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  • If my mom only knew.

    When I was younger, my parents would encourage (mandate) that I help them in the family garden out back. However, that really cut into my wiffle ball playing/tree-climbing/insect-torturing summertime. I came up with every excuse in the book to get out of it. I was told it was good exercise and that the vegetables we grew were healthier and better for me than anything we bought at the grocery store. I didn’t care. I was a kid. I hated vegetables.

    Now we appear to have come full circle. Not only are gardens making appearances in the suburbs, they’re also starting to dot cityscapes and in a surprising twist, corporate campuses.

    Four years ago, GMS built ten “garden blocks.” Any employee who wanted to take part in gardening was assigned to one of five teams. Each team could grow anything they wanted to in the garden (provided it was legal.) GMS would provide the soil and the water, and Mother Nature would provide the sunlight. The rest was up to the team members. Anything we grew, we could keep.

    Needless to say, most of us didn’t have a whole lot of gardening experience. But we learned. We worked together, and each year, the garden got better.

    And special things happened along the way.

    Team members who worked in different departments got to know each other outside of work. We worked together to strategize what vegetables would give us the best yield and what could we do with those vegetables. We got to work out in the sunshine, and we started eating a little better.

    Turns out, we were ahead of the trend. A recent article on workforce.com reports that more and more companies are creating gardens as opportunities for team-building, morale-shifting, and overall wellness promotion.

    A few weeks ago, I wrote about the importance of a good wellness program for employers looking to keep their healthcare costs low. At-work gardening may not be the end-all, but it’s an inexpensive way to start.

    You can grow more than vegetables. You can cultivate teamwork.

  • I got a call last week from a client who has only been with us for a few months. He started back in July of 2012 and just received his first few invoices from the new year. He was pretty upset that his state unemployment tax had gone up substantially compared to November and December. Being in the payroll business for about 20 years, and with this being about the tenth of these calls I’ve taken in January, I knew where this conversation was going to lead.

    The first question I ask is “Did you know about the State Unemployment Tax Authority (SUTA) wage cap?” In Ohio, the employer is only charged SUTA tax on the first $9,000 in earnings for each employee.

    In his case, all of his employees had earned that much by September. Except for his one new hire in October, his employees had already capped out and met the wage limit. In November and December he was only paying tax on one employee. In January, everyone starts from ground zero and is taxed until they reach that $9,000 limit again.

    The second thing we discussed was the number of claims he had back in 2010 and 2011. Yes…those claims stick with you for eternity. It’s like your bank account: once you write that check, the money is gone.

    I reviewed the list of claims from JP, our claims administrator. 2010 was a bad year for our client, as it was for almost everyone, and he had to lay off four employees. Our client told me that he brought them back to work after about eight months. But by then, then the damage was already done. He had just under $20,000 charged to his unemployment account. His unemployment rate went up in 2010 from 3.2% to 7% in 2013.

    Out client also mentioned something that really bothered me. He said that someone filed a claim, but he didn’t have time to fight it, so he let it go through. That was in 2011, and that claim had hit his account for $4000, and was still coming out. Because you only have 21 days to appeal a claim, he was out of luck.

    Now that he’s with GMS, he doesn’t have to worry about this. We take care of managing the claim from start to finish, with a minimal amount of his time.

    Do you know what your rate is? Do you know why it’s 3% or 8%? Do you know what your cost will be in 2013? Have you heard about the proposed federal legislation changed for 2014?

    Check back on our blog for a follow-up post on these topics, and share your thoughts in the comments below.

    “Finding Company Tax ID,” © 2010 Calita Kabir, used under the Creative Commons Attribution-ShareAlike 2.0 Generic license.

  • Do any of these sound familiar?

    • Losing good employees to competitors.
    • A cranky work environment.
    • Excessive workplace injuries.
    • Out-of-control healthcare costs.
    • Ridiculously high unemployment insurance costs.

    If you’ve been dealing with any of these issues, no doubt you’ve come to the conclusion that HR is more than just a luxury enjoyed at big corporations. HR is a necessity for small and medium-sized businesses, too.

    It’s possible that you have HR problems. What are you going to do?

    HR Outsourcing

    You’ve heard about HR outsourcing, but maybe you don’t know what it entails or how to learn more about it. How can you tell if it is right for your company?

    You’ve heard about Professional Employer Organizations (PEO). But maybe it sounds a little shaky since you don’t know of anyone who’s using a PEO. How popular are PEOs?

    You might be surprised.

