Where have the workers gone?

The bottom line is the techniques and the offerings that you used in the past will not work now. And, no, I don’t believe it’s going to change anytime soon. American workers don’t want to go back to that normal. And what needs to change, actually, is just about everything.

Where have all the workers gone?

 

 

TRANSCRIPT

Every client we talk to, every company that we interact with, is saying the same thing: they can’t find talent.
most everything that they’ve done in the past that has worked or isn’t working right now. How could that be?

The pandemic hit in march of 2020 and what did we see?
We saw unemployment skyrocketing or businesses that were affected by either shutting
down, slowing down, or going out of business.

But as the economy starts to heat back up one what we expected
was an excess of candidates and an excess of jobs–all those things would mesh together and what we would get
would be this perfect situation. But that isn’t what’s happened.

For the first quarter of 2021 what we’re seeing is unbelievable numbers on all the
factors that the government measures like GPP, durable goods spending, etc. Well the
opportunities have returned to the market but we haven’t seen the workers come back.

Why is that?

What I’d like to suggest here, are a few things that you should consider:

  1. With the increased unemployment benefits,
    some people can just survive staying at home and there may be lots of reasons that they want to do that.
  2. Some people that have been laid off have just decided they’re not willing to go back to work.
  3. Competition for talent has increased dramatically, and you need to pay attention to that because that’s a key.
  4. Some people have gone back to school and they’re not available for full-time work.
  5. But also, with schools and day care centers not going back full-time, some people are challenged because they
    now have children that are at home and they have to care for them.
  6. Despite increased vaccination rates, some people are still worried about returning to the
    workforce and being subjected to COVID.
  7. Some laid off workers have realized that, you know what, they they really dislike their manager, they
    dislike that job or the industry, and they’ve decided I’m not going back to that at all.
  8. And last but not least a remote workforce which was an exception, has now become the norm.

The bottom line is the techniques and the offerings that you used in the past will not work now. And, no, I don’t believe it’s going to change anytime soon. American workers don’t want to go back to that normal. And what needs to change, actually, is just about everything needs to change.

CDC Guidelines For Workplaces Regarding COVID-19

The following post is provided courtesy of Human Capital Concepts (HCC), a Certified Professional Employment Organization that partners with employers to manage employee-related responsibilities and risks. HCC  provides worry-free HR, benefits, payroll, and compliance solutions all in one place, with personal attention from a dedicated team of experts.


COVID-19 is here to stay and so are the employer-related issues surrounding the virus. Although the pandemic seems to be more controlled thanks to vaccines, the coronavirus that causes COVID-19 is still circulating. With the threat of another wave of infections in the fall and the specter of vaccine boosters in the future, you need to ensure you’re doing everything you can to avoid disruptions to your business operations while keeping your employees safe. You can help keep your workplace safe by implementing the latest CDC guidelines for COVID-19.

While CDC Covid guidelines are a good place to start, employers must also comply with a variety of state and federal employment laws. These employer regulations affect how your company responds to COVID-19. Workplace guidelines from OSHA, the EEOC, and the FLSA will impact how your business responds to COVID-19 in the coming years.

Like most government regulations, actionable COVID-19 guidelines can be difficult to decipher. We put together a breakdown of the CDC’s latest recommendations and some of the laws that impact employers’ COVID-19 response.

How Employers Can Prevent COVID-19 in the Workplace

The first step in the CDC guidelines to keeping your employees safe from COVID-19 is a comprehensive hazard assessment. Identify situations in which employees may be exposed to COVID-19. Obvious situations would include your employees’ interactions with the public. Other situations include areas where social distancing is not possible, such as meeting rooms.

Once the hazard assessment is complete, identify strategies to reduce the risk of exposure. If you’re like many businesses, you’ve probably already installed barriers and implemented social distancing rules. But now that government restrictions are lifting, it’s time to revisit your hazard assessment and look for additional areas of improvement. Improving ventilation in your building, whether by opening windows or increasing the airflow in your HVAC system, can offer protection at a time when mask mandates are decreasing.

A COVID-19 outbreak at your company can still jeopardize your business and your employees’ health, especially since many of your employees are probably returning to pre-pandemic activities. Consider continuing or implementing health checks for everyone entering the building. Also, if you’ve implemented work-at-home policies or staggered shifts, use caution and return to pre-pandemic work practices slowly.

Employers Must Conform to ADA When Following CDC Guidelines

The U.S. Equal Employment Opportunity Commission (EEOC) set forth guidelines to help employers navigate CDC guidelines without breaking laws that protect their employees’ medical information.

For example, if you do implement health screenings, limit your list of symptoms to those found on the CDC’s website. You also may not ask for medical information about the employee’s family. Instead, ask if the person has had contact with anyone exhibiting symptoms or has tested positive for COVID-19. The EEOC also clarified employers may administer COVID-19 tests. However, employers must use tests recommended by the FDA for accuracy. Like all other medical information, the results of the screening and the tests must remain confidential.

If any of your employees exhibit symptoms of COVID-19 at work, you do have the right to require them to leave. And if employees call in sick, you can ask them if they have symptoms of COVID-19. But you can’t ask them about symptoms or illnesses unrelated to COVID-19.

Finally, some employees may request telework as a reasonable accommodation due to COVID-19 risks. Employees who may qualify would include older employees, employees with compromising health conditions, or employees with a preexisting mental illness.

Covid-19 May Be An OSHA-Recordable Illness

Despite your best efforts, some of your employees may still become sick with COVID-19. Your recordkeeping obligations under OSHA guidelines depend, in part, on whether your business is in the health-care sector.

Most health-care employers must report all instances of COVID-19 in their workforce, whether or not the infection is work-related. Employers not belonging to the health-care industry must only record COVID-19 illnesses that meet certain requirements. One requirement is that the infection is work-related.

In addition to record keeping, other long-standing OSHA guidelines affect how employers must handle COVID-19. Under the General Duty Clause, employees are entitled to a workplace “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” According to OSHA COVID-19 guidelines, the General Duty Clause may require employers to provide PPE to protect workers.

Employers questioning how and if adverse reactions from vaccines should be recorded on their OSHA 300 Logs received some clarification on June 18th. Moving forward, employers do not need to record adverse reactions to the vaccines, even if the employer requires or actively encourages vaccination.

How Employers Should Handle COVID-19 Infections

Obviously, you don’t want employees at work if they are sick with COVID-19. But how has your HR team handled sick days in the past? If you’ve inadvertently created a culture in which staying home sick is frowned upon, hopefully you’ve corrected course during the pandemic.

Implement policies to avoid inadvertently punishing employees who miss work for illness. Create systems in which team members help complete a sick employee’s tasks. Consider implementing a program for sick pay. As the pandemic demonstrated, a widespread illness outbreak can be costlier than benefits that help employees stay home and get care when they are sick.

