The following guest blog post is submitted by our board member, Russell Klosk:
Even as we all watched the swearing in of our 44th President with the hope that things are going to get better, we are grappling with current business and human resource environments plagued by the global economic recession and the worry that it will turn into the 2nd great depression. The new administration looks to put its mark on the governance of the human capital function within the federal workforce, and both a new administration and a new Congress take up the cause of reform of the laws that govern our workplaces.
It is in that spirit, and with an eye toward what the future MIGHT hold between the Obama administration and the 111th congress that I thought I would take a moment to put to paper some of the debates and intentions already taking place, and those that look like they will have traction. My intent here is not to be all inclusive nor predict the future, but it seems likely some of it will come to pass, and as it does the HR environment will once again shift. With that in mind, I offer a discussion of the following workforce items on the agenda of the new administration:
Potential Impacts on the Federal workplace:
1. Obama has named Nancy Killifer, who comes out of McKinsey & Company with a fantastic reputation, as his Chief Performance Officer for the entire federal government. This position does not currently exist, and while the President has the power to create it, for it to have any real teeth Congress is going to have to enable an individual in this role to have oversight over much of the executive branch. That is a debate that is scheduled to be taken up in committee in early February.
Nonetheless, what Obama is envisioning is someone who can go through the government in a comprehensive way and increase performance by looking at certain functions holistically as a federal wide activity instead of an agency by agency activity. Among other impacts this will focus on the acquisition process in general, in the human capital space the talent acquisition, promotion, and rewards (compensation / pay for performance) process, and logistics in general. Other areas will certainly fall under the purview but have not yet been defined. If you’d like to know more about what people like this typically do in the private sector go to www.chiefperformanceofficer.com and you will find a bevy of information
2. Office of Personnel Management: Obama is interested in continuing President Bush’s formulation of Federal Centers of Excellence. Among these are having one agency which is responsible for transactional level activity for key functions such as Finance, Accounting, Human Resources, etc. This is highlighted by OPMs HR LoB initiative, and indications are that is going to get a kick up in implementation and authority going from a recommended federal architecture for the HR function to a mandated one.
Additionally the new administration sees waste in the duplicative efforts of multiple HR organizations. Not sure yet if this will mean allowing OPM to become the chief HR provider for all federal agencies with only employee relation support in the individual agencies or if it will take the form of centralizing HR at the master agency level (i.e. DoD OSD level, DHS HQ level, etc.) and reducing the HR footprint in the sub agencies (i.e. Department of the Navy, Department of The Army, and sub commands, DLA, etc.) but they are looking at both possibilities. This would be a major shift to a more centralized HR model, and is not a small thing to get authority for, so lot of doubt if they will succeed in this area. To date a new head of OPM has not yet been named.
The Obama administration is very concerned with the demographics of the federal workforce and the need to both ramp up hiring and retention programs as well as knowledge management programs to accomplish the work with a smaller workforce. Overall they are talking about shrinking the size of the federal workforce, through attrition, to the tune of 10-15%, and see the most waste in what are loosely the GS 12-15 ranks. The demographic trends say this will likely happen with or without a master plan as baby boomers begin to retire, and with only a very small Generation X contingent in the workforce, but this increased focus presents major shifts in the process and governance used in the executive branch over the next 4 years as well as major labor relations challenges.
Agenda Items of Interest to HR Professionals:
1. Lilly Ledbetter Fair Pay Act (H.R. 11, S.181) passed the House on Jan 9 currently under debate in the Senate vote expected last week of January. This is a response to an anti-discrimination law suit in which the courts held that issuing paychecks can not be challenged as a discriminatory act. In other words it goes after unfair wage practice law, and issues revolving around facts such as women being paid less than men, etc. Legally it states that every time a pay check is issued that would be considered an act of discrimination and opens the door for class action law suits. In practical terms it mandates that compensation systems be modified so that the only differentiators for pay on a given job be seniority, merit, and production and that other factors such as sex, geography (that is a huge one), etc. are not valid. The geography clause could result in the elimination of pay differentials based on geography and cost of living. Of more import the act is retroactive, so it will force both employers and the federal government to go back and revue past pay policies and may force them to make restitution payments.
2. Employee Non-Discrimination Act, not yet under debate, but would prohibit employment discrimination on the basis of sexual orientation
3. Employee Free Choice Act (S. 2). This is a major change to labor relations law in the US, and would mandate the certification of unions if a union could produce signed union cards totaling 50%+1 of a workforce regardless of how or when those cards were gathered. It would eliminate secret balloting for unionizing a workforce and mandate set time frames under which union balloting must take place. It would also mandate that once certified immediate collective bargaining must occur, and if unsuccessful in 90 days that the National Labor Relations Board would mandate an agreement through binding arbitration.
4. RESPECT ACT. Narrows the legal definition of a “supervisor” under the provisions of the National Labor Relations Act. Impacts include not only who could be part of a union bargaining unit, but also how companies formulate their organizational structures.
5. Workplace Flexibility / Leave Act. This is being pushed by Ted Kennedy as one of his legacy issues, and is also one of Michelle Obama’s stated focus areas. It would have impacts on the changes to the FMLA regulations that take effect on February 1, 2009. They would require any employer with more than 15 employees to provide paid sick leave (7 days minimum), prevent employers from altering existing leave policies that are more generous than that. It would also, and perhaps far greater impact, redefine full time workers (both exempt and non-exempt) as anyone working 30 or more hours in a week (1,020 hours in a year) ; which has impacts on benefits policies, job classifications, use of temporary workers, and use of season staff among other things.
6. Family Leave Insurance Act. Would provide for 8 weeks of PAID leave for any worker taking leave under the Family and Medical Leave Act (FMLA). Funding for this program still to be formulated.
7. Employment Verification: The E-Verify program through DHS expires March 6, 2009, however, DHS has issued regulations saying that since it was funded in their appropriations bill they will continue providing the service, on a voluntary basis, beyond that date. Comprehensive reform of this legislation is a key issue according to polls (# 3 with the electorate), and it is likely to see debate that would mandate among other things a stricter enforcement mechanism against companies employing illegal aliens.
8. Health Care reform is going to be a major focus of the 1st year, just as it was a part of today’s inaugural address, and issues include expansion of the State Children’s Health Insurance Plan (SCHIP) which insures anyone under the age of 18 whose parents employers do not provide insurance. This passed the house yesterday (Wednesday). Also looking at mandating that health insurance be provided to employees of any prime contractor to the federal government with 300 or more employees and any sub contractor to the government that does more than $10,000 in business with the federal government in a given year. This is not limited to “traditional” government contractors such as Lockheed Martin and Boeing, but anyone with whom the government does business. That includes newspapers and television stations they buy advertising from for one example, consumer good companies that provide goods in the militaries commissaries for another, colleges and universities as a third example, and any number of business in between.
The one thing for certain, change is coming, and change is probably overdue. So I encourage everyone to keep your eyes open and watch for what the next 6 months may do to the HR profession.