    The HR outsourcing industry has grown from $61 billion in 2002 to $103 billion in 2007 and is projected to grow to $162 billion in 2015. The largest chunk of that is the PEO industry.

    Professional Employer Organizations (PEO)

    PEOs work with small businesses to help reduce time and cost when it comes to the things that an HR department would do at a large company. If you walked into a large corporation with thousands of employees and asked to see their HR department, what do you think you would see? The department would include a payroll department, a benefits department, a risk management department and actual HR manager or department. You might even find a wellness department to work hand-in-hand with the benefits department.

    These huge companies have tons of money to throw at problems and lots of high-priced attorneys to get them out of trouble. Yet they still keep all of these departments active. They know how important HR can be.

    Big corporations realize they need HR departments. It’s even more crucial that small businesses understand that they should have access to these essential HR services.

    Specializing in Small Business HR

    Not all small businesses have the means or the resources to keep all of these HR departments in-house, and that’s when they should begin looking at outsourcing their HR.

    A small business is already probably outsourcing their payroll, their benefits and their Worker’s Comp administration to different companies. All of those departments need to be able to share information with each other. If you can have one vendor do all of that for you, allowing you to focus on growing your business, wouldn’t you? What if you could do that while saving money as well? What if in addition to saving money, you could also offload a lot of your tax and employee liability in the process? Can you see why this industry is growing?

    What about compliancy issues? In the last five years, have you seen an increase or a decrease in the amount of regulations imposed on your business? What about the Affordable Care Act? Do you need to be compliant? If not now, will you someday? What does that mean to you? Do you know who to turn to find out?

    There are tons of HR questions that small businesses have, and PEOs—like GMS—have the answers. Ask us anything.

    ***

    “Footbridge to Canary Wharf,” © 2008 Stephen McKay, used under Creative Commons Attribution-Share Alike 2.0 Generic License.

  • Once you’ve hired your employees, it’s important to keep them happy on the team. In addition to the cost benefits of employment continuity, there are also morale and productivity benefits.

    Now that you’ve got great workers, how do you keep them?

    • Train your managers.
      Much of the time, employees do not leave organizations—they leave managers. You may have excellent managers that can perform many functions of the job, but if you don’t have a manager in place that knows how to effectively manage, motivate and treat employees fairly, you will face employee dissatisfaction and turnover.
    • Offer extrinsic and intrinsic rewards.
      Yes, you need to make sure that pay, benefits and bonuses are equitable within your geographic area and industry (extrinsic reward). But when employees are motivated only by financial incentives, they tend to focus more on the financial reward than doing good work. Employees don’t stay just for the pay. They also need to know that their work makes a positive difference to the goals of the company, their managers, customers and fellow employees (intrinsic reward).
    • Consider company culture during the hiring process.
      A candidate may possess all the skills necessary to perform the job, but if they are not a good fit with your company culture and fellow employees, they are not a good fit for the company. Hiring them anyway will result in increased turnover.
    • Promote from within.
      When employees are given the opportunity to create a career path within their company, they are motivated to stay. However, if good, qualified employees are passed over for promotions or desired lateral moves, they will leave and go to a company that will recognize and reward their efforts.
    • Use satisfaction surveys and foster engagement.
      Ask your employees what’s important to them, what’s working and what’s not. Yes, in some instances you may open for the door for negative feedback, but the majority of employees will appreciate that you care what they think. After all, they are performing the job every day and can give you the best feedback and offer great suggestions for improvements or changes.
    • Give frequent feedback.
      Don’t wait until review time to give feedback. Your employees want to know how they are doing and how they can improve their performance. Don’t be negative. Give clear examples and specific tactics they can use to improve their performance. Set goals together. Engage your employees by asking what they can do to resolve any performance issues. Don’t forget to give positive feedback to those who are doing a good job. Nobody wants to hear about their performance from their manager only when it is negative.
    • Encourage executive conversations.
      Employees want to hear from executive level management about what’s happening in the company—the good and the bad. Did you have a really good year? Let your employees know and thank them for their part in it that success. Take time to share your goals for the future of your company with your employees. Help them to have a clear understanding of their role in meeting these goals. If there are major changes in your organization, your employees need to hear that from you. Changes can often cause fear and stress. You need to address these changes and alleviate your employees’ concerns.
    • Recognize employee successes.
      Appreciation is a fundamental human need. This is one of the most important factors in employee motivation and retention. Employees need to feel connected to their organization and know that their work matters. Recognition does not have to be complicated. If an employee is consistently doing a great job or excelling on a particular project, let them know. Send an e-mail, write a letter. Even a high five and “great job!” from you can mean a lot. Be specific when you express your recognition. This can be especially influential when it comes from top management.
    • Offer autonomy.
      Employees want to have direction from their manager, but they also value a certain degree of autonomy in their jobs. Employees need a clear job description, and their manger must clearly express what their expectations are from an employee for their overall performance and day to day responsibilities. With this clarity, an employee can direct their work flow and performance without being micromanaged. The employee can take ownership of their role and responsibility for their own performance.
    • Facilitate teamwork.
      People spend a large majority of their time at work and with their fellow employees. It is important to build strong, functional, well-led teams. Successful teams communicate, are respectful of other team members, and are focused and committed to their organization and to achieving goals. Good teamwork facilitates positive relationships with fellow coworkers. It helps bond them together as they work to achieve common goals—an important factor in retaining employees.

