2017 Washington Policy Conference

September 6-7, 2017
Washington, DC

Chief Human Resource Officers Convene in Washington to Discuss the Future of Work in Uncertain Political Times

HR Policy Chair Mirian Graddick-Weir, Executive Vice President, Human Resources for Merck & Co., Inc., kicked off the first Washington Policy Conference of the Trump era saying, "We have never been in a period when the tension created for our companies by the political landscape has been higher."  The program, which included appearances by Labor Secretary Alex Acosta, Rep. Bradley Byrne (R-AL), and former Sen. Kelly Ayotte (R-NH), bore out Ms. Graddick-Weir's point, highlighting challenges at all levels of government facing employers in health care, executive compensation, immigration, workplace regulations, and other policy arenas.  Meanwhile, developments in technology have raised serious questions about the future of the American workforce.  Secretary Acosta highlighted the need to prepare the workforce for such disruption, stating, "Our education system needs to be reformed to teach skills that are demanded by the modern workplace."

Key Policymakers Kick Off 2017 Washington Policy Conference

This year's Washington Policy Conference featured three keynote speakers highly engaged in policy issues of importance to the Association.  Former Senator Kelly Ayotte (R-NH) noted, "The less that happens in Washington, the more you're going to have to play in the states.  Some of it will be good for you, some will create a patchwork.  Ultimately, more will be required of business leaders."  She also explored the case for bipartisanship in Washington, observing that once the reconciliation process ends this fall, the Senate will have to work across party lines in order to cross the 60-vote threshold.  House Workforce Protections Subcommittee Chair Bradley Byrne (R-AL) spoke on the need to update the labor and employment law framework in order to match new realities about the economy and the workplace.  According to Byrne, meeting the challenges underlined by the advent of artificial intelligence and the gig economy "involves not just workforce training.  It includes reforming the labor laws to meet the challenges of tomorrow... Our policy in America is stuck in an old mold that doesn't work anymore."  Labor Secretary Alex Acosta capped off the keynote session by articulating the Trump administration's strategy to help reform the workforce, striking a hopeful tone in saying, "Workforce education is a bipartisan issue here in Washington and around the country."

  

Health Care, State/Local Activities Dominate Policy Deep Dive

Following riveting presentations by Washington policymakers on the challenges ahead, HR Policy members and staff took a closer look at these issues and more in a policy "deep dive" segment moderated by Association President & CEO Dan Yager.  In what was a lively discussion, Mr. Yager led the panel in an examination of new and pressing items, including "the shift of major policymaking to the states and localities" and the health care policy landscape sans a replacement for the Affordable Care Act.

  • Teri Plummer McClure, Chief Human Resources Officer at United Parcel Service, Inc. and Chair of the HR Policy State and Local Activity Committee, focused on the myriad of varying measures being passed outside the beltway.  With regard to paid leave, Ms. McClure noted, "Most of us have taken steps to implement procedures that allow for more paid leave and greater flexibility.  In many instances, the leave we're giving is more than what the states require.  But these state laws are very inconsistent—whether the leave can be carried over, for example.  From an ERISA standpoint, is there an ability for preemption in this area.  Can federal law preempt in these areas?"

  • Cheryl Johnson, Chief Human Resources Officer at Caterpillar Inc. and Chair of the Jobipedia Steering Committee, spoke on the importance of Jobipedia, the Association's workforce development centerpiece, in the midst of the many significant changes underway, saying, "The broader challenge for all of us is how we prepare the workforce for the changing tech landscape... this starts with getting people into the workforce in the first place."

  • Tevi Troy, Chief Executive Officer of the American Health Policy Institute, mapped out the road ahead with regard to health care policy.  As single-payer policy options develop, Troy said, "We are looking at regulatory reform, which is the main pathway that the administration has open right now.  We want to make sure that ERISA doesn't get caught up in this.  If the administration moves to a more state-based approach, we need to maintain these protections and expand them."

