Is Hybrid Work the Future of Work?

If you haven’t heard, Apple workers threatened to quit if they’re forced back to the office three days a week. Meanwhile, the New York Post reports that one Google executive, when speaking of the hybrid schedule currently in place, said (allegedly), “We’ll get everyone back to the office eventually. I just don’t want to pick that fight now.”

Perhaps you agree with the Google exec’s sentiment. Yet, the reality remains your employees likely have a similar mindset as Apple’s. It remains to be seen who will win the tech talent’s tug-of-war. But one thing is certain about the future of work: hybrid work will be central to the conversation.

And that’s regardless of whether you decide hybrid work is the future of work at your company.

Work Trends

Gallup’s money is on the tech workers when it comes to the future of work after Covid.

After conducting a hybrid work survey, Gallup predicts “hybrid work schedules will become the norm for most offices.” Currently, about 80% of employees whose jobs can be done remotely are working a fully remote or hybrid schedule, according to a February 2022 Gallup study. According to Gallup’s predictions for the future of work, hybrid work schedules will be adopted by 53% of remote-capable jobs.

 

hybrid work schedules will be adopted by 53% of remote-capable jobs.

Hybrid Work Challenges

Many companies are understandably resistant to allowing their employees to work remotely indefinitely. These companies cite future of work topics such as loss of culture, decreasing innovation, and an inability to directly supervise employees as reasons for putting the kibosh on employees’ demands to continue working remotely. As a result, many companies adopt a hybrid work schedule because it seems like a compromise.

With a hybrid work from home schedule, companies require employees to come to the office part of the time, usually two or three days a week, and allow employees to work from home on other days. The general thinking is that hybrid work is the best of both worlds. Employees can enjoy a better work-life balance and companies can maintain control over important business standards.

But hybrid work comes with its own minefield of challenges.

Hybrid Work Can Be Costly

When you sent them home in 2020, you may have noticed that some of your employees were consistently having internet or technical issues. Their faces froze during Zoom calls, or their files didn’t transfer as quickly. It became apparent that running a home office came with expenses. Companies with a hybrid work model may have stepped in by subsidizing for faster internet service, more data on cell plans, or basic ergonomic gear. As you bring employees back into the office with a hybrid work model in 2022, you’ll bear the cost for yet another workspace.

Hybrid Work May Nullify the Perk Employees Want Most

Parents, especially, cited the most important reason they love working from home: flexibility. Remote work allows employees to pick their kids up from school or take them to a doctor’s appointment. Except for very young children, many kids don’t require a babysitter as long as mom or dad are in the next room.

Requiring parents to come into the office two or three days a week at set hours nullifies the perks associated with flexibility. Many daycare options don’t price a la carte style and force parents to pay even for days kids aren’t there.

Hybrid Work May Increase Proximity Bias

Proximity bias is the unconscious favoritism leaders show to employees whom they see frequently. As a result, employees who work at home even part of the week may miss out on advancement opportunities. Since women and people of color are more likely to prefer working at home due to family obligations, hybrid work model examples may undo the gains companies have made on diversity.

Hybrid Work Model Tips

Left unchecked, these hybrid work model pros and cons can jeopardize productivity, not to mention your company’s bottom-line. You may be tempted to just throw in the towel on anything other than having your employees back in the office full-time. Be aware, though, that Gallup anticipates that only 23% of remote-capable jobs will be fully on-site. And with only 9% of the workers preferring to work fully on-site, you stand to lose talent to competition that can overcome the challenges of hybrid work.

The following tips can help you crush the challenges that might have you second-guessing hybrid work.

Redefine and Reduce Your Office Space

Don’t force workers into the office to do tasks they can easily do at home. Instead, create purpose and meaning for time spent in the cubicle. Better yet, dismantle the cubicle. Create common areas where employees can work that encourage collaboration.

Make Time for Connections

A feeling of belonging is one of the key indicators for employee engagement. Since employees are spending more worktime at home, carve time in the office for connection. Encourage employees to share their challenges and their wins.

Recognize the Savings of Hybrid Work

Sure, hybrid work creates costs you didn’t have before. But it also creates savings. Global Workplace Analytics estimates that companies save $11,000 per hybrid employee per year. These savings come from increased productivity, lower real estate costs, and lower employee turnover.

