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Reflecting on Katrina, HR pros look to rebuild

By Lydell C. Bridgeford
September 1, 2009

New Orleans, a city that symbolizes reinvention, served as an apt venue for SHRM's 61st Annual Conference & Expo, given that a bleak economy and rising unemployment has forced the HR profession to rebuild its strategies toward human capital.

Speaking philosophically about the recession, Robb Van Cleave, chair of the SHRM board of directors, told attendees: "We have answered those clarion calls for HR to be more creative and embrace more change. Changes can happen to us or through us. When things are at their worst, we have an obligation to do our best."

HR lessons learned from Katrina

What better way to highlight adjusting to a changing landscape than a session on how Hurricane Katrina affected HR policies in New Orleans, particularly recruitment and retention?

New Orleans employers that reopened their doors soon after the storm apparently were among the first to show a substantive return to profitability, thanks to positive community relations. Yet, too few employers may connect the ROI dots on such efforts.

"You always want to establish your company as a good corporate citizen within the community," said Carla Major, vice president of HR and community relations, at Harrah's New Orleans, a casino-entertainment operation.

She emphasized that the advice applies following natural disasters and financial ones. "While, right now, you may not be in a situation where you can write a check, your knowledge, expertise and workforce can still help not-for-profit organizations with fundraisers, galas and similar functions. Your services are always welcome and wanted."

Following Katrina, the casino's strong community ties before the storm helped Harrah's - a 24/7 operation - to open its doors a just couple of months after the storm.

Major recalled that her team had six weeks to find about 116 workers. "I was very much relying on the community relationships that I had prior to Katrina in looking for employees. I can honestly say that without the not-for-profit groups, I would not have been able to open the casino," Major explained.

Additionally, the company had to help its employees to find housing. "By volunteering with these organizations in the past, we knew exactly whom to call in the nonprofit community about obtaining housing for our employees. Moreover, we also were able to assist the groups with things they wanted after the storm," she added. "Nonprofits are a resource and a source for you."

The team spirit and camaraderie Major recounted was present among many New Orleans employers following the storm, said Geoffrey Dubiski, principal and managing director at New York-based consulting firm Sumner Grace & Associates. Dubiski's firm spearheaded a survey report on how the HR community rebuilt their workforces after Hurricane Katrina, and found that overall, the majority of employers in New Orleans said it was part of their corporate culture to pitch in to help the community rebuild.

Despite reduced benefits, workers remain loyal

Just as New Orleans companies had to do more with less in Katrina's aftermath, so are employers nationwide coping with the current recession. While companies are scaling back on some employee benefits, some have remained recession-proof, said Dr. Steve Williams, director of research at SHRM.

"Based on our data, 60% of companies have reported that the economic downturn has affected their employee benefit programs," Williams said at a press conference during the event, citing research from the group's 2009 Employee Benefits Survey Report. The survey reflects data on responses from 522 randomly selected SHRM members.

For example, of the 52 types of benefits offered under health care and welfare, eight declined in 2009: contraceptive coverage, HMOs, life insurance for dependents, long-term care insurance, retiree health coverage, supplemental accident insurance, surcharges for spousal health care coverage and wholesale generic drug programs for injectable drugs.

However, the emotional stress caused by economic uncertainty has spurred an increase in mental health coverage. Eighty percent of HR professionals reported their organizations offered mental health benefits this year, compared to 75% last year.

Additionally, more companies provided a defined contribution retirement plan benefit in 2009 (90%) than 2008 (84%). Williams acknowledged, however, that some employers are putting their 401(k) matches on hold, but the trend doesn't suggest a major overhaul of 401(k) benefits.

"The people who are overseeing those benefits realize that the economy is going to rebound" and will most likely reinstate those matches, he explained.

Also, despite the economic uncertainty and record job losses, job satisfaction levels remain high, Williams reported, noting that the job satisfaction rate in 2009 was at 86%, compared to 82% in 2008 and 79% in 2007.

Diligence on disability

One way for pros to maintain employee goodwill and stave off financial disaster during the recession - and in flush financial times - is through a top disability program, said SHRM presenter Robert Sniderman, president of HRFocus USA.

Employers have to make disability management a top corporate concern, since among working-age adults between age 21-64 in the United States during 2006, 21.9% had at least one disability, Sniderman noted. In 2007 and 2008, a significant number of the court opinions involved disability-in-the-workplace issues, directly or indirectly.

He believes that the uptick in litigation suggests more awareness of disability rights in the workplace and a willingness on the part of employees to exercise those rights at the expense of the employer.

The ultimate solution for employers? According to Sniderman, "a good return-to-work system will automatically protect you legally about 95% of the time if you align the system with state and federal disability laws. Yet, you also have to create a strategy of return to work that is supported by leadership and champion that strategy by becoming informed and promoting it within the leadership suite and down through the ranks of the organization."

Sniderman urged attendees "to write and embrace a comprehensive return-to-work program. Claims, when litigated, are extremely expensive and difficult to defend without clear policies and procedures."


Are you worse than a lawyer?

Once, when Hunter Lott, director of PleaseSueMe.com, was on a plane, a fellow passenger asked him what he did for a living. "The short answer," he said, "is I keep companies and managers out of court."

"Ohhh," the passenger said knowingly, "you're an attorney." Lott: "No, I'm in human resources." The passenger, sneering, said, "Ugh. That's worse.

"In Lott's session at SHRM's annual conference, he offered compliance tips to help pros keep their reputation as being worse than attorneys, but staying out of court all the same. Lott's advice included reviewing:

>> GINA (Genetic Information Nondescrimination Act). The law that prevents employers from discriminating against workers based on health predisposition, Lott suggests avoiding indepth conversations with employees about their family histories.

>> ADAA (Americans with Disabilities Act - Amendment). Review all rejected accommodations over the last several years, Lott said, and take necessary action to meet the law's new "reasonable accommodation up to undue hardship."

>> Lilly Ledbetter Equal Pay Act. "If there's only one compliance issue you pay attention to, please make it wage and hour," Lott pleaded. He recommends doing a wage audit by gender and position, and make sure you can justify gaps by something other than gender.

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