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2007 - The Year in Reviews in Human Resources and a Look at 2008

Written by: Jennifer Loftus

Article Overview: A look through 2007 and what should we focus on in 2008 to make it the best year yet.

2007 - The Year in Reviews in Human Resources and a Look at 2008

The following are highlights of the biggest news items impacting human resources in 2007, brought to you from the research of Astron Solutions, as well as HR websites www.hrimmall.com and www.blr.com.

2007 Wrap Up

Wage and Hour Division Collects Record Back Wages

The U.S. Department of Labor's Wage and Hour Division (WHD) reported that it recouped more than $220 million in back wages for workers in fiscal year 2007, the highest amount ever. In fiscal year 2007, WHD recovered $220,613,703 for 341,624 workers. Since fiscal year 2000, WHD has recovered more than $1.25 billion for nearly two million workers. WHD says it has placed a major focus on bringing very large employers into compliance, noting that numerous employers have made multi-million dollar payments, in two instances to more than 20,000 workers. Earlier this year, WHD obtained the largest private-sector settlement in the agency's history.

Raises Not Keeping Pace With Cost of Living

Most pay raises for American workers are not covering the increase in cost of living. Meanwhile, most workers have no faith in the future of Social Security, according to a new American Payroll Association survey. Just under 37 percent of respondents say they have faith in Social Security while about 45 percent do not. Another 18 percent replied that they "Did not receive a pay raise." While these figures are not encouraging, they are favorable when compared to results of the 2006 "Getting Paid in America" survey, in which nearly 82 percent of respondents said that they did not receive pay increases to cover the increasing cost of living.

SEC Says Companies Should Improve Pay Disclosure

The Securities and Exchange Commission (SEC) says public companies still have room for improvement when it comes to disclosing how and why they make specific executive compensation decisions. "Since the new principles-based rules became effective in late 2006, public companies have provided their investors with the clearest and most complete disclosure ever regarding how much they pay their executives and directors," says John White, director of the SEC's Division of Corporation Finance. The SEC's reviews of the 350 companies are ongoing. Click here to obtain the complete report.

Talent Management Becoming Strategic Priority

In a recent survey, nearly three-quarters of business executives and HR professionals "strongly" or "very strongly" agreed that talent management is a strategic priority for their company. Yet only 57 percent of those companies have implemented formal plans to identify, grow, and retain talent according to the Human Capital Institute.

5 Highest and Lowest Paying Metro Areas

Average pay in the San Francisco metropolitan area was 19 percent above the national average in 2006, the highest among the 78 metropolitan areas studied by the Department of Labor's Bureau of Labor Statistics. By contrast, pay was lowest in the Brownsville, Texas, metropolitan area, where workers earned an average of 78 cents for every dollar earned by workers nationwide. For the report, the bureau calculated the pay--wages, salaries, commissions, and production bonuses--for a given metropolitan area relative to the nation as a whole. The calculation controls for differences among areas in occupational composition, establishment and occupational characteristics, and the fact that data are collected for areas at different times during the year.

The 5 metro areas with the highest and lowest pay follow:

5 Highest
Rank Metropolitan Area Pay Relative to National Average
1 San Francisco-Oakland-San Jose, CA 119
2 New York-Northern New Jersey-Long Island, NY-NJ-CT-PA 114
3 Salinas, CA 113
4 Boston-Worcester-Lawrence, MA-NH-ME-CT 112
5 Hartford, CT 112

5 Lowest
Rank Metropolitan Area Pay Relative to National Average
78 Brownsville-Harlingen-San Benito, TX 78
74 Corpus Christi, TX 87
74 Great Falls, MT 87
74 Johnstown, PA 87
74 Springfield, MO 87

Two Focuses for 2008

Focus One: Take the Lead

"HR people must not be timid. Go back to your workplace and ask yourself, 'What would I do today if I were really brave?'" That was Johnny Taylor, addressing attendees at the opening session of the Northeast Human Resource Association's (NEHRA) annual conference in Providence, Rhode Island. Taylor is immediate past chairman of the Society for Human Resource Management (SHRM) and now senior VP of HR for IAC/Interactive Corp. in Charlotte, North Carolina. Taylor listed four major challenges that HR will face in 2008: The war for talent, immigration, diversity and inclusion, and rising healthcare costs.

Focus Two: Talent Management Software

Highlights from the 2007 HR Technology Conference "Today's Technology Trends and Predictions," panel with Jason Corsello, VP, Knowledge Infusion; James Holincheck, VP, Gartner Group; and Lisa Rowan, program director, IDC.

Highlights included the following:

- "You need to think in terms getting to a 'talent system of record,' like you have an administrative system of record," Holincheck said. "It doesn't have to necessarily come from a single vendor, but there has to be a strategy for getting them to talk to each other."

- "I recently had an 'A Ha!' moment when I did some psychometric testing on myself," Rowan said. "The tools were very good. My point: think about better use of the tools you already have."

- "We're not even close to having an integrated suite," Corsello said. "We're at year three of a seven year cycle."

While the members of this panel were all cautious, they were united on one thing: Software as a service. SaaS has potential to be a true game changer. This is different than traditional software in that companies don't own their own copies of the software and they don't install it on their own machines. Instead, the program sits out on the web, where the same program is used by all of the provider's customers (similar to the way Google and Amazon.com work). This has tremendous implications for small and medium sized companies for whom the cost of installing one of these systems is daunting--if not completely out of reach. A SaaS system, if and when it finally arrives, could truly deliver on the promise of a high-powered system that would be affordable for all. It will never be cheap because so much of the cost is in the work of implementation.

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Article Tags: america survey, american payroll association, association survey, astron solutions, back wages, compensation decisions, department of labor, executive compensation, faith in the future, fiscal year, hr websites, keeping pace, respondents, securities and exchange commission, two million, u s department, u s department of labor, wage and hour, wage and hour division, whd



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