  • E.R. Anderson, HR Policy's Vice President of Communications and Public Affairs, spoke about the temperature on the Hill regarding a number of different issues as well as the Association's State and Local Committee activities.  "The key," she said on the latter issue, "is to strengthen numbers going into state capitals... we have to influence policy as it's taking shape.  And we stand out because of you and your experiences."

  • Mark Wilson, Chief Economist and Vice President, Health and Employment Policy for the Association, explored the various possible scenarios regarding health care reform, specifically single-payer, and the implications of the developments and changes—or lack thereof—to the health care system.

  • Tim Bartl, President & CEO of the Center On Executive Compensation, led the conference in examining trends at the state and local level as well as executive compensation issues, including a look at how the composition of the SEC will influence pay ratio developments going forward.



Panel Explores How New Metrics Tool Can Help in Rebound From Low Exec Pay Vote; Coming Push for Simplification

A highly engaging panel moderated by Pam Kimmet, Chief Human Resources Officer at Cardinal Health and Chair of the Center On Executive Compensation, looked at trends in executive compensation policy in Europe as indicators of what may arrive in the states.  The panel also explored the role that design and disclosure changes can play in rebounding from a low say on pay vote and gave a live demonstration of the Center-developed Incentive Plan Analytics Calculator (IPACsm), the Equilar tool which provides a means for linking performance metrics and total shareholder return.

  • Pam Kimmet, in setting up the discussion, noted the high level of concern among CHROs about executive compensation and that the topic is not going to quiet down any time soon as certain investors intensify their focus.  "These issues," she observed, "are only going to get more important as investors continue to look more carefully at the alignment of pay and performance.  The scrutiny will increase even further if (and when) the economy experiences a slowdown."

  • Marc Howze, Senior Vice President and Chief Administrative Officer for Deere & Company, discussed his experiences in overseeing and helping explain a "purposefully complex" incentive plan aligned with company strategy and historically supported by shareholders.  Given the cyclical nature of the agriculture industry, Mr. Howze indicated that Deere's plan was designed to provide stability through the various cycles "so we can incentivize even when times aren't well."  Mr. Howze explained how the company the modified the plan after a low say on pay vote and the process of engaging investors, the compensation committee and senior management to develop plan changes consistent with business strategy and yet externally aligned.

  • Charlie Tharp, Senior Advisor for Research and Practice for the Center On Executive Compensation, discussed the ongoing debate in the UK and the EU pushing for unprecedented simplification of executive compensation, including, in some cases, the elimination of performance share plans.  He reminded that certain items familiar in U.S. executive compensation policy, such as say on pay, historically have had their beginnings across the pond.  "When you boil it all down," Mr. Tharp pointed out, "my read of what is going on in the UK is that it's a way of saying that the pay is just too much."  He further explained that executive compensation is often purposefully complex.  "This purposeful complexity, which is really important to strategy and other goals can be really difficult to explain.  As you're disclosing them it's sometimes difficult to ferret out why you're doing what you're doing," making better disclosure an imperative for companies.

  • Shelly Carlin, Executive Vice President for the Center On Executive Compensation, capped off the panel by demonstrating IPACsm, a tool the Center developed in conjunction with Equilar.  She stated that the tool has been "one of the most anticipated and successful launch they've had." The new tool allows companies and investors to assess the correlation of over 150 metrics with total shareholder return.  Ms. Carlin remarked, "Executive compensation is a complex thing, which is partly a function of investors demanding more from companies and their boards and getting more vocal about the way that performance translates into pay.  The premise of IPAC was how we can use data and analytics to support a fact-based presentation of that." 



Association Explores the Future of Humans as a Resource in Light of Artificial Intelligence, Other Technological Advances

With substantial challenges brought on by developments in technology, Tracy Keogh, Chief Human Resources Officer of HP Inc., led our Washington Policy Conference in a discussion of the future of work.  The afternoon session tackled wide-ranging issues with the perspectives of subject matter experts and featured insights by CHROs who have been at the forefront of such developments.

