NAHRMA Regional Report - October 2001

CANADA
Currently, CCHRA, the Canadian Council of Human Resources Associations, in partnership with Human Resources Development Canada, a department of the Canadian government, is in the fourth and final phase of developing national standards for the recognition of HR professionals in Canada through the designation CHRP (Certified Human Resources Professional). The national standards, assessment techniques and other relevant processes will be completed by March 2003. Details on the national standards project and the 11 member organisations are available on the CCHRA website, www.cchra-ccarh.ca.

MEXICO
The slump in Mexico’s exports, induced by lower US demand, is spilling over to domestic economic activity and has caused further downward revisions in growth outlook for this year. On a positive note, weaker domestic demand, fiscal discipline and the continued strength of the Peso have lowered inflationary expectations. Interest rates are now at a historic low.

The government recently unveiled an emergency plan to cushion the already sluggish economy from international market turmoil. The plan was clear about the need for tax reform, which has become even more crucial as the fallout from terrorist attacks on the US quickly spreads south of the border. A prolonged downturn in the US is likely to sink Mexico into recession, further straining weak public finances. The US buys 85% of Mexican exports.

Even before the attacks, economists were predicting a third round of budget cuts. In July, the economy contracted for the third time this year, while oil, which represents a third of government income, has dipped below the $18 a barrel established in the budget. Tax reform would not only reduce Mexico's exposure to crises, but would help pave the way to an investment rating by Standard & Poor the US rating agency, at a time when spooked investors are shying away from riskier emerging markets. The original bill aimed to increase tax collection from a dismal 11 to 13-14% of GDP by removing loopholes in income and value added tax that encouraged evasion. It proposed reducing both corporate and personal income tax to the same level, while removing VAT exemptions on food and medicine. Critics, however, saw it as a bid to increase taxes on the poor while reducing taxes for the richest. Their objections have become more poignant amid mounting job losses and the recent $12.5bn tax free acquisition of Banamex, a leading Mexican bank, by US financial giant, Citigroup. The timely purchase has fuelled support for a capital gains tax on stock market transactions, adding to myriad counter proposals from political parties and governors ranging from a 20% luxury tax on caviar and smoked salmon to decentralising federal tax collection.

USA
Religion
The American Civil Liberties Union (ACLU) estimates that there are more than 1500 different types of religious bodies in the United States, making it the most religiously diverse country in the world. And, though Christianity is still the most common US religion, more Americans are turning to Islam, Buddhism and Hinduism, among others. According to a survey on religion in the workplace by SHRM and the Tanenbaum Center for Interreligious Understanding, the high-tech industry represents the most religious diversity, and also offers more accommodations for religious needs compared to other industries. Increasing religious diversity is emerging as a workplace trend due to the changing patterns of immigration in the US over the past 30 years, globalisation and tight labour markets. There is also a greater need for awareness of religious issues in the workplace, as traditional Judeo-Christian religions are supplemented by the growth of Islam. Muslims may need different kinds of accommodations, including unique dress and grooming requirements, daily prayers and different holidays.

Culture
A new report from the Census Bureau estimates that in 2000 about 1 in 10 US residents (28.4 million people) were foreign-born, and Washington’s Population Reference Bureau forecasts that by 2030 the US may be 24% Hispanic and 12% Asian. US residents identifying themselves as Asian grew 48% between 1990 and 2000, and the number of Asians in the labour market grew nearly five times as fast as whites in the period from 1986 to 1996. The number of Hispanics in the workforce grew over four times as fast as whites. Over the next five years, Hispanics and Asians will comprise almost 20% of the workforce. According to studies conducted by the Harvard Immigration Project, one of five students is an immigrant, and 80% of those are students of colour. In two generations, nearly half the population will be people of colour and the children and grandchildren of today's immigrants. This is showing up even in places far from the country's borders: in Dodge City, Kansas, for example, more than 30% of schoolchildren are children of immigrants. As more different cultures enter US society, the need to develop cultural awareness, at work and elsewhere, may become paramount.

The focus of cultural diversity may also be shaped by the increasing number of foreign companies setting up shop across the US. The once ubiquitous textile mills in the South are increasingly being replaced by automobile manufacturing plants, including BMW, Honda, Mercedes-Benz, Nissan and Toyota. Small towns in Tennessee, Alabama and Mississippi are experiencing new life as these automakers bring in thousands of jobs with above average wages, attracting hundreds of related businesses. In a few short years, the image of poor southern textile workers has given way to technicians in white lab coats who are able to speak a few words of German or Japanese. An article in the Washington Post detailing the economic transformation of the South noted that the arrival of foreigners or even their anticipated arrival is changing the local culture. Seminars offered by local colleges and universities advise, among other things, toning down ‘touchy-feely’ southern effusiveness out of respect for the more formal Asian and German cultures.

All these changes, from immigrants coming to the US to foreign companies opening plants in small towns, may increase exposure to a wide variety of cultural practices.

Generation Y
The introduction of Generation Y into the workplace will raise the possibility of both intergenerational cooperation and intergenerational conflict. Generation Y are entering the workforce just as boomers begin to wind down their careers. During this overlap in tenure, knowledge and skills will need to be transferred through formal mentoring programmes and informal learning. In contrast to Generation Xers, Generation Y are less likely to chafe at this process, because they do not perceive boomers as competitors blocking them from advancement.

In addition, Generation Y may be more used to viewing older Americans as authority figures. According to the US Census Bureau, the number of children under 18 living in households headed by a grandparent climbed from 2.2m in 1970 to 3.9m in 1997. In 75% of the households in which grandparents and grandchildren live under the same roof, the grandparent(s) is head of the household. Employers can take advantage of the warm feelings between the two generations to facilitate the transfer of institutional knowledge the boomers will otherwise take with them when they retire.

