How your company plans to use its tax cut windfall could be a great recruiting tool - or maybe not

A couple of weeks ago I reviewed some recent research that analyzed how American companies plan to put to use their increasingly sizable cash hoards, (much of parked overseas but expected to start being repatriated), and which are expected to also be boosted by the recent reduction in corporate income tax rates.

The TL;DRversion of that prior piece: Most of the cash is heading back to investors, either directly in the form of increased dividends, and indirectly as a benefit from increased share repurchases.

Over the weekend I reviewed an even more comprehensive examination of what many of America's largest organizations have stated how they plan on putting this new cash to work, courtesy of Just Capital. There analysis of almost 100 large company announcements in the last few months shows a consistent picture - the data shows that so far, US companies plan to reward or grant new benefits or opportunities to employees comparatively poorly when compared to how these companies are treating shareholders.

Here's a quick look at the summary of the analysis from Just Capital (and they have lots of detail at their site, I recommend spending some time digging through the figures)

Since the chart at Just Capital is interactive in nature, it was hard to get a screen cap that showed the percentage breakdown across the uses of cash categories, so I will just list them out below:

Shareholders - 58%

Future job creation investment - 22%

Products - 7%

Employees - 6%

Customers - 4%

Communities - 3%

Once again, according to the data compiled by Just Capital from hundreds of corporate announcements related to worker raises and bonuses, stock buybacks, capital expenditures, executive compensation, and other measures related to corporate tax reform, only about 6% of this windfall is directly benefiting current employees.

There are some standout companies, from an employee welfare perspective, with respect to how they are allocating these cash flows.

Boeing for example, is allocation over $200M to programs directly benefiting workers, and another $100M towards community programs. FedEx is allocating all of their increased funds to direct employee compensation increased and investments in future job creation. Finally, Apple plans to direct 100% of their tax cut savings into the creation of 20,000 new jobs.

On the flip side, some companies, even ones who have allocated some of the tax reform savings to employee bonuses, (and have had these, usually $1,000 bonuses reported widely), are in Just Capital's analysis granting shareholders the vast majority of the benefits from corporate tax reform.

You can dig into the data in more detail for sure, but the takeaway I think of corporate HR/Talent leaders moving forward is understanding where (and more importantly, why?) your organization shows up on this kind of list.

While it is awesome to be known as company that is great for the shareholders, your job in HR/Talent is to keep creating, positioning, and communicating your organization as a great place for employees.

It might be an awkward conversation down the line if some highly sought after candidate asks you why it is that your company decided only to give employees 1 or 2% of these tax cut savings and give the rest to the shareholders.

There may be a great answer to that question, but you will only have it if you are prepared to be asked.

Have a great week!

Striking for a 28-hour work week: What happens when workers feel like they have the upper hand

Over the weekend while taking a break from freezing and shoveling snow, I caught this recent piece from the Guardian - German workers strike for the right to two-year, 28-hour working week'.

Turns out in Germany the combination of the traditionally strong position of workers and worker's groups, historically low unemployment, and a robust and growing German economy have conspired to put industrial workers, in this case the Metal Workers Union, in a place where they can hold 'warning' strikes against employers as they advocate for a new benefit - the ability to reduce their hours to 28 per week for a period of up to two years. More details from the piece in the Guardian:

Workers have downed tools at more than 80 companies across Germany as the country’s biggest union stepped up its campaign for a 28-hour working week to allow employees to improve their work-life balance.

In what is shaping up to be the biggest industrial dispute in the metalwork sector in three decades, more than 15,000 employees took part in warning strikes at factories including those of the carmaker Porsche.

The IG Metall union, which represents around 3.9 million workers, wants every employee in the metal and electrical sector to have the option to reduce their working hours for a total period of two years, with the automatic right to return to full-time employment afterwards.

Later in the piece we learn that this reduced working week proposal is centered around the need for improved work-life balance for workers, particularly in times when they have more elder or child care responsibilities. Certainly anyone who has dealt with or is currently dealing with the constant struggle to balance family and personal care needs with work would appreciate the benefit for which the German workers are advocating.

Before you pass off this as another 'Coddled European workplace' story and dismiss its importance or relevance for most of the rest of us, think about this.

The conditions here in the US are not all that different than what is happening in Germany, and in many other developed countries right now. Unemployment is at or near decades-long lows. Skilled workers are incredibly hard to find (and to retain). In manufacturing and other heavy industries, long tenured and older workers are retiring much faster than they can be replaced with new talent. And finally, more and more American workers are also struggling with elder and child care needs, and making the balance with work and these personal obligations work. In fact, we did an entire recent HR Happy Hour Show on this topic.

The main difference, you would rightly point out, in the story in Germany and the labor relations environment here in the US is the US worker generally does not have strong union/labor council representation that can advocate for these kinds of benefits and policies. And that is a big caveat, I admit.

