Archive for March, 2011

Editor’s blog has a new home

Canadian HR Reporter’s Editor’s blog has a new home.

As of March 28, 2011, the blog can now be viewed on Canadian HR Reporter‘s home page, www.hrreporter.com.

You can read managing editor Todd Humber’s current blog on the website: How not to hire wait staff

No additional blogs will be posted here.

Can employers afford to pay a ‘living wage?’

Vancouver’s living wage is $18.81 an hour; its current minimum wage is $8

By Todd Humber

There is a growing gap between the minimum wage and a “living wage” — the hourly rate at which a household can meet its basic needs.

That’s the conclusion the Canadian Centre for Policy Alternatives (CCPA) came to in a report that looked at what workers in the Vancouver area need to earn to have a “basic level of economic security.” (See below for a sample budget for a living wage earner.)

British Columbia’s current minimum wage is $8 an hour, though the province recently announced plans to raise it to $10.25 an hour by May 1, 2012.

Even with the boost, it’s a far cry from the living wage calculated by CCPA — $18.81 an hour for Metro Vancouver in 2011. That’s up significantly from 2008, when it was $16.74 an hour.

According to Statistics Canada, only 2.3 per cent of B.C.’s workforce earn the minimum wage. The average weekly wage in the province in December 2010, the most recent data available from Statistics Canada, was $834.21.

Assuming that’s based on a 40-hour workweek, that’s $20.86 an hour — so B.C. employers are, on average, already paying more than a living wage.

So the question arises: Can the employers that don’t currently pay a living wage afford to do so?

The math isn’t pretty. (CFOs may want to look away.)

A minimum wage earner in Vancouver, working 35 hours per week, would pull in $280 a week, or $14,560 per year, before taxes. That same worker, earning the living wage, would pull in $658.35 a week, or $34,234.20 per year — a difference of more than $20,000 annually.

Even with B.C.’s proposed higher minimum wage of $10.25 per hour, a gap of more than $15,000 remains.

The minimum wage hike on its own is going to be a tough pill for some businesses to swallow. Paying a living wage would undoubtedly force some of them to close up shop — a firm paying minimum wage likely can’t afford to more than double salaries.

But that doesn’t mean cash-strapped employers should dismiss the CCPA’s report. There are benefits that come from paying employees a living wage that don’t show up on the balance sheet — at least not in black-and-white numbers.

While the benefits of paying workers a living wage might be obvious to seasoned HR professionals, they’re a little hazy for some employers — especially ones without a strong HR department or no HR department at all. They include:

Reduced turnover: Pay people more, and they’ll stick around longer — that’s obvious. What’s not so obvious are the hidden costs attached to turnover, including direct replacement costs and indirect costs such as lost productivity.

Improved productivity and engagement: A worker who isn’t stressed all day worrying about how they’re going to pay the rent, or put food on the table, will be able to focus on the job at hand — which is driving revenue for the employer.

Interestingly, the 2012 Olympic Games in London will be the first “living wage” Olympics, according to the CCPA. And many employers, including HSBC Bank, KPMG and PriceWaterhouseCoopers, have embraced the concept.

Not all employers can afford to pay a living wage. But reports like this serve as a wake-up notice for employers — if you’re paying below a living wage, it may be time to re-evaluate compensation practices and see if boosting salaries might be a boon to the bottom line. After all, you’ve got to spend money to make money.

Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resource management. For more information, visit www.hrreporter.com.

BY THE NUMBERS

Sample living wage budget

The sample budget is based on a family of two parents with two children aged four and seven, with both parents working full time at 35 hours per week. At $18.81 per hour for Metro Vancouver — or $34,234 annually for each parent working full-time — here’s what a family earning a living wage could afford:

FOOD: $768/month (based on estimates by the Dietitians of Canada for a nutritious diet)

CLOTHING AND FOOTWEAR: $185/month

SHELTER: $1,360/month (includes conservative rent estimate for a three-bedroom apartment, utilities, telephone, and insurance on home contents)

TRANSPORTATION: $496/month (includes two-zone bus pass and the cost of owning and operating a used car)

CHILD CARE: $1,136/month (for a four year old in full-time care, a seven year old in after-school care, and six weeks of summer care). Notably, child care is the second most expensive item in the living wage family budget after shelter.

