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HR Does Hard Time

May 12, 2010
Related Topics: Growth, Policies and Procedures, Strategic Planning, Featured Article
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Prisons are a big business in the U.S., which has the largest prison population and the highest incarceration rate of any country in the world. More than 2.4 million adults are locked up in U.S. jails and prisons and supervised by 518,200 guards. The U.S. employs more prison guards than computer programmers.

Prison privatization is a growing trend, and Corrections Corporation of America decisively dominates the industry. The company, which advertises “just-in-time bed space,” measures its revenues and operating costs in “compensated man-days.” In 2009, revenues hit $1.67 billion, up 5.4 percent from 2008, and earnings jumped 6.1 percent. In the fourth quarter of 2009, revenue per compensated man-day reached $58.16; operating margins stood at 31.3 percent. Profitability hinges on continued mass incarceration; shareholders have not been disappointed.

     CCA’s top human resources executive is Brian Collins. From his office at headquarters in Nashville, Tennessee, Collins leads the 17,250 CCA employees who control 76,400 inmates in 65 prisons spread across 19 states. Eighty-two percent of CCA’s employees are nonexempt, and 56 percent of those are guards who spend every shift locked up with prisoners.

Collins tries to spend one week each month touring the prisons, but he admits that he will never witness a true workplace crisis.

“If I’m at any facility and an incident erupts, I’ll be the first one shoved out the front door,” he says. Riots at CCA prisons are not uncommon.

“It’s a stressful and negative environment,” Collins says. “The correctional officer position is the most difficult job, and we have to focus on safety and security. It’s not an easy business.”

Prisoners assault guards; guards sometimes assault prisoners. Staffing requirements shift quickly as contracts come and go.

Lawsuits abound. In February 2009, CCA settled a $7 million lawsuit alleging that it did not pay employees for off-the-clock work. In October 2009, CCA settled a $1.3 million sexual harassment lawsuit after the Equal Employment Opportunity Commission charged that female employees at a CCA prison were subjected to sexual harassment that included male managers forcing them to perform sex acts to keep their jobs.

Like Collins at CCA, most HR executives are not managing bankers and software engineers, but high-turnover, low-paid nonexempt employees. Production and nonsupervisory workers make up 82 percent of the total U.S. private-industry workforce of 107 million. Staffing is a constant challenge, complex compliance issues demand excruciating attention, and safety is a serious concern. Add the additional pressures found in the private prison industry, and the job becomes extremely difficult. And messy.

 Structuring HR
Collins joined CCA in 2006 from another low-margin company staffed by low-paid employees, Wal-Mart Stores Inc. After 25 years with Wal-Mart, Collins got a cold call from a headhunter who wanted him to interview for vice president of facility operations at CCA.

“I wasn’t at all interested in the job, but I had always wanted to see the inside of a prison, so I took the interview and got a tour,” Collins recalls. “After a lot of discussion, I decided the job was a perfect fit.” After three years in operations, Collins became executive vice president and chief human resources officer in September 2009.

(To enlarge the view, click on the image below. Adobe Acrobat Reader is required.)

CCA’s prisons are concentrated across the Southern right-to-work states, where incarceration rates are high and land and labor are cheap. The prisons include minimum-, medium- and maximum-security facilities. Most hold 1,000 to 2,000 inmates and are supervised by a staff of 200 to 300.

At CCA headquarters, a human resources staff of 50 sets policy and supports 190 HR employees based in the prisons. Collins’ direct reports include four HR directors with responsibility for specific divisions, plus specialists for benefits, compensation, training and development, employee relations and compliance—or a total of nine direct reports.

The four HR directors bear significant responsibility for consistency in policy and compliance. Decision making is centralized in Nashville, but HR managers based in the prisons review every policy before it is finalized.

At most prisons, CCA employs an HR manager, an HR generalist, a payroll clerk and a personnel investigator. CCA handles all HR functions in-house with the exception of benefits administration, which is outsourced, and recruiting at three prisons that are located in particularly remote areas.

The HR function at headquarters sets wages for each location. Pay rates vary dramatically based on the client. At prisons under federal contracts, which account for 40 percent of the company’s revenue, CCA must pay federal wage determination rates set by regulations for federal contractors of at least $25 per hour for guards and $30 per hour for nurses.

