Lee Conrad, a spokesman for Alliance@IBM, a union representing IBM workers, wasn’t surprised by the layoffs. “They have been going more for contractors because that way they don’t have to pay the wages or benefits – the contract firm does – and it’s easier to let them go,” Conrad said. “It also doesn’t make as much news. It’s not IBM throwing people out the door. It’s the contractors.”
MacDonald earned his HR stripes not only with his trademark passion, but by following a very basic, but effective, work philosophy -- be proactive and innovate. At IBM, MacDonald has relentlessly pushed HR's contributions, redesigning nearly every major program and reviewing processes across the world to ensure they deliver on IBM's business proposition -- even when it has meant, at times, pursuing an atypical HR strategy, one others in the profession might discourage. ...
So how is MacDonald's philosophy serving IBM? So far, MacDonald believes, so good. As most who follow Big Blue know, IBM, which has about 400,000 regular employees and a 150,000-person contingent workforce, has been in the throes of transforming itself from a multinational, fragmented organization -- a seriously outdated concept, according to MacDonald -- into a seamless global enterprise.
The more descriptive turn of phrase around IBM has been "global transformation," the company's mantra for the past several years. MacDonald and his IBM senior-management peers understand the futility of having seemingly unconnected operations in dozens of countries (IBM operates in 170), each practically working in a vacuum. ...
"The world we know is changing," he says. "There is tremendous growth in Eastern Europe, South America and Asia. As an HR executive, you have to be able to tell the business, 'If that's what you are going to do, these are the resources you need and when you need to get them.' This is the first time HR ever directly contributed to the strategy at IBM. What's the proof point? HR converting the strategy into execution."
WMI works by bringing together a strategic set of processes, policies and procedures with 15 specific applications. Key components include the Global Opportunity Marketplace, a staffing tool that processed more than 376,000 job applications in its first nine months, extending an average of 100 job offers daily.
Another, Expertise Assessments, allows more than 95 percent of IBM's professionals to classify and document their skills. Others include Professional Marketplace (see below) and Workforce Dashboard, a manager self-service tool that improved manager efficiency by 80 percent by the end of 2007, according to IBM.
Three years ago, it unraveled. His company filed for bankruptcy. The collapse reduced his expected pension to around $5,000 a year and canceled his retiree health insurance. And, in three years of unemployment since then, West of Hazel Park blew through the entire $50,000 in his 401(k) just getting by as he trained for a new career. "I lost my job after 27 years before I got my retirement. I ain't going to get nothing," says West, 52. ...
Of all the trends, perhaps the most worrisome is the failure of highly touted 401(k) private savings accounts to replace fast-disappearing traditional pensions. Not only do millions of workers not save enough, or like West drain their 401(k)s well ahead of retirement, but all the risk of making wise investment choices and planning for decades of retirement now falls entirely on workers who have no training to deal with it. "The goal of trying to educate everybody up so they can do this kind of thing is just silly," Munnell says. "We don't need a whole nation of financial analysts. We need people to play with their children and coach Little League and do all that kind of stuff." ...
Perhaps the biggest threat to retirees' living standards has been the demise of traditional pension plans in the private sector. For decades a mainstay of retirement, so-called defined-benefit pension plans are those in which employers promise to pay a fixed amount of money to their retirees each month for life. Those plans flourished after the 1940s as big carmakers, steelmakers and other industrial firms needed to build and keep a large, skilled, loyal workforce and buy labor peace. Promising lifetime checks to retirees became common. By 1980, about 60% of U.S. workers in private industry were covered by defined-benefit pensions. ...
For millions of workers, having a pension simplified retirement, because all a worker had to do was cash a check each month. "You could plan, you could count on it, the investment risk was all on the company," Stumpff says.
The advent of the 401(k) in the late 1970s and early 1980s was a leading indicator of what became a political mania for shifting the risk and responsibility for life's big challenges -- health care, an adequate income in retirement -- from employers and other broad-shouldered institutions to the narrower, weaker backs of individuals themselves.
