Unemployment Benefits: A Disaster Waiting to Happen or Helpful?

Unemployment Benefits: A Disaster Waiting to Happen or Helpful?

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"Unemployment Benefits: A Disaster Waiting to Happen or Helpful?"

Recently, I overheard someone mention that they had eleven open positions but no applicants. The comment was made, "If it were not for the unemployment benefits, I might have a strong applicant pool to select a good fit for the position." I thought this was interesting enough to take it to Google and see what I could find. The opposing views are below.

In an article written by Cynthia Tucker "Unemployment benefits make people lazy? Not so", a study was performed. Economists at San Francisco Federal Reserve looked at those that are unemployed that are collecting benefits vs. those that are unemployed that are not eligible to receive those benefits. After the study was conducted at the end of 2009, it was found that those that were receiving benefits, on average, were unemployed for about 18.7 weeks. Those that were not receiving benefits, they were unemployed an average of 17.1 weeks. The conclusion in that article was that this may exist for a small percentage but is not true for most, and the unemployment benefits are still worth having for the good that they are doing for the majority.

In an article written by David Henderson "Unemployment Benefits: How Much Unemployment Do They Cause", his view was much different. He had a quote from an Obama Advisor, Larry Summers, 'Unemployment insurance also extends the time a person stays off the job. If unemployment insurance were eliminated, the unemployment rate would drop by more than half a percentage point, which means that the number of unemployed people would fall by about 750,000".

The food for thought is that we do not all have the answers, but I believe that HR Professionals can be agents of change. If you have any comments about this topic or creative ideas on how to get a better applicant pool for open positions, I would love to hear your insight. I will post some of the feedback anonymously in the July eNewsletter. Stay tuned.....

Unemployment Benefits - Cynthia Tucker Unemployment Benefits - David Henderson

The OFCCP: Compensation Crunch Already?

In a blog posted by DCI Consulting (Consulting Group out of Washington, DC), it was mentioned that AstraZeneca underpaid a female pharmaceutical sales specialist as compared to male counterparts at its Wayne, PA facility. The OFCCP has instructed the company to identify and allocate relief to the impacted employees including lost wages, interest, front pay, salary adjustments, fringe benefits, seniority, and all other employment benefits under the threat of canceling existing federal contracts and debarment from entering into future contracts. AstraZeneca says that statistical results by an independent expert show that there are no gender-based differences in any position at their workforce. The post is linked below if you would like to review.

OFCCP VS. AstraZeneca
June 2010 Edition
Newsletter Spotlight
Unemployment Benefits: A Disaster Waiting to Happen or Helpful?

"Best Practices in Compensation"

DBSquared is at it again! During the month of June, we will hold the webinar "Best Practices in Compensation Management". Our Principal Partners have put together a powerful presentation, and we hope that you will join us. This one hour webinar will offer you all of the information that you need to have a fair and defensible compensation structure at your organization. Our webinars are only offered to small, select groups so if you would like to attend, please access our website to sign-up. Space is limited, and it is first come, first serve. You can also register by calling (479.587.0151) or send an e-mail to megan.cherry@dbsquared.com with "Register" in the subject line. Three dates will be offered to attend. Don't wait!

Novartis Pahrmaceuticals Corporation

On May 17, 2010, Novartis Pharmaceuticals Corporation lost the second largest pending class-action sex discrimination case in history. A federal jury in New York reached a $3.36 million verdict. The case will impact 5,600 women at the company, and the plaintiffs' attorneys will press for company-wide pay-scale changes and reform of the Novartis's promotion and HR system.

The jury found that Novartis treated female employees unfairly by not promoting them as much, discriminating against workers who got pregnant, and for threatening a female drug sales representative after she reported to HR that she was raped by one of her customers.

What does this mean to other organizations? First and what should be obvious, if you are not sure how to handle a very sensitive situation, threatening your employees is NOT the answer. Second, if you do not have a compensation structure in place, there has never been a better time to implement tools that assist with compensation and classification. The Department of Labor is not letting up on this issue, and the prediction is that the cases in regard to compensation and sex discrimination will continue to increase.

To read more about the case, you can access the article "HR Hell at Novartis: Alleged Rape Victim Threatened With 'Disciplinary Action'"a> or "Jury Finds Sex Bias by Novartis, Supports Punitive Damages".