative” past economic damages on her retaliation claim; $2,000 future economic damages on the harassment claim and $305,000 attorneys fees as damages).

The legislation is new and it will take some time to digest the changes and to identify where employer policies and procedures will require updating. DFEH will be holding a webinar addressing these changes to their regulatory and enforcement powers on July 25, 2012.

Before it is disbanded, the FEHC is expected to adopt expansive new regulations governing disability discrimination charges and workplace accommodations for pregnant employees. DFEH will handle enforcement and future rulemaking. At its meeting on June 13, 2012, the FEHC made several changes based on public comments. The second public comment period ended on 7/3/12. The regulations, effective on January 1, 2013, significantly expand who is entitled to reasonable accommodations and what employers must consider in making decisions. For example, “essential job functions” must be based only on tasks actually required, as reflected in recent performance evaluations or current job descriptions. The scope of pregnancy-related conditions requiring accommodation is broader. The list of disability accommodations to consider has doubled.

Record $2.3 Million+ Backpay Order

Shows Underpaying Or Violating Other Rules For Employing Foreign Workers Risky Business

Underpaying and failing to meet other H-2A visa program requirements for its employment of temporary foreign agricultural workers was an extremely costly mistake for Yerington, Nevada-based onion grower Peri & Sons.

Under a consent order entered by U.S. Department of Labor Administrative Law Judge Steven Berlin in San Francisco, Peri & Sons must pay a record total of $2,338,700 in back wages to 1,365 workers, plus a $500,000 civil money penalty to the Department of Labor for failing to properly pay foreign agricultural workers working under the H-2A visa program.

The consent order announced by the Labor Department Wage and Hour Division on July 10, 2012 reminds U.S. businesses of the need to meet compliance responsibilities when employing foreign workers and illustrates the significant risks that employers of foreign workers risk by failing to meet minimum wage and hour, overtime and other requirements for the employment of foreign workers.

The record back pay order stems from charges brought by the Labor Department’s Wage and Hour Division after it determined that Peri & Sons violated the Fair Labor Standards Act and the H-2A visa program requirements by underpaying H-2A employees involved in irrigation, harvesting, packing and shipping of onions sold in grocery stores nationwide.

All of the affected workers came to the U.S. from Mexico under the H-2A temporary agricultural worker visa program. In most cases, their earnings fell below the hourly wage required by the program, as well as below the federal minimum wage of $7.25 per hour for a brief period of time. Investigators also found that workers were not paid for time spent in mandatory pesticide training or reimbursed for subsistence expenses while traveling to and from the U.S. Additionally, Peri & Sons did not pay the worker’s return transportation costs at the end of the contract period.

The H-2A temporary agricultural worker program permits agricultural employers who expect a shortage of domestic workers to bring nonimmigrant foreign workers to the United States to perform temporary or seasonal agricultural work. The employer must file an application stating that a sufficient number of domestic workers are not available and the employment of these workers will not adversely affect the wages and working conditions of similarly employed workers in the U.S.

Employers using the H-2A program also must meet a number of specific conditions relating to recruitment, wages, housing, meals and transportation. See more on H-2A visa employment rules here.

Reflective of the Obama Administration’s heavy emphasis on the enforcement of wage and hour and other laws protective of workers, the Peri & Sons order shows the potential risks that employers run when violating these rules.

To minimize these exposures, employers of H-2A or other workers employed under special visa programs should carefully manage these programs to ensure their ability to demonstrate compliance with all requirements of the visa program, the Fair Labor Standards Act, and other relevant laws.

These programs should include careful and ongoing due diligence to maintain a current understanding of all applicable requirements for the legal employment of these workers and the establishment of systemized processes and documentation, both to maintain compliance and to preserve evidence necessary to demonstrate this compliance against possible investigations or charges.