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5 HR Basics for Any Small Business

March 4, 2014/in Blog/by Mindy Flanigan

We often hear about the Department of Labor trying to combat “catch me if you can”. All those small business owners that, according to them, just love to ignore or avoid employment laws. While there may be some out there, the vast majority just don’t know these laws exist. And if they do know they exist, we can thank our government regulators for making these laws way too complicated for the average business owner to even understand.

If federal or state labor law agencies want to minimize the amount of business owners who are violating employment laws, it is time to simplify! Many business owners really do want to do the right thing and need to be educated in a manner that is sensible. Education starts with basics. A basic understanding of labor law compliance will help a business create sensible and compliant employee management systems and processes.

So, where do the basics start? Here at the top five HR basics for any small business:

Employment law posters. Put them up! They must be displayed in a common employee area such as a break room. Make sure they are current. Yes you can print them from various web pages. But why would you do that when there are a ton of vendors out there that will put all your federal and state required postings on one single laminated sheet from $30 or less plus shipping?
Fair Labor Standards Act. This is a federal law that most small businesses get wrong. It regulates minimum wage, OVERTIME and child labor. Here is the thing about overtime. Unless a position is clearly exempt, according to defined Fair Labor Standards Act exemption categories, it is non-exempt and all hours physically worked over 40 MUST be paid at one and 1/2 times the employee’s hourly rate. Just because a job has supervisor or manager in the title, or just because you choose to pay someone a salary DOES not make them exempt from overtime.
Wage and Hour laws. There are federal and there are state. If state law is more generous than federal law, the business should follow the state law that is applicable to where the employee works, not necessarily where the business is located. If a business operates in Virginia, but also has Maryland based employees, then the business must comply with both sets of state laws.Wage and hour laws include regulations on when you are permitted to take deductions from an employee’s pay, meal and break periods and when final wages must be paid. When you are trying to determine your state’s wage and hour laws a simple Google search will usually land you right to the FAQ page of your state Department of Labor web page.
Immigration Law Compliance. In other words, form I9. A new one was just released. It expires in 2016 – refer to top right corner. Start using it ASAP and do not use old forms past May 1, 2014. This form verifies the employees you have hired are legally authorized to work in the United States, not that they are a citizen. This form should be filled out in full, identifications should be witnessed and noted in section two, and section two must be signed. If immigration chooses to audit your files and finds missing or incomplete I9s, there is a high likelihood you will be fined. An I9 is required for every employee hired (put on payroll). A new employee legally has up to three business days to produce the documentation required for this form. After three days, if no identification is presented, suspend them from work until they do. Continuing to allow them to work past the three days is a willful violation of the law.
Anti-Harassment and Non-Discrimination. Get a policy in place immediately. It would normally be found in your employee handbook and should clearly state zero tolerance for harassment in the workplace and clearly outlines for your employees how to report potential violations of the policy. Going without an anti-harassment policy in your business carries significant risk as the company will likely be without an effective means to defend itself if accused of not responding appropriately to a claim.

There is no need to fear or run from HR. Look for simplicity and start with the basics.

Click the link to view our recent blog: We Have an Employee Handbook, Now What? or check back next week for more on human resources, payroll, insurance and benefits.

Original Source: http://inspiringhr.com/5-hr-basics-for-any-small-business.html

We Have an Employee Handbook, Now What?

January 28, 2014/in Blog/by Mindy Flanigan

Congratulations on even having an employee handbook! Many small businesses try to go without, which ends up being a mistake. A current and labor law compliant employee handbook is an ASSET. It welcomes new employees, answers commonly asked questions and establishes standards for consistency and accountability; it proves what the employee should have known when you must correct their actions or are forced to terminate. It also minimizes risk in key areas such as harassment claims and wage and hour law compliance.

Make sure your handbook is current! There were at least three labor law and best practice changes in 2012 alone that created a need for existing handbook updates; ADA amendments; FLSA Safe Harbor and NLRB social media/blogging guidelines.

