CANADA REPORT: CCHRA

Perspectives and Issues – June 2004 and CCHRA Activities

PERSPECTIVES AND ISSUES
According to economic statistics for the first quarter of 2004, Canada’s growth is on the upswing, domestic and external demand are vigorous and the worst fears about the higher exchange rate have not materialized. RBC Financial Group expects real growth of 3.2% this year.

In addition to synchronized growth in the G-7 countries, including the Japanese comeback, rapid industrialization in countries like China and India will exert upward pressure on the cost of raw materials. Given that its exports constitute over one-third of its GDP, the international situation is a very positive one for Canada.

Furthermore, the percentage of employed and the unemployment rate are both generally expected to improve.

Macroeconomic data - Promising performances in Canada
The latest composite leading indicators reflect poorer performance for the seven main OECD member countries, with the exception of Canada.

The Bank of Canada’s Business Outlook Survey indicates that businesses expect their sales to grow dynamically owing to the robust growth of the American economy and low interest rates. However, they consider the main risk to future sales growth to be tied to the ongoing adjustment to the rapid appreciation of the Canadian dollar in 2003, and more specifically to potential second-round effects. Lastly, wage increases are expected to be moderate and the Canadian dollar to be more stable over the next 12 months.

The job market and the GDP…
In June, the unemployment rate was pegged at 7.3%. Since August 2003, full-time employment has grown by 342,000 (+2.7%), while part-time employment has declined by 27,000 (-0.9%). In addition, the average weekly wage was $703.21, compared with $699.88 for the previous period.

Economic activity edged up slightly in April, as the GDP increased by 0.1% after an appreciable rise of 0.8 % in March. An upswing was noted in the mining and residential construction sectors and, accordingly, in financial and legal services as well. Wholesale trade also increased for a second consecutive month after a poor start in the first two months of the year.

In June 2004, consumers paid 2.5% more than they did in June 2003 for the goods and services included in the Consumer Price Index (CPI) basket. However, the 12-month increase in the All-items index, excluding energy, rose to 1.6%, compared with 1.3% in May. Gasoline prices were the main contributor to the 12-month increase in the CPI.

Data on the human resources profession:
Human resources managers have to plan for the next generation

One of the most important issues for human resources managers remains the aging of the population and the impact it will have on future human resources needs. According to a TD Bank survey, based on demographic data gathered by Statistics Canada, our annual population growth is expected to fall from 2.9% to 1.9% in the next 25 years. What’s more, the expected influx of 200,000 immigrants per year will definitely be insufficient to counter this trend, especially since Canada is far too slow in recognizing their professional qualifications.

The provinces of Ontario, Alberta and British Columbia, which are expected to create jobs more quickly than they can fill them from among their own populations, will have to compete to attract migrants.

For these reasons, knowledge management and continuing education are also key issues since they can help workers improve their qualifications and employers meet their need for skilled workers.

Furthermore, on June 1, 2004, Quebec was the first jurisdiction in North America to introduce new provisions to its Labour Standards Act to prevent psychological harassment in the workplace. Similar amendments have been proposed to the Canada Labour Code. As a result, human resources managers are also concerned about the policies and procedures to be implemented in order to manage situations of this kind.

CCHRA ACTIVITIES
The year 2004 is proving to be another eventful year for the Canadian Council of Human Resources Associations (CCHRA). At the June Board meeting, the council voted to admit the newly formed Human Resources Professionals Association of Newfoundland and Labrador (HRPNL) as the ninth member association. CCHRA’s membership now spans both coasts, from the Atlantic to the Pacific, with membership representation at 29,300, 14,838 of whom hold the CHRP designation.

A Code of Ethics was drafted by a national committee and has now been ratified by the CCHRA and its member associations. The next step will be to develop a consistent framework for its enforcement across the country.

Progress is also being made on our strategic plan in the following areas:

(1) National Forum:
The concept of a one-day seminar, bringing together senior professionals representing the major HR associations across the country, has attracted the interest of several potential sponsors. Plans are underway to hold the forum in the spring of 2005.