Explore Software and Cloud Computing Options

If you’re adopting hybrid or remote work for the long-term, it’s time to rethink your IT solutions. Software and cloud computing options can bring your distanced workforce together more seamlessly. They may also eliminate the need for pricey internet with high data limits. A cloud service can house your large files, reducing the need to transfer data and increasing security.

Be Flexible with Hybrid Work

Be creative with hybrid work schedules. Some parents may prefer putting in shorter hours over four days instead of three if doing so allows them to pick their kids up from school. Employees who live farther from the office may prefer to come in two days a week. Be open to allowing employees to mold a schedule that works for them, within reason.

Be Proactive About Employee Recognition

Succumbing to proximity bias is lazy managing. By now, the pandemic and the switch to remote work should have reorientated your leadership to a better style of employee recognition. Your leadership team should be focusing on output rather than comforting, yet hollow, markers such as coming in early or staying late. And being proactive about employee recognition will help employees know you see their efforts, even when they’re working at home.

Hybrid Work Culture

The above tips still don’t address the elephant in the room and the reason most tech CEOs shun remote and hybrid work. The tech giants ushered in the age of corporate culture with their massive complexes and their mod maxims to “don’t be evil.” And while slides and free sushi are questionable benefits, the founders of the digital age were on to something. A strong company culture is profitable.

So how can you have a strong hybrid work culture while answering your employees’ demands for work-life balance?

That’s a trick question because, in fact, it contains part of the answer. By going through all the trouble of adopting a hybrid or remote workplace, you’re demonstrating your commitment to your employees. That, in itself, increases your employees’ commitment to your company. And that mutual commitment strengthens your company’s culture.

But there’re other things you can do to improve your company’s culture in a hybrid work setting. Rethinking what culture in the workplace can be a good start.

An article in Harvard Business Review says this about company culture, “If work is something you do, and not a place you come to, then maybe it’s about time we got rid of the notion that culture sits within the four walls of the office.”

In a way, recognizing that culture isn’t about place helps us define culture better. Suddenly, sushi and slides seem even sillier as the crux of culture comes into focus.

According to Brooke Weddle of McKinsey & Company, culture is “a common set of behaviors, plus the underlying mindsets that shape how people work and interact day to day.”

It’s interesting to note that “place” doesn’t figure into Weddle’s definition of culture. That distinction is even more important as leaders and employees alike grapple with the aftermath of the pandemic. Because whether your workers are in the office or at home, all of us have changed. Covid has made people more purpose driven. There is simply no going back to a pre-pandemic perspective or culture.

Tips to Strengthen Hybrid Workplace Culture

  • Encourage employees to adopt an entrepreneurial mindset. That doesn’t mean employees are driving your business strategy. It means encouraging employees to take ownership and pride in their roles. Encourage independent initiative and creative problem-solving where appropriate.
  • Involve your employees in the development of your hybrid work model. You may be sold on the swanky new messaging software. But your employees may find it more cumbersome than email or a phone call.
  • Find opportunities for connection. And leave no stone unturned. Water cooler chats before meetings, bring your pet to the Zoom call, and in-person events will improve your employees’ sense of belonging.
  • Encourage boundaries. There’s one hybrid work culture con that can create stress for employees. With the office always a few steps away, some employees may start working too much. Create trainings and policies that encourage employees to step away from their home office.

The Future of Hybrid Work Is Here

The trailblazing tech giants may have heralded in the information age and the sanctity of corporate culture. But they may be behind the times if they insist on bringing their employees back to the office. Of course, only time will tell.

For now, we know employees prefer working from home at least part of the time. We also know that many of the challenges that may make you hesitant to embrace the future of a hybrid workplace can be overcome. Most importantly, adopting a hybrid work policy can bring your company’s values into focus. And with that clearer perspective, you can create a stronger culture post-pandemic.

Rather than returning to the way you did things in 2019, use the lessons of these past two-plus years to create a stronger culture that embraces your employees’ shifting priorities.

If you’re wondering how you can recruit in 2022, watch our webinar Post-Pandemic Hiring: Align Recruiting to the New Normal.