CDC guidelines for COVID-19 suggest that employers do not require a doctor’s note or COVID testing. Medical facilities are busier than usual and employees may have trouble getting an appointment. Instead consider a COVID-19 health screening form that helps employees determine if their symptoms warrant missing work.

Other Employment Law Changes Due to COVID-19

If your company has terminated employees during the pandemic, the American Rescue Plan Act of 2021 may change the way you handle their COBRA benefits. Under the law, employees may be eligible for a subsidy that covers COBRA premiums. If any of your employees qualify for the subsidy, your company is required to provide COBRA benefits and recover the costs through Medicare tax credits.

The Fair Labor Standards Act, or FLSA, may also affect how your business handles COVID-19. For example, if your company is still requiring some employees to work from home, workers who are unable to do so may qualify for unemployment benefits. Additionally, if you’re requiring employees to get tested before they can return to work, you may need to compensate them for their time. And while the Families First Coronavirus Response Act expired in 2020, employers who continue to provide paid sick leave for COVID-19 may be eligible for tax credits.

HR Experts Can Help You Create COVID Response Plan

Even if the worst effects of the pandemic are behind us, employers must plan to contend with COVID-19 for years to come. Infection surges threaten not only your employees’ health, but also your company’s productivity in a time of economic uncertainty. Evolving COVID-19 guidelines, laws, and regulations add to the ever-growing specter of citations and fines surrounding other complicated noncompliance issues.

COVID-19 increases your risks as an employer. You’re more vulnerable to production issues, noncompliance issues, and employee lawsuits. A team of HR advisors can expertly guide you in your COVID-19 response as the pandemic evolves. In the month and years to come, HR experts can help you adhere to CDC COVID-19 workplace guidelines without violating employment laws.

 

 

Photo by Danielle MacInnes on Unsplash

What Are The Pros And Cons of A PEO?

The following post is provided courtesy of Human Capital Concepts (HCC), a Certified Professional Employment Organization that partners with employers to manage employee-related responsibilities and risks. HCC  provides worry-free HR, benefits, payroll, and compliance solutions all in one place, with personal attention from a dedicated team of experts.


When you dreamed about growing your business, you probably didn’t imagine that you’d need to become an expert in labor regulations, health care mandates, and safety guidelines, along with HR administration, payroll, benefits and compliance. The fact is small businesses spend 17 percent of total manpower on non-core business tasks. Most of these tasks revolve around employee management. A PEO may be able take many of these challenges off your hands.

A PEO is a “Professional Employer Organization.” A PEO will handle all of your company’s HR responsibilities and tasks. Partnering with a PEO will do more for your business than freeing resources for your core business activities. PEO clients consistently provide a better employee experience. Businesses that partner with a PEO experienced twice the revenue growth of their non-PEO competitors. PEO clients are also 50 percent less likely to permanently close.

Before you decide if a PEO is right for your company, you should consider all your options for HR support.

PEO Pros and Cons

When considering teaming up with a third party for your HR needs, you have several options. These options each have pros and cons. A PEO vs a payroll broker or HR administrator, such as an HRO or ASO, may look similar on the surface. They are, in fact, very different.

HRO stands for “Human Resources Outsourcing.” As the name suggests, an HRO allows you to outsource some or all of your HR tasks. The HRO will offer a la carte services. The downside of an HRO is that you are still responsible for decisions surrounding the minutiae of your human resources administration. You’ll still need at least one expert on staff who can make these decisions. Another disadvantage is that your company won’t enjoy lower benefits costs when you partner with an HRO.

An ASO is a cross between an HRO and PEO. ASO stands for “Administrative Services Organization.” Unlike an HRO, an ASO will administer all of your HR tasks. But unlike a PEO, an ASO does not provide workers’ compensation or liability coverage. Also, partnering with an ASO will not help your company save money on benefits coverage.

Partnering with a professional employer organization, or PEO, offers more pros than cons. The advantages of using a PEO range from tax reporting to benefits procurement. The PEO will administer all of your HR needs. A PEO will withhold employees’ taxes and employment tax liabilities. A PEO will also take care of the yearly tax reporting. Your company will benefit from partnering with a PEO to handle many of the aspects associated with having employees.

Higher health insurance costs are a downside of being a small business. Companies that partner with a PEO can leverage the PEO’s size when purchasing health insurance and other group benefits. The PEO will also carry workers’ compensation and liability insurance.

PEO Benefits

Partnering with a PEO provides many benefits for business owners, startup founders, nonprofit executives, and others. For starters, you’ll be able to focus on your core business activities. You strive to be the best in your industry, and growth is exciting. But with growth comes more employees and a larger HR burden. HR compliance, workers’ compensation laws, and employer liability issues are complex and divert resources from your company’s main focus.

A PEO will provide expert support as your HR partner. Human Resources expertise is crucial to the success of your business. Errors from your HR department can potentially cost your company thousands. Hiring the wrong HR personnel can increase your risks of fines, workers’ compensation claims, and lawsuits. In fact, a PEO with recruiting expertise can protect your organization from hiring the wrong people.

You’ll enjoy cost savings when you partner with a PEO. A study conducted by noted economists Laurie Bassi and Dan McMurrer of McBassi and Associates on behalf of the National Association of Professional Employer Organizations (NAPEO) found that businesses enjoy a cost savings of 27.2 percent when they partner with a PEO. According to the study, the average cost savings from using a PEO is $1,775 per year per employee, which also reinforced the findings of earlier research, again showing notably lower employee turnover, higher rates of both employee and revenue growth, and enhanced employee benefit offerings.

Partnering with a PEO will help you get lower rates for group insurance. Your PEO benefits specialist will leverage the PEO’s larger size, meaning you get better rates for your company. Small businesses that partner with a PEO save up to 40 percent on their health insurance premiums, according to the National Association of Professional Employer Organizations (NAPEO).

You may find the advantages far outweigh the disadvantages of using a PEO. According to the NAPEO, businesses that used a PEO grew 7-9 percent faster. They experienced lower employee turnover rates and were 50 percent less likely to go out of business.

PEO Group Insurance

When the Affordable Care Act rolled out in 2010, employers saw a 40 percent increase in insurance premiums. Over the next ten years, healthcare premiums increased another 54 percent, according to the Kaiser Family Foundation. In 2020, average health coverage for a family costs $21,342.

The Affordable Care Act also gave employees insight into the high cost of healthcare. The pandemic drove this point further in employees’ minds. As a result, good benefits are more important than ever for employee retention. More than three-quarters of employees say that benefits are an important part of their overall compensation. Half of employees say they’d consider taking a new job for better benefits.

