Human resources.

• Position: Industry Outlook - Discussion

Utah's human resources professionals are proving their worth as companies face mounting issues such as healthcare changes, undocumented worker challenges and compliance issues. Our human resources and staffing experts discussed the challenges and successes they have experienced as they face these and other complex issues.

[ILLUSTRATION OMITTED]

We'd like to give a special thank you to David Cherrington, professor of organizational leadership at Brigham Young University, for moderating the discussion and to Holland & Hart for hosting the event.

PARTICIPANTS:

Back Row;

Randy Price, Big-D Construction;

David Cherrington, BYU;

Dusty Fenwick, KLAS Enterprises;

Tera Sunder, Nelson Laboratories;

Roger Tsai, Holland & Hart;

Chris Thomas, Intrepid;

Michael King, USANA Health Sciences;

Brian Lee, Performance Progression

Front Row:

Lisa Meiling, Sorenson Development;

Clark Cotterell, Management Recruiters;

Peggy Stone, Academy Mortgage Corporation;

Dalynn Jones, Employer Solutions Group;

Sharon Roux, The Summit Group;

Monica Whalen, The Employers Council;

Brad Fagersgren, ISI

There are some incredible issues that HR is going to have to deal with in respect to entitlement programs, Social Security, workers' compensation and so forth. What is your perspective on how this is going to impact human resource management?

[ILLUSTRATION OMITTED]

FENWICK: Funding the entitlement programs has shifted slowly toward the corporate sector. We used to be able to make sure our ducks were in a row--take, for example, unemployment. We could make sure that we never had any unemployment costs outside of our regular rates, and nowadays we are hard put to not have to pay for individuals' unemployment, and we see that with a lot of areas.

PRICE: As entitlement programs get cut, we'll see a workforce that will continue to age, and the opportunities for individuals to retire will diminish. We'll see people working longer. We already see it in construction. The average age of a construction worker is about 45 right now and it's continuing to go up, and those people are not leaving the workforce.

FENWICK: Which is also going to hit healthcare; it's going to hit workers' compensation.

The Social Security Administration is saying that the current program is not sustainable. What are your thoughts?

LEE: First of all, I never believed it was going to last this long. I don't know what the solution is, but I don't think long-term social funding is the right answer. People are going to have to find a way to save for their own retirement plan, for their own future, because waiting for the government to do it has not worked.

Even in the early days when we had defined pension plans and so forth, people would just assume that everything was going to be taken care of when they retired, and I saw a lot of discouragement when they found out what's really there.

The same thing is true of Social Security. People assume that it's just going to take care of them, and when they find out what the benefits are like, they find out that's not true. So there has to be another solution that we can pursue personally and maybe even in business to help enhance that.

ROUX: We've added to the problem recently because of the temporary cuts in the employee's portion of that contribution. Employees are paying 2 percent less, the employer's portion is staying the same, but at the time when we say we can't fund it, we've cut back the money going into it. There's some talk now that that will continue beyond 2011. So we'll see what happens there.

Within my own employee population, I thought people might take that 2 percent and increase their 401(k) contributions. Two people did it--and one of them was me. I thought that was interesting.

We want to have the lower contribution, we want lower taxes, but we want that benefit to be there and we're not saving on our own for it either. So that's just compounding the problem.

FENWICK: And it's never going to change until the rhetoric changes, where politicians are not promising that everybody will be taken care of anymore. It perpetuates the idea that, "Oh, I'll be taken care of somehow. Somehow they'll find a way." At some point there is going to be the time where everybody jumps up and says, "We've got to make a change now." Nobody wants to hit that point while they are currently in power because it's going to be very painful at that transition point.

But it starts with the rhetoric, and we've got to educate our employees and say, "Hey, you might be told this by your elected officials, but here is the reality and here is what you need to start doing." Less on the recommendation side and more on the--I wouldn't say mandatory side, but you are going to be faced with some situations like this if you don't start taking care of yourself now.

COTTERELL: I held a meeting about two months ago with all my employees, prompted in part because some had decreased their contributions to our 401(k), and I actually had one or two people who had a loan out against their 401(k). So I held a meeting about what retirement is like and what it's going to cost. I think people are surprised when they actually do the research, if they want to maintain the standard of living they have now and what that will mean 20 or 30 or 40 years down the road, how much they need to be contributing--not just to a 401(k), but also if they have children that plan to go to school with 529s or other investments.

I don't plan on Social Security and I encourage my employees to not bank on that as well. And I think George Bush may not sound as crazy as he did a few years ago about the privatization of Social Security. If you are going to be putting money in from your paycheck, you might as well have some control over it, instead of just funding other people's retirements that we will never see. We've got to take control of it.

SUNDER: We do a lot of education, but the reality is that people are having really hard times. And if their spouse loses a job, it's not about when I retire. It's about, I don't want to lose my house. It's about, I want to put food on the table. So it is a great dream for a lot of people to be able to retire, but it's just that right now.

Especially some of the younger people. I've got one kid who says, "I just finished my MBA and I spent $72,000 on it." And he wants us to double his salary because he paid that much money for this MBA that he has no experience in--so kind of setting the tone for him to understand that your investment in your education is over your lifetime. It will and should pay back, but who-ever told you as soon as you finished your MBA you were going to be worth double what you make today was selling you a bill of goods. You are still doing the same job you did for me yesterday. I don't pay for master's degrees. I pay for contribution.

I hear people in my offices daily who are really, really struggling. They are trying really hard and it's...