MEDICAL SERVICES PLAN (MSP) PREMIUMS: $121/month

NON-MSP HEALTH CARE: $133/month (for Pacific Blue Cross Insurance; does not include expenses only partially covered by the insurance plan)

PARENTS’ EDUCATION: $89/month (allows for two college courses per year)

CONTINGENCY FUND: $219/month (provides some cushion for unexpected events like the serious illness of a family member, transition time between jobs, etc.)

OTHER: $714/month (covers personal care, furniture, household sup­plies, school supplies, some reading materials, minimal recreation and entertainment)

This living wage calculation does not cover:

•  Credit card, loan, or other debt/interest payments;

•  Savings for retirement;

•  Owning a home;

•  Savings for children’s future education;

•  Anything beyond minimal recreation, entertainment, or holiday costs;

•  Costs of caring for a disabled, seriously ill, or elderly family member; or

•  Much of a cushion for emergencies or tough times.

 Source: Working for a Living Wage 2011, Canadian Centre for Policy Alternatives

Every CEO should have a daughter

When male CEOs have a daughter, the gender wage gap at their firm closes

By Todd Humber (todd.humber@thomsonreuters.com

Fathers have legendary soft spots for their daughters. Turns out, for male CEOs, having a daughter also loosens the grip on the company payroll.

In an unpublished paper, Like Daughter, Like Father: How Women’s Wages Change When CEOs Have Daughters, researchers from the University of Maryland, Columbia Business School in New York and Denmark’s Aalborg University examined 12 years’ worth of Danish workforce data and came to an interesting conclusion: If a male CEO has a daughter, the gender wage gap at his firm closes.

How much? Overall, the gender wage gap reduces about 0.5 per cent. And if the CEO only has one child, and it’s a girl, the effect is amplified — a decrease in the wage gap of about 2.8 per cent.

The birth of a daughter also impacts classes of employees differently. The least-educated female employees experience virtually no effect, while the most-educated experience a one-per-cent decrease in the wage gap. The authors suggest this is because “CEOs experience a higher degree of social identification with more educated women, who they believe their daughters are likely to resemble.”

Not surprisingly, the wage gap closes more in smaller organizations when a daughter comes on the scene — likely because these CEOs have more autonomy in determining salaries.

“Our results suggest that the first daughter ‘flips a switch’ in the mind of a male CEO, causing him to attend more to equity in gender-related wage policies,” the authors wrote.

It’s not surprising — human behaviour almost always changes for the better when there is a personal connection or a vested interest. But let’s hope that “switch” is flipped in more organizations. It’s high time we moved past the issue.

BlackBerry update: Thanks to everyone — and there were a lot of you — who wrote in response to my tongue-in-cheek commentary in the Feb. 28 issue on the refusal of my BlackBerry to type HR (it insisted on changing it to “hour”). For those who want a fix, here’s how to do it: Go to “Options” (that’s the wrench icon) then select “AutoText.” Look for “hr” and click on it — you can then delete it, or even change it so it spells out “human resources” rather than “hour.”

See you out West: I’ll be attending the British Columbia Human Resources Management Association (BC HRMA) conference in Vancouver next month as well as the Human Resources Institute of Alberta (HRIA) conference in Edmonton. If you’re there, be sure to drop by the Thomson Reuters booth to say hello.

Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resources management. For more information, visit www.hrreporter.com.

Debating the merits of a profession

Ontario MPPs sing praises of HR in legislature while discussing Bill 138

By Todd Humber

Watching the debate in Ontario’s legislature on the second reading of Bill 138 — the much talked about legislation that would regulate members of the Human Resources Professionals Association (HRPA) in a manner similar to accountants — one couldn’t help but feel the HR profession was packing on a bit more credibility.

As an aside, debate on Bill 138 followed discussion of a bill about engineers in the province — an interesting paradox in itself.

But regardless of your feelings about the legislation — and at Canadian HR Reporter we’ve heard strong voices from supporters and detractors — there was no denying politicians were giving the HR profession a heady dose of respect in Ontario’s legislature.

Liberal MPP Bob Delaney gave a history lesson on HR during second reading on March 3. HR evolved from the boss essentially using personal intuition in hiring people, to the personnel department to what it is today, he said.

“The function evolved into a profession,” he said. “It was a profession that had a set of core principles and that used a recognizable and, more importantly, teachable body of knowledge, that governed itself through recognized and uniform standards and that moved forward through the evolution and the leadership of its peers. That’s where we are today.”