As a small to medium-sized business, your insurance costs are higher than what large corporations pay. In the past, you may have been forced to provide your employees with less-than-stellar benefits. But partnering with a PEO can lower your costs and provide better options. This is because the PEO negotiates with insurance companies for coverage for all of their clients. You get to pay rates similar to the big corporations when you have PEO group insurance.

The Affordable Care Act did more than raise premiums. Increasingly complicated regulations also increase your administrative costs for health care benefits. An in-house HR team must spend more time ensuring your company remains in compliance. Additionally, an in-house HR team often becomes a sort of middleman between the insurance provider and the employees. When issues arise, your HR staff redirects their time contacting the insurer or deciphering the policy.

PEO Payroll

Payroll administration demands hours that could be spent growing your business. The tasks start with getting withholding information from your employees. From there, you need to track hours and calculate withholdings. You must also track direct deposit information for your employees.

Like any other payroll administrator, a PEO can do all these tasks for you. But there are advantages to partnering with a PEO vs a payroll broker. Your PEO becomes your co-employer. The PEO’s EIN number will appear on all employee tax forms. This allows the PEO to handle tax withholdings and reporting. When tax time comes around, your PEO, not you, will file the litany of related employment tax forms.

But be careful about the downside of PEO tax implications. If you choose a PEO that is not certified by the IRS, otherwise known as a CPEO, you’re on the hook for unpaid taxes. Not every PEO completes the stringent qualifications to become an IRS-certified CPEO. Those that do, however, take on 100 percent of the liability for unpaid employment taxes for your company. Choosing a CPEO is the only way to be confident the money you earmark for taxes makes its way to the IRS.

Another of the pros of a PEO is that you don’t need to employ a Human Resources professional to handle HR administration, benefits and workers’ compensation issues. The average salary for a full-time human resources manager is $68,399, plus an additional 40 percent, or $27,336, for recruitment, benefits, and taxes. The Society for Human Resources Management says businesses need 2-3 HR team members per 100 employees to deliver essential HR services.

Professional Employer Organization Tax Reporting

Partnering with a PEO has important and beneficial tax implications for your company. A PEO will become your “co-employer.” Under this arrangement, the PEO is able to withhold employee federal and state taxes. The PEO then pays the government the withholdings.

A PEO will handle all of your other time-consuming payroll tasks, such as tracking employee wages and other payroll expenses. Your PEO will handle direct deposits and employee classifications. PEOs also take care of all employee documentation and compliance reporting, including new hire paperwork.

But what if your PEO fails to forward employment taxes to the IRS? Some unfortunate companies discovered a significant disadvantage of using a PEO when their provider failed to pay the IRS. Even though you’re entering into a “co-employer” agreement with the PEO, in the eyes of the IRS, you are still the primary employer liable for employment taxes.

That’s why you need an IRS Certified Professional Employer Organization when it comes to tax reporting. A CPEO is certified by the IRS. A CPEO undergoes financial audits, background reports, among other qualifications. Most importantly, once a PEO becomes certified as a CPEO, they assume liability for employment taxes. In the eyes of the IRS, the CPEO is on the hook if it fails to pay your employment taxes.

The PEO will also help handle many of the administrative tasks associated with workers’ compensation.

PEO Cost

Before you decide to purchase PEO services, you should understand how much money and time you’re spending on in-house employee administration. The Small Business Administration says the cost of an employee is up to 1.4 times his salary when you include recruitment, benefits, and taxes.

The time you and your team spend on payroll and HR-related tasks is a little tougher to pin down. A survey by the National Retail Federation found that 69 percent of small business owners feel “overwhelmed by regulations, rules and mandates such as labor regulations, health care mandates, tax codes and safety guidelines.”

The PEO will relieve you of the administrative burden of HR-related tasks. A PEO will also have the expertise to navigate the regulations, mandates, tax codes, and safety guidelines that, frankly, take too long for any layperson to unravel. Your PEO employs a team of HR experts who can navigate the complexities of the Affordable Care Act. They’ll also field questions from your employees. Your PEO will also stay on top of the ever-changing regulations.

Remember, PEO clients average a 27.2 percent return on their investment. A PEO can likely negotiate better rates for all of your employee benefits. Companies that use a PEO experience lower turnover and higher growth. But a PEO may also shield you from unexpected trouble.

The NAPEO recently compared the pandemic’s impact on PEO clients with other small businesses. Its findings suggest that PEO clients were better insulated from the catastrophic impact of the pandemic. PEO clients were twice as likely to have received Paycheck Protection Program loans. Most importantly, PEO clients were 91 percent less likely to still be temporarily closed and 60 percent less likely to have permanently closed.

Conclusion

The reality of employee management may cast a shadow on your dreams when you’re a business owner. But an HR partner can tackle the tedious, yet necessary, administrative tasks that are bogging you down. Once you have a trusted ally who can navigate the burdens of HR administration, you can go back to focusing on your core business activities.

How to Manage Teams in Different Locations

I love the way grandmothers pack priceless wisdom into colorful phrases. Phrases like “when the cat is away, the mice will play” speak volumes about the human tendency to slack off when the boss isn’t around. Or how about this one: “out of sight, out of mind.” When something isn’t in front of me, it gets pushed to the back of my mind.

Maybe you think of these phrases when wondering how to manage teams in different locations. Conventional wisdom says managing dispersed teams is a headache. You can’t possibly make sure your staff isn’t goofing off. You wonder how to handle managerial tasks for a team possibly hundreds of miles away.

Nothing against Grandma, but her notions of remote management are a bit old-fashioned. With the right strategies and software in place, you’ll take to managing dispersed teams like a fish takes to water.

Considerations for Hiring Dispersed Teams

Grandma would say you can’t separate the wheat from the chaff when hiring a dispersed team. When you post job openings for multiple locations, you run the risk of missing high-quality applicants if your process is unorganized. Hiring employees at multiple locations requires strategic planning and implementation.

Perhaps one of the biggest considerations for hiring dispersed teams is maintaining your company’s branding. Multiple locations will probably develop their own unique culture. Your branding becomes the glue that binds employees in different locations to your company’s vision. Without strong branding, different locations may begin to feel like independent outposts for employees as well as customers.

You can introduce applicants to your company’s values, vision, and character with a branded careers site. A single careers website can manage applications for job postings at all of your company’s locations, even allowing job seekers to apply to multiple jobs with one application. Not only will you elevate your brand in your applicants’ eyes, you’ll be able to uncover more qualified candidates and manage applicant data from a cloud-based software system accessible at all of your locations.

From within the applicant tracking system, you’ll be able to sort applicants using a variety of data fields, including location. You can then assign tasks to individuals on hiring teams throughout the organization. You’ll be able to view applicants’ progress throughout the hiring process.

