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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 Make a Tough Hiring Decision

in Workforce Management/by Harlan Schafir

There’s a lot riding on your hiring decisions. Studies show, when companies make good hiring decisions, employee turnover goes down and productivity and profits go up. The reverse is true when hiring decisions go wrong. Employee retention and morale go down, customer service suffers and companies struggle to maintain a competitive advantage. Whether an employee leaves voluntarily or is terminated, filling the empty chair costs thousands.

It’s easy to see why the future of an organization depends on making great hiring decisions.

But so much of the hiring process seems subjective. Assessing education and work experience is the easy part. Hiring managers face difficult decisions when assessing for personality, culture fit, and soft skills. Abstract qualities such as these are difficult to quantify. Hiring teams that rely on intuition to assess these abstract qualities may find themselves making decisions based on personal biases.

When considering how to make a tough hiring decision, develop a data-driven hiring process that artfully mixes objectivity with sound intuitive judgement to choose the best candidate.

Making Great Hiring Decisions

The pressure is on to make great hiring decisions. Creating strong teams and reducing employee turnover are effective ways to reduce costs and increase profits. Great hiring decisions rely on three important factors.

The first of these factors is the quality of the data you gather. When applications and resumes come in, you should have an effective way to analyze and sort the information they contain. Recruiters often find the internet brings mixed blessings in their search for top candidates. The internet is an effective way to increase the radius of your search. But oftentimes, recruiters are faced with too many unqualified applicants. Stellar candidates can easily get lost in the mix. Use applicant tracking software to help you organize and sort the responses that your job ad garners.
The second important factor for great hiring decisions is an objective set of criteria against which to measure all the candidates. For this, you’ll need an updated job description. Resist the urge to just go with what you had when you were hiring the position three years ago. Supervisors and team member can help you make sure the job description accurately represents the role. From there, develop a list of necessary qualifications. Don’t let your anxiety over hiring the wrong candidate get the better of you. Don’t require a college degree for entry level positions unless it’s absolutely necessary. Personality traits like motivation and loyalty may be more important than oodles of work experience.
Your emotions will likely influence your final hiring decision. But that’s not necessarily a bad thing. That’s why sound intuitive judgement is our third factor for great hiring decisions. At some point, you’re going to have to “trust your gut.” But you’ll find your gut is trustworthy when you learn how to make emotionally intelligent decisions.

Distribute Hiring Authority

You can make the best data-driven, objective, and intuitively sound decisions when you rely on a hiring team. Avoid “group think” by including a diverse group of people from throughout the company. A variety of personalities with various roles and stakes in the organization can provide the well-rounded perspective you need to make great hiring decisions.

You’ll want to include the new hire’s supervisor and perhaps even a team member. These individuals are in the best position to assess the unique qualities required for this role. They’re also in the best position to assess how a candidate’s personality will mesh with existing team members. But be careful not to enable a toxic work environment if there’s conflict among members of the current team. In that case, look for a new hire with the positive attributes that will make the team stronger and address existing conflict separately.

The most successful companies are the ones with a strong, unifying vision. For this reason, you need someone on your hiring team with deep knowledge about the company’s culture, its goals, and values. This person can help you make sure the new hire’s values align with the company’s mission.

Finally, you’ll need someone unassociated with the department in which the new hire will be working. Departmental heads can sometimes be blind to the weaknesses within their own teams. An outsider can appreciate the strengths an introvert may bring to a team of extroverted members.

Consider Amazon’s Bar Raiser Program. Amazon proactively identifies star performers within their organization and then trains them to be skilled interviewers with a focus on hiring candidate’s who demonstrate 14 Leadership Principles. The program helps ensure objectivity during the hiring process and influences behavior centered around the company’s values.

Choosing Between Two Quality Candidates

If you find that you’re repeatedly forced to choose between two equally qualified candidates, it may be time to reexamine your hiring process. Ask the following questions to better describe how your hiring manager should decide to hire the best applicant.

Are you collecting enough data about candidates during the application process?
Are you quantifying the soft skills and personality traits required for the job?
Have you created an assessment against which to rate candidates?

