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Archive for July, 2016

BUDGET SEASON: ARE YOU PREPARED?

It’s that time of year again when companies are preparing their budgets for the upcoming year.   For HR professionals, it is probably not one of your favorite tasks, but by embracing the process, it can be an opportunity to reinforce the HR function as a strategic partner. In the WageWatch 6/12/13 blog, Budget Boot Camp, we covered the fundamentals of the HR Budgeting process.  Now we will dive a little deeper into the specific elements of the HR Budget.

Budgets are used to monitor progress toward goals, help control spending, and predict cash flow and profit.  The challenge is predicting the future 100% accurately and in turn developing effective budgets.

It is valuable for HR to gain a strong understanding and appreciation for the value of good annual budgeting.  In most companies, employee costs constitute the majority of fixed costs and therefore the HR budget contains key and critical elements of the overall company budget.

Here are a few things you can do to make the budget process a smoother one:

  1. Throughout the year, ensure to include the CFO when reviewing such things as pay increases with the CEO.  This can go a long way to developing a partnership with the CFO.
  2. The credibility of the HR function is significantly improved when you can demonstrate real savings and value for HR Projects and Processes.
  3. Empower your HR team.  Every HR team member should own their line items in the budget.  For example, recruiting is responsible for their search firm fees, recruiting tools and relocation.
  4. Link the development of your budget to corporate strategy.   This gives a clearer understanding of strategic goals.  And, in turn, should create greater support for the goals, and, a stronger companywide performance. The key to linking the two is communication.  In order to communicate strategic goals, top management needs information about customers, competitors, technology, etc. and this information must come from support units such as Human Resources.
Budgeting   requires the collection of many forms of data. From a human resource   perspective, below are some items that would be included in the budget:Recruiting

  • Advertising & Agency fees
  • Employee referral program
  • Background checks / Drug Testing
  • Recruitment expenses
  • Applicant tracking system costs

Training

  • Training Programs
  • Travel expenses
  • Consulting fees

Compensation and Benefits

  • Payroll costs
  • Salaries  & Overtime
  • Compensation surveys / Benefit surveys
  • Incentive compensation
  • Health and Welfare Benefits
  • Retirement Plan
  • Employee Assistance Program

Employee and Labor Relations

  • Recognition program  / Service Awards
  • Employee Opinion Survey
  • Performance appraisal software
  • Employment and Labor relations expenses (attorneys, consultants)

Other

  • Strategic planning (data/consultants)
  • HR databases such as HRIS/subscriptions/memberships/books

At WageWatch our compensation consultants can assist with your organization’s compensation needs and help you ensure that your compensation programs are supporting your company’s business strategy and objectives.  WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary surveys that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online .

Posted in Uncategorized on July 28th, 2016 · Comments Off on BUDGET SEASON: ARE YOU PREPARED?

COMPENSABLE TIME

Employers need to ensure they count all worked hours as paid hours for their non-exempt staff. For example, when an employee eats lunch at their workstation or desk and their lunch is interrupted by work such as answering phones or email, the employee is working and must be paid for that time because the employee has not been completely relieved from duty.

If the employer has a policy that is expressly and clearly communicated to the employee regarding a specific length of time for a break, any unauthorized extensions of that break time do not need to be counted as hours worked.  Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time. However, the employee must be completely relieved from duty for the purpose of eating regular meals.

The federal Fair Labor Standards Act (FLSA), doesn’t require employers to provide meal or rest breaks, though some states do require such breaks and the rules can also be different for younger workers.  You can find a list of state meal and rest break laws at the Department of Labor’s website at  http://www.dol.gov/whd/state/meal.htm and  http://www.dol.gov/whd/state/rest.htm.

Employers that fall under the federal guidelines do not have to pay for meal or rest breaks unless:

  • The employee works through or during their break, or
  • The break lasts 20 minutes or less, or
  • The break is interrupted by work

Some other compensable time under the federal rules can include waiting time, on-call time, attendance at meetings and training programs, travel time and performing work outside of work hours such as checking emails.

Waiting time may or may not be hours worked depending upon the circumstances.  If an employee needs to wait before a duty can start such as a firefighter waiting for an alarm, then the employee is ‘engaged to wait’ and this time is worked time and must be paid.

On-Call Time is paid time if the employee is required to remain on the employer’s premises.   In most cases the on-call time does not have to be paid when an employee is not required to remain on the employer’s premises.   However additional requirements put on the on-call time that further limits the employee’s freedom could require the time to be compensated.

Attendance at meetings or training programs is paid time when any of the following conditions are true:

  • It is during normal hours,
  • It is mandatory,
    • If the employee feels that they should or need to attend, then it is mandatory
    • It is job related

Travel time may be paid time or not depending upon the kind of travel involved.  Regular commute time to and from the work site is not paid time.  When the employee works at a different work site location then any commute time that is greater than the employee’s regular commute time to their usual work site needs to be counted as paid time.

Travel that is part of the regular work duties, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.  Overnight travel is work time and must be paid time

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives and that your pay practices are fair, equitable and non-discriminatory. We can provide your business with compensation surveys and salary reports to help you establish a budget for your merit pay program, including bonuses and incentives. Our innovative company is a leader in the collection of data for surveys and salary reports, which allows us to provide services to a wide range of industries in both the private and public sector. To learn more about our compensation surveys, salary reports and other services, please call 480-237-6130 or contact us online.

Posted in Uncategorized on July 21st, 2016 · Comments Off on COMPENSABLE TIME

TO CHECK OR NOT TO CHECK: A BACKGROUND CHECK PRIMER

Thorough pre-employment background checks are a critical tool in mitigating new hire risks. There are many types of background checks available to HR professionals that can be conducted in house or externally by vendors who specialize in employment screenings.  HR professional should take a strategic view of onboarding as a process. By doing so, several layers of checks and screenings are implemented to best reduce new hire risks.  It is the old adage that the result is more than the sum of its parts.