    ***

    Your employees are the backbone of your company. If your employees are happy, it will show in their performance—and it will be one the most important factors in retaining your customers and increasing the overall profitability of your organization.

    ***

    Check out Part I of this series: Employee Retention: What Does Employee Turnover Cost?

    ***

    “Happy Coffee,” © 2012 Jim Wolffman, used under a Creative Commons Attribution 2.0 Generic license.

  • You work hard to recruit and hire the best employees that you possibly can. It’s only logical that you want to keep these employees engaged, happy, and working well on your team.

    Employee turnover can be an inconvenient, time-intensive challenge. But employee turnover costs even more than time: it costs money.

    Costs of Employee Loss

    According to the Society for Human Resource Management (SHRM) and the Center for Community and Economic Development (CCED), turn-over rates are very costly for organizations.

    The costs of employee turnover are both tangible and intangible. These costs include separation costs and replacement costs.

    Separation Costs

    Separation costs can include:

    • Costs incurred for exit interviews
    • Administrative functions related to separation
    • Separation/severance pay
    • Increases in unemployment compensation
    • Lost productivity
    • Lowering current employee morale
    • Decreased customer service
    • Disruption to the organization’s ability to operate efficiently and effectively
    • Increased over-time or temporary employee costs
    • Loss of workgroup synergy
    • Performance differential (the loss of skills and knowledge between the separated employee and the new hire)

    Replacement Costs

    Replacement costs can include:

    • Attracting applicants
    • Entrance interviews
    • Employment Testing
    • Pre-employment administrative expenses
    • Medical exams, drug testing, background checks
    • Training costs

    SHRM estimates that it costs $3,500.00 to replace one $8.00 per hour employee when all costs were considered. Of course, the higher the wage: the higher the turnover cost.

    ***

    Now you know the cost of employee turnover. Check back next week to learn more about how to prevent turnover by retaining great employees in Part II of this series: Employee Retention: Keeping Top Talent.

  • In a former life I was a general manager. A large part of my position was screening and interviewing potential new hires. This important yet time-consuming process included:

    1. Phone screening
    2. Background checks
    3. Scheduling initial interviews
    4. Clearing my schedule to make time for interviews
    5. Conducting interviews

    …you get my point.

    Recruiting Takes Major Time

    My assistant managers and I would spend between 1 to 3 hours each week on these administrative functions, depending on the season. That averages out to 100 hours over the course of a year.

    During this entire time I was unaware of the HR and recruiting assistance offered by a professional employer organization (PEO) such as Group Management Services Inc., which would have cut those hours by more than half.

    Saving time – sounds good right? It gets even better.

    Finding the Best Candidates

    In a recent Inc. article, Ed Powers shares this insight about initial recruiting efforts:

    “Get a big funnel. You don’t want to be overwhelmed with candidates who all look the same, but you do want to have enough candidates so that you can be selective within a large pool. Reaching out beyond your usual go-to sources can uncover skilled candidates you may not have realized were out there.”

    When recruiting to add to your team, it’s important to:

    • Have a larger reach of candidates
    • Ask consistent questions
    • Fully comply with EEOC and labor laws

    Who can consistently meet those criteria: your HR recruiting professional from GMS, or you?

  • Take off the Recruiter Hat

    Life-work balance for small business owners begins with self-control. Owners say they have too many roles to play but stubbornly hang on to them all. Sooner or later, owners like you have to give up something. I would start with recruiting.

    Just for a moment, apply some time management to the task. List the minutes you spend on framing an ad or posting, on qualifying phone calls, on live interviews, and background checks. Add it up, and you will find you spend 4-5 hours on each candidate. If you are doing it well, that is about 30 hours out of your week.