No matter how well thought out your hiring process, from time to time you will be lucky enough to find yourself with two stellar applicants. The hiring process is no time to draw straws. So how do you choose between the two?

If you haven’t called all of their references, pick up the phone. You may get information that will sway your decision. Consider administering assessments to test for the personality traits that will make your new hire successful. If there is still no clear winner, don’t jump to consulting your gut instinct just yet. Develop some tie-breaker interview questions first.

Tie-Breaker Interview Questions

Tie-breaker interview questions uncover hidden, but important, personality traits. The right list of questions can help you develop a personality profile for the candidate that gets underneath the mask they put on when they wear their best interview suit. You can gauge an applicant’s maturity level and emotional intelligence. You can find out what motivates them, whether they possess self-confidence, and whether they’re committed to personal growth. Tie-breaker questions are unexpected and, being unrehearsed, will give you the greatest insight into your applicant.

Examples of open-ended tie-breaker questions include:

Why are you interested in working for our company?
What are your short and long-term goals? Where do you want to be in two and in ten years?
What do you like best about your current job? Why do you want to leave it?

If there still isn’t a clear, logical choice, don’t be dismissive of your intuitive powers. Your marketing team will be quick to tell you most of our decisions are emotional. No matter how rational you fancy yourself to be, many of your choices are rooted in your emotions.

And using your intuition to make decisions isn’t necessarily a bad thing. Studies show your mind processes far more information than you can juggle in your logical, working memory. The conclusions your super-processing brain make come through as emotions. A decision feels right or it feels bad.

Make sure hiring decisions are rooted in healthy emotions. If the new hire’s department is known to be toxic, you may hire someone you think is tough enough to handle the negativity. In reality, you’re probably hiring a person who will contribute to the negative atmosphere. The better, and more difficult, solution, is to hire people with desirable traits while separately dealing with undesirable behaviors that have already taken root.

Final Decision on Hiring

You can avoid needing to make a tough, last-minute hiring decision if you develop effective strategies to determine how the final hiring decision is made.

Start with applicant tracking software that can scan resumes and pull the most qualified candidates for you to review first. Count on a diverse hiring team to provide different, yet valuable, perspectives. Recruit a specially trained person to assist with recruitment decision making who prioritizes the company’s culture and is also unaffiliated with the position’s department.

Incorporating tie-breaker questions throughout your entire application process can help you uncover each applicant’s true personality. When you’re still faced with a tough hiring choice, an intuitive judgement call from an emotionally healthy place can be your best tool for making a final employment decision.

Assign one person who will make the final hiring decision in the selection process if you find your team can’t agree on the best candidate. Remember one of Amazon’s Leadership Principles: a bias for action. As important as the hiring decision and selection process are, there are other equally important factors that can lower employee turnover and develop your team’s potential. Effective onboarding and training programs are useful tools that can help an average new hire become great.

Are you interested in developing better interview questions? Download our guide that shares best questions and advice from over 70 hiring experts.

Photo by Clem Onojeghuo on Unsplash

How to Manage Teams in Different Locations

in Workforce Management/by Tom Branson

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

in Workforce Management/by Harlan Schafir

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. To streamline your diversity hiring, and making the process as simple and easy as possible, consider an ATS for your hiring needs. We have a Free ATS Buying Guide to provide all the information you would need!

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.

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

How to Write a Job Description

in Workforce Management/by Randi Renee Doerr, SPHR, SHRM-SCP

Indeed.com, just one of many jobs sites, is home to more than 16 million job postings. How can yours stand out? How can you avoid underqualified applicants? Most importantly, how can you persuade the best candidates to apply to your company?

The answers to all of these questions begin with your job description. That small post of just a few hundred words has to do some heavy lifting. Your job description must be optimized for search algorithms. It must be clear and honest to help candidates self-qualify. Your job ad has to subtly communicate the awesomeness of your company to a small pool of coveted, well-qualified candidates.

Your job description must accomplish all these goals for one purpose: to convert only the best job seekers into a manageable pool of applicants. How can you write a job description packed with that much power?

Job Description Writing Guide

When thinking about how to write a job description, there are two things to keep in mind. First, you’re writing for the search engines. Second, you’re writing for the job candidates. Each of these “audiences” requires a different approach.

