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Corporate Reputation Drastically Impacts Talent Acquisition, Salary Costs

According to a study from Corporate Responsibility Magazine and talent acquisition firm Alexander Mann Solutions, company reputation has a significant impact on staff recruitment, retention, and salary expenses. Prospective candidates are extremely hesitant to join a company with a bad reputation and, among those who may be willing to accept a job offer, a significant pay raise is required. Conversely, they can be tempted to move to a company with a good reputation for a significantly lower raise.

To leave their current employer and take a job with a company with a bad reputation, males would require an average of a 53% pay increase—60% among females. In total, nearly half  (48%) would require more than a 50% increase in pay. While 93% of people who are currently employed would leave their employer to work for a company with a good reputation, that rate goes down to 70% for companies with a bad reputation. Workers would only require, on average, a 33% pay increase to move to a company with a good reputation, with just 18% requiring a raise of more than 50%.

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Among companies with a bad reputation:

Expense to Recruit to Company with Bad Reputation

Among those with a good reputation:

Expense to Recruit to Company with Good Reputation

These trends hold true and are even magnified among unemployed individuals. An overwhelming 76% of people said they are unlikely to accept a job offer from a company with a bad reputation, even if they do not hold a current job.

Odds of Accepting Job with Company of Bad Reputation While Unemployed

Researchers found that companies face increased recruiting costs due to the greater difficulty to source and attract new hires, particularly when recruiting women and more experienced workers.

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But these costs are far from the greatest of a company’s troubles.

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“While recruiting expense increases are in the millions of dollars, this great expense is literally dwarfed by the billions of salary cost differential,” the study reads. “The cost of recruiting and salaries added to any expenses associated with a reputation damaged by an environmental scandal, for example, can be disastrous to a company’s bottom line.”

Further, CEO reputation can make a critical impact on the success and expense required to recruit top talent. “A CEO perceived to be active in CR and environmental issues has impact on recruiting. This reputation should be maximized when building the employer brand or against competitors whose reputations may be weaker,” the study said.

The study also examined the most damaging sources of a bad corporate reputation:

Most Harmful Sources of Bad Corporate Reputation

Amicus Supports Government’s Position in Mach Mining vs. EEOC

On Monday, six advocacy groups representing the interests of workers and plaintiffs’ class action lawyers filed an amicus brief with the U.S. Supreme Court in Mach Mining v. EEOC, No. 13-1019, here. Authored by the Civil Rights Clinic of the Dickinson School of Law and The Impact Fund, the amicus brief represents the collective views of multiple public interest organizations, including the National Employment Lawyers Association, The Impact Fund, the American Association of Retired Person, the Asian Americans Advancing Justice-Asian Law Caucus, Disability Rights California and Public Counsel.

The amicus brief was filed in support of the U.S. Equal Employment Opportunity Commission, which filed its Reply Brief with the SCOTUS on Oct. 27, 2014. In supporting the government’s position, the amicus asserted that the brief represents the “perspective of the victims of workplace discrimination whom Title VII is intended to protect.”

Given the importance of this case and the issue presented, the new amicus brief is well worth a read by employers.

The Context and the Stakes

Mach Mining v. EEOC is a big case for employers and for government enforcement litigation. In a game-changing decision in December 2013, the U.S. Court of Appeals for the Seventh Circuit ruled that an alleged failure to conciliate is not an affirmative defense to the merits of an employment discrimination suit brought by the EEOC.

That decision had far-reaching, real world significance to the employment community, for it means the EEOC is virtually immune from review in terms of the settlement positions it takes prior to suing employers: “pay millions or we will sue and announce it in a media release.”

We have blogged on this case at various points before, as the litigation winded through the lower courts and culminated in the precedent-setting decision of the Seventh Circuit. Readers can find the previous posts here and here and here.