But all the other conditions are present, if not more acute here in the US. In fact, the US unemployment rate is about 4.1%, much lower than in Germany right now.

So the thing to think about might not be 'What will I do when the workers agitate for 28-hour weeks?', but rather, 'Am I / we prepared for a labor environment where we (the employer), have even less power and influence than we have today?'

And, 'Are we prepared for a world where we don't choose employees, but rather one where employees choose us?'

Have a great week!

Signs of the Corporate Death Spiral #5 : Have we learned nothing from Yahoo?

Every once in a while, I still come across a story about a book or books being banned, or even burned, in a local area or school system. And every time I hear a story like that I make the same , bad joke - "They are burning books? Burning them? I mean, have we learned nothing from Footloose?"

And every once in a while we come across stories of organizations that, in the spirit of the formerly great tech company Yahoo, pulling the corporate version of banning books, except is it about banning telework or remote work arrangements.  You probably caught the news that this week IBM's Chief Marketing Officer Michelle Peluso is effectively banning remote working arrangements for IBM's US marketing organization. Staffers will have to report to, (and in some cases relocate within commuting distance of), one of six US offices and (in her words), sit "Shoulder to shoulder" with their colleagues.

IBM Marketing employees who are unable or unwilling to cease remote work arrangements and report to one of the six offices will be essentially tendering their resignation, (according to reports).

Call me cynical, but my guess is Ms. Peluso herself will not have to suffer a 'forced' relocation to keep her job. I bet she already lives near enough one of the six offices. 

But the larger point, like Yahoo, Comcast, or any other organization that resorts to the 'No more remote working for anyone' card is sending a signal that they are kind of out of ideas on how to generate better ideas.

So they pull the 'More/Better ideas get generated when people are physically together' line and issue edicts like Ms. Peluso's and Yahoo's Marissa Mayer before that. And they are at least (partially) right. Sometimes great ideas do get generated when people are physically together.

But also true is that great ideas get generated when people are walking their dog, are in the shower, or sometimes when they wake up in the middle of the night and scribble something down on a pad. Keith Richards dreamed the riff for 'Satisfaction', woke up a 4AM and played the lick into a tape recorder on the night stand. He didn't come up with the legendary tune as Agenda Item #6 in an official Rolling Stones band weekly status meeting.

It seems like these kinds of blunt, non-differentiated, unscientific, (does IBM really know that working in the office will lead to better performance?), never work out in the long run.

The best talent that feels negatively impacted by this policy change will find their way to greener pastures. And other folks will feel forced by their employer to make incredibly disruptive life changing decisions in order to keep their jobs.

Ever have to hell an 11 year-old they have to relocate to a new city, new school, and make all new friends? Have fun with that conversation.

I don't know what is going on at IBM in a big-picture sense. But I do know the various IBM folks I have dealt with and do work with now (some are in Marketing), are all dedicated, intelligent, considerate, and a real pleasure to work with.

I hope things work out for them the way they want them to.

On corporate reactions to current events

I don't think I need to recap the series of political and policy events here in the USA over the last few days that have seemingly set thousands if not millions of folks (and almost EVERYONE) on Twitter afire.

In the aftermath of a contested, contentious election, the first days of the administration have been, depending on your point of view, either a colossal and dangerous train wreck, or simply the expected result and consequences from a series of campaign promises/threats that have been acted upon.

Since it doesn't matter to you what I think about these actions, and no matter what I think I would not change anyone's mind anyway (and I am not really interested in changing your mind. Make up your own mind), I'd rather make a couple of comments on what I have seen from the many 'corporate' responses to the events of the last few days.

From what I can observe, there have been three major categories of 'corporate' response, (or non-response), to the recent Executive Orders from the new President.

1. 'We' (meaning the corporation, even though I would suspect that the individual CEOs that are penning these responses are not really able to consult or poll all of their employees in just a day or two), are 100% in opposition to these policies, and we are actively working to see them overturned or ended. We are donating to the ACLU, providing free services to those affected (see Airbnb), and want everyone to know that we are NOT COOL with this. This has been the response from many high-profile companies, many of them from the tech space.

2 'We' (again the corporation), have a culture of openness, inclusiveness, tolerance and fair treatment towards all. We support all our employees regardless of race, ethnicity, religion, sexual orientation, etc.. We will extend direct services to our employees who may be impacted by these policy changes. This is sort of a toned down version of response 1, focusing more on their internal people and their families. It could be seen (and has been by some), as the more pragmatic CEO/corporate response, particularly for organizations that have business and dealings with the various arms of the Federal government. See Elon Musk/Tesla for a decent example of this approach.

3. Nothing publicly announced at all. This is actually the majority of organizations I would think. For every big tech company CEO who has issued a statement or a Tweetstorm condemning the recent events and policy changes, there are 100 if not more organizations who are not commenting on it at all, or at least not publicly. There a a million reasons to do/say nothing publicly as a CEO/organization, and saying nothing does not mean necessarily that the CEO/organization does not object or rebuke these new policies.

