Workers Continue to Cheat on Timesheets

A new survey commissioned by The Workforce Institute at Kronos and conducted by Harris Interactive reveals that 21 percent of hourly workers have cheated on their timesheet to gain extra pay from their employer. The “Gaming the Clock” survey indicates that employers who use outdated workforce management methods are at risk of significant payroll inflation.

News Facts

• 21 percent of respondents who are compensated with an hourly wage admit to “gaming the clock” (cheating on their timesheets)
  • Of the total number of respondents who state that they game the clock, 69 percent admit to punching in earlier or punching out later than scheduled
  • 22 percent admit to adding additional time to their timesheet
  • 14 percent say that they don’t punch out for unpaid lunches or breaks
  • Five percent admit to having someone punch them in or out (“buddy punching”)
• 35 percent of respondents who receive an hourly wage stated that their employers use paper timesheets to keep track of employee time worked
  • According to a Nucleus Research report, organizations with manual time and attendance systems typically incur unnecessary payroll costs upwards of 1.2 percent of their total payroll costs due to inaccurate application of pay rules, as well as human errors. For example, an organization that has annual payroll costs of $50 million could save more than $600,000 per year if they automated the collection of employee time.¹
• Along with providing immediate cost savings by reducing time-consuming processes and costly payroll errors, an automated workforce management system can also empower organizations with the information they need to uncover significant labor cost savings. A recent Diagnostic Assessment analysis by Kronos of more than 19 months of timekeeping history for a manufacturer with approximately 6,800 employees uncovered more than $20 million in cost savings overall including $3.6 million in gaming the clock-type abuse.
• When researching the purchase of a workforce management solution, organizations should ask vendors about the potentially hidden costs of customization; whether the time and labor data is provided in real-time or in batch fashion; and how intuitive and easy to use the product is.

Here’s What Happens in Vegas…

As the travelogue part of Crisis Post continues, I thought I would get into the top 10 things I loved about Las Vegas, where I just attended the Reverse Merger Conference and stole a few extra days with the family.

1. My 7-year old son telling one of the conference attendees, “What happens in Vegas…well you know the rest.” Then later stumping me when he asked, “Dad, why does what happens in Vegas stay in Vegas?”

2. The great equalizer of a town, where four 20-somethings sharing a room for $89 enjoy it as much as the high rollers with their limos.

3. The ability to entertain clients and friends  in a fun, relaxing atmosphere.

4. The improved smoke removal devices that make the casino easier to breathe, if not easier to come away a winner.

5. The cruise ship atmosphere with great shows and restaurants at every turn.

6. The ability to go there with kids and all really have a great time.

7. The little pool at the Venetian where chaise lounges are waiting for you in the pool.

8. Posing with the President (he’s really tall), well, the wax one, at Madame Tussaud’s.

9. The slot machines at the airport. Oh yeah, and the great 7 minute ride from the strip to your plane.

10. Again, like London, however, just not great bagels and not great pizza. Guess I’m just a New York snob at times, sorry.

Great fun time and great business done. Thanks LV.

Top Law Firms Starting Associates On Time

The ABA Journal online has reported that almost all the top ten most profitable firms (as rated by the American Lawyer) are starting their new law school graduates’ employment on time in September. A number of other firms have delayed the start in order to keep costs down in an uncertain economy. Firms like Paul Weiss and Wachtell Lipton have not changed a thing and new grads have their usual one month off after the bar exam in late July before starting after Labor Day.

There are a few exceptions, one particularly surprising. Venerable firm Cravath Swaine & Moore, often considered a bellwether in associate compensation, has offered incoming lawyers $80,000 to take the year off. Also, Schulte Roth & Zabel has told new associates they are required to wait one year.

I am hearing that more and more firms are seeing signs of life in the transactional world that tends to drive a big part of the practices in these major firms. In fact, I’m told by headhunter friends that a number of firms are looking to hire M&A lawyers in anticipation of growth that is coming. That’s a good sign!

Advertisers Are Freeing Up Dollars for Trusted Marketing Buys

In another sign that businesses are freeing up advertising dollars to regain sales momentum, IT Business Edge has announced that they have set new records for Cost Per Lead (CPL) revenue in the three consecutive months of March, April and May of this year. IT Business Edge is a free professional community site providing over 650,000 business decision makers with up-to-the-minute analysis, collaborative tools, white papers and relevant templates that allows executives and IT professionals to easily gather information, make smart investments, and run their companies more efficiently.