    Assign your hourly rate to the 30, and add the hours it will take to train and orient the new hire. Lastly, determine how long it will take to regain the lost cost.

    Why Do it at All?

    Structured recruitment, expert interviewing, and regulatory compliance are some of the benefits of an established PEO.

    Leave it to Them

    One you are confident that your PEO understands your staffing needs and business culture, job descriptions and required skills, delegate the recruiting to the real pros. Among other reasons, the PEO has a fully functioning pipeline tapping the available labor pool for your needs and those of other clients. They have a constant figure on the pulse of available candidates. They also have a greater playing field, interview within Federal and state labor laws, and place those candidates who are ready and anxious to prove themselves.

    About the Author

    Carolyn Sokol is founder and President of PEOcompare.com, a current member of SHRM (Society for Human Resource Management) and writes on issues that affect small businesses.

    Image Credit: www.akersassistants.com

  • President Obama’s administration has decided to delay enforcement of one of the key provisions in the Patient Protection and Affordable Care Act (PPACA): the Employer Mandate.

    Mark Mazur, Assistant Secretary for Tax Policy at the U.S. Department of the Treasury, posted on the White House’s Treasury blog on July 2. In this post, he announced that the administration has decided to postpone enforcement of the Employer Mandate portion of the Affordable Care Act by a full year.

    This was done because the administration has “heard concerns about the complexity of the requirements and the need for more time to implement them effectively. We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”

    According to the blog, this action accomplishes two goals: “First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”

    Employer Mandate Impact on Businesses

    Setting politics aside, I want to address the impact of this news on the business climate.

    People whose opinions I trust have shared that they think this law will be overturned. While many businesses would relish that, I was hesitant to believe that it would happen. Until I read this Wall Street journal editorial on July 3 that addresses the issue of the individual mandate. The article contents that the mandate cannot possibly survive this and be implemented on on 1/1/14.

    The reason, they cite, is in the name, Affordable Care Act. Individuals without coverage at work and those who earn lower income levels are supposed to be subsidized. This subsidizing would occur when buying insurance through exchanges.

    According to the WSJ editorial, “Individuals are only supposed to be eligible for ObamaCare’s subsidies if their employer doesn’t offer the right benefits. But how will the Treasury know who qualifies in 2014 if they lack the information that businesses are supposed to provide? Citizens must also pay the individual mandate-tax if they decline coverage from their employer. How will the Treasury verify these offers?

    In other words, who qualifies for the subsidies?

    When you look at these latest developments, plus the growing concerns that these Federal exchanges will not be ready to go by October of this year, the employer-sponsored healthcare landscape has become much more muddled.

    Do you think that the individual mandate will survive? Share your thoughts in the comments below.

  • When you think “sexy,” you don’t automatically think “HR.”

    I’m not talking about the kind of sexiness of the first time I held my wife’s hand. I’m talking about business sexy— what makes a company interesting and what makes an industry intriguing. What gets people excited.

    On the surface, HR doesn’t seem like it would fit the bill. Labor laws, payroll, benefits, HealthCare reform, compliance, BWC, worker’s compensation, unemployment, recruiting, handbooks, job descriptions etc… this is not necessarily scintillating stuff.

    But is sexiness like beauty? Is it in the eye of the beholder?

    I mean, look at what PEOs can do:

    • Provide jobs when the unemployment rate is high.
    • Offer essential benefits to employees and their families.
    • Recruit talent so owners can focus on growing their business.

    Look what GMS has done:

    • Reduce a company’s unemployment rate from 7.7% down to 1.2%.
    • Shrink a company’s healthcare premium from $82,473 to $71,397.
    • Lower a worker’s comp bill from $211,000 to $130,000$13,622 to $9,409.
    • Decrease the number of a company’s habitual tobacco users from 33% to 11%.
    • Replace a company’s method of using a typewriter to prepare payroll checks with direct deposit.

    These are real-life stories, and they represent a fraction of the services we provide. We tangibly improve peoples’ lives. When you look at it with this perspective, it’s clear that we are in one of the sexiest of industries around. It may not be as sexy as seeing her walk down the aisle, but nonetheless: PEOs are bringing sexy back.

    So I ask you, what is it that makes your business or industry sexy?

     

    Image from Free Images

  • What if I told you that you can accomplish all of your HR goals?

     

    You can. You just need to form a few good habits.

     

    Check out my guest blog post on Easy Small Business HR. In it, I explore the ways to make success a habit. Your HR successes help you — and your business — succeed.