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5/15/05 WORKPLACE With 75 million baby boomers set to retire in the next few years, corporate America could be in trouble if those workers take their knowledge with them. Accenture said last week that a poll of 500 full-time workers between 40 and 50 years old reveals that nearly 45 percent work at companies that do not have formal policies in place to capture what they've learned before they retire or leave their current workplaces. In addition, 26 percent said they expect to retire without any transfer of knowledge to younger employees. Only 20 percent said they will spend months relating their experience and skillset to other workers prior to retirement. Twenty-eight percent said they will probably spend about two weeks talking to other workers about their jobs, and 16 percent said they will have an informal discussion with others at the company before they retire. Kathy Battistoni, a partner at Accenture, a management consulting firm, said companies should start putting policies in place or risk losing valuable institutional knowledge. "If they don't act soon, organizations will face a major exodus of institutional knowledge as their most experienced employees leave the workforce," Battistoni said. She recommends that companies take three critical steps before the first wave of baby boomers begin to retire in a few years: "First, companies must understand the extent of the problem, including the skills they are at risk of losing," she said. "Second, they must develop a strategy to capture and transfer core skills from retiring employees and to identify, attract, and retain new workers with critical skills. Finally, they must manage and measure the progress of the entire effort." SAFETY Massachusetts recorded 72 deaths on the job last year, down from 81 in 2003, according to a report by a coalition of health and union advocates that highlighted a greater-than-average risk to immigrant workers. In one case, a factory worker was crushed by an injection-molding machine when it started after he climbed into it. In another, a roofer fell 22 feet, and a third person drowned while doing maintenance work when a surge of water swept him down a sewage pipe. All three workers were immigrants. The report released this week by the Massachusetts Coalition for Occupational Safety and Health and the Massachusetts AFL-CIO said that a majority of the 72 workers died from acute or traumatic injuries. It also said many of the deaths could have been prevented if employers had paid more attention to federal Occupational Safety and Health Administration regulations. "The greatest tragedy is the deaths we looked at were preventable," said Nancy Lessin, coordinator of safety and health for the Massachusetts AFL-CIO and co-author of the report. "This stems from a failure of the system, and a failure of employers to abide by safety provisions." Andre Mayer, senior vice president of Associated Industries of Massachusetts, a trade group that represents 7,600 state employers, said most are concerned about the well-being of their workers. "They have a significant investment in their employees and it is bad for business to have accidents on the job," he said. "There are also extensive state and federal regulations that employers must follow and, in addition, there is a workers' compensation system that is structured to penalize employers who do not maintain a safe workplace." However, the report's authors maintain that the penalties for violating the Occupational Safety and Health Administration Act are not stringent enough. For example, the average fine in Massachusetts for a violation of federal safety rules under OSHA is $971, and the average fine assessed a Massachusetts employer in connection with the death of a worker last year was $8,885, the report said. In addition, 14 employers were penalized in the commonwealth for unsafe working conditions that led to a worker's death. Of those, nine settled their cases and paid $10,000 or less, including five employers who paid less than $5,000. Marcy Goldstein-Gelb, executive director of the Mass. safety and health coalition, said the number of immigrants killed at work continued to grow. "Last year, we estimated that 10 percent of the workers who were killed were immigrants," said Goldstein-Gelb, coauthor of the report. "This year, more than 20 percent are immigrants. They are in the most hazardous jobs, and they tend to be more vulnerable and less likely to speak out about unsafe working conditions." EXECUTIVE SUITE With skyrocketing executive pay and the corporate accounting scandals etched in their minds, shareholders are demanding that US firms reduce costs and change the way they reward executives. A national survey of 115 top American firms reveals that 71 percent have either revised or plan to revise their long-term incentives for executives, reports Illinois-based Hewitt Associates, the benefits consulting firm. Hewitt attributes the changes to greater scrutiny of corporate boards and how they compensate top executives. Employees are demanding accountability, too, according to a consumer survey by Maritz Research in St. Louis. It found that 22 percent of US employees disagree or strongly disagree with the statement that corporate leaders are honest and ethical. In addition, 21 percent felt their employers are not doing enough to inspire great work, and 18 percent are not too happy with the way they are being managed. Maritz concluded that many employees feel far removed from the top leaders at their firms. In addition, the Enron Corp. debacle and other corporate accounting scandals have caused workers to be less enthusiastic about upper management. After Enron went bankrupt, for example, many of its 5,000 employees spoke up about losing $800 million in pensions due to the firm's improper accounting standards. Today, corporate boards must adhere to the provisions of Sarbanes-Oxley, the 2002 federal law whose regulations are designed to improve and restructure corporate boards so they can better govern US companies. Among other things, the act lays out a series of federal standards for corporate governance. Barrons, the business publication, estimates it will cost about $35 billion for corporate America to comply with the law this year. Tracy Davis, senior consultant at Hewitt Associates, said such regulatory changes coupled with the demands of shareholders are causing companies to pay more attention to how they reward and compensate executives. "As corporate boards come under increasing scrutiny from shareholders and from regulators, they're shifting more executive pay to performance-based equity, which has a greater focus on long-term results," said Davis. Diane E. Lewis can be reached at .
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