“March, April and May have ended up being three of our top five months in the company history for CPL revenue, and we attribute this strong resurgence to tech advertisers coming back to the marketplace, even if somewhat cautiously,” said Phil Branon, president, IT Business Edge. “Based on our conversations, advertisers came back to IT Business Edge because they knew from experience that we represented an excellent investment of their marketing dollars. We have proven ourselves as a vehicle to reach engaged decision makers who control large IT budgets and to convert those users into potential sales opportunities for our IT vendor partners.”

Like many online publishing sites, IT Business Edge saw CPL revenue pull back in January and February as technology companies experienced a lack of visibility into their sales pipelines; the economy was in free fall and the banking system appeared headed for nationalization. It was during this time that IT Business Edge took advantage of the lull and aggressively moved forward to launch a new version of their site that added peer-to-peer collaboration and additional B2B tools to encourage strong user engagement.

“We saw an opportunity at the end of 2008 and the first months of this year to build IT Business Edge into a fully collaborative environment and take advantage of the slowdown by reaching out to new users,” continued Branon. “CPL revenue came storming back in March, with more than a 50 percent increase over February, and we feel our investment was a smart, strategic decision at a key time to better serve our readers and advertisers.”

As part of its service, IT Business Edge features expert analysis in blogs that cover a wide range of business issues and technology trends affecting large enterprises and SMBs, allowing users to cut through information clutter, identify strategies and assess relevance to their business needs. In addition, B2B-focused tools let users access and contribute to high-value business documents, track their community participation, and enjoy access to business IT-focused wikis, whitepaper libraries and a community of executives, directors and managers responsible for making IT decisions in their organizations. Vertical IT experts from the IT Business Edge editorial staff, along with analysts and consultants who have joined the IT Business Edge community, provide additional resources for site users, including downloadable templates, calculators and business process documents. IT Business Edge community editors expand and enhance these tools based on feedback from community members, creating an evolving environment where the community shapes the coverage and resources provided as much as the editors.

“We believe that business decision makers need perspective – from experts, from their peers, and from leading vendors – to make choices that will allow them to stay in front of the curve, and IT Business Edge provides the platform to deliver all those points of view,” continued Branon. “Our goal is to provide value to all of our stakeholders – IT decision makers and IT vendors.”

HealthSouth Shareholders Get Scrushy in Civil Court

Back in the early 2000s to defraud people out of $2.8 billion was quite a lot of money indeed. Now of course it pales in comparison to the $50 billion plus that Bernie Madoff has admitted to. But in the craziness of major accounting scandals at Enron, WorldCom, Tyco and yes HealthSouth, we learned that even big companies can pull off massive schemes to steal very large amounts of money from their companies for their own benefit, direct or indirect.

Richard Scrushy, then CEO of HealthSouth, was acquitted of criminal fraud charges in connection with the major accounting scandal at his company. But in a form of irony, he was jailed (and still sits there) for seven years for bribing then-Gov. Don Siegelman for a seat on a state health care policy board, according to the Birmingham Business Journal. He was taken from there to testify in his criminal fraud trial.

Shareholders did not give up and brought civil fraud charges against him. Much like in the OJ Simpson case, where the higher standards of proof in a criminal case did not receive a guilty verdit, the lower standards in civil charges did. A judge has now ordered Scrushy to pay $2.8 billion back to the shareholders, still a whopping amount.  By the way he had also paid the SEC $81 million to settle charges with them. The big question: will he simply declare bankruptcy or does he have this kind of money? Unclear. But let’s hope the HS shareholders at long last receive some justice for what was done to them.

New Financial Regulatory Structure: Are You Systemically Significant?

This is a phrase it appears we will be hearing a lot in the coming months. In the largest proposed overhaul of financial regulation since the 1930s, President Obama and his team have proposed an 88-page restructuring that does not address the financial markets (they’ve decided to leave that to regulatory changes rather than major change in approach) but does address how banks, major financial institutions and hedge funds will be overseen.

