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HR Bulletin August, 27, 2010

The September 2010 issue of HR News magazine (5.05 MB) is now online.
The Fall 2010 issue of Public Personnel Management (2.3 MB) is available online.
Press releases on the IPMA-HR Web site may be accessed here.
To access archived issues of the HR Bulletin, click here; you must be a member of IPMA-HR in order to access these archived issues.

Report Warns Federal HR Staff May Not Be Up To the Task of Implementing President’s Hiring Reform Plan

WASHINGTON – The nonprofit Partnership for Public Service and Grant Thornton LLP recently released Closing the Gap: Seven Obstacles to a First-Class Federal Workforce, a report examining the state of federal human capital management. The report is based on in-depth interviews with the government’s primary policy advisors on human resource management issues, the chief human capital officers (CHCOs) and other HR leaders.

Closing the Gap found that the ability to build and maintain a high-quality federal workforce is being seriously hampered by a number of longstanding, systemic and often dysfunctional practices and policies.

The federal government’s arcane hiring system has long been identified as one of the primary obstacles, an issue President Obama is seeking to address with plans slated to be fully implemented this November that will make the process more applicant-friendly, improve the speed and quality of hiring, and more fully involve managers in the hiring decisions. But many of the HR leaders worried that a significant proportion of their HR staff lack the ability and skills to successfully carry out the important reforms.

“We applaud the president for his leadership in addressing a number of pressing federal workforce issues, including the flawed federal hiring system,” said Max Stier, president and CEO of the Partnership for Public Service. “But we are alarmed by the report’s finding that our federal government’s human resource leaders have serious doubts that their HR employees—the very people who will be on the frontlines implementing the needed reforms —have the right resources, training and support to get the job done.”

The CHCOs reported that far too many of the 25,000 federal HR employees lack the necessary skills to help their agencies improve their human resource operations and workforce management. They also believe this situation may get worse with the new demands and expectations driven by hiring and other reforms.

Besides the hiring process and HR staff capabilities, the CHCOs identified five other key obstacles to creating a first-class federal workforce: pay, classification and performance management systems; a sometimes tense relationship between federal agencies and the central HR authority, the Office of Personnel Management (OPM); the leadership capabilities of federal managers; substandard HR information technology systems; and labor relations. The CHCOs also noted that insufficient resources are devoted to HR training. The individuals interviewed offered a number of recommendations for addressing these issues.

Federal workforce issues have also been a matter of concern for other federal executives. According to Grant Thornton Director Scott Cameron, a former CHCO at the Department of the Interior, “Grant Thornton has been surveying the federal management community—chief financial officers, chief information officers, chief acquisition officers—for more than a decade. The common and continual thread across all these communities is a concern about human capital. In fact, it is typically the number one concern by a wide margin.”   

Closing the Gap is the third in a series of surveys with CHCOs conducted by the Partnership for Public Service and Grant Thornton LLP.  

The Partnership for Public Service is a nonpartisan, nonprofit organization that works to revitalize the federal government by inspiring a new generation to serve and by transforming the way government works. To download a copy of Closing the Gap: Seven Obstacles to a First-Class Federal Workforce, visit ourpublicservice.org.

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Pay Raises Expected to Increase Next Year

According to Mercer’s 2010/2011 U.S. Compensation Planning Survey, almost all employers intend to provide salary increases in 2011. The survey found that 98 percent of companies are planning to increase salary next year, while only two percent are planning salary freezes. In 2009, 31 percent of employers implemented salary freezes and in 2010, 13 percent reported freezing salaries.

The average increase next year is expected to be 2.9 percent, up from 2.7 percent in 2010. Most employers intend to provide greater increases to high performers. The survey found that the highest performing employees are expected to receive salary increases of 4.3 percent in 2010 as compared to 2.6 percent for average performers and 0.5 percent for the weakest performers.

According to Catherine Hartmann, a principal with Mercer’s rewards consulting business, “The risk of losing key employees is top of mind as the economy recovers and certain labor markets improve. In the tug of war between limited resources and the need to retain critical employees, recognizing top performance is still clearly a driving factor”

The survey includes responses from more than 1,100 mid-size and large U.S. employers and reflects pay practices for more than 12 million workers. Additional information is available here.