Search engine writing elevates your ad near the top of search results where applicants can find it. Writing your job description with keywords will guide algorithms to your ad. Keywords should appear in your job title and the description, especially the first paragraph. The meta title and meta description should also include keywords.

Keywords will get your ad in front of the applicant. But only clear and compelling writing will persuade readers to complete the application. When asking yourself how do you write a good job description, start by identifying your ideal candidate. Then create a job ad that appeals to that person.

Sometimes, a boss will ask employees to write their own job descriptions. Ideally, several stakeholders should be involved in crafting job ads. HR professionals should seek input from the supervisor overseeing the new hire and also the position’s co-workers. A marketing professional or content writer can craft a job description that is both SEO optimized and compelling for applicants.

Best practices for Writing Job Descriptions

The best practices for writing job descriptions seamlessly weave SEO writing with persuasive writing. If you’re learning how to write your own job description, start by crafting a job description that clearly identifies the role. This description becomes the blueprint to which you add keywords. Finally, you’ll rework your description to persuade job seekers to apply.

What do you write in a job description? Things like the job title, pay range and shift should appear at the top. Next, include a brief summary of your company. Follow this by a summary of how the job fits into the goals of the company. You’ll want to include the most important or time-consuming duties and responsibilities for the position. Identify the minimum qualifications. Finally, identify unique requirements for the job, such as heavy lifting or repetitive hand motions.

Identify what words job seekers are using to find your position. These become your keywords. Use both general and specific terms. The first paragraph of your job description should contain all of your keywords.

Perhaps you’re writing a job ad for what your company calls a project manager. But many industries employ project managers. Someone searching for a position as an IT project manager would not be a good fit for a litigation support project manager. If your job description is for an industry-specific position, then include that information as a keyword.

Include keywords that specify required skillsets. “Java-Script Computer Programmer” or “B2B Content Creator” act as longtail keywords. They are more likely to appear at the top of results for applicants searching these terms. Being specific with your job titles will also help applicants self-qualify.

A Good Job Description Template with Job Responsibilities

When wondering how do you write an effective job description, consider your ideal candidate. What does this person want? For example, perhaps you want someone who works well with a team. This person wants to feel like a valued team member. Perhaps you want someone who can work independently. This person wants to feel trusted and empowered.

Notice that you’re writing to appeal to your ideal candidate’s emotions. In this way, writing your job description is much like writing content for customers. You want your candidates to feel good about applying to your company in the same way you make customers feel good about purchasing.

The best practice for writing the duties and responsibilities section of a job description will tap into a candidate’s desire to support a larger cause. Any job duties list can be written to tap into the applicant’s desire to contribute to something bigger than themselves. If you already track employees’ roles and responsibilities in an Excel or Word template, you can rewrite them from this purpose-centered perspective.

A job seeker’s decision to apply to your company is largely an emotional decision. In this way, applicant conversion is similar to customer conversion. However, you’re only hiring a few select applicants. Effective job descriptions will increase the number of preferable applicants while discouraging undesirable or unqualified applicants.

You can do this by highlighting the emotional benefits that the company values. For example, perhaps your open sales position requires travel. Enticing someone who “wants to see the world” may not attract the type of candidates you want. But you’ll appeal to more desirable applicants if you highlight the opportunity to “work with some of the most innovative and culturally diverse software clients in the world.”

Good Job Description Examples

Rework the key components of a job description to highlight the benefits applicants may enjoy. The best job descriptions for 2021 will highlight benefits in relation to a purpose-orientated mindset.

Good job description examples of the duties and responsibilities for a receptionist may include answering the phone. A compelling description may be, “Be the friendly first point-of-contact for Esperion Therapeutics. Ensure a great customer experience by correctly determining callers’ needs and identifying the person or department best suited to meet those needs.”

Perhaps you’re wondering how to develop a job description for a service technician who will travel to repair equipment for clients. A persuasive job description may read, “Use your mechanical know-how to ensure a consistent customer experience. Keep client productions running smoothly when you travel to client locations nation-wide to diagnose and repair equipment or perform maintenance.”