Perhaps most importantly, an ATS will give your hiring teams the tools they need to work independently without sacrificing your ability to oversee the process. An ATS can eliminate many of the intra-company emails and phone calls that hinder hiring across locations. With all the benefits of an ATS, I think Grandma might finally agree you can have your cake and eat it too.

 

Multi-Site Management of Employee Onboarding

Grandma might warn you against biting off more than you can chew when it comes to multi-site management of employee onboarding. It’s true that onboarding new hires at multiple sites can be problematic. Ineffective onboarding will cut into your bottom line, decrease your company’s productivity, and possibly leave you vulnerable to lawsuits.

Employees who undergo a comprehensive onboarding program are productive in their new roles more quickly. Effective onboarding can also improve employee retention. Onboarding software can help you create a consistent and effective onboarding process for all of your locations. You can use these digital onboarding tools when introducing your new hires to your company. Training modules within onboarding software can be customized for each position and its location.

New employee forms get trickier during cross-office collaboration. The best onboarding software will determine the correct new employee forms for each position and location. You won’t need to worry about your hiring teams forgetting about non-compete agreements for new sales people. And you can be sure the correct city payroll tax withholdings are on file. Best of all, onboarding software stores your completed new employee forms digitally. If your new sales person leaves for a competitor a few years down the road, you won’t need to chase down a paper copy of that non-compete agreement.

Even Grandma has to admit, onboarding software leaves no stone unturned.

 

Managing Employees at Multiple Locations

Grandma wouldn’t want you burning the candle at both ends when managing employees at multiple locations. Each location may develop a culture inconsistent with your company’s values. Productivity may suffer when employees aren’t engaged in the company’s larger mission. Poor communication can enhance existing problems.

You can address the challenges of managing employees in different locations by proactively managing your workplace culture. Create a comprehensive onboarding process with an emphasis on your company’s values and mission. Existing employees may benefit from training that focuses on your company’s culture. Try implementing a rewards program for employees who demonstrate behavior consistent with your values.

Nurturing a positive culture and workplace environment will help engage employees. You can also increase employee engagement by offering skill development training. Dispersed employees could access advanced training modules within your onboarding software or classes online. Think about pairing employees at remote locations with mentors working from the company headquarters. These mentors can help employees navigate the company’s dynamics.

Stakeholders need strong communication skills to make these strategies for managing teams at multiple locations successful. Managers with poor communication skills struggle with how to increase collaboration between teams and improve cross-departmental communication. Remind these managers to have regular video conferences with remote team members. Email is great for task-related communication. But only a phone or video call can nurture meaningful connections between co-workers.

You can overcome the challenges of managing and leading remote teams through culture, engagement, and communication. When you use these strategies, your employees will feel more emotionally invested in their roles and happy as clams.

Final Thoughts

Conventional wisdom may say that managing teams in different locations is difficult. Dispersed worksites tend to develop their own culture. Distance can complicate items such as paperwork. And poor communication will make managing remote employees even tougher.

But you’ll be changing your tune when you invest in the right software. And your remote teams will be over the moon when you use strategies to promote culture, engagement, and communication. Before you know it, managing teams in different locations will be a piece of cake.

Are you thinking about investing in applicant tracking software or onboarding software? Contact us today.

Photo by Antonio Janeski on Unsplash

 

Why Diversity Hiring Is Important

The world has its eyes on systemic racism. And now, more than ever, everyone seems committed to dismantling discrimination. But with the heightened attention comes the awareness of the complexity surrounding inequality. Diversity is complicated, and that’s why most companies fail to meet their Diversity, Equity & Inclusion goals.

Businesses tend to see diversity as a numbers issue. They see that a minority group comprises a certain percentage of the local population and then focus their efforts on having a similar percentage in their workforce. But emphasizing statistics ignores the uncomfortable factors that lead to poor diversity.

Leaders can address these issues within their workplace when they emphasize the benefits of diversity without downplaying its difficulties. Situational factors, privilege, and implicit bias drive inequality. These factors make conversations around diversity difficult. But companies that address the circumstances that lead to inequality ultimately reinforce the shared experience of living in our society. Ultimately, everyone in the organization will feel more valued.

Defining Diversity and Its Importance in the Workplace

Most business owners think of diversity in the workplace in terms of the compliance regulations imposed by the federal government. These regulations ensure equal employment opportunities for marginalized groups. Business owners agree diversity hiring in the workplace is important. But they tend to view their diversity hiring efforts under the narrow lens of the EEOC. They acknowledge hiring for diversity is important in the world and contributes to the greater good. Yet they also see diversity in the workplace as having very little impact on the company’s success.

Nothing could be further from the truth. Diversity in the workplace is good for the bottom line. In 2015, McKinsey and Company found that companies with a diverse workforce performed 15 to 35 percent better than the national industry median. This success underscores the importance of diversity in the workplace.

McKinsey followed up with a 2018 report that echoed the finding of the first: diversity is good for the bottom line. Companies with gender diversity at the executive level were 21 percent more profitable than their less diverse competitors. Companies with culturally diverse executive teams outperformed their competitors by 33 percent.

In both the 2015 and 2018 reports, McKinsey delivered bad news to companies with poor diversity. Companies that fail to cultivate gender and culturally diverse teams perform up to 29 percent worse than their competitors. Companies that fail to recruit minorities need to figure out how to increase diversity in the workplace.

Leverage Diversity in the Workplace

There are no disadvantages of diversity in the workplace. When companies go beyond simple compliance and truly leverage diversity on their teams, they can outperform their competitors. Businesses can better withstand unexpected challenges, such as a pandemic, when they leverage the benefits of diversity in the workplace.

Businesses can avoid “group think” when they prioritize diversity in the workplace. Companies with a diverse workforce will benefit from the different perspectives and experiences their employees bring to the table. Leveraging diversity on teams will lead to more creative solutions and innovations.

High-quality talent demands diversity as well. According to a survey by Glassdoor, 76 percent of respondents said diversity is important when considering job offers. Professionals under 35, especially, expect their employers to emphasize diversity, equity, and inclusion. Companies that prioritize diversity in their hiring efforts can attract and retain this top talent.

You’re more likely to understand your customers’ needs when you leverage diversity in the workplace. The U.S. is rapidly moving toward a diverse population. Will your workforce be diverse enough to meet the needs of an increasingly diverse consumer base?

Realizing the benefits of diversity in the workplace requires more than hiring for diversity. To really tap into the potential throughout your workforce, you need to leverage diversity. Leveraging elevates diversity from a numbers game for compliance to a comprehensive strategy for diversity hiring and development.

