ORC Sightlines

March 2009

In this issue:

Sustaining Commitment to Diversity & Inclusion in Difficult Economic Times

For diversity professionals and business champions of diversity and inclusion, one of the challenges of today’s economic environment is maintaining a serious focus on diversity and inclusion when managers are distracted by crisis. Not surprisingly, this issue was one of the top concerns for members of the Global Diversity Forum (GDF) who gathered from around the US and Europe to meet in New York last month.

One of the strategies discussed was using the growing importance of Corporate Social Responsibility to bolster the case for investing in diversity management despite limited resources. CSR expert Philip Sack, a senior consultant at ORC, noted that companies are under increasing pressure, especially in Europe, by investors, non-governmental organizations, labor organizations, and employees to manage their businesses in a way that has a positive impact on society, especially in the realms of human rights, environmental protection, and labor rights. Nonetheless, while many companies include metrics of workforce diversity in their CSR reporting, few actually align their CSR and diversity efforts with one another and with business objectives. Speaker Ed Gadsden, former head of diversity for companies such as Texaco, Coca-Cola, and ADM, and other Forum members described how linking CSR and diversity to multicultural marketing, product development for diverse consumers, and philanthropy to local communities can increase the value of each of those activities to the business.

Other Forum members shared strategies for embedding diversity and inclusion into the culture of the organization so that the principles survive downsizing and budget cuts. One such key process is leadership assessment and development. Inclusive behaviors should be part of the leadership model used to evaluate and develop managers. Although the purse available for rewarding these behaviors has shrunk, non-monetary recognition is still a powerful tool.

One company noted that having a very lean diversity function can actually be an advantage in tough times, because there is no fat to trim. That organization, like many others, relies heavily on the diversity council, which is made up of line managers, to implement diversity plans. Another member added that it is working to “professionalize” its diversity council, to develop the members’ strategic and operational diversity capabilities. Several also agreed that effective metrics that demonstrate the returns generated by diversity and inclusion efforts were important to sustaining investment in this area. (Diversity metrics will be an area of continuing focus by ORC’s Global Equality, Diversity and Inclusion Networks in the coming months and the theme of the June 25th Global Diversity Forum meeting in London.)

For more information on the Global Diversity Forum, ORC’s US- and UK-based Equality, diversity, and inclusion networks, or ORC’s diversity consulting capabilities, contact Liz MacGillivray, +1-212-852-0406 or Deirdre Golden, +44 (0)20 7591 5600.

Multinationals Seek Cost Savings in Global Mobility Programs

Global mobility programs represent a major financial investment for multinational organizations, so it is no surprise that in this economic environment they are under considerable pressure to lower costs. Many clients and members of our North American Expatriate Management Roundtables have asked ORC about actions they might consider and about what other members are doing to cut costs. ORC recently conducted a survey of 147 companies to find out. Among the results:

All in all, global mobility managers are facing a tough task in the year ahead: maintaining programs while reducing unnecessary expenditures, and keeping employee morale positive.

ORC’s International Management Roundtables allow participants to share information and innovative approaches to managing international compensation and a global workforce. For more information, contact Tricia Danielsen, +1-212-852-0438.

Employers in the UAE Face Redundancies for the First Time

The economic downturn is forcing employers in all parts of the world to confront new and worrisome challenges. In the United Arab Emirates, businesses are facing the prospect of redundancies for the first time in recent history—arguably, for the first time ever. This means that many companies have no established procedures for redundancies, and many HR managers have never had to deal with them. Adding to the difficulty are laws that forbid firing an Emirati national unless he or she is in breach of contract and requiring that any expatriate employee laid off leave the country if he or she has not found another position within a month.

Not surprisingly, then, members of ORC’s UAE HR Network were eager to explore best practices for managing the legal and employee relations implications of redundancies at the group’s meeting in Dubai earlier this month.

The UAE government is considering possible changes in the immigration laws that will allow more time for expatriates to seek fresh employment before being forced to leave the country. In the meantime, however, managers are seeking alternatives to layoffs. One option is to institute a shorter working week with commensurate reductions in pay. UAE labor law permits this strategy, and most member companies that have tried it report positive feedback from employees who understand that the alternative might be losing their jobs.

Another option is perhaps unique to the Middle East, where 80 percent to 85 percent of the workforce in many parts of the region is made up of non-nationals. A number of companies at the UAE HR meeting and others surveyed by ORC are implementing an enforced unpaid extension, typically 60 to 90 days, to the required 30 days’ vacation. This measure is not as popular with employees because, in addition to being without pay for an extended period, there is no guarantee that they will be called back to work at the end of the period.

Where redundancies are unavoidable, “employer of choice” companies in the region are taking pains to mitigate as much as possible the impact on their employees by:

ORC member companies in the region are also taking steps to maintain the morale of the remaining workforce and retain key high performers. They are beefing up internal communications, clarifying career paths, and improving processes for identifying and developing high potentials: in short, they are doing their best to be “employers of choice” even in difficult economic times.

For more information on ORC’s UAE HR Network, contact John MacDonald in our Dubai office, +9714 339 7967.

Ledbetter Fair Pay Act Presages Changes to Come

The recently passed Lilly Ledbetter Fair Pay Act will make it easier for employees to make pay discrimination claims. Named for the woman whose failed lawsuit inspired Congress to amend the law, the Act provides that “an ‘unlawful employment practice’ occurs each time an employer issues a paycheck that has been impacted by a prior discriminatory pay decision, regardless of when the initial alleged discriminatory pay decision was made.”

Writing for Talent Management’s online journal, Nita Beecher, chair of ORC’s Employment Law & Litigation Group, explains that the Ledbetter Act is the first of a series of changes to employment laws and regulations expected from the Obama administration. It is the beginning, Beecher writes, of “a seismic shift in approach, a shift that began under the Bush administration with EEOC and the Office of Federal Contract Compliance Programs refocusing on systemic employer discrimination.”

The ORC Legal and Regulatory Change Seminar Series is a cost-effective way to keep your managers, HR business partners, equality and diversity specialists, and employment lawyers up-to- speed about how these changes can be expected to impact companies operating in the United States. Modules are available on overall employment law changes, on specifics of amendments to the ADA and FMLA, and on best practices for conducting internal investigations. For more information, contact Ms. Beecher at 212-852-0436 or visit http://www.orcworldwide.com/hr/edi/building.php.

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