2015 CHRO Summit

March 6 - 7, 2015
Orlando, Florida

CHRO Summit Explores Health Care Future State, Highlights Corporate-Led Strategies for Increasing Skills and Employment Opportunities

HR Policy Chair Mirian Graddick-Weir, Executive Vice President, Human Resources, Merck & Co., Inc., set the stage for the ambitious agenda of this year's CHRO Summit, saying: "As we look at issues like the future of employment-based health care, we realize that the people in our position have probably never before in the history of corporate America carried such a high degree of responsibility on such decisive matters." American Express Company's Chief Human Resources Officer L. Kevin Cox, who serves as Chair of the American Health Policy Institute, along with Chief Human Resources Officer, Macy's, Inc. William S. Allen, who serves as Vice Chair of the Association's Health Care Policy Committee, led the nearly 300 HR Policy members in attendance in a discussion of the future of employer-sponsored health care, and provided a vision of how employers could remain involved in health care for their employees as the system continues to evolve under the Affordable Care Act. In addition, Executive Vice President, Global Strategy and Talent, ManpowerGroup Mara E. Swan, who chairs the Association's Talent Sustainability Initiative, facilitated a deep dive into the array of issues involved in the pressing income inequality and wage stagnation debate while discussing how member companies could share what corporate America is doing to address the disparities. She concluded, "This issue is not going away," and she suggested, "what is currently missing from the debate is the substantial work major companies are already doing and will be doing to attack the disparity by helping American workers attain the skills that are in demand that will enable them to share in the economic growth of the country."

Membership Will Collaborate to Transform U.S. System of Employer-Provided Health Care

During a lengthy session at the CHRO Summit regarding the future of employer-provided health care, there was strong agreement that existing marketplace solutions were inadequate and a major effort should be launched to bring consumers together with the health care supply chain to build a sustainable system.  Kicking off the session was William S. Allen, CHRO of Macy's, Inc. and Vice Chair of the Association's Health Care Policy Committee, who said it was "not going to be a series of presentations" but rather "an intervention." The session featured L. Kevin Cox, American Express CHRO and Chair of the American Healthcare Policy Institute, saying, "Employer-provided healthcare as we now know it is in critical condition, and for many of us is not expected to survive without a major transformation." Therefore, "we should accept the fact that its utility is coming to an end and focus on its replacement."  Having looked hard at all the data, he said, large employers "are largely out of bullets in trying to bring down health care costs" which means that "within the next five years, in fact, probably within the next three, employer-provided health care will no longer be affordable to a significant portion of the American workforce," a problem of "epic proportions."  Therefore, "spending a great deal of our resources trying to preserve this system for another four or five years is not a prudent course of action."  Mr. Cox and Mr. Allen laid out a vision for a health care Future State which was received very favorably by the attendees.  They were joined on the panel by Charles E. Columbus, Senior Vice President, CHRO for Kaiser Permanente and an Association Director, who welcomed "this exciting and much needed opportunity to envision a health care system that is affordable, accessible, and provides high quality value based services and outcomes."  Pointing out that the Association is a microcosm of the Fortune 500 whose membership includes both consumers and providers of health care services, "we have tremendous collective knowledge and experience as the employers who have provided the majority of coverage in this country.  And within our membership we also have the elements of the health care supply chain to lend expertise."  Association Executive Vice President Michele A. Carlin laid out the roadmap to achieve the leadership's vision of the Future State along with Colleen McHugh, Executive Vice President of the Health Care Policy Roundtable.  Further information will be distributed to Association members in the coming weeks.  Regarding whether the Association has the political and economic leverage to achieve its Future State vision, former member of Congress Rob Andrews, now Special Advisor to HR Policy Association, said, "I have a four word answer: twenty million covered lives.  That's the total number of lives covered by the members of HR Policy Association."  He continued, "But know this: if you do not understand the scope of your considerable political and economic leverage, and if you do not coalesce around an agenda to employ that leverage—if you do not decide what you are for—then you will lose control of your future. Someone else will call the shots for you and your employees."

