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Aug 1, 2014

Managing a workforce is never easy, especially in the complex economy we face here in the early 21st century.

A new survey from Littler Mendelson, the world’s largest employment and labor law firm, shows just how complex and challenging our current work environment is.

Littler surveyed more than 500 in-house counsel, HR professionals, and C-suite executives, many from the nation’s largest companies, for it’s 2014 Executive Employer Survey. Released late last month, this third annual survey, analyzed just “how employers are being impacted by current economic conditions and regulatory changes during the final years of Barack Obama’s presidency.”

Concern over fallout from a “divided government”

There’s a lot of information packed into this study, but here are some of the data points that interested me. But first, a broad overview from the executive summary:

Employers continue to feel the impact of a multitude of changing legislation and regulations. However, the past three survey reports have seen a steady decline in the level at which respondents anticipate these issues, particularly health care reform, will influence their workplace in the coming year. Employers seem to be shifting their concerns to a general uncertainty surrounding the potential fallout of the deadlocked Congress and divided government.”

Now, some of the specifics:

  • Employers appear to be increasingly comfortable with the size of their current workforce. The percentage of respondents indicating no plans to make changes to their workforce has increased steadily over the past three years from 13 percent in 2012 to 22 percent in 2013 to 26 percent in 2014.
  • However, employers still remain relatively bullish in their hiring plans, with the majority (53 percent) planning to hire workers in the coming year.
  • Nearly half (48 percent) of respondents reported that current economic conditions are leading disenchanted employees to bring more lawsuits or claims against their employers — up 25 percentage points since last year.
  • Discrimination and harassment is the area in which respondents noted that their organization has seen the most employee lawsuits or class actions during the past year (40 percent), followed closely by wrongful termination claims or wage and hour lawsuits (36 percent).

Is “do more with less” the new normal?

“The rise in the degree to which respondents are seeing lawsuits from disgruntled employees is a troubling finding for employers. Even if the claims are frivolous, they can be costly, distracting and time-consuming to defend,” said Barry Hartstein, co-chair of Littler’s EEO and Diversity Practice, in a press release about the survey.

He added:  “The prevalence of lawsuits from disenchanted employees, which often center on discrimination or harassment claims, combined with an increasingly aggressive Equal Employment Opportunity Commission create significant risks for employers, particularly when claims fall into the priority areas of the EEOC’s Strategic Enforcement Plan.”

Here are a few more survey findings that are newsworthy:

  • Employees being asked to do more with less is an area in which respondents continue to witness their workforces being impacted by the economy (84 percent in the 2014 survey). This may represent the “new normal” in the current world of work.
  • As employers work to retain high-performing employees, workforce retention emerged as the issue respondents felt presented the most difficulty in managing their workforce with 88 percent having some level of concern. Additional areas of concern that employers identified in relation to managing their workforce included social media and employee privacy (86 percent), preventing abuse of leaves under the Family and Medical Leave Act (FMLA) and similar laws (69 percent), and generational differences between younger and older employees (68 percent).
  • Advanced technologies – robotics, artificial intelligence, and automation – are changing the way companies do business and how workers perform their jobs, and survey respondents are taking notice. Some 39  percent have either already integrated advanced technologies into their workplaces or are considering doing so within the next year, particularly those in the health care/pharmaceuticals, manufacturing, and transportation industries.

“Aggressive … reforms from the federal agencies”

There is a lot in Littler’s 2014 Executive Employer Survey about how employers feel about the impact of government regulations (like Obamacare) on their businesses, and I have purposely avoided really getting into any of that here because, frankly, the back and forth finger-pointing so many people get into with these topics gets a little tedious. But, you may want to get into the survey results if you like that kind of stuff because it’s pretty interesting overall.

It also found — and this is not a big surprise — that the onslaught of legislation coming from various federal agencies in the wake of a divided and polarized Congress largely abdicating its duties is a big concern for most business executives. As the survey put it,

The most troubling outcome of the divided government for employers has been more aggressive enforcement and reforms from the federal agencies. More than half of respondents (56 percent) are concerned with rule making and enhanced enforcement arising from President Obama’s focus on utilizing federal agencies, such as the U.S. Department of Labor (DOL) and Equal Employment Opportunity Commission (EEOC), to bring about changes to workplace policy.”

Is it possible for a piece of research to be both enlightening and troubling at the same time? Well, Littler’s 2014 Executive Employer Survey is just that. Ignore it at your own peril.

What would we do with a shorter work week?

Of course, there’s a lot more going on this week than just the latest employer survey. Here are some HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of talent management. I do it so you don’t have to.

  • What will it take to fix HR? Ram Charan’s call to split the HR function has gotten a lot of people worked up. As yet another HBR blog post put it, in an argument against Charan’s proposal, “(Should we) break up a strategic function in response to underperformance in the wake of severe market disruptions? Put the most strategic pieces into the hands of up-and-comers passing through the leadership-development revolving door? What would the capital markets look like today if a similar tack had been taken when the CFO role was ripe for transformation?”
  • Did McDonald’s just become to boss of its franchise workers? Bloomberg Businessweek has a pretty good overview of the NLRB general counsel’s ruling this week that McDonald’s corporate is responsible for all workers in the fast food chain, even those in franchise stores, but McDonald’s has just begin to fight back. “The five presidentially appointed members of the NLRB in Washington have already invited briefs on the question of who qualifies as a joint employer in a different case involving a recycling company. If they ultimately reach the same conclusion on McDonald’s as the general counsel did, and hold McDonald’s responsible for alleged lawbreaking at its franchised stores, you can expect McDonald’s to appeal the decision to federal court. And congressional Republicans can be expected to raise a furor, as they did when the NLRB investigated the aerospace giant Boeing.”
  • What would we do with a shorter work week? The Globe and Mail newspaper in Toronto raised an interesting question this week — what would we do if we worked a shorter schedule each week? Here’s part of the analysis: “It’s fine to talk about taking more vacation or working fewer hours, but attitudes would need to be adjusted alongside punch clocks. As the Washington Post reporter Brigid Schulte writes in her enlightening new book Overwhelmed, we have become addicted to busyness. Psychologists, she writes, talk of “treating burned-out clients who can’t shake the notion that the busier you are, the more you are thought of as competent, smart, successful, admired and even envied.” To be on the brink of collapse, perversely, is the height of success.”
  • Myths about the gender pay gap. The Washington Post listed Five Myths About the Gender Pay Gap. Here’s one that should get you going — “Women earn less because they don’t negotiate well.”