Download ExactHire Company Culture E-book

An Effective Hiring Process Includes Diversity

The first step to employing a diverse workforce is an effective hiring process that includes diversity as one of its primary goals. Impress upon your team the importance of an effective hiring process that emphasizes diversity. Companies that understand the importance of hiring and retaining the right employees are more successful.

One or two (or more) stakeholders may (silently) think the company should hire the best qualified individual rather than hire for diversity. Explain to your hiring team that the company will always seek out the most qualified person for the job. But unconscious biases often exclude highly qualified people from marginalized groups. Dismantling these unconscious biases is the first step to a hiring process that promotes diversity.

An article in the Harvard Business Review details a study conducted to uncover biases while rating resumes. They found that a female or minority candidate needed a 4.0 GPA to get the same rating as a white male with a 3.75 GPA. A white male with an impressive internship received a 50 percent higher rating than a female or minority with the same internship.

Understandably, your hiring team may feel uncomfortable with the idea that they, too, have implicit bias. However, leveraging diversity goes deeper than simply hiring for diversity. To have a truly inclusive workplace, your hiring team should understand and dismantle their own implicit biases.

Technology may help you avoid implicit bias in your candidate selection. Applicant tracking software can scan and sort resumes for qualifications. The resulting list will be free of human bias. ATS can also track your applicants to help you identify problem areas in your recruiting efforts.

Hiring Diverse Candidates for Your Organization

Hiring diverse talent requires intention and strategy. Even the most committed companies may fall short in their diversity goals when they fail to proactively recruit a diverse workforce.

Start by examining your requirements for the job, such as GPA. Applicants who come from low-income backgrounds likely had to work while attending college. Their GPA may have suffered under long work hours. Failing to account for situational differences among applicants can lead to poorer hiring decisions.

These situational differences extend to attaining a degree. Since the Great Recession, employers inflated the importance of degrees for entry and mid-level jobs. Yet, in 2016, just 30.8 percent of Black adults had attained a college degree, compared with 47.1 percent of white adults. Furthermore, degree holders in these jobs do not always perform better than high school graduates.

Reexamine the necessary skills for entry and mid-level jobs within your organization. Place a higher value on work experience. If you still find that candidates need specialized skills, consider recruiting from trade schools or implementing an in-house training program.

Consider your interviewing process from the lens of marginalized groups. Are you flexible with your scheduling? Do not doubt a candidate’s commitment just because she isn’t available for an interview until next week. Up to 58 percent of the nation’s low-income families belong to non-white racial groups. Candidates may be working multiple jobs or jobs with unconventional schedules.

You may be sabotaging your diversity hiring efforts if the application process and virtual interviews require too much technology. Black and Hispanic candidates have less access to the Internet and laptops. On the other hand, these candidates are more likely to primarily use cell phones for their job search and applications. A hiring process that embraces mobile technology can boost your efforts at creating a diverse workforce.

 

Workplace Diversity Goals in Hiring

You can create diversity hiring goals to gauge your success and examine areas for improvement. Good diversity goals focus on the corporate culture, the corporate branding, and corporate recruiting. Your company is more likely to meet its diversity goals if you effectively communicate them.

Your compliance reporting likely already contains information about how your hiring metrics compare with the general population for your area. You’ll have access to even more data if you use an applicant tracking system. Finally, examining your current workforce and diversity at all levels, including executive levels, can create a clearer picture.

Now that you’ve compiled your data, you can look for areas of improvement.

  • Does your workforce include as least as many diverse employees as the community’s population?
  • Are candidates from marginalized groups applying for jobs within your organization?
  • Is one group disproportionately offered interviews compared to minority groups?
  • Is your hiring team composed of a diverse group of people?
  • Is there pay disparity in your company between marginalized groups and their peers?
  • Does the demographic of your managerial and executive positions match the demographic of your entry level positions?

When you understand where your company is lacking, you can create actionable steps towards a more diverse workforce. These steps are more achievable if you communicate them correctly to your staff. Companies are more likely to achieve their diversity goals when leaders tell their teams that diversity is important and requires a focused effort. This creates a positive message around diversity and also creates buy-in from their staff.

Diversity Recruiting Strategy

Many companies find that minorities and marginalized individuals aren’t applying for open positions. A diversity recruiting strategy that proactively seeks these candidates can help. In addition to removing unnecessary the educational and technology requirements mentioned above, recruiters can implement strategies that encourage minority applicants.

Create a culture that values diversity and inclusion in recruitment and beyond. Incorporate your diversity initiatives into your company mission and value statements. Provide company-wide diversity training, with an emphasis on those in management and hiring teams. Include minorities in your company’s marketing campaigns. Emphasizing diversity within your organization and your branding will create a welcoming atmosphere for minorities.

Connect with community organizations. Look for associations that attract minority members. As you speak with professionals in your community, learn about the employment issues these groups are facing. Build a network that includes professionals in underrepresented groups. Lean on your network for employment referrals.

Expand your recruitment efforts to schools with a significant minority population. Minorities are underrepresented in the nation’s top schools. Companies face diversity recruiting challenges when they focus on a few universities. Instead, redirect some of your recruiting efforts to schools with ethnically diverse students.

Invest in an applicant tracking system. An ATS comes with several features to help you reach your diversity goals. You can more easily comply with diversity hiring laws with built-in compliance reporting. The ATS will also help you build a talent pool you can use for future openings. And the resume sorting capabilities of an ATS can help you ensure diversity in your recruiting and hiring practices. The right applicant tracking system will come with a fully mobile careers site that allows applicants to use their smart phones.

Final Thoughts

Diversity is hard, but well worth the effort. Federal compliance and the financial benefits of diversity will always be important. But the biggest reason to hire for diversity is because it’s the right thing to do.

The tragic stories in the news over the past year brings racism and bias to the forefront of our collective consciousness. At the same time, the pandemic has undone the gains women have made in the workforce. Now is the time for your company to recommit itself to Diversity, Equity, and Inclusion.

If you’re interested in learning how applicant tracking and onboarding software can help you achieve your diversity goals, you can register for a personalized demo with a one of our solutions team members.

 

 

Photo by Sharon McCutcheon on Unsplash

What Are the 5 Main Drivers of Employee Retention?

Are back-to-back candidate interviews cutting into your other responsibilities? Are there so many new faces at work that you have trouble remembering who needs to complete the latest safety training module? Or maybe a hostile culture simmers under the heated grumblings of overworked, under-staffed employees. You’re inviting these and many more problems if you aren’t implementing these 5 main drivers of employee retention.

Hey, I get it. People leave their jobs for a variety of reasons. And at first glance, it may seem like there isn’t much you can do when an employee says they want to move to another city or switch careers. The reasons for high turnover that you hear most seem to be out of your control. It’s easy to hyper-focus on recruiting, even if you understand the importance of employee retention. But when an employee leaves, the reasons they give you for leaving may not be the whole story. Giving these employees a reason to stay may be easier than you think.