Unfortunately, employers probably can’t expect the same peace between Generation Y and Generation X, at least initially. A recent article in The New York Times quoted several Generation Xers who expressed consternation that members of Generation Y did not want to perform entry-level assignments. Employers may be able to mitigate some of the tensions by pointing out to Xers that the stereotypes they are applying were, at one time, also levelled at them. While real differences between generations do exist, the displeasure with new recruits’ attitudes is an age-old phenomenon.

One note of caution, however: while generational conflict has always existed in the workplace, the arrival of Generation Y puts Generation X in a tenuous position. With two powerful groups on either side of them, the concerns and issues unique to Generation X may be overlooked or dismissed by employers seeking to satisfy their largest constituencies. And, if Generation Y do form strong bonds with the baby boomers, they may try to capitalise on these ties to leapfrog over Generation Xers into positions left vacant by retiring boomers.

Another challenge for employers will be helping to manage the high expectations of Generation Y if it is not possible to compensate or advance them at the pace they demand. College admissions officers and company recruiters are reporting that an increasing number of students are consulting their parents before making enrolment or job decisions (National Association of Colleges and Employers survey). This means employers have to appeal to two constituencies with sometimes very different concerns. Organisations will have to show that they are simultaneously entrepreneurial and stable; supportive, but not paternalistic; innovative, yet still focused on the basics.

Also, the proliferation of new educational options, including home schooling, online schools, charter schools, school vouchers and bilingual schools, to name a few, will make the hiring process more challenging. Employers used to evaluating candidates based on traditional schooling may find appraising the skills and knowledge of candidates with non-traditional educational backgrounds difficult. They will increasingly find themselves with resumes and applications that list degrees, certificates and coursework completed through unfamiliar universities and programmes. And, because many of these educational options are relatively new, employers will have no experience with previous graduates to use as a guide. As a result, we can expect more emphasis on skills-based testing and increased focus on the accreditation and certification of both individuals and educational programmes.

Technology and privacy
Balancing employees' demands for privacy and autonomy in the workplace with the need to ensure productivity and appropriate use of technology is proving difficult. In a Vault.com survey 90% of respondents admitted to visiting non-work-related websites during work hours. An American Management Association survey revealed that over 50% of employers monitor employees' Internet use, and 74% of respondents to a recent SHRM privacy survey always or sometimes monitor employee Internet use. Many are using the information they collect to make employment decisions.

Employers have a legitimate concern that allowing employees to use the Internet and company email system will result in unproductive time or, even worse, will create an environment in which a hostile work environment can flourish. Some employers have made controversial decisions to conduct company-wide audits of employees' online behaviour. For example, the New York Times, Xerox, Dow Chemicals and Honda of America have all received media attention for firing large numbers of employees for inappropriate use of the Internet or email.

However, technology development has quickly outpaced the privacy debate. For example, while we continue to mull over the ethics of Internet monitoring, more sophisticated tracking software emerges. At the same time, counter-measures proliferate, such as websites that allow Internet browsers to mask their activities. The Electronic Privacy Information Center (EPIC) website lists dozens of resources for privacy-concerned Internet-users, including ‘snoop proof email’, hard drive encryption programs, anonymous ‘remailers’ that make tracing a message difficult or impossible, and programs that ensure that disks or files are completely erased and cannot be recovered.

HR professionals are struggling with the dilemma presented by ever-evolving technology. In the main they are embracing technology and the innovations that have been spawned by the Internet. On the other hand, they are increasingly being called on to act as cyber-cops, enforcing restrictive policies. Just as privacy litigation has two sides - lawsuits about overly intrusive HR practices vs those concerning failure to protect data adequately - so does HR's involvement in privacy-related technology discussions. And taking responsibility for ensuring employees' confidential data remains private and secure means understanding the technical aspects of data security.

Even basic HR policies can have data security implications. For example, a recent article in Computerworld speculates that the highly publicised breach of Microsoft's corporate servers last year may have been the result of hackers breaking in through a telecommuter's computer. Home computers are typically much more vulnerable to security breaches than office-based computers, and may allow for inadvertent data corruption, via transmission of viruses, or may jeopardise data security via hackers. Telecommuting policies should factor in this threat, and data integrity should be ensured by addressing home computer security issues within any work-at-home policy.

Data integrity has also received renewed attention thanks to Safe Harbor, a voluntary programme that US companies can adhere to in order to certify that their data handling processes conform to the EU's Data Protection Directive. The Directive requires stringent control over any personal data collected from European citizens or residents, and prohibits the transfer of data to nations deemed to lack adequate privacy protections. To comply with the Directive, Safe Harbor requires businesses to notify individuals about the use of any personal data collected, and to allow them to opt out if the data will be disclosed to a third party. Such privacy initiatives increasingly involve HR professionals.

The economy
September’s US unemployment rate was 4.9%, but many economists are predicting that this could surge to 5.3% or higher in October because of the widespread layoffs that have already occurred: US businesses shed 199,000 jobs last month, the largest job loss in more than a decade. They are also predicting that the shock of the terrorist attack will push the country into a full-blown recession, the nation’s first downturn since the 1990-91 slump, which occurred in part because of the economic disruptions from skyrocketing oil prices after Iraq invaded Kuwait. Areas most affected include manufacturing, construction and services, which has suffered the biggest decline. This category includes temporary help agencies who have been hard hit by the slowing economy.

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