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Recent Grads Don’t Plan to Stay Long in First Job

PHILADELPHIA, Pa. – Most college graduates do not expect to stay long in their first job, according to a survey by Right Management. Right Management is the talent and career management expert within Manpower, a leader in employment services.

More than 350 graduates were surveyed by Right Management about their job hunting and career plans.

Fifty-nine percent expect to remain in their first position for just three years or less. Another 29 percent expect it will be no longer than five years. Only 11 percent expect to stay for more than five years.

“Young people tend to job hop, which is nothing really new,” said George P. Herrmann, executive vice president for the Americas with Right Management. “Recent grads are anxious to move forward and get as much experience as they can as quickly as possible. Employers who want to hold onto them have to provide career-stretching and development opportunities in return for their performance and loyalty.”

Compared with college graduates surveyed in 2009 by Right Management, this year’s graduates are less optimistic about finding a job they like and also felt less prepared to start a job search.

The graduates were asked what factors are most important to them when considering employment. Development ranked first (77 percent), followed by good rapport (72 percent), and work/life balance (68 percent). Cited by just 31 percent of the graduates, compensation was among the least important.

About this survey: The survey was conducted during job search workshops conducted by Right Management during May and June. The complimentary workshops were provided to the children of the firm’s clients.

Right Management is the talent and career management expert within Manpower, a leader in employment services. Right Management helps clients win in the changing world of work by designing and executing workforce solutions that align talent strategy with business strategy. With offices in more than 50 countries, Right Management partners with companies of all sizes.

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Job Market Recovery Stronger than Many Think; Stronger than 2001 Recovery

CHICAGO – As Labor Day approaches, many Americans want signs of a job-market recovery. While many are frustrated with the pace of job creation, a new analysis reveals that the job market is well on the road to recovery and that it is rebounding sooner and faster compared to the jobless recoveries that followed the previous two recessions.

In its annual Labor Day outlook, global outplacement consultancy Challenger, Gray & Christmas, Inc., says that positive trends in a number of employment indicators, including the pace of layoffs, the unemployment rate and job creation, are shrouded by the fact that the economy began its recovery in a much deeper hole; the deepest since the Great Depression.

“By most accounts, we are barely a year into the recovery. At this point in the previous two recoveries—following the 1991 and 2001 recessions—the job market was actually getting worse. Many people are so caught up looking at the weekly and monthly numbers, that they fail to look at the bigger trends, which indicate just how much the job market has improved over the last 12 months,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“There is no doubt that the job market has a long way to go before it fully recovers. After all, this is the worst recession this country has experienced in decades, with unemployment climbing to 10.1 percent as the number of jobless American grew by more 8.3 million, reaching a record high of 15.6 million. It doesn’t take an economist or jobs expert to tell you that it is going to take longer to get all of these people back onto payrolls,” said Challenger.

“However, the statistics indicate that the job market has made great strides over the last 12 months and appears to rebounding sooner compared to the previous two recessions,” he added. 

No official end has been declared for the recession that began in December 2007. Based on quarterly GDP, which has now seen four consecutive quarters of growth beginning in the third quarter of 2009, many experts are pointing to June 2009 as the presumed end of the downturn. 

“Of course, those who recall the 1991 and 2001 recessions understand that the end of the downturn does not necessarily mean an end to job market misery. In both cases, the end of the recession was followed by a period of “jobless recovery” during which payrolls continued to lose jobs and the unemployment rate continue to increase. In 1991, the jobless recovery lasted about 15 months, and following the 2001 downturn, it took about 19 months for the job market to reverse course,” said Challenger.

“This recession also experienced a period of jobless recovery. However, an examination of several employment trends suggests that this jobless recovery may have lasted just six months and is now on a positive track,” said Challenger.

Layoffs Have Fallen to Pre-2001-Recession Lows
Evidence of improved job stability and security can be seen in Challenger’s own tracking of planned job-cut announcements, which reveals a dramatic decline in layoffs since June 2009. From January 2008 through June 2009, employers announced a total of 2,120,668 planned job cuts. The pace of downsizing began to plummet in the second half of 2009.

Through the first half of 2009, employers announced 896,675 job cuts. In the second half of 2009, total job cuts dropped 56 percent to 391,355. The number of planned layoffs fell another 24 percent in the first half of 2010, with employers announcing workforce reductions totaling 297,677. 