  • Ms. Keogh set up the discussion by noting, "Until now we've been focused on Workplace 2020.  The discussion today is going to question the future of work and of our profession.  Since the beginning of the industrial revolution, there have always been increasing levels of automation in the workplace, a development that made America one of the strongest economies of the world and along with it created a vibrant middle class.  We have now begun another revolution that is transforming our society.  Automation in this revolution comes equipped with artificial intelligence that not only learns but can learn exponentially and get smarter over time."

  • Ellyn Shook, Chief Leadership and Human Resources Officer at Accenture, who recently co-authored a report entitled "Harnessing Revolution," took a strategic look at many of the issues that were discussed.  Ms. Shook remarked, "I think the dystopian view is the very far side of the spectrum.  Technology is going to elevate humans, not replace them... But we need to start taking actions today to start preparing for the future."  Ms. Shook further explained how using artificial intelligence in the application process helped Accenture move toward goals of diversity within the company.

  • David Rodriguez, Executive Vice President and Global Chief Human Resources Officer at Marriott International, Inc., related Marriott's successes and strategies in making the most of the best of the new technologies and preparing to mitigate the negative aspects of disruption.  On the challenges ahead, Mr. Rodriguez said, "The reality is society will adjust but the penalty will be severe in the short term.  I think it speaks to our roles, which is to have a calling to be caretakers of our value but also of our most vulnerable stakeholders."

  • Andy Stern, former SEIU president, observed that given the disruptive ability of the new technologies we are now at a "strategic inflection point," which is the "time in the life of a company or country where fundamentals change – and the options are to rise to new heights or things are about to end.  Unfortunately, our leaders are in denial, and the reaction is to throw 20th-century solutions at 21st-century realities."  As a solution to the workplace disruptions caused by technology, Stern proposed a Universal Basic Income (UBI), guaranteeing every individual a minimum level of income paid by the government.

  • Dr. Jerry Kaplan, adjunct professor at Stanford University and a leading expert on artificial technology, offered that while negative trends are sure to take place due to new technological developments, the overarching effect will likely be more productivity and higher household wages.  "Labor markets are much more dynamic than people give them credit for," he pointed out.

  • Tim Bartl, Executive Vice President of the Association, led the conference in discussing the Association's role in exploring the policy implications of artificial intelligence and examining the future of work.



Washington Insiders' Roundtable Searches for Reason Amid Political Chaos

A spirited Washington Insiders' Roundtable discussion featuring Mike Allen, Executive Editor of AXIOS, Joy-Ann Reid, host of AM Joy on MSNBC, and Byron York, Chief Political Correspondent for the Washington Examiner, and moderated by Dan Yager, President & CEO of HR Policy, attempted to make heads or tails of an unprecedented political environment in D.C. and around the country.  Mr. Allen pointed out, "If we look back over the 200 some days of the administration, there's been hits and misses.  But if you ask what [Trump] does well, it is giving business a spring in its step.  He has introduced a little more confidence that hasn't been there before."  Ms. Reid, on the other hand, highlighted the disruption brought by the Trump presidency.  "What President Trump did," she said, "and what this last election did was explode a lot of the pre-existing binaries that we believed about American politics.  He illuminated a lot about his base that I believed needed to be believed before."  Mr. York, focusing on the policy implications of the Trump Presidency, said, "One additional factor [to health care reform failing to pass] is that trump personally doesn't care that much.  'Repeal and replace Obamacare' was something he started saying after he realized it worked.  Beforehand, he'd never been that interested in health care."  Mr. Yager, speaking to the conference, noted, "Right now, you are being challenged in ways not seen in decades... politics has become reality TV, and from all of us at HR Policy Association, we admire your courage for being willing to wade into the swamp this evening to get a better handle on how public policy will influence the direction of your HR strategy."



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