Wait, I just thought of a potential 4th response. The one where the CEO comes out openly and aggressively in support of the recent Executive Orders on immigration, placing him or herself in line with the new President an Administration. Note, a quick scan of headlines while drafting this post has resulted in zero examples of this actually happening. Doesn't mean it hasn't, but I have yet to find any CEO/organization, (at least a national brand), coming out in support of these policies.

I know what you might be saying, that this particular policy change and set of orders are SO egregious, so un-American, so divisive that there is no way, no person, no CEO, no organization could support them. In fact, they are such an affront to what we like to think makes America a great country that it really is not controversial at all to come out strongly against them. And you might be right be that.

Why think about these 'corporate' responses/stances to current event, particularly as and HR/Talent pro?

Because once the CEO of the organization takes a public stand on issues as divisive as these, it sets down a kind of organizational culture marker that will be just about impossible to ignore or alter in the future. When the CEO comes down hard in opposition (or support) of these kinds of flash point debates, and if he/she commits organizational resources (time, money, products, services), on one side or another, the message gets pretty clear, pretty fast.

And no matter what side of this (or the next big issue) that the CEO does come down on, (and one last reminder, I am not telling you what I think about this, or what you or your CEO should think), there is almost certainly going to be a cohort of stakeholders, (employees, customers, candidates), that are not going to see eye to eye with your CEO, and by extension, your organization.

And that might be fine by you, as and HR/Talent leader, to have this element of the organization's DNA and culture laid bare such that employees and candidates that find themselves in stark opposition to the accepted (or at least stated) views will naturally begin to self-select out. They either will resign, will start looking for another job, or decide not to apply in the first place. Either way, you have maybe saved yourself some time in trying to answer the 'Is he/she a 'fit' for the job here' question.

But that is not really the point, at least not the main point. The word 'divisive' implies that at least some people are on the other side of that divide from you. And I think we have to be very careful that we don't forget that. Because the next 'divisive' issue might not be so clear cut. It might not be so obvious which side your CEO and your organization should be on, (assuming both of those things matter). The next issue might have very cool-headed, rational, logical people on completely opposite sides. And should both of those kinds of people be welcome in your organization?

Lastly, and this is I swear the end of this (too long) post, you also as an HR leader should probably ask yourself this question:

Is a person's opinion on the current political debate of the day a valid, predictive, appropriate screening question for employment at your firm and whether they meet the criteria for the ever tricky idea of organizational 'fit'?

Have a great week. Be good to each other. 

VACATION REWIND: The smart leader's approach to dress codes (and any other policy)

NOTE: I am on vacation this week - please enjoy a replay of a piece from March of this year.

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The smart leader's approach to dress codes, (or any other policy)

Happy Spring!

It's Spring right, at least here in the USA, (and I suppose some other places as well, I was never all that great at geography). But with Spring comes the return (hopefully), of warmer weather and the shift to our 'summer' clothes - both for work and for not work.

And the first time Gabe from accounting or Marcia in customer service turns up to work wearing some cargo shorts or worse, you or your organization's leaders might be tempted to send one of those beloved 'all employees' emails from HR that run down the ins and outs of the official dress code, as you know, we don't want to really treat folks like adults, at least not at work.

But before you do send that email listing just what types of concert T-shirts are acceptable and which ones are not, I would encourage you to read this piece from ESPN.com, on how one organizational leader is wrestling with these same workplace policy issues as you are: Joe Maddon, (Chicago Cubs manager), on dress code: 'If you think you look hot, wear it.' 

Get past the title for a second and read the whole piece. Here is a snippet to prod you along:

Cubs manager Joe Maddon met with his “lead bulls” on Sunday to go over team rules as 11 players and their boss discussed everything from a dress code to kids in the clubhouse.

“The biggest topic of discussion was shorts or not on the road,” Maddon said after the meeting.

Maddon isn’t a stickler for a lot of written rules, instead preferring a common-sense approach. He believes players know the line not to cross. He used last year’s policies -- his first on the team -- as a guideline. They worked out pretty well.

“You have like a force field, not an actual fence. Guys know if they go past a certain point you might get stung a little bit, but you don’t have to see the fence there,” Maddon explained. “I like that.”

“Exercise common sense with all this stuff,” he said. “There are so much archaic stuff that baseball stands for. I’m here to manage the team, not make rules. I learned my lesson with that to not go nuts about it.”

Just about everything you need to know about dress codes or most other workplace rules right there. Treat folks like adults, let them know what is really important for the organization to be focusing on, (it isn't the dress code), and involve a larger group of leaders and influencers on the staff as you talk about expectations and whatever policies you have. Not only will they help you define the rules, they will likely help you self-enforce them as well.

It is actually really simple. Simple enough for even the Cubs to figure out.

Have a great day!