In essence, the Seventh Circuit determined that the EEOC’s pre-lawsuit conduct in the context of conciliation activities cannot be judicially reviewed. Subsequently, in what many SCOTUS watchers found ironic, even though the EEOC prevailed in the Seventh Circuit, the Government also backed Mach Mining’s request for SCOTUS review to resolve the disagreement among the courts of appeals regarding the EEOC’s conciliation obligations. Given the stakes, the SCOTUS accepted Mach Mining’s petition for certiorari in short order to resolve this issue.

Amicus Briefs for the Defense

Employer groups have lined up behind Mach Mining to support reversal of the Seventh Circuit’s decision. Seyfarth Shaw LLP submitted an amicus brief to the U.S. Supreme Court on behalf of the American Insurance Association in Mach Mining. For blog readers interested in our amicus brief, here.

Amicus Brief Filed In Support Of the EEOC

The amicus submission to the Supreme Court asserts that interpreting Title VII to allow judicial review of conciliation efforts by the EEOC would harm alleged victims of discrimination by violating the mandate of the statute that conciliation remain confidential. Judicial review, the amicus brief asserts, would chill full and frank settlement discussions; expose sensitive information about pre-lawsuit negotiations to the public, and hurt the cases of allegedly injured workers because federal judges might be potentially influenced by irrelevant settlement communications. The amicus brief also argues that if the SCOTUS interprets the statute to allow judicial review of pre-lawsuit conciliation efforts by the EEOC, dismissal is an overly harsh remedy where those efforts are determined to be inadequate (and instead the parties should be ordered to engage in further settlement negotiations).

The point of the amicus brief about compromising the impartiality of federal judges—by exposing the court to settlement discussions in conciliation—is somewhat surprising. Federal judges conduct mediations and settlement conferences as a matter of course, and are “exposed” to settlement discussions routinely.

Next Up on the Docket

Mach Mining’s answering brief is due on Nov. 26, 2014, and then the SCOTUS will set the case for oral argument for January 2015.

We will keep our readers updated as developments occur in this litigation.

This post was previously published on the Seyfarth Shaw website, here.

Email and Stress in the Workplace

According to a 2012 McKinsey study reported by Chui and colleagues, employees on average spend 28% of their workday reading and responding to email. Digging deeper into the amount of email usage, Jennifer Deal describes a 2013 study that surveyed a group of executives, managers and professionals (EMPs) and found that 60% of EMPs with smartphones are connected (primarily via email) for 13.5 hours or more per workday and spend about five hours connected during the weekend.

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This amounts to a 72-hour workweek.

In response to this hyper-connectedness the German automaker Daimler (maker of Mercedes-Benz) provides vacationing employees with an unusual extension to the automatic out-of-office response. As usual, the response states the employee is on vacation and provides an alternative contact person.

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But then, the Daimler system goes a step further and “poof” the sender’s e-mail is automatically deleted from the vacationer’s inbox. Daimler’s intent is to let the employee “come back to work with a fresh spirit.” Volkswagen and Deutsche Telekom also have policies that limit e-mails.

Empirical Evidence

While it may appear intuitively obvious that 72 hours per week of connectedness produces stress, some researchers at the University of California Irvine conducted an empirical study of email where, among other things, they closely monitored EMPs at work using email and then during an absolute no email period. The test subjects wore heart rate monitors during both the email and no email periods in order to directly measure their stress levels throughout the workday. The researchers also installed a custom-designed, activity logging application on each participant’s computer in order to measure both the frequency and duration of each participant’s computer window switches.

The empirical conclusions of this study are not surprising.

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The data collected shows a “very strong trend” of more stress on participants during e-mail usage versus non-usage. As to multitasking, during the no-email period participants had their computer windows open “for a significantly longer duration before switching to another window” as compared to the email period. Bottom line, EMPs without email had lower stress, multitasked less, and spent more time on individual tasks.

Qualitative Findings

The qualitative findings of this study are not as clear-cut as the empirical evidence.

During the no-email period all participants reported more personal contact with other people, both face-to-face and by telephone, and consistently reported that without email they felt more relaxed and focused.