Employee Retention Definition

A simple employee retention definition is “the rate at which employees leave a company and are replaced by new employees.” New hires are at the highest risk of leaving, with many companies losing one-third of these workers. Long-term employees, however, take experience and knowledge with them when they leave. When your employee turnover is high, you lose the stability long-term employees bring.

The importance of employee retention can’t be overstated. Whether your business is Armstrong Flooring or Physicians Healthcare Network or anything in between, you need a high employee retention rate to stay competitive. Companies that maintain a definitively high employee retention rate enjoy greater profits and productivity. Their teams are stronger and their customers have a better experience. By keeping your employee retention rate high, you spend less on recruiting and training. You also get to hold onto the wealth of knowledge and experience your current employees offer. Employee retention, by definition, reduces the high cost of turnover.

Employee Turnover

A high employee turnover rate, on the other hand, is costly. According to the Work Institute’s 2017 Retention Report, every employee that leaves costs your company about 15 percent of his salary. That cost goes up if the employee leaves before his one-year anniversary, long before his productivity can offset recruitment costs. Companies lose an average of one-third of these new hires.

High turnover has hidden costs too. Decreased customer service that goes along with too many inexperienced new hires can drive sales down. Low morale and a weak team also exemplify the harm that comes from voluntary turnover. These factors prove the following statement about turnover: poor employee retention is expensive.

Employee churn refers to the rate at which companies must hire new employees to replace the ones who are leaving. A high rate of churn tends to have a negative impact on the remaining employees in an organization. And while insufficient pay is one of the reasons that lead to employee turnover, it isn’t the most important. Before companies can find ways to retain employees, they must first know what is driving their workers to leave.

Factors Affecting Employee Retention

There are five main drivers of employee retention.

  1. The first driver for employee retention is effective onboarding. Introducing your employee to the company and her new role will improve your company’s image in her mind. By proactively creating an onboarding plan for each new hire, you take the reigns on another important factor that affects employee retention: culture.
  2. The second factor, a positive workplace culture reduces turnover and improves employee retention. Emphasizing a positive culture during employee onboarding is one way to improve employee retention. A strong value statement and purpose will help you find ways to improve culture throughout your company.
  3. The third factor that affects employee retention is job satisfaction. An employee who is satisfied with her job feels her work has meaning, is challenging, and is fulfilling. There are several ways you can improve workplace satisfaction. Recognizing achievement, fostering growth, and increasing responsibility are a few.
  4. A fourth way you can improve employee retention is through environmental factors at work. These are things like salary and benefits, work rules, and coffee breaks. Maintaining facilities that are comfortable and conducive to good work is just one way to improve the environmental factors that can reduce employee turnover.
  5. The fifth driver of employee retention is inertia. Turns out Newton would have been a good HR manager because he understood a body that isn’t moving won’t move without good reason. Even if you’ve proactively addressed the previous causes of turnover, your employee may leave if there is a significant change to his circumstances. If he becomes fully invested in his stock options and his children graduate college, he may decide to move on to a less stressful position. HR managers need to create drivers for employee retention during all phases of an employee’s tenure.

Adams Equity Theory and Employee Retention

John Stacey Adams is an American psychologist who developed the earliest need-based theory of human motivation at work. The resulting Adams Equity Theory is still used over 50 years later. The theory states that the employee’s input, in the form of his work, must be balanced by the output, such as salary or job satisfaction, he receives from his employer. Adam’s Equity Theory neatly balances employee motivation with employee retention.

Hard work, which according to equity theory is an input, should be balanced with the result the employee gets in return. According to Equity Theory, employees lose motivation if they feel their input is greater than the output they receive. Conversely, employee motivation is higher if they trust they’ll receive an output that matches their input.

According to Adam’s Equity Theory, employees provide the following inputs: effort, skills, knowledge, loyalty and experience. Employees receive as outputs financial rewards as well as immaterial rewards, such as recognition, challenge, and responsibility. These financial and immaterial rewards keep employee turnover low. Adams Equity Theory provides a formula for employee retention strategies by balancing the employee’s input with the rewards he receives.

Employee Retention Strategies

Employee onboarding software can help you organize and develop an onboarding process for each position. By strategically introducing employees to your company and their roles, you’ll help them become productive more quickly. You can also emphasize your company’s culture and expectations through the onboarding process. Companies with a strong onboarding system enjoy higher employee retention rates.

Defining your company’s values and purpose is the first step to creating a better culture. Once you have a clear vision for your company’s mission, you can use employee assessments during the pre-screening process for candidates. Employment assessments are one of the most effective employee retention strategies. You’ll be able to screen candidates for the qualities you value in your corporate culture such as work ethic, integrity, and compassion.

You can expand the scope of your employee retention strategies by implementing ways to increase job satisfaction. Remember, effective employee retention goes beyond salary and benefits. Recognize your top employees’ achievements. Incorporate opportunities for growth through educational and training programs.

Pay attention to the environmental factors that drive employee retention. Create a workplace environment that is comfortable and conducive to productivity. Make investments in software and other tools your employees need to reduce their frustration and increase efficiency. Pay attention to the details, like providing quality coffee and tea.

Proactively work to make sure your employees don’t have a reason to leave as their circumstances change. Yearly bonus programs are more effective than stock options that become vested at the same time. Use HR software to identify employees who may have plateaued in their careers and find ways to reignite their enthusiasm. Interviews that assess current employees‘ experiences will help. If an employee does leave, conduct an exit interview to find out why.

cultivating-company-culture-exacthire

 

Employee Retention | PDF Download

The importance of employee retention goes beyond saving the time of your HR team. The numerous benefits of employee retention will keep your company competitive. You can increase the scope of your employee retention measures through strategies that address the drivers of employee turnover. Employee retention strategies should balance employees’ input with the output they receive from your company. A thorough exit interview will help in employee retention efforts as well.

If you need more ideas on how to create a workplace that encourages employee retention, download our guide on Cultivating Company Culture.

 

Photo by kate.sade on Unsplash

 

 

End-of-Year HR Budget Spending

It’s been a long, roller coaster of a year…and we still have another month to go!

The HR professional’s December to-do list is usually longer than a kid’s wish list for Santa. However, as with most things in 2020, your list is likely a bit different this year. It may include the same items from years past, but the pandemic has forced organizations to look at these items through a new lens. Take, for instance, end-of-year HR budget spending.

End-of-Year HR Budget Spending

“Use it or lose it” is a typical theme around this time of year. However, with so much volatility in 2020 spending, it is important to remain fiscally responsible with your remaining funds. In fact, fiscal responsibility should be top of mind for the majority  organizations right now. More than ever, spending truly needs to be a cost-savings investment.