He went on to talk about the numerous areas where HR plays a significant role, including settings missions and goals, measuring organizational effectiveness, matching staffing needs to the available labour pool, sourcing strategic skills, retaining key employees and developing a fair framework for compensation and proper costing, both present and future.

MPP David Zimmer, the Liberal who introduced the private member’s bill in November, spoke passionately in its defence.

He pointed out there had been nearly 500 convictions under the province’s employment standards act between October 2008 and January 2010, yet not one of those convictions could be linked to an HRPA member.

The message was clear — competent HR professionals know the law and know how to implement it in their organizations. The impact of that on the general population is significant, he said.

“How happy, satisfied and safe we are at work depends largely on how organizations implement the various laws that govern the Ontario workplace,” he said.

He pointed out HR safeguards more confidential and personal information than other professionals, on both employees and the employer. They have access to sensitive medical information and know who’s battling addictions.

And he went on, discussing the financial impact of HR decisions.

“Given all the evidence that shows that HR practices have big impact on an organization’s bottom line, an incompetent or unethical HR professional can do just as much, if not more, financial damage to an organization as a CA, a CGA, a CMA, a lawyer or any other professional,” he said.

MPP Elizabeth Witmer, a Progressive Conservative, said over the last 20 years the HRPA has “developed in scope, sophistication and responsibility to match the remarkable development and influence of the human resources profession.”

She read a letter from Christine Elliott, another Conservative MPP, who couldn’t make it to the debate.

Elliott pointed out that HR professionals are at the centre of a rapid change in how employers conduct business, with economic conditions, demographics and labour law all becoming more complex and interrelated.

She went to highlight the numerous ways HR professionals provide value, including:

•identifying workforce trends and forecasting changes before they happen

•discovering potential problems before they materialize and adversely impact the organization

•identifying key talent for retention and leadership development

•forecasting the changes in “human capital resources” — within the organization and in the changing economic environment.

In short, she said: “HR professionals ‘put the right people in the right place at the right time.’”

It remains to be seen whether or not this bill will make it into law. But HR professionals from across Canada (and beyond our borders) are watching what’s happening in Ontario carefully.

Did HR need validation from some provincial politicians? No. But it’s nice to see they get it, and HR professionals will gladly take another pat on the back in recognition of their hard work, how far the profession has come and the critical role it has to play in the future of business.

Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resources management. For more information, visit www.hrreporter.com. You can read the full transcript of the debate on Bill 138 here.

Here’s the memo on Facebook – again

Employees aren’t the only ones who need a lesson on the boundaries of social media

By Todd Humber (todd.humber@thomsonreuters.com)

In 2009, a city in Montana drew a line in the sand employers knew, unequivocally, they should never cross. Apparently, not everyone got the memo.

To refresh your memory: Two years ago, the City of Bozeman made headlines when it asked candidates to hand over usernames and passwords to social media websites like Facebook as part of the screening process. Common sense prevailed, and the city wisely abandoned that practice.

A journalist uses the new Facebook Deals application on a mobile phone at its official launch in London. The Maryland Department of Public Safety and Correctional Services caused a stir when it recently asked an employee for his Facebook password before reinstating him from a leave. (Photo: Suzanne Plunkett/Reuters)

Last month, the Maryland Department of Public Safety and Correctional Services (DPSCS) decided to step into the limelight. It asked Robert Collins, a corrections officer returning from a leave of absence following his mother’s death, to hand over his Facebook username and password before reinstating him.

“My personal communications, my personal posts, my personal pictures, looking at my personally identifiable information, where my religious beliefs, my political beliefs, my sexuality — all of these things are possibly disclosed on this page,” Collins said in a video produced by the American Civil Liberties Union (See the video here).

DPSCS pointed out that the request was voluntary, and had not been taken into account when evaluating job applicants. It made a decision to suspend the practice of asking for social media information for 45 days in light of the fact it’s a “newly emerging area in the law.”

It’s one thing to do a Google search on a candidate. It’s quite another to ask them, even voluntarily, to hand over personal IDs and passwords. And, frankly, it’s a road employers shouldn’t want to go down. If the person didn’t get the job, for whatever reason, the employer could be exposed to a human rights complaint. If the candidate’s private Facebook account revealed he was gay, the employer might have some explaining to do in front of a tribunal as to whether or not sexuality played a role in the hiring decision.

Employers have long lamented the fact many workers don’t know the boundaries of social media and what’s inappropriate in the workplace. Employers, apparently, still have a thing or two to learn as well.

Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resource management. For more information, visit www.hrreporter.com.


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