In the 13 months since the presumptive end of the recession in June 2009, announced job cuts have averaged 56,208 per month. In fact, monthly job cuts have numbered fewer than 100,000 for 14 consecutive months, a streak that has not been achieved since 1999-2000. 

The post-recession decline in announced job cuts far exceeds that which followed the 2001 recession; a relatively mild downturn that lasted from March through November of that year. In the 13-month period following the end of that recession, job cuts averaged 125,262 per month. In fact, the 12-month moving average did not fall below 100,000 until February 2004, when it finally dropped to 96,736. By the end of 2004, the average fell to 86,645.

“The current 12-month moving average, which stands at 52,778 as of the end of July, is already well below the lowest annual average achieved during the last period of economic expansion, when the moving average bottomed out around 64,000,” noted Challenger.

Payrolls Start Growing Six Months into Recovery
While announced job cuts have declined dramatically over the last 12 months, many complain that employers have been slow to hire. Indeed, after the estimated end of the recession in June of 2009, payrolls continued to experience net losses totaling nearly 1.1 million between July and December. However, those losses turned to gains as of January 2010, with payrolls experiencing five consecutive months of net growth that saw more than one million new jobs added to the economy.

The gains slowed in June and July as the government shed tens of thousands of temporary Census workers, resulting in overall total non-farm job losses of 352,000 over the two-month period. Despite those losses, payrolls have still seen net growth totaling 654,000 jobs so far this year, due in large part to steady job gains in the private sector. The private sector has had seven consecutive months of job gains, adding a net total of 630,000 new jobs to the economy since January 1.

These gains may appear relatively anemic and will indeed need to be much stronger to begin making a dent in the large number of unemployed. However, while the payroll gains remain weak, they are occurring much sooner when compared to the 2001 recession. Following the end of the 2001 recession, it took 21 months before the economy began to add jobs on a consistent basis. 

When steady job gains did occur, they were far from robust. The first five months of consistent job gains, which did not begin until September 2004, saw average net payroll gains of 120,000 new jobs per month. In contrast, the five consecutive months of job gains that ended in May reached an average of 201,000 new jobs per month.

Unemployment Rate Still High, But Falling
Like payrolls, the unemployment rate is beginning to descend sooner in the wake of this recession. Following the end of the 2001 recession, the unemployment rate stood at 5.5 percent. It continued to climb for 19 months, peaking at 6.3 percent in June 2003. Following the nine-month downturn that ended in March 1991, unemployment continued to increase from a recession-ending 6.8 percent to a peak of 7.8 percent in June 1992; 15 months later.

At the presumed end of this recession in June 2009, the unemployment rate stood at 9.5 percent. It also increased in the months that followed. However, instead of increasing for 15 months or 19 months, it appears to have peaked at 10.1 percent in October 2009, just four months after the end of the recession. As of July, the unemployment rate had fallen to 9.5 percent.

“While the unemployment rate remains historically high and the decline is not occurring fast enough for most, it definitely appears to be heading in the right direction. If the economy were following the same pattern as the early 1990s recession or the 2001 recession, we would be facing another three to six months of rising unemployment,” said Challenger.

Volatile Weekly Jobless Claims See Overall Downward Trend
While many point to recent increases in the number of new unemployment insurance claims as evidence of a stalling job market recovery, an examination of the bigger statistical picture suggests a more positive outlook. It is true that initial jobless claims, which fluctuate greatly from week to week in the best of times, grew by 28,000 from 460,000 new claims the week ending July 24 to 488,000 new claims the week ending August 7. However, the number of people with continuing unemployment benefits fell by 92,000 during the same period.

Furthermore, when the weekly claim figures are compared to the same period a year ago, it becomes even clearer that the job market has vastly improved. The four-week moving average for initial jobless claims stood at 481,750 the week ending August 14. That is 85,500 less than 567,250 new claims averaged during the four-week period ending August 15, 2009. 

The number of people receiving ongoing benefits also has declined significantly over the last year. As of August 7, 2010, a seasonally adjusted 4,478,000 Americans were receiving jobless benefits, nearly 1.7 million fewer than the 6,127,000 claiming benefits the week ending August 8, 2009. As a percentage of total employment, the unemployment insurance rate has fallen from 4.6 percent to 3.5 percent over the same period.