But it is not good enough just to have one. Any kind of employee management document or tool is only as good as how it is used. Once you have an employee handbook ready to go, follow these steps to maximize effectiveness:

Plan for distribution. Will you take the handbook to a printer and have a bound copy created for each employee? That works great in a small office but can get expensive the more employees you have. How about printing a single copy for each employee to reference in their primary office location and saving a copy of the PDF version of the handbook? Better yet, is there a shared drive or an intranet it can be saved to? This way you only have to print the Acknowledgement page, typically the last page of the handbook, for each employee to sign.
Execute a company wide roll out. This can include a single event or mini group meeting, perhaps by department or team. Make the roll out sessions as positive as possible. Sell employees on why the company needs the handbook and why it is of benefit to them. Establish a script or checklist to follow ahead of time. Identify 5-7 key policies or areas of concern to review with the group; cover zero tolerance in your anti-harassment policy and how to report a potential violation.
Collect signed handbook acknowledgements. This document alone is what makes the handbook a true company asset. If you want to be in a position to effectively defend the counseling, disciplinary action or termination of an employee, you need look no further than their signed handbook acknowledgment. It proves what they “should have known” they were being held accountable for. During roll out, instruct employees to sign the acknowledgement and return it to their supervisor or other authorized representative of the company within 2-3 business days. Keep track and make sure all are returned and placed safely in each applicable employee file.
Incorporate employee handbook review into your new hire process. Even companies with a loose new hire training process sets aside time for employees to complete payroll paperwork; form I9 and tax forms. Use that time to review the employee handbook briefly with them. You can even follow the script of key points you used for the roll out meetings.
When updating an employee handbook, notify employees properly. This usually entails re-issuing the entire handbook (painful) to every single employee and collecting new acknowledgements. Or, you can post and distribute a company wide memo that advises of the key changes, where to locate the latest employee handbook and requires a signature per employees. Remember, anything signed by an employee that can be used to prove what they should have known needs to make its way into the employee file.

You have invested time and money into creating an employee handbook. It is the backbone of all the employee systems and processes you have in place or will create. Don’t delay your return on investment. Now is the time to put it to effective use.

Click the link to view our recent blog: Five Tips for Successful PEO HR Services or check back next week for more on human resources, payroll, insurance and benefits.

Source: http://inspiringhr.com/we-have-a-handbook-now-what.html

5 Tips for Successful PEO HR Services

December 20, 2013/in Blog/by Mindy Flanigan

Congratulations! You have chosen to work with a professional employer organization (PEO) to make your payroll, benefits, workers’ compensation and human resource management life easier – all at a one stop shop and price.

There are many advantages to using a PEO. Many of them were likely presented and discussed during the sales and enrollment process. Now that you are anticipating the service relationship beginning (or perhaps it has already started, you might be having a hard time making sense of what HR service you should be accessing and when. Here are five tips to get you started.

1. Determine Who Internally Can Implement Delivered HR

a. A PEO HR specialist is there to help you solve and implement HR. They need a partner at the client location to get that done. Typically this partner or point of contact(s) would be the person most likely to request HR support, call the HR specialist with questions and would be the person the HR specialist would provide consult to if there are products or services that would be of benefit to your company. For example, a PEO HR specialist can create an Employee Files Guide, but it is typically up to your internal contact to receive it and use it. A PEO HR specialist is also there to guide decision making when it comes to employee corrective action measures. But they still need that internal contact and/or the employee’s supervisors to execute based on the guidance provided.

2. Ask for an Overview of Options; Typically Referred to as the “Basics”

a. It is reasonable to expect that the PEO you are working with has a dedicated HR specialist or an HR service team member to explain in as much detail as you need, how the platform will support your business’s human resource management needs. If you have the time and are inclined to participate in a collaborative discussion, ask your HR service representative to conduct a labor law compliance and HR best practices audit. In doing so, you can gain a better understanding of where the “holes” may be and how the HR services being offered can fix that.

3. Get Your Employment Law Posters Ordered

a. Some PEO’s will do this automatically once the service agreement is signed. Some will ask the HR specialist assigned to your account to evaluate if you need them, for which states and how many. This is a labor law compliance basic requirement and unless you recently ordered federal and state labor law posters that are current, you have a right to expect that your PEO will provide you with a new set and will keep their eye on when you need a new set due to labor law changes.