CCA’s remaining customers are state and local governments, led by the state of California, which contributes 10.4 percent of the company’s revenue. Collins’ team uses local market rates to set wages for prisons under state and local contracts. Starting pay for guards at these prisons ranges from $7.80 to $18 per hour, with most locations set at the lower end of the range.

“Human resources staff in Nashville monitor turnover rates for each facility and unemployment rates for each local market,” Collins says. “If a facility has a problem with recruitment or retention, the local human resources manager consults with the human resources director for the division. The compensation staff at headquarters reviews market surveys, and if they don’t have one for most recent three months, they get a new survey, and then work with the human resources director to determine a solution.”

Within the human resources function at headquarters, the compliance department employs three specialists, who are supported by an additional employee from the legal department. CCA runs an annual human resources audit at each prison to monitor operational HR functions in the field. “The annual HR audit looks at 300 to 400 HR pressure points,” Collins reports. “Current issues concern personnel file privacy, I-9 forms and OFCCP [Office of Federal Contract Compliance Programs] requirements.”

Just-in-time staffing 
Staffing is complicated in an industry where contracts may evaporate, often without much warning. Kentucky is in the process of moving 400 female prisoners from a CCA prison after multiple allegations of sexual misconduct by male guards. In January, Arizona announced that it will move 700 prisoners out of a CCA prison in Colorado, ending its practice of housing prisoners out of state and prompting CCA to shut down a facility with a staff of 188.

Because CCA locates most of its prisons in low-cost remote areas, labor supply is tricky. In Eloy, Arizona, a town of only 10,000 residents, CCA must staff three prisons with a total of 6,660 inmates, including the massive 3,060-bed La Palma Correctional Center, which houses inmates from California, and the 1,600-bed Red Rock Correctional Center, which houses prisoners from Hawaii and Washington.

Recruiting is centralized in Nashville with online applications, but CCA also posts jobs on job boards, advertises through local sources and conducts job fairs. Regional recruiters support prison staff. Most hiring centers on filling guard jobs, but recruiters must also supply candidates for warden posts, nurses, dental assistants, maintenance workers and clerks.

High unemployment rates across CCA’s locations have aided recruitment. In Pahrump, Nevada, where CCA is opening a new 1,072-bed prison, unemployment topped 15 percent at the end of 2009. Hundreds of applicants turned out for CCA’s January 2010 information session on the 231 positions at the new prison. CCA planned a two-day job fair in April to fill the jobs.

The online job application for prison guard positions warns those who apply that the application takes one hour to complete. Most of the time required is consumed by an integrity test. The job requirements for guards include a high school degree or general equivalency diploma. All employees receive 40 hours of orientation; guards receive an additional 120 hours of training during the first year of employment.

Overall turnover is now 28 percent, down from 39 percent in 2007. “The economy has helped reduce turnover,” Collins notes. “We are also very focused on engagement.” In 2009, CCA launched new initiatives to improve engagement, including regular roundtable discussions for employees with wardens.

“The human resources directors are responsible for convening focus groups in each facility and creating action plans with wardens based on the outcome,” Collins says. “In addition, we conduct culture assessments that look at all the shifts to understand the DNA of each facility. We sit down with exempt and nonexempt employees. Issues are revealed and we try to change the culture if it’s headed in the wrong direction. If we find positive elements, we try to strengthen and improve them.”

Although most of his experience is in operations, Collins held several HR positions at Wal-Mart, and his training there has served him well at CCA. Still, the move was not easy. “For the first six months, I struggled,” Collins says. “I wondered if I had made the right decision or if I should go back to Wal-Mart. I am used to feeling that I belong, but I realized that I would never be a part of the corrections fraternity. But then I realized I could take the skills I had developed at Wal-Mart and match them up line by line with the skills I need at CCA.”

Collins still draws from his Wal-Mart experience. “To be successful, you have to understand people and foster open communications,” he says. “Sam Walton once told me, ‘You learn from your people. Ask questions and listen, listen, listen.’ ”

Workforce Management, May 2010, p. 18-20, 22-23 -- Subscribe Now!

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