(2) Federal Government Affairs Committee:
Efforts are underway to recruit volunteers for this committee. Staff support will be provided initially by HRPAO’s Manager of Government Affairs.

(3) National Campaign to Support the CHRP Designation:
The Board has given the go-ahead to develop an RFP and then engage a marketing consulting firm to develop a national marketing plan for the CHRP.

These three areas will be the focus of strategic planning initiatives in 2004 – 06; work on research into best Canadian HR practices will be started in 2007 and on international representation in 2008.

CHRP Designation Update:
The Professional Standards Organization (PSO) was established to implement national standards of assessment. Its primary focus has been the development of the two exams required to achieve the designation. Both exams were offered in May 2004 and the results were much better than the first offering in September 2003. Some relevant statistical information is presented below.

Three hundred and twenty-three candidates wrote the National Knowledge Exam (NKE), 74.25% of whom passed. On the first NKE, we found that the key differentiating factors between those who passed and those who failed were: (1) educational level – candidates with at least some university education had higher pass rates and (2) years of HR experience – as a group, those with more than 3 years of HR experience had the highest pass rates. This trend was also noted in the May 2004 NKE. University graduates had a 76.8% pass rate overall, while community college graduates had a 73.6% pass rate. In all, 67.5% of exam writers had a university degree.

Two hundred and nine candidates wrote the Professional Practice Assessment (PPA) and 88% passed. The single most successful group of PPA exam writers was made up of individuals with five to nine years of HR experience. They recorded a 94% pass rate. No other variables were statistically significant. In this group, 74.6% of the exam writers had a bachelor’s or higher level university degree.

The requirement for a university degree has been the focus of considerable discussion at the CCHRA Board and in member associations (except for Quebec where the degree has been a requirement for quite some time). At the June CCHRA Board meeting, the Board passed a motion indicating that, starting in January 2011, anyone applying to write the PPA, the final exam before the CHRP can be awarded, must have a university degree.

The educational background of this year’s exam writers helped reinforce the Board’s resolve in this respect. The decision was made based on this and other relevant research, including analyses of newspaper want ads, Canadian labour market information, surveys conducted with HR professionals, and reviews of federal and provincial government HR staffing requirements. These data indicated that a significant number of employers are asking for a university degree along with a CHRP, and that a degree is required to advance to more senior levels in human resources. This trend was explained to members as being part of the global move towards higher standards in many professions and an acknowledgement of changing workplace requirements. Although change is always difficult, we are hopeful that the relatively long phase-in period, coupled with the large number of CHRP applicants who already have a university degree, will facilitate its acceptance.

Lastly, pursuant to NAHRMA bylaws, Canada will assume the leadership of the organization for the next two years. Current CCHRA treasurer Brian Foster will be Canada’s appointee as NAHRMA President for 2004 – 2006. Genevieve Fortier and Florent Francoeur will serve as the Canadian delegates and Florent Francoeur has been appointed as NAHRMA representative from Canada at WFPMA.

U.S.A. REPORT: SHRM

HRM Perspectives and Issues
The economic recovery in the U.S. appears more fragile than thought in recent months. The July 2004 Bureau of Labor Statistics reported that the unemployment rate held steady at 5.6%. Concurrently, the Department of Labor reported fewer jobs created in the month of June than originally projected, the weakest report since February 2004. Stock prices fell somewhat in reaction to this report, but economists remain optimistic about a steady recovery. There is a sense that companies are taking a wait and see approach to hiring and other investments pending results of the upcoming presidential elections.

