NAHRMA UPDATE

The NAHRMA Board has held several teleconferences since meeting in Los Angeles, California, on March 20, 2007 during the SHRM Global Forum Conference and Exposition.

Immigration Survey
NAHRMA member countries participated in a survey that was originally conceptualized to focus on immigration issues; subsequently it was broadened to include issues related to recruiting and retaining of local and foreign talent. A final report covering results from Canada and the US will be available by December 2007. HR professionals from Mexico were invited to participate however due to the low number of required responses their data will not be included in the final report.

Country Reports

 

I. CANADA

Economic Outlook

Canadian economy still going strong!

Despite the troubled housing market in the United States and steady growth of the loonie, the Canadian economy is still going strong. In the second quarter of 2007, the real GDP rose by 0.8%, up from 3.7% in the first quarter. This growth is mainly due to increased consumer spending, investment and exports. It remains to be seen whether this trend will continue since the OECD and some major Canadian financial institutions predict a year-end growth rate of 2.6%. Nonetheless, this would place Canada well ahead of its neighbour to the South, where growth is expected to be only 1.9%.

Unemployment: remains at its 33-year low

According to statistics released in September 2007, the unemployment rate remained unchanged at its 33-year low of 6.0%. Interestingly, employment growth is particularly strong among older workers. Since the start of the year, employment growth has brought total gains for people aged 55 and over to 4.6%.

Source: Statistics Canada, Labour Force Survey,The Daily, September 7, 2007

Lastly, average weekly earnings rose in the first semester of 2007, climbing to $769.43 in June. The year-to-date growth, calculated as the average of the first six months of 2007 compared with the average of the same six months in 2006, was 3.1%.

Federal elections remain on the horizon
Even though the minority Conservative government has managed to serve 20 months of its term, its position is still precarious. With a weak minority, it is unlikely that it will be able to survive the tabling of its next budget scheduled for early 2008. As well, Prime Minister Stephen Harper will announce his new priorities in October, which could spark an election if the opposition parties decide to introduce a non-confidence motion.

Canadian Council of Human Resource Associations (CCHRA) Activities:

Move of CCHRA offices to Ottawa
As a result of CCHRA’s Strategic Planning last fall, it was determined that to enable its mission of being the national voice on the enhancement and promotion of the human resources profession across Canada and internationally, CCHRA needed a presence in the nation’s capital. As of July 2007, CCHRA has moved its office from Toronto to downtown
Ottawa. The new address is: 150 Metcalfe Street, Suite 603, Ottawa, Ontario K2P 1P1.

New Chief Executive Officer

Lynn Palmer, MBA, CHRP was named Chief Executive Officer in May 2007 following a distinguished career in both the public and private sectors, most recently as a Vice President, Human Resources for a large national organization. Her experience in both line and staff functions throughout her career with allow Canada and the CCHRA to continue to
evolve and ensure that our designation maintains its relevance and that the CHRP continues to be the symbol of excellence in human resources management.

Lynn and her team will continue to work with the provincial associations to deliver on the CCHRA’s vision, enhance the benefit of the CHRP designation and promote the profession.

Research
Canada has been involved in two significant pieces of international research. The first is the study by SHRM on the recruitment, hiring and retention of citizen and foreign national workers in Canada. The second is currently under way with the WFPMA and the Boston Consulting Group on identifying the most important HR topics for the next 15 years. Both
studies benefited from successful participation rates.

Enhancement of Required Professional Capabilities (RPCs)TM
As part of a process designed to ensure the relevancy of the certification process and content, a two year process is concluding this fall to renew the RPCsTM that the CHRP designation and testing process is based on.

Sponsored by the Professional Standards Organization which oversees the updating of professional standards to ensure validity over time, the effort was the result of a two year process resulting from focus groups that were held across the country to identify new and emerging trends and areas of focus, followed by an in depth questionnaire and quantitative
survey process. Over 2,250 HR professionals contributed to the research from all across the country.

National Forum
CCHRA will host its third National Forum in Ottawa on March 25 and 26, 2008. The session, which is an invitation-only event will focus on immigration and feature senior HR leaders and policy and decision makers from across the country.

CHRP designation Update
Since national professional standards and standard certification was introduced in 2003, the CHRP designation has become the symbol of excellence in Canada for human resource management. Exam writers in 2007 are at the highest levels ever, increasing by 25% over 2006 levels and we expect to have over 18,000 CHRP’s by year end.