Additional Employment Statistics Revealing Positive Trends
In addition to payroll and unemployment figures, other statistics provide further evidence of a job market turnaround. For example, the number of Americans working part time in for economic reasons has fallen from a peak of nearly 9.2 million last October to just under 8.4 million in July.

Additionally, while the number of people out of work for 27 weeks or more remains near a historic high, it has dropped by nearly 200,000 from a peak of 6,763,000 in May to 6,572,000 last month. Furthermore, the median duration of unemployment stood at 22.2 weeks in July, which was down from 25.2 weeks a month earlier. That decline may not seem significant on the surface, but it represents the largest one-month decline in the median duration of unemployment ever recorded.

The duration of unemployment should continue to fall as hiring begins to accelerate. The latest data from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey show that employers hired 4,254,000 new workers in June, up 10 percent from a year earlier when new hires totaled 3,856,000. The number of job openings also increased, reaching 2,937,000 in June, compared to 2,519,000 a year ago. 

“When you look at any of the employment statistics on a month-to-month or week-to-week basis, there are going to be ups and downs; particularly at this stage of the recovery. However, when you look at the overall trend since June 2009, everything is headed in a positive direction,” said Challenger.

So, why are so many people so pessimistic?

“Consumers, business owners, hiring managers and even politicians tend to be overly optimistic at the beginning of a recession and overly pessimistic at the beginning of a recovery,” said Challenger.

“In the early stages of a downturn, many businesses are still adding workers. People who lose their jobs early in a recession have severance money, unemployment insurance and rainy-day savings to prop up their spending. However, by this point in the recession-recovery cycle all optimism, not to mention rainy-day spending money, is long gone,” he continued.

“Making matters worse is that with the mid-term elections just three months away, both parties have a vested interest in talking down the economy. Democrats want to set the bar low so they can show improvement; Republicans want the jobs picture to look as bad as possible so they can take back some of the seats they lost in 2008.

“Obviously, for the millions of Americans who are still out-of-work, the improvements are not coming fast enough. However, it is important to remember that the economy is digging itself out of the deepest hole this generation of workers has ever experienced. The recovery is not going to occur overnight and not without hitting some bumps in the road,” he added.

Labor Day Resolutions
“Unfortunately, even as cash-rich businesses begin to gain more confidence and start adding workers at an accelerated pace, hiring will never occur as quickly as most people would like. We have seen more than 600,000 Americans added to payrolls in the last seven months, but that barely makes a dent in the more than eight million who joined the ranks of the unemployed during the recession,” said Challenger.

“Hiring will accelerate in the coming months, but not before employers maximize the productivity of their existing workers by adding new technology and increasing hours. In the meantime, the job market will remain fiercely competitive as the recently unemployed square off against the long-term unemployed as well as with job seekers reentering the labor pool after abandoning it out of frustration,” he said.

“Job seekers should view Labor Day as the beginning of the workplace New Year and make a resolution to abandon all passive job-search strategies for ones that are far more aggressive,” Challenger advised. 

“In this environment, job seekers cannot rely on simply answering internet help-wanted advertisements. One has to make a full-time job out of expanding his or her network, meeting with people face-to-face everyday, cold-calling companies that are not advertising job openings and being creative when it comes to selling yourself.

“As Labor Day approaches, job seekers should view it as a new beginning; a chance to regroup and renew their resolve. For those who have been out of work for a prolonged period—a year or more—it is particularly important to remain vigilant in the job search. 

“It may be time to consider relocation or switching industries. The long-term unemployed may be forced to take a position he or she doesn’t want or that doesn’t meet salary expectations. However, it is critical for these people to get back into the workforce in order to make themselves more marketable going forward,” he concluded.

Challenger, Gray & Christmas, Inc., founded in the 1960s, is an outplacement consulting firm. The firm’s primary goal is to assist displaced workers to make the transition to reemployment.

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Voting Open for IPMA-HR Election

The IPMA-HR Nominating Committee has selected the slate of candidates for this year’s election to fill the position of president-elect.