New hire selection process starts with the job advertisement or announcement.  The announcement needs to be designed to attract specific skills and behaviors while discouraging those without. Posting in the advertisement that the position requires a drug test or criminal background check is a potent deterrent.  Those still interested should be directed to a job application that captures information that will form the groundwork for the pre-employment screenings in the next recruitment phase.

The EEOC enforces Title VII of the Civil Rights Act; Age Discrimination Act; Title I of the Americans with Disabilities Act; Equal Pay Act; and Title II of the Genetic Information Act.  Employers are welcome to use all manner of pre-employment screenings – as long as they comply with EEOC standards. None of these Acts directly prohibit employment discrimination based on credit information, conviction records, previous employment, education, or psychological/behavioral profiles. However, the EEOC has a published a Compliance Manual and provides guidance on a number of pre-employment scenarios, because of the disparate impact facially neutral polices can have on these numerous protected classes.

This is the tightrope that causes many HR professionals to gloss over background checks out of fear of inadvertently triggering an EEOC investigation.  What you don’t know, can hurt you.  HR has a duty to the company to traverse this tightrope and understand the often gray and contradictory playing field (between state and federal guidelines) in which they conduct pre-employment screenings.

Criminal Background Checks – Treat each criminal record individually in the context of the job sought, work environment and conditions, and risk to the organization. Ask the candidate about the situation. Deliberate omission and lies can be used a basis to disqualify the candidate.

Credit Check – Most commonly used for positions that have are executive level, have financial responsibility, or have access to confidential information such as social security numbers to reduce the risk of theft or embezzlement.  Allow candidates the opportunity to explain negative results as some reasons, such as medical bills, are protected.

Physical/Medical Exam – This screening is allowed only after a conditional offer of employment is extended and is used in specific jobs that require a proof of fitness in order to safely perform duties.  All candidates in the job category are required to have the same medical examination.  The candidate medical history is confidential and must be kept separate from employment records.  HR professionals need to keep in mind that the medical examiner does not make the final hiring decision.

Motor Vehicle Record – This is a critical check for positions that are required to operate a company vehicle as part of the job requirement.  In some states, DUI convictions are kept with the DMV not the criminal court system.  There are vendors that make multi-state verification easier by consolidating searches.

Work & Education History – Past performance is a strong indicator of future performance.  The goal of the work history and education background check is to establish that the glowing resume represented to the recruiter is factual and accurate. On education, check with the governing body on the authenticity of the degree.  We recommend asking for full transcripts for recent graduates with a short work history.

As a company, it is important for you to understand the new regulations set forth by the EEOC and implement them in your hiring and workplace practices. Additionally, for the good of your employees, it is helpful to analyze benefits survey data, compensation surveys and salary reports. Having this information at hand allows you to plan a budget, including competitive employee salaries and benefits, which will help you to hire and retain a happy, talented team.

At WageWatch, our expert evaluators provide businesses in a large range of industries with accurate and beneficial benefits survey data, compensation surveys and salary reports to ensure that payment and benefits plans are on par with those in the industry. For more information on market compensation data, please call WageWatch at 888-330-9243 or contact us online

Posted in Uncategorized on July 14th, 2016 · Comments Off on TO CHECK OR NOT TO CHECK: A BACKGROUND CHECK PRIMER

GET MORE OUT OF YOUR TURNOVER METRIC

Most HR departments miss an opportunity when it comes to measuring and reporting turnover. The goal of any HR metric is to provide information on how to improve the measured item. As Peter Drucker said, “What gets measured gets done.” Reporting turnover as simply a percentage of the workforce can be made more meaningful and more useful by diving down into the detail and adding data and information that quantifies cost and provides insight on root causes and how to make improvements.  Some examples of this are:

  • Along with your company’s turnover rate, add the turnover rate of competitors, giving a baseline or something to compare to.
  • Add the percent of turnover that were top performers or top sales people, the percent of turnover in each department and for each manager, the percent in high impact jobs and hard to fill jobs.
  • Add the percentage of turnover in the first year of employment, which can be linked to possible employee dissatisfaction.
  • Add how long it takes to fill positions, the recruiting cost of filling the positions and how long before they are up to the minimum productivity level.
  • Add exit interview information such as how many went to work for competitors and which competitors. Exit interviews may also indicate whether turnover was preventable, which may in turn provide managers with information needed for improvement.
  • Add the dollar impact of lost sales where applicable, ie., sales turnover, which can be directly linked to revenue and economic impact to the company.
  • The involuntary turnover metric is also important. It can indicate that the company is keeping low performers which can also be costly.

With this additional information, conclusions are now more easily drawn and the cost of turnover is more tangible  (Ie., The cost of losing individuals in key positions is likely higher than losing individuals in low-impact positions.).  If losing hard to fill jobs, the job market may be tight and replacing these employees could be expensive.  Losing individuals with strong reputations within the industry can impact stock analysts’ assessments of your firm. It can also send bad signals throughout your firm and the industry, which can in turn lead to more turnover.

Some additional information that can be helpful if included with the turnover report are: leading causes of preventable turnover, the satisfaction or frustration level of those who left which could impact the company’s external image, the lowest turnover rates within the firm which can provide a target for managers to aim for, and the likelihood that the person that left will take others with them.

Today’s world moves fast, and as an employer you should constantly be monitoring and adjusting your business operations to meet the ever changing wants and needs of your employees. At WageWatch, we offer accurate, up-to-date salary survey reports and pay practice reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including market compensation data, benefits survey data and salary reports, please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on July 7th, 2016 · Comments Off on GET MORE OUT OF YOUR TURNOVER METRIC