It seems to be the feeling of Treasury Sec. Tim Geithner and the Administration that the credit crisis which started in 2007 might have been prevented or the damage restricted if there had been better powers to regulate the large banks and brokerage firms. The proposal, still being reviewed, gives the Federal Reserve much more power to oversee institutions. Given that a number of the governors of the Fed are selected by the very banks being regulated, and the criticism leveled against their preparation for and response to the crisis, one wonders if this is where the new powers should lie, but that is the suggestion.

In addition, according to Marketwatch, an “eight-member, multi-agency financial services oversight council that would seek to identify potential risks with large financial institutions and problematic investment products.” It is not clear if that means they will oversee broker-dealers that are otherwise regulated by the SEC, and whether this means there will still be overlapping regulation that supposedly this process is supposed to streamline. The key is giving the new board power to take action where “systemically significant” companies are failing, similar to the powers currently in the hands of the FDIC with regard to savings and loans.

As more details emerge we can talk more about this. Obama introduced the plan with soaring rhetoric, noting,  “I have always been a strong believer in the power of the free market. I believe that our role is not to disparage wealth, but to expand its reach; not to stifle the market, but to strengthen its ability to unleash the creativity and innovation that still make this nation the envy of the world.” Let’s hope the rhetoric matches the fine print.

Social Media an Increasingly Important Tool in Keeping Employees Engaged During Tough Economic Times

Employers faced with reduced communication budgets and resources are turning to social media to keep their workforce engaged, according to a survey released today.

In its “Employee Engagement Survey,” the International Association of Business Communicators (IABC) Research Foundation teamed with Buck Consultants, an ACS company, to determine how organizations are communicating with employees to keep them engaged and productive. The survey includes responses from nearly 1,500 participants representing a broad industry and geographic base. The survey results are being released today at the annual IABC World Conference in San Francisco.

“Communicating for optimal employee engagement is always a timely topic, but even more so during challenging economic times,” said Robin McCasland, a director in Buck Consultants’ communication practice and 2009–2010 chair of IABC Research Foundation. “Our results represent opportunities for communicators to have greater influence in delivering messages that encourage employees to remain productive, and to understand how their work contributes toward achieving business priorities.”

Almost four-fifths (79 percent) of the respondents report that they use social media frequently to engage employees and foster productivity, outranking even email (75 percent). Company blogs are the most popular social media tool currently in use (47 percent), with discussion boards ranking the highest for future planned use (33 percent).

“It’s encouraging to see the rising popularity of social media in employee communication,” said Julie Freeman, ABC, APR, president of IABC. “Companies are moving away from the one-way communication model where they would send out information hoping people would read it. Using the various social media tools, companies can now engage employees in discussions and foster conversations between teams across geographic and other boundaries.”

Current use of social networking sites such as Twitter (21 percent), Yammer (20 percent), and Facebook (18 percent) is significant, but organizations are planning to use those tools even more in the future.

Other key survey findings include:

• More than half of the respondents (52 percent) report their communication budgets have decreased and 35 percent report their communication staff has been reduced over the past 12 months
• The most common reasons cited for communication budget and staff cuts are: the economic downturn (46 percent) and organizational mandates (42 percent)
• Forty-eight percent report their employee communication strategy has stayed the same despite the economic downturn
• The frequency of ongoing employee listening reflected an “all or nothing” approach, with 62 percent of respondents who regularly engage in employee listening activities such as surveys and focus groups, and 30 percent who rarely or never engage in these methods
• Fifty-six percent of top executives are not using social media at this time, and nearly half (46 percent) of organizations are not measuring social media’s effectiveness
• Almost six in 10 respondents (59 percent) think their company has a well-established internal or employer brand

Marketing ROI

Considering the impact from the auto industry meltdown, I thought it would be interesting to look at how current dealerships around the country are moving forward.  A new survey conducted by Foresight Research quantifies the automotive sales impact of print articles and print advertising. Then it compares print articles and print advertising influence to other forms of marketing communications used by auto buyers.

The study shows that the majority of vehicle buyers are influenced to some degree by print articles, and 45% are influenced to some degree by print advertising. 19% said print articles were a primary or secondary purchase influence, and 8% reported that print advertising was a primary or secondary influence.

“We also noted the influence by vehicle brand purchased and found that BMW, Cadillac, Acura, Lexus, Infiniti, Hyundai and Mazda lead the brands in terms of impact from print articles. Then we looked at the print advertising side and many of the same brands appear. The reason is that buyers are paying attention to both the articles and the ads,” says Steve Bruyn, CEO of Foresight Research.