4. Get Your Employee Handbook Done

a. A good PEO will have a template, based on federal law, ready to use. You have to request that you want a handbook and the HR specialist should take it from there. Usually that means answering a few basic customization questions and the HR specialist researching applicable state labor laws. The PEO will create as many handbook drafts that you need for review and the convert the document to final when all content has been ironed out and is ready for employee distribution. You can also ask for guidance on the best path for handbook rollout, collection of signed acknowledgements and how your supervisors can use the handbook to their benefits. You get a copy, the HR specialist (HR service team) retains a copy and the HR specialist will keep you posted if a labor law change at the federal or state level requires a handbook update.

5. Request Standard Employee Management Forms

a. As your “partner”, the PEO HR service specialist/team is there to help you build up your HR/employee management foundation. You can’t do that without implementing some standard forms and processes into your workplace. Those include an employment application, deduction authorization forms, employee counseling forms and performance reviews. You should expect these to be in MS Word format so they can be customized to suit your specific needs, but PLEASE make sure you lean on your assigned PEO HR specialist for guidance on how to customize; particularly when there may be concern that content being added is creating liability or violating a labor law.

There is so much more than can be offered by a PEO to support the creation and evolution of your internal HR/employee management functions. What you have access to largely depends on the price you pay and the sophistication and structure of the PEO’s service team. Whether you are paying a discounted rate to a smaller PEO or a larger price with a PEO that has a huge HR service offering remember this: if you think you need it, it never hurts to ask!

Click the link to view our recent blog: Before Promoting to Supervisor There are Five Key Trainings or check back next week for more on human resources, payroll, insurance and benefits.

5 Key Trainings Before Promoting to Supervisor

November 17, 2013/in Blog/by Mindy Flanigan

As a small business owner it is great to identify high achieving employees that are being groomed to become a manager or supervisor. This means your business is growing and you are in a position to lighten or re-distribute your load by trusting a supervisor to make a certain level of operational and leadership decisions on their own.

But please don’t overlook liability. Keep in mind that “I didn’t know” is never a good defense and that a poor supervisor can create significant risk for the business you have worked so hard to build.

The person being promoted might be highly skilled at the technical aspects of work. But do they know how to lead? Will they do so in line with your expectations? Do they understand basic labor law compliance so you can reasonably trust them not to create unnecessary liability?

Here are five key areas of employee management ‘education’ we encourage you to put in place for new supervisor training. It is a good idea to cover this BEFORE they assume supervisor or manager duties.

Employee Handbook. Have them understand not just that the company has one, but why and how to use it. Key Point! The largest liability that can loom for an organization is failing to properly respond to a discrimination or harassment complaint. First time supervisors need to understand what discrimination and harassment is, how to lead in a manner that curbs it, what your employee handbook states in terms of how to report a claim and, if brought to them direct, how the organization expects the supervisor or manager to respond and initiate an investigation. Last but not least, first time supervisors should be reminded of the very real cost of a retaliation claim. Coming forward with a complaint of harassment of discrimination is a PROTECTED act. Don’t let a new supervisor double your liability by taking some form of retaliatory action against an employee who had the courage to come forward.
Job Descriptions. Great for hiring, but also critical to supervisor success. How? A job description keeps the employee the supervisor is leading accountable. Make sure first time supervisors know why you have job descriptions AND how to use them. Job Descriptions can and should be used through the full employee lifecycle. They dictate how to craft an advertisement of a job opening, help you structure effective phone screen and behavior based interview questions, create documented accountability when signed upon hire and should be used as a basis for how employee performance is evaluated and measured.
Contractor (1099) Versus Employee. If you organization uses contractors as a part of your workforce, make sure your supervisors understand the difference between “managing” the two. Since the IRS defines a very clear line between 1099 and employee, you need not let a first time supervisor unknowingly open your business up to the liability of back payroll taxes and fines. If a new supervisor is being trusted to oversee the work deliverables of contractors, they need to understand that they are vendors, not employees. As such, the supervisor needs to abide the by service agreement terms in place. They should not be dictating hours worked, should not be reimbursing expenses, should not be offering employee like benefits and should not be formally evaluating work as if they contractor was an employee.
Wage and Hour Laws. There are two to pay close attention to. (1) The Fair Labor Standards Act (FLSA) – it regulates overtime, among other things. Train a first time supervisor on the very clear difference between exempt and non-exempt. Paying a salary is NOT how you qualify to be exempt. Neither is putting supervisor or manager in the job title. Non-exempt employees who physically work more than 40 hours per work week (not per pay cycle) must be paid those additional hours at one and 1/2 times their hourly rate. No exceptions. Non-exempt employees are not legally permitted to “bank” overtime for future time off. Nor are they permitted to voluntarily waive overtime wages. (2) NO unauthorized deductions from pay. Outside of taxes and benefit plan elections, deductions from pay must be voluntary, specific, written and signed by the employee to be legal. Don’t unnecessarily invite the Department of Labor in to audit your payroll records. It is not fun and tends to not end well for the employer.
Define a Good Manager or Supervisor. Here is how we break it down: a good manager is able to be a “reasonable person”, limits liability by handling issues fairly and consistently, understands when to seek higher level or HR assistance, has the courage to immediately counsel poor performers (and document such counseling), hires employees who fit the job requirements, provides documented coaching and feedback, leads by example (and not by fear), is approachable and accepting of diversity, discusses concerns privately, offers praise publicly, is not afraid to cut their losses and learn from mistakes. Last but not least, if trusting a new supervisor to interview and hire, train them on an effective and compliant process. They need to know discriminatory versus non-discriminatory practices and how to look and listen for reference flags before an employee is hired.