2. MEXICO

Macroeconomic trends

For the second semester of the year, inflation is one of the subjects that Mexican companies are putting more attention on. 2007, started with increases in the prices of the wheat and sugar derived from supply stock; and will continue with new increases on bread, gasoline and petroleum derivates, that for sure will have an impact on wage increases which have been maintained since June 2006 between 4 and 5% against an expected inflation rate located at the beginning of the year between 3.5 and 4%. Members of AMEDIRH do not perceive a problem of exchange instability, since the predominant opinion is that the dollar will remain between $11.10 and $11.20 pesos in the second semester of 2007; and between 11.20 and 11.40 pesos in first of 2008.

In the opinion of our community, the main factor that could obstruct the rate of economic activity in the next months is the deceleration of the American economy, followed by political reform and insecurity.

Political trends
“Today, our country faces enormous challenges, but we are convinced that it also has the potential to overcome them, as before. This will be possible if Mexicans manage to come to an agreement and make the right decisions.” With these, words President Calderon is trying to convince people that his government has pledged to use the funds obtained from the tax reform to invest in the country’s most pressing needs, particularly now that government has an instrument for charging taxes to prevent tax evasion. At the same time, the president listed the measures implemented to help commerce. These include the quick start-up System for firms to speed up the paperwork required for new projects and the program to support small and medium businesses, which includes a guaranteed fund of three billion pesos to offer credit under preferential conditions.

Employment
The Presidential Decree to create jobs and to establish solid bases for the creation of employment over the next years was established in January 2007 to meet the key demand for Mexicans. Unfortunately this program, has not delivered the expected results. With the tax reform authorized starting in January 2008 as an obligation no authorized social prevention as a reimbursable expense. Students and freelance professionals will be asked to be paid by companies as any other worker and not only as a monthly help. This measure will affect corporations’ headcount budgets.

Social trends
Government is proposing a results-based budget to increase the effectiveness, quality and social impact of programs. It is reviewing the operating rules of government programs to avoid delays, particularly in public works, bidding and purchases and the delivery of funds to the states. It is also reinforcing gender equity as a central criterion in all government programs and, fourth, it is taking steps to guarantee austerity. For next year, the administration plans to save 10 billion pesos in federal government’s operating and administrative expenses, in addition to the billions saved in the 2007 tax year. Close collaboration and coordination between government and civil society is essential to effectively solve the social problems that prevent the development of our nation.

AMEDIRH Activities
Board of Directors
Our new president, Luis Garcia Orozco has been an excellent support for all AMEDIRH activities since January 2007. New ideas and products have been delivered with the support of the board of directors. The board has met monthly since January this year. We are starting a new age according to human resources directors who have returned to our Association in search of nformation, procedures and government contacts which could help them in their day-to-day activities.

Membership
AMEDIRH has found new ways to contact medium and small companies interested on our services and at least 100 new members have joined. National Associations around Mexico have contacted us, asking for support on how to gather human resources executives and what kind of services to deliver in order to create representations in small towns. Monthly breakfast meetings are held for new members.

Annual Conference
This year AMEDIRH commemorated its 60th anniversary with the Human Resources Congress held on 11-12 September at the World Trade Center in Mexico City with participants from the private and public sector of the country, particularly from the Central and North regions of Mexico.

The event featured high calibre speakers, attendees provided excellent feedback commenting on the unexpectedly and high quality of the educational program and the presentations. The congress exhibition attracted 24 sponsors including 103 exhibit booths. Total event  participation surpassed over 1,000 attendees.

To commemorate AMEDIRH’s anniversary, also a special compilation of key strategies in HR “The 50 Key Plays in Human Resources” will be available early in November 2007.

Other activities

Last year, the Board created five working committees to address different areas of HR. These committees meet monthly with AMEDIRH members and they are well attended. This is a new benefit for AMEDIRH members allowing them to network with their peers and share problems and solutions to everyday challenges in a controlled environment. In October 2007, AMEDIRH will create two additional committees.

AMEDIRH has launched a new logo. The process to change the logo included focus groups that helped to define what image could reflect the current status of the organization.

AMEDIRH has been working with the government’s legislative body on tax reforms. The association is also currently working toward participation in the labor legislative reforms.

 

3. USA

US macroeconomic data

Many labor market analysts and economists note the similarities of the mortgage crisis and resulting job losses to the dot-com bust of the late 1990s. The job losses and hit to investor confidence then was enough to send the US economy into a shallow recession. However, the problem was exacerbated by the Sept. 11 terrorist attacks. After those attacks, the airline industry cut approximately 100,000 jobs.

The recent decline in housing prices coupled with the ensuing mortgage problems has resulted in the loss of approximately 1 million jobs in the construction industries. Still, the labor market has held steady throughout the United States, with the unemployment rate hovering around 4.6 percent.

The Federal Open Market Committee decided onSeptember 18th to lower its target for the federal funds rate 50 basis points to 4-3/4 percent. In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 5-1/4 percent. Issues to watch:

• Economic growth was moderate during the first half of the year, but tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. This action was intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.

• Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

• Developments in financial markets since the Committee’s last regular meeting have increased the uncertainty surrounding the economic outlook. The Committee will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

The current SHRM/Rutgers LINE® survey indicates that manufacturing hiring will be much weaker in September 2007 than it was in September 2006. Within the much larger service sector, September 2007 growth will be slightly stronger than it was in September 2006. The August 2007 responses from survey participants reveal that compared with a year ago,
new hire compensation is dropping slightly within both the manufacturing and service sectors. The number of vacant positions that employers are actively trying to fill is rising less rapidly within the exempt and nonexempt manufacturing sector. In the service sector, the number of vacant positions has risen sharply within the exempt sector but dropped slightly for nonexempt positions compared with August 2006. Compared with a year ago, recruiting difficulty has dropped in both sectors, with a particularly substantial decrease in the service sector.

The LINE index is an economic indicator that identifies early economic trends and changes in the national job market by surveying human resource executives at manufacturing and service-sector firms. The indicator reports on four employment measures: job expectations,
job vacancies, new-hire compensation and recruitment difficulty. The LINE “net increasing index” is calculated by taking the percentage increasing minus the percentage decreasing.

The US Department of Labor's From Bureau of Labor Statistics reports that in August 2007 total payroll employment was essentially unchanged (-4,000) at 138.0 million, seasonally adjusted. This followed little job growth in June (+69,000) and July (+68,000), as revised. In August, employment continued to fall in manufacturing (-46,000, for a total fall of -215,000 over the past year) and construction (-22,000); local government education also lost jobs (- 31,000).

Productivity and costs
The Bureau also reported revised productivity data (as measured by output per hour of all persons) on September 7th for the second quarter of 2007. The seasonally adjusted annual rates of productivity change in the second quarter were:
• 3.5 percent in the business sector and
• 2.6 percent in the nonfarm business sector.

In both sectors, the second quarter productivity gains were larger than the preliminary estimates reported on August 7. In manufacturing, the revised productivity changes in the second quarter were:
• 1.8 percent in manufacturing,
• 4.7 percent in durable goods manufacturing, and
• -1.4 percent in nondurable goods manufacturing.


HR trends
The deadline arrived for most US employers to post the new Federal minimum wage increases that were recently signed into law by President George W. Bush. All workplaces subject to the Fair Labor Standards Act's minimum wage provisions are required by law to display the new rates in a conspicuous location from July 24, 2007 — the date of the first of three incremental increases in the Federal wage standard.

The US Department of Labor has created a poster that explains the new minimum wage law to employees. Copies of the poster are available online at: http://www.dol.gov/esa/regs/compliance/posters/flsa.htm and can be downloaded directly from the Labor Department’s website. This is the first increase in the Federal minimum wage since 1997. The new rate of $7.25 per hour will be phased in over 26 months according to the following timetable:
•First increase - $5.85 per hour, effective on July 24, 2007
•Second increase - $6.55 per hour, one year after the first increase (July 24, 2008)
•Third increase - $7.25 per hour, two years after the first increase (July 24, 2009)

SHRM activities
SHRM announced that China Miner Gorman will serve as the Society’s new Chief Operating Officer (COO). Gorman, who has extensive leadership, HR, international and business strategy development experience, began her tenure with SHRM on August 28th 2007.

China’s experience in the human resources field expands over a 25 year period. She was previously the President of DBM, North America, a human resource management solutions consulting firm, where she was responsible for DBM’s business in the United States and Canada. Prior to DBM, she was President of Lee Hecht Harrison (LHH), a global HR
resources and outplacement company. While at LHH, China helped to establish the company’s first global strategy and to improve the organization’s operational efficiency and financial results. She has completed post-graduate work in organizational development at the National Lewis University. She has traveled the world speaking to business, professional and corporate groups on a variety of HR-related topics. She is also a frequent speaker to women’s professional groups on the topics of leadership and change management. She currently serves on the Boards of the Chicago-based Council for Adult and Experiential Learning and Adventure/Unlimited headquartered in Colorado.

SHRM is collaborating with associations in the Canadian provinces to provide programming to compliment existing offerings. A delegation of four SHRM staff and Board members recently attended the CIPD Annual Conference and Exhibition held September 18-20th in Harrogate, UK. The program was excellent and it was good to connect with our friends from CIPD.

SHRM Strategy Conference
The SHRM Strategy Conference planned for Tampa, Florida, October 10-12, 2007 was sold out. Keynote speakers included Marshall Goldsmith, Dr. Roch Parayre, Pankaj Ghemawat, Regina Herzlinger and Michael Abrashoff.