So, what are the most influential publications? Consumer Reports and newspapers are widely influential but so are some of the automotive publications like – Car and Driver, Motor Trend, Automobile Magazine, Road and Track and Autoweek. “This study proves that print publications still play a role in this electronic era,” stated Bruyn.

The Foresight study also examines the messages delivered to buyers across all forms of communications to determine which channels are most effective at communicating each message. When communicating quality, commentary and reviews, pricing and value, safety ratings, fuel economy and customer satisfaction ratings – print articles and advertising score at or near the top.

Consumers Willing to Pay More for Innovation Despite Hard Times

Contrary to expected buying behavior, Retrevo® Pulse, a live report that tracks pricing and demand data for consumer electronics, indicates consumers are willing to pay higher prices for new and innovative products. Trends suggest companies that innovate and develop customer-centric products attract more buyers than companies that simply lower prices and maintain the status quo.

“We’ve seen prices successfully rise for leading edge products that meet customer’s needs,” says Retrevo CEO Vipin Jain. “Despite a 15% year-over-year decline in the overall demand for consumer electronics, there are companies that are innovating and succeeding in driving demand up while raising prices.”

The Retrevo Pulse shows higher Average Selling Prices (ASP) and demand for digital cameras and DVD/Blu-ray players driven primarily by new and innovative features. As standard definition DVD players have become a low-priced commodity, consumers purchase the newer Blu-ray technology with a corresponding higher price tag, raising the overall ASP for video disc players by more than 20%. More than a third of video disc players now shipping are Blu-ray players. Similarly, more than 50% of digital cameras shipping now have optical image stabilization and face recognition technology enabling a higher price, driving up ASPs for digital cameras by more than 10%.

The Retrevo Pulse also indicates that one of the hot categories last holiday season, Home Theater Systems, is seeing a decline in both demand and price. Even though the category has gone through a product refresh cycle, there have been no significant product developments, dissuading consumers from making a purchase, and less than 5% of home theater system products ship with integrated Blu-ray players.

“Today’s shoppers aren’t just looking for the lowest price,” says Vipin Jain, President & CEO of Retrevo. “They’re looking for long-lasting technology and they’re willing to spend more to acquire innovative products. To compete, manufacturers need to deliver new and improved versions of products that meet their customer’s needs, not just their pocketbooks.”

T. Boone Pickens Highlights U.S. Oil Dependence for Sixth Consecutive Month

This past week energy expert T. Boone Pickens provided his sixth consecutive monthly update on the level of United States’ oil importation.  Pickens said that based on the latest figures from the U.S. Department of Energy’s Energy Information Administration (EIA), the U.S. imported 65 percent of its oil, or 366 million barrels, in May 2009, sending approximately $21.6 billion, or $484,087 per minute, overseas to foreign governments.

“If you’ve opened a paper or turned on the news this week, the bankruptcy filing of General Motors has dominated the headlines,” said Pickens, architect of the Pickens Plan to reduce dependence on foreign oil. “While there were many mitigating factors that contributed to its demise, I can’t help but point out that GM, along with the rest of the U.S. automakers, failed to keep up with innovations widely adopted elsewhere across the globe that could help wean this country off its oil addiction. I hope that as the company restructures under the watchful eye of the U.S. government it will make serious investments in developing vehicles that run on fuels such as natural gas that are available in this country, in addition to the investment in electric cars. Our staggering dependence on foreign oil is responsible for more than two-thirds of our trade deficit, and it’s killing our economy and putting our national security at risk; the automakers need to take some responsibility for getting us to this crisis point and participate in the solution of this critical issue. “

For the first five months of this year, the U.S. has imported 1.874 billion barrels, after spending approximately $475 billion on imported oil in 2008.

Pickens continued, “My army of more than 1.5 million Americans understands the threat importing nearly 70 percent of oil has on our national security and economy. President Obama has continually said that he is committed to significantly reducing America’s dependence on foreign oil during his term. We cannot waste anymore time, we need true energy reform now. I am confident that we will see Congress tackle important legislation in the coming months addressing the energy crisis.

“It remains critical to track our progress as a country as we work to reduce the amount of oil we import. I will continue to highlight our foreign oil dependence number every month, and I hope that we soon see a significant reduction.”

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