To help you effectively invest (not simply spend) your remaining budgetary funds, here are a few key questions to ask initially.

What are my company’s goals for 2021?

When we were celebrating 2020’s arrival at New Year’s, little did we know that our goals and strategies for the year would soon drastically change. Perhaps your 2020 looked something like this:

Pre-COVID goals

    • Increase profits.
    • Be the best known product/service provider in the city, state, region or nation.
    • Reduce turnover.
    • Hire the best talent.

COVID goals

Goals before the pandemic still applied, but new goals likely emerged out of necessity.

    • Reduce time on tasks to maximize cost-savings.
    • Minimize furloughs and layoffs.
    • Stay operational.

With all the curveballs and changes thrown at you this year, what will your goals for 2021 look like? It’s a good idea to take the time and do some internal soul searching here. A SWOT analysis is a reflective strategic process that can help you make sense of 2020 and provide learnings to use in 2021 goal setting. It includes asking yourself questions like:  

  • What worked well?
  • What did not work?
  • What could we modify?

Evaluate your answers carefully and consider the knowledge that you acquired this year, then determine how your end-of-year spending can support strategic goals and operational scenarios for 2021.

What will enhance productivity for my organization?

Our work environment has changed dramatically. And with no clear roadmap ahead, there are many questions to answer:

  • Will all or some of your employees work remotely?
  • Is remote work viable as an option, or will it now be required?
  • How can communication be improved among teams?
  • How can organizations improve the work lives of employees to make it easier to complete tasks?

While these questions may not be easy to answer right now, they are great topics to discuss with your employees. These discussions can help employees feel connected to their work and supervisory teams.

Organize periodic video or phone chats to see how work is going, and to see if outside environmental factors are impacting your employees. Unless you ask and truly listen to their answers, certain work and non-work stresses may go unrecognized.

What can be automated or streamlined to save money?

Employee onboarding is one of the many processes that have been upended by the pandemic. Completing new hire paperwork onsite has not been a viable option for the majority of the year, and so many organizations have had to rely on email, scanning, printing and other workarounds. This is obviously not the most efficient and engaging way to acclimate new employees.

Employee onboarding software offers the ability to create tasks and engage new hires with paperless onboarding. No matter where you or your employees are, tasks can be assigned among your team for completion. OnboardCentric by ExactHire also has the ability to integrate with E-Verify, which is extremely helpful as more states are requiring the use of this federal program.

Similarly, organizations have had to be creative when it comes to the the hiring process. Many have embraced technology, but are struggling to cleanly incorporate new digital tools into traditional hr processes. ExactHire HR Software bundles together several tools that support remote hiring, such as integrated:

    • text recruiting (with no extra fees)
    • email and attachments
    • event scheduling
    • video interviewing

And when it’s time to send an offer letter to an applicant, you can send and receive documents directly from the applicant’s record. Other optional integrations include background checking and assessments. Reduce time to hire and manual labor in the hiring process by posting jobs and communicating with applicants and teammates directly using ExactHire HR Software.

How can we show appreciation for employees?

Do my company’s employees know they are appreciated? How can we reiterate that to them? Unfortunately, social events have been hindered this year due to social distancing and varying local/state capacity orders. However, in-person events are not the only way to show appreciation for your teams.

Supporting each other has never been more crucial than this year. Some employees are juggling remote work (which may be new to them), while others continue to perform tasks onsite with health concerns about COVID. Companies that provide flexibility in work hours and environment will help relieve employee stress and enhance company loyalty.

A flexible work arrangement will go a long way in showing appreciation and empathy for employees. However, when employers also need to find a way to bring everyone together–especially when we’re not physically together. Gifting items to employees is one way to do this. Company logo items are a good approach; your employees can represent your organization with pride. But maybe a deeper look is necessary.

How are your employees doing at home? Are there any resources they need? Do they have the means to provide a meal, particularly on the holidays? If not, consider checking with local farmers or grocery stores to see if discounts could be provided for bulk purchases for certain foods that could be distributed to employees’ families. Support your community while supporting the life of your organization – your employees.

Budget Planning for 2021

If your organization’s funding is already allocated through the end of the year, take the answers to these questions and apply the information when crafting your organization’s 2021 budget proposal. Designate funds in your new budget to invest in resources and software that will yield a fruitful return for your organization and its people.

Here’s a virtual high five and air hug to you. It’s been a rough year, but we are in this together! Cheers to a calmer 2021!

If you would like to learn more about ExactHire HR solutions or discuss your unique hiring needs, please request a demo call. We’ll discuss your needs, answer your questions, and–if it makes sense–provide you with a tour of our software.

6 Considerations for Sharing Bad News

What do you want first: the good news or the bad news? We’ve all faced this question before, and depending on who it came from, we’ve answered with an anxious smile or an indifferent shrug. Our reaction was based on an immediate calculation–just how bad could the news be?

From the perspective of the person delivering the news, the offer of “good news or bad news first” is a way of softening the bad news. It’s a small expression of empathy for those receiving the news. Unfortunately, it’s also a tired cliche that, when used to share bad news, can undercut a leader’s professionalism and integrity–especially when there’s little, if any, good news to be shared.

But while the “good news/bad news” line is best kept on the shelf, organizational leaders should still have a plan for sharing bad news effectively. Here are six considerations for doing just that:

Prepare to Share

Bad news has the tendency to arouse bad feelings. Anger, jealousy, and disappointment are all feelings that can cause individuals to react negatively to bad news–and to those delivering it. Leaders can better manage these reactions by preparing to share bad news, which includes:

  • Having a complete and solid grasp of the facts surrounding the bad news
  • Understanding the scope of the bad news and possible implications for the future
  • Anticipating questions that will be asked, and having the answers to those questions
  • Scripting key thoughts and responses

Take a Step Back

Sharing bad news is never easy. This is true whether it impacts one, several, or hundreds of employees. So while preparing to deliver bad news should be taken seriously, leaders must also keep the news in perspective. Consider the following to help relieve the stress of sharing bad news:

  • It’s unlikely that you are the first person to share this type of news
  • The news must be shared, and it’s your responsibility to share it
  • Sharing the news, rather than hiding it, will produce better outcomes

Stay Detached

With good preparation and the proper perspective, most leaders will be in a position to mitigate conflict that may arise from sharing bad news. Of course, as the great philosopher, Mike Tyson, once said, “everyone has a plan until they get punched in the mouth.” Or, to put it in less violent terms: having a plan is always necessary, but not always sufficient.

Once a leader begins to actually share the bad news, any number of things can happen that could derail even the best plan. Leaders need to understand that this is possible. Then, they must be able to detach from an emotionally-charged conversation, and remain calm in the face of conflict.