Income Inequality Panel Urges Companies to Voice Role Employers Play in Promoting Economic Opportunity

Executive Vice President, Global Strategy and Talent, ManpowerGroup Mara E. Swan, who serves as Vice Chair of the Association and Chair of the Association's Talent Sustainability Initiative, led a panel and roundtable discussion on the pressing issue of income inequality and announced the Association would develop an initiative to help member companies build upon and communicate all they do to alleviate income disparities across the country.  In her remarks, she specifically drew attention to a critical disconnect between the hard and soft skills employers currently seek and America's reemergence as a leader in technology, innovation and productivity.  "That factor holds the key to the role we can play in the income inequality challenge," she said.  She said the development of a highly skilled, more engaged and prosperous workforce was at the core of the solution to wage stagnation.  To demonstrate the type of activities to be promoted, two HR Policy members shared the following about efforts already underway at their companies:

  • Kimberly S. Hauer, Vice President and Chief Human Resources Officer, Caterpillar, Inc.  Several years ago, Caterpillar, Inc. brought work back from Mexico, but it required skilled welders.  The company began working with the Department of Labor and the county school systems in North Carolina.  It also began partnering extensively with local high schools, focusing its efforts on opportunities for students to learn skilled trades.  Working with the State Assembly and Department of Labor, the company also established a certificate program to develop the workforce it needed.  Results followed.  "Nationally at Caterpillar, 13 percent of production workforce are women," Hauer explained.  "In North Carolina, we're now at 30 percent."  She also noted that Caterpillar, Inc. has been providing grants that have impacted 2,200 students and that the company has 800 employees who sponsor and mentor kids in the FIRST LEGO League program.  Together, those volunteers have put in about 100,000 volunteer hours.  "Importantly, we have found that exposing the kids to the workforce early is having an impact on them getting jobs, and investing in STEM programs has resulted in more of those students going into engineering careers."  She concluded, "We believe in the idea of advocating nationally and globally, but focusing locally is where we're seeing the most progress."
  • Gerard Q. Pierce Senior Vice President, Human Resources, Wegmans Food Markets, Inc.  One third of Wegmans Food Markets, Inc.s workforce is under 21, so the company makes efforts to ensure responsiveness to worker needs and schedules.  The company uses an online work schedule system that allows workers to view and trade shifts with fellow employees on their own.  It also rewards employees who demonstrate a commitment to the company's values with increasing pay and responsibilities.  As a result, the company has less than 20 percent turnover—an unusually low rate for its industry.  The company also supports the education of its employees.  It provides 1,400 four-year scholarships each year.  In addition, Wegmans is part of the Work Scholarship Connection, and partners with an agency that provides at risk kids with an advocate throughout high school.  In turn, Wegmans provides the students a job and a trusted adult mentor who is salaried.  The advocate and mentor stay with them through school and at home, establishing a strong foundation for further education and career growth.   "We give them job skills and resume training, and we give them a job after graduation when we can," Pierce explained.  The program also provides tutoring and college prep.  "Once employed, we have seen graduation rates go from the low forties to 96 percent," he proudly shared and added, "If they leave us, that's ok, too.  We know they'll still be our customers."
Association President and General Counsel Daniel V. Yager described how the income inequality debate is driving most of the workplace regulation agenda.  Ms. Swan underscored the need to build upon existing HR Policy skills and career programs, including jobipedia.org, a career advice website supported by 30 member companies, and WeHireAmerica.jobs, a clearing house of job opportunities at HR Policy member companies.  "We are clearly playing a leading role in the steps being taken to address income inequality," Mara Swan said of HR Policy's member companies.  Ultimately, she said, we need to "use the collaborative power of our membership to tell our story."

Association Chair, Vice Chair Examine State of the Association and the CHRO Profession

HR Policy Association Chair Mirian M. Graddick-Weir, Executive Vice President, Human Resources Merck & Co., Inc., and HR Policy Association Vice-Chair and Chair of the Center On Executive Compensation Richard R. Floersch, Executive Vice President, Chief Human Resources Officer, McDonald's Corporation, presented a highly favorable Association status update and announced a new Association initiative that will provide CHROs additional resources for succeeding in their challenging roles. They reported that membership in the Association is at an all-time high with 360 companies, employing about 20 million employees globally and almost 13 million in the United States—roughly 11 percent of the private sector workforce.  Ms. Graddick-Weir explained that the Association continues to play an "outsized role" in the public policy process but cautioned that challenges lay ahead: "In looking back over the history of human resource policy, rarely before have so many significant issues been in play at any one time."  In particular, she noted that during the past seven years, Congress and the administration have completely overhauled the health care sector of the U.S. economy and that the Obama administration will also continue to pursue a very aggressive regulatory agenda, which will likely become more intense in its final two years.  To facilitate individual success in the top human resources role, Ms.Graddick-Weir and Mr. Floersch also announced that the Association would create small professional networks based primarily on geography so that every CHRO in the Association will have the opportunity to share ideas and perspectives, as well as have access to peers to whom they can reach out to for advice, in an intimate, small group setting.  Ms. Graddick-Weir connected support for individual success to success of the Association as a whole, saying, "We are a community of CHROs who look out for one another and are dedicated to improving human resource policy and the profession.  Individually, we have limited capacity to change public opinion, influence policymakers, or drive the marketplace in a different direction. Collectively, we can accomplish all three of those objectives."

