Fast Facts

Published in HR Professional

COMPANY
Changing Spaces

Want to exercise your strategic planning skills? Try moving offices. When Ontario steel producer Stelco Inc. decided to relocate its headquarters from downtown Hamilton to its Hamilton plant site, human resources was assigned the huge task of planning and coordinating the 300-person move.

"It's not just a matter of finding someone a desk at the new location," says Ron McClure, chief HR officer. "It involves strategic planning." HR had to decide which departments interrelated, then map out where they should be located. They also brought departments together; where, previously, IT was spread out on different floors, it's all in one area in the new location.

"Some of these functions are time sensitive," says McClure. "You can't just say 'we're moving on Monday.' It's a lot of coordination." For example, when moving payroll personnel, they had to ensure it didn't interfere with employee payments. Also, a number of employees had spent their careers working downtown, so they weren't thrilled about moving. HR had to take the time to explain why this was important for the company.

Just changing locations is expected to save Stelco $4.5 million, starting in January 2005. But it still doesn't make the transition simple. "People don't like change," says McClure. "Even if it's a good change."

HR WORLD
Worldly Woes

Are you thinking about sourcing labour offshore? Watch for hidden expenses. According to a recent U.S. study by Hewitt Associates on global sourcing trends and outcomes, companies saw lower savings than expected due to hidden costs.

"The average operating cost reduction for captive offshore operations was 12.2%, far lower than earlier estimates of up to 60%," says Tina Kao, a consultant at Hewitt Associates.

Why were estimates off base? Too many companies rushed into global sourcing without planning, says Kao. Sure, 88% of companies examined labour costs, but less than 40% analyzed the local economic or political climate. Only one out of three companies regularly evaluated the affects of global sourcing on the community and even less examined the impact of employee or union representation issues back home.

Overall, they just didn't add up all the expenses. For instance, Kao says, "with labour costs, many companies only look at basic costs such as base and variable pay. They forget to include statutory benefits and supplemental prerequisites."

Cultural issues can create other challenges. "If you compare U.S. and Canadian ways of working with those of India, there are some similarities. But there are also differences in terms of communication style, team processes and work/life balance," she says. Training on these issues can help tremendously.

And it looks like that training will need to start soon, since more than 75% of employers in the Hewitt study said their global sourcing operations were permanent. -L.M.

MARKETPLACE
In Style

Been put in charge of updating the business-casual dress code? Don't worry. You can always call for back-up advice-talk to an image consultant. Gloria Starr, for example, specializes in ironing out business-casual dress codes. "Business casual has become far too casual," she says. "We were casual for so long it went overboard. Now we need to clarify new guidelines."

As president of Toronto's Global Success Strategies Inc., Starr provides image and etiquette consulting services to companies around the world. Not only does she help companies rewrite dress codes, but she also teaches everyone from sales teams to top executives how to dress for success. Her workshops could leave a lasting impression on your staff.

Far from a dry lecture, Starr's workshop resembles a reality TV show. She selects volunteers from the group to have extreme makeovers, performed by a team of hair, makeup and clothing experts.

Next, she gives the groups style advice. Topics include appropriate office attire, the psychological effect of colour and guidelines on how to dress with authority. Not to mention the "ten most fatal business faux pas."

What's the price tag on helping your employees look their best? It can range from $3,500 to $12,000. You can also obtain image certification for $7,500, which will prepare you to teach others in your company yourself.

In business, Starr says, clothes cover 90% of the body. It's inevitable that they will make a statement. -L.M.

NEWS
Who Benefits?

Employers are working overtime these days to find solutions to the health expenses crunch. Costs increased from 3.2% of payroll in 1990 to over 6% in 2003, according to the report, Beyond Band-Aid Solutions: Managing Organizations' Health Benefit Costs, put out by the Conference Board of Canada.

Future cost predictions aren't much brighter. More than two-thirds of survey respondents expect to spend more on benefits in 2004. Meanwhile, Mercer Human Resource Consulting estimates that costs will rise to 8% of payroll by 2007.

Still, employers rely on health programs to stay competitive, because Canadians care about their benefits. In fact, 38% of unionized respondents in the Board's study said health benefits were one of the top three bargaining issues.

To manage costs, companies are finding some innovative solutions. For instance, Godin says, mid- to large-size companies can share risk with insurers through large-amount claim pooling. She explains that this can offer some protection. It's now more common to see higher claims, especially considering there are drugs that cost over $5,000 a year.

Post-retirement healthcare and dental coverage can also be a liability. "We're seeing that we can't provide the same level of benefits to retirees that we provide to active employees," says Godin. Instead, some plans are shifting towards a defined-contribution approach, which allows recipients to spend X amount of dollars per year.

So what can you do? Flex plans are being repackaged. Employers are now passing on some of the costs to employees. "Everyone is looking for the silver bullet," says Gaylene Godin, senior consultant at Mercer Human Resource Consulting. "The reality is your claims are your costs." -L.M.

TECHNOLOGY
Paper Chaser

When Ottawa-based Halogen Software Inc. was formed in 2001, it was a small company with a large mission-create an employee performance program that will alleviate monotonous paperwork for the HR professional.

"We saw HR spending too much time administering the appraisal process and too little time on the strategic aspects," says president Paul Loucks. "We focused on productivity gains for both HR and line managers."

The result was Halogen eAppraisal, a Web-based program with a central status centre and real-time monitoring that allows administrators to check the status of employee appraisals at any time. The system also bypasses the problem of chasing after incomplete appraisals with automated reminders and late notices.

First released in 2002, eAppraisal made Halogen one of the world's 500 largest software and service providers, according to Software Magazine. Since then, the company has introduced more techie features to the 5.0 version, released this year, already a finalist for an award by the International Quality and Productivity Centre.

Some features include new learning and development reports to help HR understand training needs, plus an expanded development planning capability that links existing course content with individual development plans.

Licensing fees start around $7,000 for a minimum 200 licenses. But it might be worth it to bypass all that paperwork. -L.M.