What Job Descriptions Should Not Include

Now you know your job ad needs keywords and compelling writing. But what should not be included in a job description?

Overwrought Job Titles. Don’t include words like rock star, ninja, connoisseur, or anything similar in your job titles. Rather than creative, these words seem dated and desperate. Candidates aren’t using these terms to search anyway.

Unrealistic Qualifications. Ask yourself if you really need a branch manager with a Master’s degree. Or a receptionist who speaks Spanish. Or an assistant who can write Excel macros. Some qualifications aren’t as important as you may think.

Too Much Positivity. You also want to realistically assess the job. Is there something about the position that may be a deal breaker for some people? If the job requires overtime or working weekends or excessive travel, then clearly say so in the description.

Jargon and Abbreviations. Your words should be clear to a general audience and spelled out completely for search engines. Don’t use terms that only people in your industry or company would understand. Don’t use abbreviations.

Complete List of a Role’s Tasks. Your job description should not be an exhaustive list of the position’s duties. For legal purposes and to avoid wrongful termination suits, include phrasing that allows supervisors to expand responsibilities for the role.

Final Thoughts

Recruiters need to do more to attract top talent. With more than half of job seekers going to online job boards, the work of getting noticed by quality applicants begins with your job description. This small block of text must appeal to algorithms as well your ideal candidates.

But what happens when your amazing job description spurs a candidate to apply? The best job descriptions will fizzle if they end with email instructions. You can keep the momentum going when your job ad directs clients to a branded careers site where they can learn more about your company. You can sort and manage the data from the influx of awesome candidates when your branded careers site feeds into an applicant tracking system.

Do you want to know more about how to connect with job seekers online? Download our free guide, Connecting with Job Seekers in the Digital Age.

Photo by Tim Mossholder on Unsplash

How Much Does Onboarding Software Cost?

in Workforce Management/by Harlan Schafir

Companies may be breathing a collective sigh of relief now that the vaccines have arrived. The end of the pandemic is in sight. Economic recovery can begin.

Not so fast.

Have you thought about what the pandemic’s end means for your employees? A new survey says one in four of them will be quitting your company. Eagle Hill Consulting released a survey that indicates 25 percent of employees are planning to leave their jobs once the pandemic is over. The number climbs to 33 percent for Millennials and parents with children who are remote learning.

People will be leaving their jobs for a variety of reasons. But their departures will mean one thing for your company: rising employee turnover. Low employee retention can cost your organization thousands. As you prepare for future recruiting, you can also incorporate strategies to reduce employee turnover.

Effective onboarding increases employee retention by 82 percent.

You can prepare now for the new hires in your future. And by doing so, you can improve what may be the most important ingredient for creating high employee retention: your onboarding process. Effective onboarding increases employee retention by 82 percent. Onboarding software can further reduce your costs while improving your new employees’ experience.

Estimating the Price of Employee Onboarding Software

Before you can know the true cost of anything, you have to know the price you’re paying for not having it. You can’t calculate the ROI of best employee onboarding software until you know what your current onboarding process is costing you.

First, there’s the hours spent onboarding new hires. Someone in your organization is printing off those new hire forms and putting together the new employee packets. Your new hire is spending time completing the forms and handwriting the same information multiple times. Then the documents make their way to someone who inputs the information into a variety of software, databases, and spreadsheets.

Then there’s the not-so-straightforward hours spent onboarding employees. Someone is charged with chasing down forms when they’re not completed on time. That same person searches for forms that long-term employees completed on their first day. Has a sales person ever left your company for a competitor and there was nothing you could do about it because the non-compete form he signed a decade ago was MIA?

Next, consider the obscure number of hours spent training the new employee. These numbers are difficult to estimate if you’re not using employee onboarding software. Chances are, employees are stepping in to help when they can. Without onboarding software to outline a training plan, your new hire’s introduction to your company is an ad hoc assortment of good intentions and tedious forms.

Now you’re probably wondering, what does employee onboarding software do to improve the onboarding process? Software will streamline your onboarding process, saving both time and money. You’ll improve your new hire’s experience, increasing employee retention. Over time, you’ll collect data which can be used to further improve your onboarding process. You’ll find the cost savings and benefits make onboarding software essential to an effective and affordable employee onboarding process.