 

 

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Top 5 New Year’s Resolutions for the HR Generalist

The year 2022 has arrived at our door whether we are ready or not. Traditionally, at the culmination of the year, rumination over the year’s positive and negative experiences flood the mind while music like Auld Lang Syne resonates with the validity of its translation: “Days Gone By”.  Truly, those days have gone by quickly, yet at times, days are seemingly endless. Let us turn our energy to starting a new year with renewed focus and optimism.

As we reflect on days gone by and the challenge of starting a second year of business operations in a pandemic, it helps to focus on the core of a business’s success. And while customers are a driving force for profit and growth, the ultimate force that helps sustain and grow our organizations–the core of our success–is our employees.

Each day, statistics and articles are published focusing on “The Great Resignation”. No one can deny that people are leaving the workforce in record numbers for myriad reasons.  Executive leadership within organizations must be cognizant of the daily struggles of their employees at all levels. Eliminating the disconnect between managers and support staff is crucial to ensuring a productive and positive working environment.

HR Generalists – keep your superhero cape fastened.  Here are five goals for 2022 that will help keep the light bright within your organization.

  1. Reevaluate your current talent – Look internally at your talent. Are there current employees who would be ideal for your vacant roles?  Do you have a succession plan in line if your key talent and leadership leaves? Current employees are knowledgeable of the company culture and already meet a basic learning curve.
  2. Retrain and refocus – As technology evolves, are your employees staying up-to-speed? Do certain departments or employees need specific training offsite, or can outside trainers meet your needs onsite?  Many educational institutions offer group training designed after a thorough needs analysis which can be delivered onsite or virtually.
  3. Enhance the employee experience – Make physical and mental health for yourself and others a priority. Does the organization offer, and encourage, the use of physical and mental wellness plans? Many gyms have closed or are on modified schedules due to COVID. Some individuals do not feel comfortable going into public exercise facilities. Any option to provide paid time to work out for 30 minutes during the day at the company or at home?
  4. Lead by example – HR is the go-to for the majority of items. Often, HR receives complaints and concerns but not always positive feedback on the successes of others or wins across departments. Seek ways to generate positive feedback from employees and departments to improve struggling morale.
  5. Flexibility, flexibility, flexibility – HR has been stretched to the point of snapping, but HR is also flexible enough to bounce back after being pulled multiple ways at multiple times. Our working world will not be able to party like it is 2019 anytime soon. Having contingency plans for staffing, support and incentives for employees to pick up additional tasks and shifts will help ease the roller coaster of departures and quarantines. Find ways to bridge the gap between onsite and remote employees. Weekly or biweekly sessions offered via video conferencing software might help.

Human Resources professionals are human like each of us. HR Departments of one or many need support too. The last two years have proved that we must work together to succeed.

 

To start 2022 more efficiently and streamline your employment processes, contact ExactHire to learn more about our Applicant Tracking Software (ATS), employee onboarding and employee assessment solutions to help increase your organization’s productivity.

 

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Hiring Former Offenders

Help Wanted! Now Hiring! Sign On Bonus to Work! Those attention grabbing, highly colorful signs are everywhere on windows, billboards, and yard signage. Look on social media or pick up a newspaper – more “Help Wanted” content. Go to the primary source for job openings – online job boards encompass an endless list of companies who are hiring for all levels of roles.

It’s never been more clear. Companies need employees now, and if companies do not meet their staffing needs to operate, doors will close—maybe permanently. So what can companies do to find more employees?

Pandemic Job Market

The pandemic has brought many challenges to the nature of the hiring process. Competition for employees is fierce with organizations scrambling to find additional perks to recruit, and even retain, employees. Good insurance and vacation time won’t cut it anymore; people are seeking flexibility and remote options because many need to be caregivers or provide support to children who are e-learning.

Additionally, there are many factors that affect the ability and willingness of individuals to work. Government funding plays a role along with concerns of physical and mental health due to COVID-19. Ultimately, in discussions with fellow HR colleagues, the consistent concern of finding available employees is reiterated. Where can organizations find potential candidates to fill their vacancies?

Hiring Former Offenders

After listening to an inspirational presentation delivered by Alice Marie Johnson at the HR Indiana Conference a few weeks ago, a solution for many organizations is readily available and has been in the forefront for awhile. To fill vacancies, it is time for organizations to take a clearer look at the former offender population.

