In the first of Personnel Today‘s new Global HR series, looking at what UK HR professionals can learn from their peers around the world, we turn the spotlight on North America.
You don’t hear many transatlantic HR-related jokes, but New Jersey-based HR director Guy Pedelini has one to offer.
“We say: if you’re going to be made redundant, then try and get a move to Europe before it happens,” he quips.
That’s because, he says, there is much less protection for employees in the US compared with the UK. For instance, in the US, employers are not legally obliged to offer written contracts or severance pay.
“But most employers in the US do have some kind of severance pay plan for employees worked out on a length of service basis,” he adds.
Having held a number of senior international HR roles, including his present job as worldwide director of HR at healthcare marketing agency McCann Healthcare Worldwide, Pedelini is well-positioned to give a view on the relative merits of the HR profession on both sides of the Atlantic.
One key difference he highlights is that while employers in the UK are still coming to terms with the implications of recent legislation around age and disability discrimination in the workplace, in the US, affirmative action against discrimination has been around for “20 to 30 years”.
Another disparity is that HR professionals and employees in general Stateside earn better salaries for comparable jobs. Salary-checker website Salary.com, for example, states the average pay for an HR manager in Chicago ranges from $76,000 to $100,000 (about £45,000 to £60,000), while the average pay for an autonomous HR director is in the region of $134,000 to $192,000 (about £80,000 to £115,000).
“The US has much bigger buying power when it comes to attracting talent,” he says. “I’ve been involved in recruiting engineers from the UK, and we were able to offer them a considerable pay rise from their UK wage, which still did not match what their peers were earning in the US.”
But attracting and retaining talent still remains a major issue for US HR professionals at present, according to Pedelini, who says the credit crunch is forcing employers to focus on ensuring they have the key skills required to see them out of the current slump and beyond.
He says there is a concern among US employers that they face a demographic timebomb as workers from the baby-boom generation prepare for retirement – taking with them valuable knowledge and experience.
Pedelini reports a trend towards employers offering older workers flexible working arrangements and part-time roles to keep them at work longer. While at the other end of the age range, dealing with the new generation of employees, who tend to have different expectations and ideas about career loyalty, is also the cause of headaches for many US HR professionals.
“How to blend them in and motivate them is an issue,” he adds.
At the National Human Resources Association (NHRA), an umbrella organisation for local HR membership bodies, manager Sue Murphy adds performance management to the list of US HR priorities. “Companies are doing more with less, so hanging onto non-performers is not an option,” she says.
The pay of senior management is also high on the NHRA’s agenda. “Executive compensation has got as outrageous as the salaries enjoyed by some athletes and actors, and has faced increased scrutiny over the past 10 years,” adds Murphy.
She believes UK workers have a better work-life balance than their US counterparts, who “typically start off with only two weeks vacation leave, 10 federal holidays and up to one week’s sick time.”
The perennial debate over whether the HR director should sit on the board seems to have been raging as long in the US as is has in the UK. Murphy says in the bulk of US organisations today the HR function is no longer seen as the place for “administrative folks”, with many reporting directly to the CEO or general manager. But it is still a minority that sit of the board of directors, mainly in larger companies.
While the foremost HR membership body in the US, the Society for Human Resource Management (SHRM), offers a Professional Human Resource (PHR) certificate and Senior Professional Human Resource (SPHR) qualification, Pedelini says there isn’t as much of an onus on US HR professionals to gain an industry standard as there is with their UK counterparts and the CIPD qualifications.
He says HR professionals in the US are just as likely to have a law degree or MBA – reflecting the contemporary expectation that HR must have a good understanding of the business as whole.
Pedelini says there are currently a significant number of “mid-level HR people who have come from large organisations” who are out of work in the US. These, he says, are the HR professionals who have not grasped that HR today must make itself “business critical” rather than remain an ancillary function.
However, he believes in general there are more HR professionals involved in the running of the business in the US than in the UK. On the downside, he says fewer HR people in the US, and Americans in general, are aware of important socio-economic factors affecting the workplace, such as how a new political party coming into power will affect labour relations.
To the north in Canada, professional standards manager for the Canadian Council of Human Resources Associations, Cheryl Lamerson, says her country’s close proximity to the US – “we’re the mouse sleeping next to the elephant” – means Canadian HR professionals face similar issues to those in the US.
She reports pay for HR professionals differs across the nine provinces within Canada, with an average salary for an HR manager in Ontario being around $70,000 Canadian dollars (about £38,000), while HR directors typically earn $20,000-$30,000 Canadian dollars (about £11,000-£16,000) more.
To the west, Ian Cook, director of research and learning at the British Columbia Human Resources Management Association, says there are greater levels of union representation in some sectors of the province’s workforce – forestry, hospitality and mining – than currently exist in the UK.
Edinburgh-born Cook, who moved to Vancouver five years ago after holding a number of HR and training roles in the UK, says with 95% of British Columbia’s companies being small or medium-sized, HR does have “a challenge to be taken seriously.”
He says the idea of HR enabling line managers to coach and mentor staff is something he admires about management in the UK, and is an approach he is trying to promote in the province of British Columbia.
But he feels the UK has a lot to learn about British Columbia’s approach to work-life balance.
Cook adds: “There’s a brilliant entrepreneurial spirit in Vancouver, especially in the tech sector, where working from home or around other commitments is the norm.
“It’s not about working less, it’s about working smarter, and we do it better than anywhere I’ve seen.”
Key employment law differences UK v US
- While every UK employee is entitled to a written contract of employment, in the US they are not.
- US workers are employed “at will’, meaning an employer can bring the employment to an end whenever they want with no notice. UK employees work in a ‘for cause’ environment, meaning once an employee is beyond their qualifying period, an employer can only get rid of them for a cause – such as performance, misconduct or redundancy.
- Work councils don’t exist in the US, whereas in the UK there is an expectation employers take important issues – such as redundancy – to the workforce.
Source: Martin Hopkins, partner, Eversheds
Statutory holiday entitlement
Employees are not entitled by federal or state law to any vacation – paid or unpaid. However, the vast majority of employers provide some vacation time.
The Family and Medical Leave Act (FLMA) grants mothers and fathers up to 12 weeks of unpaid leave to care for a newborn or adopted child. A variety of US states also provide additional leave entitlements.
There is a federal minimum wage of $7.25 (about £4.40) per hour. Individual states have established a higher minimum wage – for example, in California it is $8 (about £4.86) per hour.
Redundancy is known in the US as ‘reduction in force’. Companies are not required to give employees any payment on the termination of their employment due to a reduction in force. Where a company employs more than 100 people and the reduction in force will affect 50 or more full-time employees, the company must give the employees at least 60 days notice of termination
Statutory sick pay
Current federal and state law does not require employers to pay employees, but federal legislation known as the Healthy Families Act is currently being considered.
Over the rest of 2009, the Global HR series will examine how UK HR compares to the profession in Europe, the Australia/Pacific region, Asia, Russia, the Middle East and India.