This leads us to our next consideration, stick to the relevant facts.

Stick to the Relevant Facts

When a conversation becomes charged with emotions, it can very quickly move into an open argument. The best way for leaders to avoid an ugly argument is to maintain a focus and emphasis on the facts, specifically the facts that are relevant to issue at hand.

Once a leader strays away from the facts and begins making emotional appeals, or addressing unrelated issues, all advantage gained from planning is lost. This also largely precludes a leader from gaining closure on the original bad news. In short, a leader who is led into an emotional argument…isn’t really leading.

Provide Vision

It’s not enough for leaders to simply share the facts when conveying bad news. After all, effective leaders should inspire positive action and loyalty in their employees. This can be achieved by providing employees with a vision for the future that moves past the bad news of the present.

Importantly, a leader’s vision shouldn’t ignore realities or downplay potential risks, and it should be flexible enough to provide employees with options. It requires taking an honest look at how the bad news will impact the future of the organization and its employees. Bad news can rattle employees, but a strong vision for the future can provide them with tools to overcome challenges and flourish.

Close with Strength

Finally, a strong closing to the conversation will instill confidence in employees and further support the leader’s vision. It’s common to open the floor to questions at this point if they have not already been asked. As mentioned above–and perhaps more important here–leaders should answer only relevant questions, and the answers should be fact-based. 

The closing should be brief. Leaders must not hesitate to name some questions as being outside the scope of a conversation or decline to answer other questions. Ultimately, if the bad news has been communicated effectively up to this point, there should be very few relevant questions.

Good News or Bad News?

At some point, all organizations will have to share bad news. And although conflict can be almost certain, an organization’s culture and leadership will go a long way in determining whether the news will cause damaging conflict. Organizational leaders who have a plan for sharing bad news can mitigate conflict, calm emotions, and provide a path forward. In this way, bad news can inspire employees to raise their performance to new levels. And that is good news.

 

Transparency in Leadership

Increasingly, people in all areas of society are seeking transparency in leadership. We want to know the “why,” “how,” and “who” of decision-making, especially when those decisions affect us. Furthermore, we want to trust that decision makers are taking our interests into account when arriving at decisions.

The desire for transparency is so strong that many leaders may feel pressure to vet, check, and double-check every decision with every stakeholder. Of course, this is impractical, if not impossible.

We know that there are some decisions that can be made with little input, and others that require extensive discussions and long consideration. However, as is often the case, it’s the area in between those extremes that can create problems. This is where leaders must practice transparency in order to maintain the trust of stakeholders.

Leadership Transparency in the Workplace

Suppose the executive leadership of an organization decides that it is necessary to reduce work hours for its employees. The leadership group has not spoken about this to managers outside of the group, and they anticipate that this change will be a surprise to everyone. Still, the leaders believe that it’s better to implement this decision sooner rather than later.

A Top-down Decision

No matter how the news is communicated, the decision will not be popular with employees. So rather than beat around the bush, one lucky member of the leadership group is asked to simply communicate the decision. This spokesperson for the leadership group anticipates the following questions:

  • Why are we reducing hours?
  • How was this decision made?
  • Who was involved in the decision?

So the leader provides the answers to these questions in her announcement, and she is hopeful that the employees will be understanding and take the bad news in stride. Unfortunately, that is not the case.

Blindsided

Managers outside of the decision making process immediately began receiving questions and complaints regarding the reduction in hours. They had no good answers for the employees. This greatly damaged trust and respect between the managers and their reports.

The managers resented leadership for making such a quick decision without their input. They felt blindsided and unfairly set up to fail in managing their teams. Just like the other employees, they lost trust and respect for the executive leadership team.

Very soon, news reaches the leadership group that employee morale is tanking. What happened?

Part-time Transparency

Although the leader built understanding around the context of the decision in her announcement, the managers and other employees felt almost tricked by the sudden reduction in hours. The leadership failed to communicate any information beforehand that would have led the employees to anticipate this change. For many employees, the news was bad, but the sudden announcement and surprise were worse.

Transparency in leadership cannot be part-time, and it cannot only accompany official announcements or appear on the backend of an important decision. It must be proactive, constant, and sincere. It must be part of an organization’s culture.

A Culture of Transparency

A strong, positive organizational culture will not often materialize without the presence of effective leadership. Leaders create a compelling mission and vision, and then determine the organizational values that will advance both. Taken together, these are the foundational elements of organizational culture.

An organization can profess to hold numerous values, but successful ones will whittle these down to 4 or 6 values. The result is a set of core values that inform workplace behaviors. An organization that wants to embrace transparency in leadership, then, must ensure that its core values encourage this behavior.

The behavior of transparency in leadership can be described in many ways, but a helpful description would be: the timely, frequent sharing of information and the invitation to provide feedback or enter discussion in regard to this information.

Timely and Frequent Sharing

As previously mentioned, transparency in leadership is not seeking and considering input on every decision, and it is not sharing every piece of information on every decision. The right frequency of sharing information, then, is a frequency which ensures that employees are kept aware of:

  • the status of ongoing issues, and
  • the possibility of emerging issues.

This can be thought of as simply “keeping people in the loop.”

Timely sharing of information is seeking to achieve the above, while also considering whether there is a need to know the information at a particular time. For example, interrupting work on a time-sensitive project to hold a meeting where the topic is a new snack program….that is not timely sharing.

Feedback and Discussion

Of course, simply sharing information is not enough to create transparency in leadership. A one-way street of top-down sharing  would cause most employees to feel as if they were only receiving a long list of dictates and decrees. An organization that values transparency must go further and give every employee the ability to influence decisions by seeking their feedback.

Feedback can be collected through surveys, but individual or small-group discussions are often the most effective vehicle. This provides an opportunity for all parties to gain clarity in understanding. Additionally, discussions often uncover new perspectives that the decision makers may not have considered previously. 

While seeking feedback is important, leaders must also convey sincerity in seeking feedback. Employees must feel that their thoughts and perspectives will be taken into consideration by decision makers, and they must see evidence of this when decisions are announced. Few things hurt employee morale more than the constant request for feedback that is never considered. 

Transparency Mitigates Conflict

The leadership group in our workplace scenario created conflict when making the announcement to reduce hours. Specifically, the conflict was between the employees anticipating a certain amount of hours and the leadership’s decision to reduce hours. From the organization’s perspective, the conflict was unavoidable; however, an organization that values transparency understands that while a conflict may be necessary, it doesn’t have to be damaging.

A damaging conflict is most likely to occur when there is unequal access to information that, when revealed, moves one party to resent the other. Transparency in leadership, then, prevents damaging conflicts by ensuring that all employees have access to important information at the right time.