It was never sold this way, of course. The pitch for the 401(k) was a contemporary version of the get-rich-quick scheme: The promise of strolling along a sun-dappled beach in retirement would be realized with ease, as long as workers regularly contributed modest amounts to the accounts and then let the compounding magic of the market work. To hear the mutual fund companies and the media tell it, only fuddy-duddies and dinosaur employers would be foolish enough to opt for the old-fashioned defined-benefit pension, the type employers paid for and professional managers oversaw, and which guaranteed monthly payments in old age.
But despite the hype, the data on 401(k)s have never -- ever -- shown that these accounts were creating a mass of workers who would be able to retire with security, let alone luxury. The 401(k)s didn't expand the proportion of the work force with pension coverage, notwithstanding claims that shifting to accounts that required workers to contribute would make employers more willing to offer the benefit. Less than half of workers have any pension coverage from their current employer at all, according to the Center for Retirement Research at Boston College.
The global financial crisis that revealed the flaws of Wall Street has also exposed the vulnerability of America's retirement system. Employers have increasingly abandoned traditional pensions, forcing workers to rely on 401(k)s and similar plans that have a lot more exposure to the stock market. The assumption was that even if the market suffered short-term losses, over time it would rise, allowing workers to recoup their savings. But the steepness of this year's market collapse and the still-uncertain depth of the economic downturn has prompted lawmakers, academics and economists to question the wisdom of letting workers hitch their retirement fortunes to the precariousness of the stock market.
So far this year, the Dow Jones industrial average is down 36 percent, eroding the savings of millions of Americans and forcing those who had planned to retire in the next few years to reconsider their plans. "Right now, we're really seeing the risks come home, and people are recognizing the extent to which their retirement savings are on the line when the stock market goes down drastically," said Jacob Hacker, a political science professor at the University of California at Berkeley who chronicled the advent of 401(k) plans in "The Great Risk Shift." ...
"Everyone wiped their hands of any obligation for retirement, and the burden shifted from the employer to the employee, and the risk is shifted from the employer to the employee," said Rep. George Miller (D-Calif.), chairman of the House Committee on Education and Labor, who last week convened a hearing to examine 401(k)s. "In the beginning, no one ever said, 'Would this be sufficient? Would it work?' and what you see is a plan that is highly responsive to external events unlike Social Security, unlike defined-benefit plans, unlike a public pension plan."
The price of specialty drugs can run to tens of thousands of dollars per patient per year. Drug makers explain the high prices by pointing to high research costs, small patient populations and the complexities of manufacturing biotech drugs. Even so, the prices have been getting plenty of pushback lately from patients, government officials and even the occasional Wall Street analyst wondering how high prices can go. That hasn’t stopped companies from jacking up the prices of drugs already on the market: Among 112 commonly used specialty drugs that were on the market from Dec. ‘03 through Dec. ‘07, the average price rose by 42.9%, the survey found.
David Johnson, director of hematology and oncology at Nashville's Vanderbilt-Ingram Cancer Center, says some of his patients have opted to stop treatment partly because of the cost. His own brother-in-law, a truck driver, turned down Erbitux when he was facing colon cancer four years ago. He says patients face a painful dilemma: "Do they pay out of pocket — sometimes in the thousands of dollars — or do they forgo the therapy to preserve for their family what modest assets they may have?"
That is the disturbing finding of a survey by the Commonwealth Fund, a private foundation specializing in health policy research, that was published by the journal Health Affairs. The survey found that some 22 million adults with health coverage all year still spent a large chunk of their incomes — at least 10 percent for middle-class families — for out-of-pocket medical expenses. Another 3.4 million were saddled with high deductibles that would cause financial problems if they became ill.
Conservative health theorists and insurance industry leaders have long argued that the best way to slow soaring health care costs is to force people to pay a significant share of the bill so that they will buy medical services more judiciously, and sparingly. But as out-of-pocket expenses and deductibles have risen, many families are instead postponing or forgoing treatment. Many of those surveyed had put off seeing a doctor when sick, failed to fill prescriptions or skipped tests, treatments and preventive care. About half had difficulty paying their bills; many took out loans, mortgages or credit card debt to pay them.