Factors that Affect the Price of Software

The price you pay for your new software will depend, in part, on how many employees you typically hire per year. As you consider what features you need from your employee onboarding software, also consider the current cost to onboard new hires at your organization.

New Hire Onboarding Packet: Your employee onboarding forms can be digitized for efficiency and to reduce errors. The information entered into electronic I-9 and W-4 forms can seamlessly integrate with your payroll software. Onboarding software also includes E-Verify integration, and electronic signatures are legally binding.

Company Policy Manual: Are you sure your new employees actually read your workplace and sexual harassment policies? You can integrate all of your new hire’s training into the onboarding software with training modules. These modules will educate your new hire on your company policies and ensure they have the necessary knowledge with short quizzes.

Assign Tasks with Email Reminders: With software, you can create a customized workflow for the onboarding process with tasks. You can assign each task to a stakeholder. This person will then receive email reminders to mark the task as complete within the software. Everyone will know their roles. You’ll always know where the onboarding process stands.

These are just some of the affordable onboarding software features to consider when you calculate the ROI of onboarding software. Onboarding software will also assist with various federal compliance tasks, such as reporting and security measures that keep information confidential.

Choosing the Right Onboarding Software for Small Businesses

When you decide to buy employee onboarding software, you may find companies that sell onboarding solutions cater to large organizations. Not only are these providers more expensive, they may not offer the level of HR support as a provider catering to small and mid-sized businesses.

Look for a provider that offers customer support for onboarding software tailored to SMB. A support team that is SHRM-certified will give you the detailed HR support small and mid-sized businesses need. And a realistic timeline expectation–or even a guarantee–for software implementation, along with a money-back guarantee, mean less risk for SMBs.

When considering how to choose employee onboarding software, look for E-Verify integration and comprehensive support features. In addition to HR-related support, you’ll want in-house technical support staff. And of course, software that is cloud-based means you won’t need to invest in IT infrastructure.

Get a Price Estimate for Employee Onboarding Software

Before you get a price estimate for employee onboarding software, make sure you find a provider that can handle your unique employee onboarding process needs. As an SMB, you’ll need unlimited onboarding software customer support at no extra cost. Many so-called top HR software vendors target large corporations and may not provide unlimited, personalized support.

Also consider how your employee onboarding software will integrate with your other HR systems. “Best of breed” onboarding software can readily accommodate payroll and other HR software systems. By creating a seamless digital onboarding experience, you save time, reduce errors and improve your employees’ experience.

Regardless of your timeline for HR software implementation, make sure your provider won’t tack on additional hidden charges. Look for a pricing structure that is straightforward, where you won’t need to pay extra for support or implementation. And finally, ask if you can try onboarding software risk-free for a couple months. With guaranteed support, a risk free trial period, and a solid set of onboarding features, you’ll be ready to decide whether the cost of employee onboarding software is worth it.

Photo by Raj Rana on Unsplash

How Do I Write An Employee Application?

in Workforce Management/by Randi Renee Doerr, SPHR, SHRM-SCP

The digital age has transformed recruiting. From a branded careers site where applicants can search and apply for jobs to quick-as-a-click reporting that lets you see what works and what doesn’t, data-driven recruiting beats the old paper-pushing days of yore. But don’t toss your job application form in the recycling box just yet.

Far from being obsolete, the reliable questionnaire is still a heavy hitter in your recruitment toolbox. But if job seekers still need a pen to apply to your company, it’s time to write your employee application form for the Web.

The Basic Job Application Form

A simple job application form performs a straightforward role in your hiring process: gather enough relevant information to determine if the applicant should move forward in the next step of the recruitment process. A Web-based application form achieves this crucial task far more efficiently than a paper application as well as a number of other functions.

An online employment application form will transfer candidate information into an applicant tracking system (ATS). Capturing data through the application means your hiring team will spend less time typing and later correcting errors. It also means you can find and sort candidates easily using a search box. Later, you can file your EEOC reporting with just a few clicks rather than thumbing through file folders and creating a lengthy Excel spreadsheet.