SHRM recently released 2004 – 2005 Workplace Forecast: A Strategic Outlook report, for your reference the document is online here: http://www.shrm.org/trends/04forecast.asp. The report outlines key issues in demographics, economics, employment, international affairs, politics, society, and science and technology likely to have the greatest impact on the workplace in the next ten years. Of particular note in the report is continued significance of rising healthcare costs, which found its way into several sections of the report. This structural issue in the economy undercuts US competitiveness in the global marketplace, and could contribute to changing the dialogue on healthcare reform. In the meantime as businesses shift more of the expenses onto employees, increased strike actions may occur. (Schramm, 2004) SHRM recently conducted a survey that indicated while nearly all respondents offered some form of health care benefit to employees, 75% had changed their plan design in the past year in response to rising costs to employers. (Collison, 2004)

Association News
The first Global Professional in Human Resources (GPHR) certification exam was held the morning of March 21, 2004 in Bal Harbor, FL, in conjunction with the Annual SHRM Global Conference and Exposition. The level of participation was better than expected and SHRM is hopeful that many more will register for the second exam, which will be computer based and is scheduled for later this fall.

SHRM held its Annual Conference and Exposition in New Orleans, Louisiana, from June 27 – 30. The program was well attended and the speakers a success. SHRM is hopeful the strong attendance is an early indicator of an improved economy. The SHRM Board held its June meeting while in New Orleans and part of their agenda was dedicated to review and approval of recommendations on internationalization. SHRM is working to prepare its staff to better serve members from outside the U.S. An internal team has been created to help ensure that ownership for international activity spreads across the organization, to focus its efforts and resources more effectively. This in combination with the planned Board meeting adjunct to the Rio World Congress is encouraging for SHRM international efforts.

Preparations for the SHRM Board meeting planned for Rio de Janeiro continue. SHRM will lead a U.S. delegation to the event in addition to its Board, and will host a special networking reception for the members of the delegation. The World Congress has been continually marketed to the entire SHRM membership.

MEXICO REPORT: AMEDIRH
MEXICAN ECONOMIC, POLITIC AND LABOR INDICATORS 2004

MACROECONOMIC TRENDS
Mexican peso keeps loosing ground versus the US dollar, around 15% in comparison to 2003. Mexican peso will continue sliding while the economic, political and social instability in the country persist.

The economy expanded at a 3.7% pace in the first quarter, and the country’s Finance Secretariat in June, raised its growth forecast for this year to 4% from 3.5%

POLITICAL TRENDS
For more than a year, and after keeping the nation in prolonged suspense, first lady Martha Sahagun summoned reporters and announced that she would nos accept nor seek her party’s nomination for president in 2006, giving with this, a break to the political pressure put under the President.

SOCIAL TRENDS
Mexican society went out to the streets or demonstrate wearing white clothes on June 28th
its demands to the local and federal governments for security and new rules for punish kidnapping. Starting to demonstrate with this movement, the social force and power that until that day has never joined forces in Mexico.

UNEMPLOYMENT
Mexico is experiencing its longest stretch of rising production since President Vicente Fox took office in December 2000.

Six months of increasing industrial production has not yet translated into job growth. The economy is growing, but it’s not generating many jobs, the real buying power of the consumer is not increasing, therefore economy continues under pressure.

HUMAN RESOURCES ISSUES
Minimal Increases, at all levels have been linked to productivity.

Human Resources areas are much more involved in seeking for new compensation strategies linking productivity with cost production.

At least until September 2004, no reform of the Mexican Labor Law is expected.

AMEDIRH MEMBERSHIP
- Slightly increase of new membership since May 2004 but maintaining with brand new services the 2003 associates number.

- The 2004 Annual Exposition held on may 18-19, 2004 with a complete and different image, was an economical success for AMEDIRH, in terms of assistance and exhibitors with a slightly small exhibition area.

- Newly organize 75 top Human Resources executive group to promote betterrelationships among the HR community and create activities towards improvement of HR Management Practices launched by AMEDIRH’s Executive Council on June 2004.

ADMINISTRATION
- As a result of the Editorial Committee formed in January to assure format and content of Proyeccion Humana Magazine and web site, AMEDIRH has received good comments from the HR community and membership.

- Second Best Practices Edition to be held on December 2004 with the participation of more than 20 well known companies.

- Certification Program starting up with a well recognized education institution support for the first stage.

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