Political Experts Predict More of the Same Until 2016 Elections

The 2015 CHRO Summit featured a range of prominent political commentators who offered their take on the 114th Congress, health care policy and the upcoming 2016 elections.  As Kim Strassel of the Wall Street Journal noted bluntly, "If you were hoping that the elections changed something, you were fooling yourself."  Though some minor legislation could move as part of must-pass spending bills she said, "To the extent anything gets done or doesn't it will probably come in a crisis moment."  Others on the Friday morning panel, including Ron Fournier with National Journal and Mara Liasson with National Public Radio generally agreed with her assessment, noting that one such opportunity could come this summer if the Supreme Court rules against the Administration in the King vs. Burwell health care case.  The trouble is, at this stage, it is unclear how congressional Republicans and the Administration will handle the fallout if the court blocks federal subsidies to state exchanges.  Some on the panel said there is a slight possibility of agreement on an international trade bill, though labor interests could derail that.  As for the coming Presidential election season, the speakers were more upbeat.  Veteran campaign strategist Steve Schmidt , Vice Chair, Public Affairs of Edelman, argued that in contrast to the 2012 election, 2016 would be a “change” election, potentially opening the way for real policy changes.  On the Democratic side, Hillary Clinton is the presumptive nominee so far, but Schmidt cautioned that the "Democratic field is far less settled at this time than the national media would have you believe."  On the Republican side, he said the top-tier candidates today are Governors Jeb Bush, Scott Walker and Rick Perry, but that they will likely face serious challenges from the more ideological candidates to their right.  He predicted the 2016 election will likely be the most costly in U.S. history, but it offers both parties an opportunity to redefine themselves and will set the political stage for the next decade.

Saturday Morning Thought Leader: The China-America Paradox

In order to understand what is currently driving China's relationship with the rest of the world, "We have to begin to update our understanding of how Chinese people view themselves today," Evan Osnos, Washington Correspondent for The New Yorker and author of "Age of Ambition: Chasing Fortune, Truth, and Faith in the New China" advised a packed morning "Thought Leader" session.  Senior Vice President, Chief Human Resources and Communications Officer, Avery Dennison Corporation Anne Hill moderated the discussion with the author, who focused his remarks on the country's profound economic advancement and the emergence of an increasingly individualist Chinese citizenry.  Osnos pointed out: "There are moments today when China looks incredibly strong, and there are moments when it looks incredibly fragile."  As a result, the U.S. has "very complicated feelings" toward the country as it tries to figure out whether China is a partner or a rival.  To better understand that dynamic, Osnos suggested the need to understand the underlying forces currently at play on both a strategic and a personal level.  On a strategic level, he said China "sees itself in an asymmetric relationship with the world's powers."  It welcomes U.S. companies "to the extent they are useful" but will continue to use Chinese law, including domestic anti-trust laws, to dampen foreign competition.  Osnos also noted that, despite China's ambitious domestic infrastructure build-up, it does not wish—nor is it prepared—to take on the responsibilities that the world currently looks to the U.S. to bear for addressing global security concerns.  On a personal level, he explained that conformity is no longer the dominant fact of life in China.  "Under Mao, the Chinese were instructed 'hide your strength and bide your time.'  Today Xi Jinping is calling on people to 'pursue the Chinese dream,'" he related.  Young Chinese have internalized such messages from the government, and increasingly from marketing campaigns in China, in ways that could have profound political implications for the country still.  "Young people place their loyalties fundamentally in themselves," Osnos said.  "If an institution will help them do it, great, if not, that institution no longer matters."