An online employee application form is also more convenient for your applicants. When they find your job ad online, they can click over to your careers website and immediately fill out an application. You’ll benefit from a larger talent pool when your application process is user-friendly.

An applicant tracking system will allow you to create an online application form that can be customized for unique positions throughout your company. You’ll be able to ask applicants questions that are specific to their desired role or the location where they’ll work. If you simply make a PDF job application form from your current paper version, you won’t be able to tailor your questions to the applicant or sort through the resulting data.

An Effective Job Application Form

A web-based employee application form is more effective than a paper, or even a downloadable PDF, version. Pairing your online job application form with an applicant tracking system will help you search through numerous applications to find the best candidate more quickly. But how can you write an employee application form in a way that encourages the best job seekers to complete it?

Consider the candidate experience during the application process. A slow or frustrating recruiting process can be a turn off for quality applicants who understand their worth. Take your application for a test run to experience your recruiting process from the candidate’s perspective.

A short, simple application form is almost always preferable to a long series of questions. Aim for an application that takes about 15 minutes to complete and has fewer than 20 questions. If you find that you need more information to narrow your choices, invite qualified candidates to complete a second, short employee application form.

Every iteration of your employment application template should be reviewed for potential legal issues. Not only will new legislation affect the legality of your employee application form, but so will recent case law. For instance, questions about education aren’t illegal, but a recent discrimination case may have been successful if the application unintentionally excluded a protected group.

Job Application Formatting Tips

Candidates are more likely to complete your questionnaire when you stick to a simple job application form format. The web page should tell the applicant at the beginning how long the application process will take. Use check boxes and drop down menus for questions with yes/no or predictable answers. If your employee application form has more than one page, include a page counter that lets the candidate know how many pages are left.

A job application formatted for mobile use will simplify the process for most of your candidates. Hourly workers, especially, are more likely to rely on their smartphones. But, professions with the lowest mobile job search rates—math and computer jobs—still see nearly half of candidates using smartphones to find their next job. Creating a simple job application form in a mobile-friendly format will increase the number of applications you receive from these candidates.

Creating even a simple job application form formatted for mobile use is a daunting task for IT departments in many small to medium-sized businesses. Fortunately, the best applicant tracking systems can take care of the numerous coding and capability issues that arise when creating an application for both Android and iOS. Applicant tracking software can offer a mobile-friendly employee application form that works with the most popular job boards and social media sites.

Drawbacks of Employment Application Form PDF

Quality candidates will skip your job application form if they need a pen to fill it out. Even if your employment application form is online, candidates will drop off if it’s too long or not mobile-friendly. But when you create an online employment application that’s easy to complete while still capturing the important information you need, you’ll benefit from an improved application to hire ratio.

Perhaps you thought a mobile-friendly, online employment application was out of reach for your business. In fact, an ATS that caters to your company’s unique needs will create your online employment application and give you the tools you need to mine the data for your best candidates. With your application form online, your business will be able to compete for the best talent.

If you’re thinking about ditching the pens and setting up an online employee application form, give us a call. We’d be happy to answer your questions and help you figure out if an online job application is right for you.

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What Are the Most Important Onboarding Forms?

in Workforce Management/by Randi Renee Doerr, SPHR, SHRM-SCP

If you’re paying closer attention to your onboarding process, congratulations. You’re one of the few employers that recognizes that turnover is costly and mostly preventable. An effective onboarding process—complete with the most important onboarding forms—is the first step to creating productive, long-term employees.

Employee separations are costly to a company’s bottom line. Work Institute estimates that the cost of an exiting employee is 33 percent of his annual salary. Turnover costs increase if an employee leaves before his first anniversary. Most employee separations are spurred by employees voluntarily quitting their jobs. For example, in January 2020, 62 percent of separations were voluntary quits. In 2016, voluntary separations cost U.S. employers $536 billion. The “productivity costs” can be even greater. Companies with high turnover simply don’t perform as well as companies that are able to retain their employees.

If your company wasn’t fiscally austere before, the pandemic likely created an urgency to reduce costs. Now that 2021 is underway, you’re probably considering the high cost of turnover and looking into ways to reduce it.

