2003 in review

Canadian HR Reporter's year-end review searched the archives to put 2003 in perspective. To find out more about the year's headlines, click on "Advanced Search" and enter the article number listed.

Hand-wringing over labour shortages

With baby boomers starting to retire and skilled talent scarce in many sectors, Canada’s pending labour crisis has been a hot business topic.

In some cases, sector-wide strategies are being drafted and phased retirement has become a popular topic. The government of New Brunswick okayed one such program this summer which will, it hopes, keep nurses at work longer (Sept. 21, article #2737).

A common theme in many sectors and regions is the growing dependence on immigrant workers. The year began with a report from Statistics Canada that revealed just how important immigrant workers have become and, as the baby boom generation retires, how the need to attract foreign workers will increase.

In the last decade, nearly 70 per cent of the growth in the labour force was accounted for by newcomers who arrived in the 1990s. By 2011, new immigrants are expected to account for almost all labour force growth, reported Statistics Canada (March 10, article #2390).

However, the federal government came under fire in the spring for creating rules for immigration that make it more difficult for skilled workers to get into the country. Ottawa originally said it was comfortable with the process but eventually backed down in the fall, easing the requirements for workers to get into the country (May 5, article #2510 and Oct. 6, article #2760).

In June, the City of Toronto said it will fight federal immigration policies that seek to settle immigrant workers more evenly across the country. In recent years, more than 40 per cent of all immigrants have settled in the Toronto area (Aug. 11, article #2667).

However, American academic Peter Cappelli and Canadian author and demographic expert David Foot independently maintain reports about an impending labour shortage are incorrect. There’s even evidence that boomers’ children will create a labour surplus.

“It is exactly the opposite of the perceived wisdom that is out there,” said Foot (Oct. 6, article #2756).

HR Outsourcing — Jury’s still out

Outsourcing remained a popular topic for debate among HR professionals looking to play a more strategic role in their organizations. While some look at outsourcing small pieces of their HR operations, and have done so for years, in April BMO signed a 10-year $750 million deal with Exult Inc. to outsource almost half of its HR function including payroll and benefits administration, HR call centre management, employee records and other technology-driven administrative functions.

“Our agreement with Exult will give us the freedom to focus on the strategic management of human resources while continuing to provide leading HR administrative services,” said Rose Patten, executive vice-president, human resources at BMO (June 2, article #2557).

Also last spring, HR outsourcing and consulting firm Hewitt Associates bought out long-standing payroll provider Cyborg Worldwide, giving Hewitt a more complete HR business process outsourcing operation.

The deals came roughly two years after CIBC completed its landmark HR outsourcing deal with EDS. Reflecting on the lessons learned during those two years, Hugh MacDonald, vice-president strategic alliance management, explained to Canadian HR Reporter why CIBC had gone the outsourcing route.

When HR professionals are working with business leaders, they don’t want to be talking about HR administration, he said. They want to be talking about which HR strategies, projects and initiatives are required to help the business achieve its goals.

“Who wants to talk to a business leader about how well payroll is running. Nobody should be talking about it. My job is to make HR administration as boring as possible,” he said (June 16, article #2609). CIBC was pleased enough with its outsourcing arrangement that in November, it signed a three-year, $92.5 million extension of its deal with EDS.

While outsourcing advocates told Canadian HR Reporter in September that anywhere from 50 to 70 per cent of all HR could and should be outsourced, the practice still has its skeptics.

Monica Belcourt, author, academic and president of the Human Resources Professionals Association of Ontario, said the evidence on outsourcing is not conclusive.

She said savings from outsourcing range from zero to 40 per cent. The average savings is 15 per cent and about one-half of organizations say they have met cost-saving objectives. About 40 per cent say they have ended up with higher costs than expected. “People are finding it more expensive to manage the outsourcing arrangement than they expected,” said Belcourt (Sept. 22, article #2736).

And RBC chief financial officer, Peter Currie, made it clear Royal Bank won’t be outsourcing its HR any time soon. “I don’t like the idea of outsourcing. I think it is an adoption of this mentality that these activities are nothing more than sweatshop-scale operations and I think that is wrong, especially human resources. If you are going to outsource something like your recruiting, how silly is that? Your recruiting is probably one of the most important things you do as a company, and you outsource it to someone who is also recruiting for a widget manufacturer and a gizmo distributor. Give me a break,” he said (Oct. 6, article #2781).

Federal public sector gets HR overhaul

Ottawa introduced the Public Sector Modernization Act to reduce the red tape involved in hiring and promoting people within the federal public service (Feb. 6, article #2320). Management style is also being revisited across the board, as leadership ranks within the bureaucracy continue to be trained in the ways of modern comptrollership, a home-grown philosophy that would have managers on all levels share risk-taking and the stewardship of public goods (April 7, article #2450).

But with fresh stories of mismanagement and out-of-control spending still making headlines throughout the year, then Treasury Board President Lucienne Robillard dampened expectations by wondering out loud if reform went too far, too fast. If managers have been given greater authority, she said in an interview with Canadian HR Reporter (Nov. 3, article #2801), “did we really go too fast and too far without putting in the mechanisms and parameters that we need?” If the goal is to have a less command-and-control type system, there first has to be good HR management to make sure staff can function in that system, she said. “It is the basics that perhaps we forgot.”

Meanwhile, the response among the rank and file to stories of malfeasance has been a growing call for whistle-blower protection. For the last few years, the Treasury Board’s answer to that demand has been the Public Service Integrity Office, an internal disclosure office that investigates civil servants’ complaints of mismanagement and ethical lapses ( Aug. 11, articles #2682 and #2685). But with just 100 cases reported since April 2002, even the public service integrity commissioner agrees the creation of his office isn’t enough. Without a law to protect whistle-blowers from retaliation, he said, “I don’t know if I’d go to the (integrity) office myself.”