The name of the game with new supervisors is risk aversion. Otherwise, how will you gain a comfortable level with trust and delegating? All it takes is some training on employee management basics, in a simplistic form that can be easily understood. You can groom their leadership effectiveness as they go along, but don’t overlook the risk of the untrained.

Click the link to view our recent blog: Don’t Be Held Hostage to Poor Performers or check back next week for more on human resources, payroll, insurance and benefits.

Source: http://inspiringhr.com/before-promoting-to-supervisor-5-key-trainings.html

How to Handle Underperforming Employees

October 29, 2013/in Blog/by Mindy Flanigan

Common business owner question: How do I terminate this employee without fear of a legal challenge? In general, there are two ways to tackle this. First, create a hiring process that identifies poor performing employee BEFORE they are hired. Second, minimize liability by complying with labor laws, and hiring managers that are effective.

Costs and Damages of Poor Performers

The best practice is to not hire them in the first place. Remember that turnover of an employee tends to cost 1-2 times of the position’s annual salary. This includes the cost of time to interview a replacement, overtime or temporary help costs, lost sales and/or lost productivity.

When a poor performing employee continues to stay actively employed, they can do immense damage to the bottom line. Quantify how much you are paying them, versus what their output is? Are you getting a return on the dollars you are investing in their salary? A poor performing employee can also hinder their supervisor’s work quality and quantify, and diminish team productivity by hurting morale. These are reasons enough not to turn a blind eye.

Successful “Hostage Taking”

Fear tends to be the driving factor. But fear of what? Do you feel the employee in question can successfully claim: Discrimination, Retaliation, Defamation of Character, Illegal Acts, Labor Law violations, Breach of Contract? If your answer is yes to any of these, minimize your fear by taking the necessary steps to eliminate the employee’s chance of succeeding. This is where HR can be your friend. An HR audit, with consultation on labor law compliance and best practices will put your company on the correct path towards eliminating fear of legal challenges.

The clearest way to not be held hostage, is to not hire a poor performer in the first place. How effective is your recruitment and selection process? Resume review must include a scan for grammar errors, misspells, gaps in employment and lengths of stay. An effective phone screen should be your first attempt at having the candidate put forth the effort to prove motivation and qualifications. What is their motivation to make a chance? What was the reason for leaving past positions? LISTEN for red flags. If you hear red flags during the phone screen, are they worth spending precious time with during an in person interview? If granting an interview, what is the best method of making sure a candidate is motivated and fits the job? Behavior Based Interviewing. Open ended, position specific questions. Apply the 70/30 rule – the candidate should be talking 70% of the time or you won’t get the information and red flags you need to make a quality hiring decision.

The First 90 Days

Many business owners are under the impression that if an employee is within their first 90 days, you can cut them lose for no reason. Unless under contract, on the surface, in the land of “at will”, that looks to be true. But the truth is, once an employee is on payroll for 60 days or six years, many of the same liabilities apply. What you can do in the first 90 days, is provide the employee a reasonable chance to succeed and document, document, document. The company employee handbook is a real asset, particularly during those first few months of employment, as it establishes standards of performance, conduct and outlines grounds for corrective action. A trusted advisor and mentor should be assigned – one that has the ability to give the manager or supervisor constant feedback on progress and concerns. The best way to stay on top of a new employee’s performance and productivity is short daily meetings during week one and weekly meetings thereafter, so there is always open discussions going on about progress and concerns.