A comprehensive onboarding plan is the best way to start building a team of long-term employees. But as you ramp up your onboarding efforts, how do you organize all the pieces? Specifically, can modernizing your onboarding process help you keep track of the most important onboarding forms?

Employee Onboarding

A good onboarding meaning is this: the process by which you introduce the new hire to the company and his role. But don’t be deceived by the simplicity of this onboarding process meaning. When planned well, your new employee’s initiation helps your company in countless ways. Those who quit before the first year likely do so because they’re unhappy with the job’s characteristics. Effective onboarding continues well beyond the first week and ensures your new hire gets support to meet the expectations of his position.

Onboarding paperwork is a crucial piece of your employee’s inauguration into your company. The data you collect will make its way into the employee’s personnel file. This information will inform everything from your employee’s direct deposit to her tax withholdings. Onboarding forms, like all employee-related files, will protect you in the event of litigation or audits. Your employee’s documentation must be correct and organized from the first day.

You put yourself at risk if you aren’t storing your onboarding forms and other employee documentation electronically. Your new hire may accidentally leave a form incomplete. Messy handwriting may increase data entry errors. Worst of all, you may find yourself on a scavenger hunt when you need the forms in the future. If key people leave the company, they make take the secrets of their ad hoc filing system with them.

Filing your forms electronically with onboarding software solves these problems. The software will alert the employee if she left any fields empty. You won’t need to decipher messy handwriting. You can ditch the data entry too. The data your new hire enters will transfer to your HR and payroll systems. And you can save the scavenger hunts for team building exercises. Your employee’s information is safe, secure, and accessible to only those who are authorized.

Employee Onboarding Process

A comprehensive onboarding process increases the return on your recruitment dollars. Your new hire will become productive more quickly. He will feel supported, without the frustration that commonly leads to high turnover in that crucial first year.

Onboarding is your chance to help your new employee become engaged in his new role. Her perception of your company begins with her first interaction and develops during that first year. Finally, onboarding is an opportunity to prevent cultural problems common in business: infighting, toxicity, and other problem behaviors that undermine the organization.

You’re probably considering what are the phases of onboarding. Remember, if your new hire leaves she will most likely leave before her first anniversary. Plan on continuing your new hire’s onboarding phase until at least the end of that first year. You can create an onboarding checklist to keep the process on track.

When considering what is the onboarding process for a new employee, think about the goals surrounding the position. Refer to the job description to create a timeline. Set the dates by which you expect the employee to be able to work independently on important tasks. Then, create a training plan to support the employee in learning her position’s responsibilities. Information about the new hire’s training plan can be organized and kept electronically with the rest of her onboarding forms.

If you use onboarding software, you can start with a training module introducing the employee handbook. The module can walk the new employee through the handbook and, when completed, she can electronically sign it. Onboarding software can present the next training module upon completion of the first to prevent overwhelm. You can set deadlines for completion of the modules that supports the overall training plan. If your new hire falls behind, onboarding software will send her reminders.

Onboarding Process Documents

Documents related to the onboarding process have far-reaching significance. These documents go beyond those required by state and federal governments. Your new hire’s onboarding forms shield you from liability. Items such as signed receipts for the employee handbook and harassment policies can be organized using onboarding software. Onboarding software ensures all the forms are completed and remain accessible for authorized staff.

Paperwork such as the I-9 and W-4 are obvious choices to put into digital form. But don’t forget about other onboarding documents. Non-disclosure and non-compete agreements are essential documents that should be digitized for safe-keeping. A completed application form contains verifiable information and the employee’s signature that the information contained is true.

There’s no need to use printed forms if you implement onboarding software. Electronic signatures are legally binding—as long as you follow the rules. Onboarding software will ask employees if they consent to electronic signatures. Employees will also be required to enter a password before signing a form. The consent and password will ensure your digital forms are legally signed and stored securely. Just as importantly, you always have the digital forms available even if key stakeholders move on to other positions.