Firms count the cost of health

The passage into law of the so-called “corporate killing bill” was perhaps the most significant workplace safety development in 2003. The law was long in coming, but now, corporations can be found criminally liable for the acts of their representatives that endanger the workforce. Further, anyone directing work can be held responsible for not taking reasonable steps to ensure worker safety (July 14, #2641).

It remains to be seen whether the law will bring down the number of workplace fatalities. Canada and Italy are tied with the worst workplace death records among nations belonging to the Organization for Economic Co-operation and Development.

Kevin Flaherty, executive director of the Alberta Workers’ Health Centre, a non-profit group based in Edmonton, said about the bill: “If we had to send a couple of people like that to jail, even for a little while, I think it sends a big message because it’s such a violation of their own culture. If you’re a petty criminal, you know you’re probably going to get caught eventually. But when you’re a corporate executive or a business owner, it’s a lot harder to look your colleagues in the eye when you’ve been sent to the big house” (April 7, article #2467).

As with physical health, employees’ mental health continues to gain as a business concern, as organizations crunch the numbers and realize the workplace costs. Depression has become the second-leading cause of disability, next to heart disease. In addition to better intervention, employers are looking at job-related causes. As are governments: psychological harassment will be outlawed in Quebec as of June (Oct. 6, article #2757) and Alberta has made changes to the Occupational Health and Safety Code to require a response plan to workplace violence (posted online Nov. 14, article #2825). And in the wake of a coroner’s investigation into a 2002 workplace shooting in Kamloops, the British Columbia government brought in violence prevention programs that would mandate, among other things, annual performance reviews (posted online Sept. 3, article #2700).

The year saw significant changes to workers’ compensation regimes in a number of jurisdictions. Two provinces, Nova Scotia and Alberta, have followed Manitoba in awarding compensation to firefighters who develop cancer (May 19, article #2530). Research has shown firefighters are more likely to develop cancers of the brain, bladder and kidney. Labour leaders have argued that workers in other occupations where there are known associations with various cancers deserve similar protections.

And in Nova Scotia, a compensation cap for chronic pain was struck down by the Supreme Court of Canada as discriminatory (Nov. 3, article #2803). Legal experts say the principles used by the Supreme Court to expand the rights of workers to claim benefits in Nova Scotia, could be used in other jurisdictions to similarly challenge limits on compensation benefits for other injuries and illnesses, including chronic stress.

National standards for CHRP

This was the year Canada finally got a national professional HR designation, the Certified Human Resources Professional, the CHRP.

The Canadian Council of Human Resources Associations (CCHRA), which represents more than 22,000 human resource professionals across Canada, had been working toward the creation of national standards for the designation for almost 10 years. By March all of CCHRA’s member associations had begun to transition to the new standards (posted online Feb. 6, article #2322).

Though HR association executives hailed the national CHRP as a major step forward for the profession, there were rumblings of discontent about changes to CHRP requirements, emanating mainly from Ontario.

First in February, members of the Human Resources Professionals Association of Ontario (HRPAO) voted to make a university degree a requirement for the designation by 2011. With the change almost certain to mean fewer HR students for their institutions, colleges vigorously protested the change, charging it was bad news for the profession. Gerard Mercer, dean of the school of business at Oakville-based Sheridan College, called the change academic elitism. “They’re saying an arts degree in dance is better than a three-year diploma in HR,” he said. College representatives called for a degree or equivalent combination of education and experience so that college graduates would still be entitled to the designation (April 7, article #2449).

Then over the summer it became clear some HRPAO members were unhappy about recertification requirements for the professional designation. Beginning in 2006, CHRP holders must either write a three-hour exam or complete and document a requisite amount of professional development. Local chapter presidents said they were getting complaints from members who were unhappy with the process, more than the concept of recertification, which was new for Ontario members.

HRPAO said disgruntled members are a small minority and most of the inquiries the association fielded were matters of clarification. Outside of Ontario, where recertification is mostly the rule, members have taken the process in stride, said Anne Charette, CCHRA president, (Sept. 8, article #2715). Still, CCHRA did make minor changes to the requirements in September (Nov. 17, article #2864).

Also in September, students wrote the first CHRP national knowledge exam — soon to be a prerequisite for all CHRP candidates — and some exam-takers were clearly unhappy. They felt the exam was unfair and that they were misled about what to expect. CCHRA admitted that for some students, those from Ontario for example, the marks were below expectations, but the exam was fundamentally sound. It is not supposed to be easy, said Charette. There should be some failures or it becomes impossible to set a high standard for the profession (Dec. 1, article #2872).

E.I. surplus a bone of contention

The feds managed, for one more year, to avoid addressing the issue of Employment Insurance surplus. The surplus has reached $43.8 billion this year, well beyond the $15 billion Auditor General Sheila Fraser said is needed to cover the costs of EI. She has frequently protested Ottawa’s practice of funnelling the surplus into general revenues instead of holding the fund in a separate account.

Employers groups want a major reduction in premiums. (Premiums have declined every year since 1994, when they were $3.07 per $100 of insurable earnings, to today’s rate of $1.98.)

On the other side of the fence, unions and workers have been turning to the courts to try to force the government to loosen the purse strings (Sept. 8, article #2724). In Quebec, a coalition of unions recently lost a lawsuit in which they claimed the surplus belonged to workers and employers who pay into the fund. Undeterred, Montreal firefighter Steven St-Jacques has launched a class action suit to recoup what he calls “illegal” EI premiums (posted online Dec. 2, article #2846).