At the extreme are cases such as the Texas woman who went to the hospital complaining of back pain. Physician Doug Curran immediately spotted cancer on the X-ray. "She'd had a lump in her breast for a while, but things were tight and she said she couldn't get it looked at," he recalled. "We're going to see more of that."
Nationwide, the number of consumers who went without a prescription, tapped into retirement savings to pay for health care or skipped a doctor visit for themselves or a child has risen since last year, according to a survey released this summer by the Rockefeller Foundation and Time magazine. One-quarter of the 2,000 respondents, for example, said they had decided not to see a doctor because of cost in 2008, up from 18 percent the year before. Ten percent said they did not take a child to the doctor for the same reason.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich."
From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
Enter, instead, the new cult of the free market, aka the Chicago School. The entire economy of South America collapsed, as did the post-Soviet economies. Some said the cause was too much free market, some said not enough. If only we could get just the right amount of free market. If we stuck with it, if the entire globe competed freely, non-stop, around-the-clock, we'd all be rich. Possibly dead from exhaustion, but rich for sure. Now the world's economy is collapsing and nobody has a clue. What we lack, apparently, is confidence in the market. In other words, faith.
There is doubtless a lot of truth to that. If no one goes to the marketplace to buy and sell eggs and butter because they don't trust the pricing, there will be none available. But it's also true that we have suffered from too much faith. Now that we're disabused, we won't believe again for a while. Too many common sense doubts remain un-addressed, or so it seems to a layman like me. At times like these when the media blizzard roars loudest, it always seems that the most glaring questions don't get asked. Here again, in no particular order and in all humility, I offer a few such probes...
Compensation experts say that the provisions, though politically prudent to appease public anger, will probably have little real impact on how financial executives are paid in coming years. They predict banks will simply pay higher taxes and will find other creative ways of paying their executives as they see fit. Some say there could even be a sudden surge in compensation as soon as the government program ends, in a few years, leading to eye-popping numbers down the road. ...
Like other experts, Professor Murphy expects the $500,000 cap to be largely ignored, with banks willing to accept the tax consequences. For many of the top executives, such a salary would simply not be competitive: “$500,000 was supposed to be a good week,” he said, adding that many of these executives would respond to such suggestions by leaving for jobs at unregulated banks or hedge funds.
Thanks to incentives such as profit-sharing bonuses, banks’ managers were keen on asset securitization “simply because it may increase their income with no commensurate risk premium imposed—the risk in the form of increased default probabilities is mostly borne by shareholders and third parties in case of bank insolvency,” CFS said. “The incentive to expand securitizations was upheld by the fact that the management pay-off was cashed out as a bonus well before the externality was felt in the profit/loss of the bank,” it said, describing such incentives as “perverse”.
So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
The main reason for optimism here is the banking system. Experts here note that Canadian banks are more tightly regulated, more liquid and less highly leveraged. Instead of being highflying investment banks, they tend to operate in a more traditional manner, with large numbers of loyal depositors and a more solid base of capital. ...
Strict rules also govern mortgage lending. By Canadian law, any mortgage that will finance more than 80 percent of the price of a home must be insured. Two-thirds of all Canadian mortgages are insured by the quasi-governmental Canadian Mortgage and Housing Corp. As a result of the tough standards for insurance, "people tend not to get mortgages they cannot afford," Gregory said. Defaulting on a loan is also more difficult in Canada than the United States, Gregory said. "You can't just drop off the keys and walk away."
After working there 6 months I received a 4% raise. I have already been told by my mgr when I want to go full time to let him know and they will start me @ $60K per yr. Right now I am kind of enjoying this 25.5 hr work week and will probably go full time at some point. The meaning of this post is for folks who are looking for a job to check out UPS, the insurance is great and unlike ibm they will PAY if you are a top performer. They are a stable company and appreciate someone who can function without having someone stand over them and direct their every move... ....good luck to all -A year later- Alliance Reply: UPS is also unionized in some job classifications; is this true for your job?
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some sample posts follow:
You think I'm kidding, but I've worked with guys who worked their butts off for 10 months and were able to take 2 months off and still have 100% utilization. Of course, they didn't have a life during the 10 months, but for them, it was worth it.
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