Storing your onboarding documents electronically will help you adhere to the requirements surrounding these forms. For example, the Equal Employment Opportunity Commission requires you to hold onto several onboarding forms for terminated employees. Onboarding software will ensure that items, such as drug tests and accompanying results, are stored in compliance with these regulations.

Electronic forms also help you adhere to guidelines requiring you to control access to certain forms. EEO-1 forms identifying employees’ race and ethnicity have more stringent security controls than other, less sensitive data. Onboarding software with multiple security levels is the best way to keep sensitive documents secure.

Free Onboarding Checklist

Are you ready to reap all the benefits of a well-organized onboarding process? We created a free onboarding template to get you started. Our checklist helps you organize your onboarding process. We divide onboarding into four phases with associated tasks and onboarding forms for each phase.

Our checklist is further divided into categories, so you know exactly how each task and document fits into your larger onboarding process. Tactical tasks take the chaos out of compliance. These administrative details help ensure that you’re ready for audits and EEOC reporting.

Our strategic and cultural tasks are designed to help you improve on key performance measures. These are the tasks that will improve your company’s employee retention rate and your new hires’ time-to-productivity. Cultural tasks are activities that boost employee engagement and foster support to help new hires make it to their first anniversary.

Onboarding begins before your new hire’s first day and continues throughout his first year. During each phase of onboarding, different stakeholders will take on tasks to support your new hire. Our free onboarding template will help you identify these individuals and identify the ways they contribute to the onboarding workflow.

Each position may need a slightly different onboarding plan. Additional factors, such as multiple locations, can complicate the onboarding process. Onboarding software can track these variables. Using the software, you’ll be able to create an onboarding plan for each position and corresponding location. Within each onboarding plan, you can include the most important onboarding documents. The software ensures these forms are completed.

Previously, you may have been hesitant to take on a comprehensive onboarding process. You may have been overwhelmed with the many tasks associated with onboarding. Our free checklist will help you create an effective onboarding process while ensuring related documents are completed.

Creating a New Hire Checklist for Your Company

Your new hire paperwork checklist should have several phases. Pre-boarding begins before the employee’s first day. During this phase, you can send your new hire important documentation via email. Documentation could include a complete description of the responsibilities for the new hire’s job. An organization chart, corporate mission, and values will help your new hire to familiarize herself with the company. You can include a link to online information, including the company website and the benefits portal.

During the first week, your new hire will complete standard employment paperwork. You may consider taking her photo and inviting her to complete a short biography to post on the company’s intranet. Now is a good time to go over the results of any employee assessments you’ve administered and the training plan you’ve developed.

During the first 90 days, the employee is becoming more familiar with her new coworkers and her role within the company. Providing her with information about the company’s past and its objectives for the future will help her see how she fits in. Now is a good time to provide her with information about any incentives for bringing on new clients or employee referrals. A scavenger hunt or Bingo card will make seeking out information fun and memorable.

Once your new hire reaches her one-year anniversary, she is more likely to stay and become a valuable long-term employee. It’s important to include in your onboarding a plan for support for the period from the first 90 days to that one-year anniversary. Provide the employee with documentation about benefits as she becomes eligible for them. Go over her training progress and perform an employee performance review. Create a plan for support to help her overcome any revealed difficulties.

Conclusion

The global pandemic made businesses reevaluate their fiscal responsibilities. Companies are thinking about ways reduce costs without sacrificing performance. Reducing turnover is the key to saving money while also improving revenue.

Employees initiate most separations in the first year of employment. These departures cost your company a third of the employee’s annual salary. Your business can spend thousands recruiting and training new hires. A comprehensive onboarding plan is the most effective way to stem the flow of exiting employees. Onboarding doesn’t just reduce turnover. Effective onboarding will help you curate a winning team.

Expanding your onboarding may seem daunting if you’re still using paper forms and filing cabinets. Onboarding software can help you develop an onboarding process customized for each position. You can ditch the piles of paper and effortlessly organize your onboarding forms.

Are you thinking about implementing a more efficient and effective onboarding process? Our team is happy to help you.

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What Are the 5 Main Drivers of Employee Retention?

in Workforce Management/by Randi Renee Doerr, SPHR, SHRM-SCP

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.

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.
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.
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.
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.
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.

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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