What Impact Will State Government Have on the HR Profession in 2012?

HRACO Magazine

Human resource professionals across Ohio are faced with a myriad of issues and situations demanding informed decisions every single day. A large part of their responsibility lies in understanding federal, state and local laws and how they affect their business operations. Sometimes the federal or state government makes decisions that make compliance with laws easier, but at other times, the choices made by these same groups only add to the already cumbersome responsibilities that human resource professionals must deal with each day.

On February 7 , 2012, Governor John Kasich delivered his State of the State speech at Wells Academy in Steubenville, Ohio. His strategy in choosing Wells Academy was to highlight a school where 60 percent of the enrolled children are considered economically disadvantaged,yet one that ranks number one in Ohio in academic performance. He highlighted Wells Academy’s operations and credited their success to the fact that funding is going where it is needed most,the classroom, and not to administrative overhead.

Why is K12 education so important to HR? It’s simple. Students today are the workforce of tomorrow. In his speech, Governor Kasich criticized the high dropout rate in urban schools and noted the cost of providing remedial education for students who graduate unprepared. Students that do not graduate from high school,or graduate without soft skills, add to the cost of training for employers and frequently require additional resources to educate or train.

The Governor said he will spend the next year working toward a consensus on how to fix public education. He highlighted the success of Cleveland Mayor Frank Jackson's newly introduced school reform plan, saying, "I'm counting on Cleveland to deliver the goods... We can change urban education in Ohio and in America. That is worth fighting for."

What about the existing work force or students in higher education institutions preparing to enter the job market? Governor Kasich explained that it’s critical for colleges and other job training programs to provide workers with the skills to match the 80,000 unfilled jobs in Ohio. Ohio’s unemployment rate hit 8.1 percent in December, 2011, down from 9.5 percent the previous year, just before Governor Kasich took office. The Governor stated that Ohio has picked up 43,500 jobs and climbed from being ranked 48th in job creation to 9th, and is Number 1 in the Midwest. But,the Kasich Administration understands that the state’s existing workforce development system is failing to adequately assist our unemployed, underemployed and incumbent workforce.

The Governor promised to overhaul and consolidate the 77 different job training programs in the state, and called on colleges to work together to increase graduation rates and eliminate duplication in programs."We have to put this together and let nothing stand in our way," he said.

To that end, on February 9, 2012, Governor Kasich signed an Executive Order creating the Office of Workforce Transformation (OWT) and the Governor’s Executive Workforce Board. The OWT is tasked with coordinating and aligning workforce policies, programs, and resources across state government to improve effectiveness, efficiency and accountability. To better understand the scope of this undertaking, it is helpful to note that 77 different programs comprise Ohio’s workforce development structure across 13 state agencies. Many of the related funding streams are overly complex, fragmented, administratively burdensome, and do not adequately align with regional and state economic developmentneeds.

The Governor’s Executive Workforce Board is tasked with advising the Governor and OWT on the development, implementation, and continuous improvement of Ohio’s entire workforce system. Déjà vu? For some employers this Board may sound familiar because, for nearly a decade, former administrations have been trying to pull together business leaders and human resource professionals to help the Governor develop workforce policies. What makes Governor Kasich’s initiative different than previous administrations is its focus. For decades, the current system has lacked a central guiding entity to ensure that the right resources are set aside for job training services and that workers have the skills they need to fill open jobs today and in the future.

What else is the administration doing to help Ohio businesses? After the Kasich Taylor Administration took office, Lt. Governor Mary Taylor was tasked with overseeing CSI Ohio: The Common Sense Initiative. CSI Ohio was created by executive order and codified in the Ohio statute by SB 2. The Initiative builds a regulatory framework that promotes economic development and one that is transparent and responsive to regulated businesses, thus making compliance as easy as possible and providing predictability for businesses.

A higher level of accountability in the administrative rulemaking process is a critical part of the CSI Initiative. Every administrative rule that affects businesses must undergo a CSI Business Impact Analysis, and is subject to new scrutiny by the General Assembly. In addition, another new program called “Buckeyes Forever” entices Ohio high school graduates who leave the state to return with the promise of paid in state tuition for both college and graduate school.

Another major initiative brought about during the Kasich Administration was the creation of Jobs Ohio in HB 1. JobsOhio is an aggressive economic development strategy to help build new businesses, grow existing ones,and bring new companies to Ohio. Additionally, the Job Creation Tax Credit, are fundable tax credit, is an incentive offered to companies that create at least 10 new jobs (within three years), with a minimum annual payroll of $660,000, and that pay at least $10.87 per hour (or 150% of the federal minimum wage of $7.25 per hour).

The Kasich Administration has made the aforementioned changes during its first year, aided in great part by strong support from Ohio’s 129th General Assembly. One bill currently pending in the legislature, HB 18, would provide a state grant to eligible employers of $500 per employee. The eligibility requirements are that a company must lease or purchase vacant commercial space for its business,and increase its payroll by hiring new employees or increasing the pay of the existing workforce. If enacted, HR professionals in medium or larger companies might consider leveraging the grant benefits for growth opportunities, especially if the company is in a position to reorganize the workforce into a smaller number of locations. HR professionals in smaller companies looking to expand into larger facilities that choose to renovate or improve existing commercial space instead of building a new facility may also benefit if the new law is enacted.

All levels of government, whether federal, state or local, can significantly impact HR professionals throughout Ohio. Keeping educated on changing laws is important. Equally important is for HR professionals to provide input to HRACO, the Ohio State Council of SHRM, and SHRM on the issues that specifically impact human resources and business ownership. Lastly, HR professionals need to be involved in initiatives and legislative proposals before they become law, and need to do their due diligence in making educated and informed decisions in choosing legislative and executive leaders at all levels of government. The primary election for 2012 is on March 6, when Ohioans will be selecting candidates for the November ballot. The ballot will include candidates for offices of President, Congress, House and Senate, as well as local offices. HR professionals need to task each other with being informed and involved in learning more about the candidates and changing laws that will certainly impact HR professionals for years to come.