First, a little about Ms. Johnson…Alice Marie Johnson was pardoned in 2020 after spending over 21 years in federal prison for her first and only conviction in a nonviolent drug case. She has been instrumental in criminal justice reform and helping former offenders become self-sufficient upon release. Ms. Johnson provided testimonials from multiple former offenders who simply want a chance to prove themselves to employers, their own families and even to themselves.

USA Today also provided statistics that we need to examine. More than 70 million Americans – that’s nearly 1 in 3 adults – have a criminal record. Those adults have families also so nearly 1 in 2 children have at least one parent with a criminal record.

A Brookings report published in March 2018 found that 45% of those released from prison did not have any reported pay in the first calendar year after they returned home. If a person cannot support oneself or their family, that affects the likelihood of recidivism. Earning a living wage to support oneself and family through employment can reduce the likelihood of committing future offenses and break the cycle of incarceration and poverty.

Justice Involved Hiring

As a country, we need economic stability, especially now in an unstable global market. A study released by the Center of Economic and Policy Research in 2016 found that the economy loses out on roughly 2 million workers and approximately $80 million in gross domestic product (GDP) by not hiring justice involved job seekers. That was in 2016, so take into account five years and the influence of a global pandemic, and those numbers have grown.

To help former offenders find more options to acclimate into life outside of prison and re-enter the workforce, the federal government passed the First Step Act. The First Step Act is a criminal justice reform law that reduces prison sentences by changing the sentencing guidelines and facilitating early release, and supports education and treatment programs in prison.

The need to hire former offenders is prevalent. Organizations such as Taking Action for Good (TAG, created by Ms. Johnson), Hope for Prisoners, and Indeed are offering resources to help formerly incarcerated individuals find the stability they need through work.

ExactHire does not provide legal counsel so please check with your company’s legal team. If your organization’s employment application(s) include questions related to conviction history, ensure there are established guidelines internally as to how the conviction will be evaluated in the applicant review process. Consider the impact of the conviction related to the nature of the job, the severity of the offense and how much time has passed since the offense to ultimately determine how much, or if at all, that conviction affects the individual potentially completing the duties of the role.

Ban the Box Policy

As more cities, municipalities and states evolve into Ban the Box entities, companies need to review their employment application content to confirm legality. Even if an organization is in a location that allows companies to ask if an individual has ever been convicted, is that question really necessary to include on an employment application?

Is it worth eliminating a population of individuals who want to work?

Once that question has been answered on an employment application, will that cause any staff to have preconceived notions?

Background checks are consistent resources in the hiring process. As an organization, consider removing the conviction question from the employment application initially to increase applicants. Then, if and when an offer is extended, conduct and review the applicant’s background check. The conviction may show, but at that point after reviewing the applicant’s qualifications and interviews, that applicant might have already demonstrated enthusiasm and willingness to work that supersedes a conviction from years ago.

Employers Benefit from Justice Involved Employees

Consider the nature of the organization. Does the organization have legal parameters that provide bona fide reasons to prevent the hiring of former offenders? Some industries, particularly healthcare, might have certain roles that have hiring restrictions. However, if an organization does not have specific guidelines that prohibit the hiring of former offenders, it’s time to review the qualifications of individuals in a population that is seeking to work.

Hiring former offenders can offer opportunities for an organization to adhere, or even develop, Diversity and Inclusion initiatives. Financial benefits might exist for organizations which hire former offenders as well. An organization might qualify for tax credits through the Work Opportunity Tax Credit (WOTC) program if hiring former offenders. Federal bonding programs also offer additional security for organizations who hire former offenders as well.

Staffing challenges are at an all time high. Let’s keep businesses open. Explore the opportunities for your organization by providing employment opportunities for qualified former offenders. We’re all in this together!


ABOUT EXACTHIRE:

ExactHire offers applicant tracking software with features, such as multiple applications, to allow an organization to customize employment application content. Our OnboardCentric solution has the ability to help organizations effectively manage potential tax credits.

 

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Where have all 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.

VIDEO

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, 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 GDP, 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.

 

Read and Watch More Change Your Approach to Hiring

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.

 

 

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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.

 

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