On the other hand, nearly all participants felt email is double-edged. It is stressful, but it allows them to work remotely and leave work, for example, to attend a child’s activity. And 24/7 email also allows EMPs to quickly respond to genuine emergencies at work. But, about half the participants in the UC Irvine study felt a loss of agency at work.
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That is, they were not in control of their email and hence not in control of their work. “The dark side of 24/7 connectivity that comes with the flexible workplace is that people feel they are always on, never done.” Interestingly, most EMPs who feel this dark side “blame their organizations for this – not their smart phones.” They blame it on poor management.

Suggestions for Reducing Email Stress
Reducing email lowers stress, promotes more verbal interaction, reduces multitasking, and increases task focus. The benefits are readily apparent, so it behooves both organizations and employees to deeply understand their email usage and then, depending upon the nature of their email problems, adopt some of the policies below.

  • Set up an overnight out-of-office auto response that states the employee will be unavailable, for example, from 6 p.m. till 6 a.m. except for emergencies, and emergencies must be identified as such in the subject line.
  • Avoid checking email when on the phone. It is easy to discern when the person on the other end of a phone call is checking his or her email. This is particularly pernicious in client or customer phone calls, so organizations are likely to increase client and customer satisfaction if they institute this policy.
  • Use the phone or speak face-to-face instead of drafting an email. Some organizations have written policies encouraging this for client and customer communications. Of course employees need to use judgment about whether a written record of the exchange is required.
  • Vet your inbox and only open the emails that enhance your productivity and your organization’s goals. For many people, this means taking advantage of the unsubscribe links that appear in newsletters and forum mailings.
  • Set specific times to check email, and only check during such times. If you are concerned about responsiveness to emergencies, you could set up intermediate times when you briefly scan the subject lines and only open emails that appear to be emergencies.
  • To make this work for other people, convey accurate information in the subject line. The receiver should be able to tell at a glance whether your email is an emergency or not and whether a response is required or not.

This article by Geoff Fallon was originally published on PositivePsychologyNews.com on Oct. 13, 2014.

Lloyd’s Underwrites Ebola Indemnity Coverage

A new class of insurance is now being offered to address the occupational hazards faced by healthcare workers and first responders who are in jeopardy of contracting blood-borne pathogens such as Ebola, HIV, Hepatitis B and Hepatitis C.

Underwritten by Lloyd’s of London and distributed by Specialty Insurance Advisors, Essential Professional Insurance Coverage (EPIC) is the first such indemnity coverage available to individuals, including administrators who check in patients, doctors and nurses treating patients and patrolmen and women responding to 911 calls. The coverage goes beyond workers compensation and disability insurance to protect these individuals, EPIC said.

According to the Occupational Safety and Hazards Association (OSHA), up to 800,000 needle sticks occur each year, of which 16,000 are likely to be contaminated with HIV. The risk of acquiring Hepatitis B or C from a needle stick is even higher than HIV.

EPIC President Richard Kosinski said in an online interview with Fox Business, “We provide the ability for a health care worker or law enforcement professional to buy very inexpensive coverage in the event they get infected with Ebola, HIV or Hepatitis B or C.

For a nominal amount of 9 per year they can get 0,000 of coverage if the worst case happens and they get infected with Ebola or some other type of blood pathogen.

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While the coverage has been available for more than a year, primarily through unions, to large health care hospitals and other institutions, “We have just announced the ability for an individual to buy a policy,” Kosinski said. Centinela Hospital Medical Center in Inglewood, California was one of the first hospitals in the United States to offer EPIC to its healthcare workers, and the first to add Ebola infection coverage, according to EPIC.

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The plan provides a safety net that can help defray some of the costs, Kosinski explained, adding that otherwise, “No one is going to pay the cost for the average health care worker to be flown by a private jet to a specific CDC facility to get Ebola care.”

How is it possible to write this coverage? “Because this is Lloyd’s of London, which has a 500 year history of writing specialty risks,” Kosinski said.

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“We understand the risk, how to price it correctly and how the claims will be paid out.”