BDO to go employee-owned; Target defends employee branded ‘racist’

In our HR news round-up this week: Accountancy firm, BDO, is set to become employee owned; Target defends staffer accused of racism; while scale of tech sector and non-profit job losses is revealed:

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Aug 18, 2023
This article is part of a series called The Most Interesting HR Stories of the Week.

BDO to give employees part ownership

Global tax consulting and accountancy firm, BDO, has voted to give its US workers the opportunity to own a stake in the company – a first for the accounting industry’s top tier of firms. Reports reveal the firm’s 860 shareholders voted last Friday to form a stock ownership plan – which was confirmed by BDO this week. The trust BDO will set up will own 43% stake in the firm once the new retirement plan is up and running in September. Over time, the trust will acquire 100% ownership of BDO. Said Wayne Berson, the firm’s CEO since 2012: “We are providing a benefit that no one else is providing. This is effectively a big increase that people are getting by working at BDO.” Partners and front-line employees will accumulate shares based on their compensation and how long they stay with the firm. The retirement benefit is in addition to the firm’s 401(k) retirement plan and will replace future pension payments for current partners, Berson said. Tax savings from operating the trust – the firm’s contributions are tax deductible – will free up cash that BDO can then invest in its staff, all without tacking on additional debt, Berson added. The new deal creates one of the largest employee stock plans in the country.

Target denies employee was racist after TikTok wannabe was removed from its store

Target has come to the defense of one of its employees – a security guard – after he called the police to remove wannabe pop star ‘Baby Storme’ and a troupe of her dancers, for attempting to film a video in the store without permission. Storme branded the employee racist in his handling of the unauthorized flash-mob, but his bosses have leapt to his defense, saying: “It’s not right to assume that a Target employee is racist because they are following the store’s policy.” Storme continued to brand the employee racist in a later TikTok post, but was met with furious backlash in some quarters. “I’m black; where was this racist?” asked the top-rated commenter on YouTube, named Lisa Ann. “You’re disturbing an entire store without permission and when security does their job (where they were extremely courteous), they get labeled as racists?,” said another. Some suggested the security guard should now sue her for defamation – with even the brother of disgraced social media star, Andrew Tate, wading in, saying he would pay for the legal bill. In March 2022, Storme – real name Janice Mofus – claimed Citibank workers racially profiled her.

Non-profit employment revealed to be the big loser to Covid-19

The number of people working in the US not-for-profit sector fell by 14% according to research revealed by the University of Missouri-Columbia. Earnings by those who kept their jobs also fell, finds the research, which also argues that the not-for-profit sector was largely prevented from collapsing completely thanks to the government’s Paycheck Protection Program (PPP). Researchers estimate that PPP saved more than 450,000 non-profit sector jobs during the Covid-19 pandemic, as charitable donations normally relied on fell by 20%, and not-for-profits were forced to spent 34% less than normal to survive. The research suggests wages for those employed by charities fell by more than 40% during the height of the Covid-19 pandemic. The report said: “The Paycheck Protection Program was a particularly helpful lifeline for non-profits, which constitute a large segment of the US economy. Non-profit employees make up roughly 10% of the US labor force.” It added: “As far as we’re aware, our study is the first to assess the economic impact of the pandemic on the entire non-profit sector in the United States.”

Lifestyle accounts grow by 14%

The number of organizations offering flexible Lifestyle Spending Accounts (LSAs) has grown by 14% in the last 12 months, according to analysis of 60,000 workers by benefits platform provider, Benepass. LSAs – non-salaried allowances designed to support employee’s physical, mental, and financial wellness – are a relatively new benefit in the market. But the data finds that in 2023, LSA adoption rose to be the most popular flexible perk, with 51% of companies now offering it compared to 37% in 2022. The largest jump in percentage of companies offering LSAs came from large companies – where 75% now provide an LSA. This compares to 40% in 2022. Small and medium-sized companies were also found to rapidly embrace LSAs, with medium-sized companies seeing a 33% boost and small companies increasing LSA adoption by 10%. “If you’re really looking to build an inclusive benefits program, a lifestyle spending account is the way to go,” said Matt Sanborn, senior manager (benefits), Seres Therapeutics. He added: “It’s really the only benefit that is truly 100% inclusive. There’s no other benefit out there that anyone could offer that’ll do the same.”

EEOC sues Cloudbeds for discrimination against deaf job applicant

Remote-first company, Cloudbeds, is being sued by the US Equal Opportunity Commission (EEOC), for failing to accommodation a deaf job applicant. According to the lawsuit filed this week, the jobseeker – Peter St John – was well qualified for the role of providing IT support to Cloudbeds employees. But, after requesting the use of American Sign Language (ASL) to communicate at the job interview stage, the EEOC claims his candidacy was terminated on the basis that verbal communication and hearing were job requirements for the position in a remote setting. The EEOC claims Cloudbeds violated federal law by denying an applicant’s request for an accommodation in the interview process and by refusing to hire the applicant based on his disability. The EEOC filed suit in US District Court for the District of Massachusetts (EEOC v. Digital Arbitrage, Inc. d/b/a Cloudbeds, Civil Action No. 1:23-cv-11856) after first attempting to reach a pre-litigation settlement through its conciliation process. The EEOC is seeking compensatory and punitive damages for the applicant and injunctive relief designed to remedy and prevent future disability discrimination.

Big rise in tech layoffs revealed

Tech companies have already laid off 40% more people than they did in the whole of 2022, according to a report published this week. Some 226,000 tech employees have lost their jobs in the first half of 2023, according to While big layoffs – such as those by Google, Meta, Microsoft, and Amazon – have typically garnered the most news coverage, it claims hundreds of smaller technology companies, from retail and crypto to the transportation market, have also been forced to make painful cost-cutting measures, resulting in the highest number of layoffs the tech industry has ever seen. Across all sectors, 75,912 people lost their jobs in January 2023 alone, almost half of all the layoffs reported in 2022. February saw a decline with roughly 40,000 job cuts. Although the number of layoffs continued falling in the next three months, tech companies still reported almost 73,000 job cuts in this period. Since then, they have let go nearly 24,000 staff members, pushing the total number of layoffs to 226,117 as of last week. The layoff figures for the last three years make even grimmer reading. Statistics show that tech companies have laid off more than 405,000 people since the tart of 2021. Around a third of all reported job cuts have come from only ten companies.

Rampant crime – that’s one way of avoiding returning to the office

According to The Daily Telegraph, hundreds of federal staff in San Francisco have been told not to commute into the office due to the rise in crime there making the journey too unsafe. It reports that The Department of Health and Human Services told employees at the Nancy Pelosi Federal Building to “maximize the use of telework for the foreseeable future” due to “conditions” outside the building. The office houses a variety of federal employees, plus staff working for Ms Pelosi, the former speaker of the House of Representatives. But the area around the building, in the centre of the city, has become a hotspot for drug users, many of whom are hooked on fentanyl and other opioids. Cheryl R Campbell, the department’s assistant secretary for administration, wrote that the work from home recommendation “should be extended to all [Western US] employees, including those not currently utilizing telework flexibilities”, the San Francisco Chronicle reported. Many claim the rise in crime is linked to a recent exodus of technology companies from the city. During 2020-2022, the city’s population fell by 7.5%.


This article is part of a series called The Most Interesting HR Stories of the Week.
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