For president-elect, the nominees are Kimla Milburn, IPMA-CP, human resources director, city of Annapolis, Md.; and Mark van Bruggen, IPMA-CP, HR consultant team leader, New Jersey Civil Service Commission. Click here to read a statement and biographical sketch for each candidate.

Vote now! (You’ll need to enter your membership identification number on the Web site in order to vote.)

Voting closes on Monday, September 20, and the ballots will be counted on Tuesday, September 21.

If you have any questions about this year’s election, please contact Neil Reichenberg at nreichenberg@ipma-hr.org, or call (703) 549-7100. Forgot your member ID? Please call (703) 549-7100 for immediate assistance, or contact IPMA-HR via e-mail at membership@ipma-hr.org.

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Learn About Social Media, Telework, and Much More at the 2010 IPMA-HR International Training Conference and Expo

Join us for the 2010 IPMA-HR International Training Conference & Expo, which will be held October 2-6 at the Sheraton Seattle in Seattle, Washington. This conference is the largest gathering of public sector HR professionals anywhere and you don’t want to miss it!

Highlights of the 2010 International Training Conference education program include the following:

  • More than 20 Educational Sessions
    • Social Media: Don’t Be Afraid to Make the Leap – Learn from a dynamic panel of experts what social media is, why governments use them, how you too can get started in your particular environment. Presented by Steve Ressler, president and founder of GovLoop.com; Steve Rothberg, CEO of CollegeRecruiter.com; David Uejio and John Grill from the Office of the Director of Human Resources at the National Institutes of Health; and Zach Hubbell, Social Media Product Manager, Jobing Technology Services.
    • Top-Ten (Untapped) Employee Health Cost Control Strategies – This session will feature 10 proven-effective (too-little-used) strategies used by very proactive plan sponsors that are resulting in health care costs that are about 30 percent less than their comparison plan sponsors. Presented by William Hembree, director of the Health Research Institute.
    • The Implications of Ricci vs. Destefano on Public Safety Promotional Testing – This facilitated discussion panel will address the implications of the 2009 United States Supreme Court decision in a case involving the promotional process used by the City of New Haven, Conn., Fire Department for fire lieutenant and fire captain and their decision not to establish employment lists based on the results of the testing process due to adverse impact. Presented by Jeffrey Feuquay, psychologist and attorney with Russell, Brown & Breckenridge; Shelley Langan, IPMA-CP, manager of Selection Services Section at California Prison Health Care Services; and Steven Harman, IPMA-CP, consultant at Steven A. Harman & Associates.
    • The Best Course for Creating and Maintaining Organizational Trust – This presentation will focus on trust within organizations, and examine it in three ways: what defines it, how we rebuild it, and how we rebuild it when it has been lost. Presented by Keren Stashower with the Centre for Organizational Effectiveness.
    • Telework in the Public Sector: Findings and Practices – This session will feature a panel of experts sharing findings from recent research studies from both the U.S. Merit Systems Protection Board (MSPB) and the Partnership for Public Service on telework. The session will also include Judy Gilpin, who worked with the local Regional Coordinating Council on a teleworking project which resulted in a grant for the council to promote teleworking within the community. Presenters include Laura Shugrue, deputy director of OPE with MSPB, and Judy Gilpin, senior HR analyst with Kitsap County Human Resources.
  • The opportunity to earn up to 11 recertification credits for IPMA-CP and CS Certifications
  • A Welcome Reception at the Space Needle in Downtown Seattle
  • A golf tournament at West Seattle Golf Course that offers views of downtown Seattle and Elliot Bay
  • Several networking sessions to interact with your peers about hot topics

To review a full list of session descriptions, click here. Advanced bird rate ends September 9, so make your plans and register for the International Training Conference & Expo today.

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On the Calendar

September 19-22, 2010
Eastern Region Conference
Adlephi, Md.

September 22
Online Course
Developing Competencies for HR Success

October 2-6, 2010
2010 International Training Conference & Expo
Sheraton Seattle Hotel & Towers
Seattle, Wash.
Contact IPMA-HR Director of Membership and Professional Development Jessica Allen at jallen@ipma-hr.org or click here for more information.

October 6
Online Course
Managing Employee Performance as an HR Business Partner

Watch the HR Bulletin and our Web site for more information on educational opportunities.

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