Managing a Poor Performer

Are the managers and supervisors you have in place increasing or decreasing potential liability? A good manager, to name a few: Fits the definition of a reasonable person; Limits liability by handling issues fairly and consistently; Understands when to seek HR assistance, but does not want HR to do the job for them; Has the courage to counsel employees; Leads by example. If you have that type of manager in place, you are off to a great start. To be effective at minimizing risks associated with terminating a poor performer, managers need to: Plan on how to stop the “bleeding”; Understand discrimination and other employment law liability; Follow “Due Process” and provide immediate feedback; Document, Document, Document all concerns – with the employee’s signature; Create an Performance Improvement/Action Plan; FOLLOW through on dates. If a deadline for improvement is set, and the manager lets it slip by without a re-evaluation, they’ve lost credibility and the termination window.

This isn’t working – Now What?

Before you terminate, ask these questions: Was “due process” followed?; Has HR reviewed and/or consulted on the documentation?; Would a “reasonable person” categorize this employee as a poor performer?; Is there a legitimate reason for poor performance?; Is termination consistent with previous action?; Do they have pre-termination rights? Review the offer letter, your handbook and state law to be sure.

If you are still ready to move forward, here are some best practice tips: Determine if legal advice is necessary; Notify IT and other security departments ahead of time; Have a silent witness present; This should not be a surprise, if prior discussions were held and good documentation exists – be prepared to prove consistency; Keep the conversation direct and short – don’t be pulled into what could become a hostile debate; Never leave them unattended while they collect belongings; Collect company property; Abide by state final wage payment laws. Last but not least – cut your unemployment claim exposure by terminating on the business day closest to the most recent infraction.

Remember that anyone can sue you at anytime, for any reason. Let go of fear (it may be unnecessarily costing you) and realize that minimizing liability is within your control and good documentation is your defense.

Original Source: http://inspiringhr.com/poor-performers-dont-be-held-hostage.html

New Hire Onboarding That Motivates

October 3, 2013/in Blog/by Mindy Flanigan

Contractor Dan; he’s beyond frustrated. More than half of the employees he has hired in the last year have been let go – most of them in the first 90 days. Yikes! If a terminated employee costs the company at least one times the position’s annual salary, that’s a big loss to the P&L.

So, what’s gone wrong here? Contractor Dan decided to ask us before he was ready to hire his third office manager in three years. As we discussed his hiring process, we only noticed a few missteps. For the most part, Contractor Dan had an effective hiring process in place. He looked and listened for red flags, asked good behavior-based interview questions and even followed through with reference checks.

During this discovery period, Contractor Dan frequently told us that everyone he fired “didn’t get it”. They turned out to not be nearly as motivated post-hire as they were pre-hire. We wondered, what “didn’t they get”? Then the ah-ha moment.

Engagement! Yes, that is an HR buzz word these days. What does it mean to the average small business owner? Involvement. If you want passionate employees, who work with a purpose, get them involved. How? Does your new hire onboarding process:

Fully educate your employees on the company, its mission, its values and how it makes money? If your employees don’t know how the company earns revenue, will they understand how they contribute?
Outline for your employees where they fit in? Yes, even small businesses should have an organizational chart. It isn’t meant to demonstrate a chain of command; it is a visual tool for new employees to see all the pieces of the puzzle.
Illustrate how essential duties of a job tie to business success. If you are hiring an office manager, do they understand why they are to limit access to postage or petty cash? Don’t assume they understand how much cost containment can positively affect the business.
Communicate what you expect? Not output! What you expect in terms of the soft skills and behaviors. How to interact with peers and customers, for example? That you expect everyone to work with a sense or urgency?

Contractor Dan revealed that he was using somewhat of a sink or swim model for new hire onboarding. New employees were given an employee handbook and a non-disclosure to sign. After that, they needed to work! Before you do that, put yourself in their shoes. How would you feel about taking incoming calls before you understood who the customers were and how the company makes money. Remember, new employees aren’t mind readers. Provide examples and lead by example.

Contractor Dan is giving a SIMPLE new hire onboarding process a test run. It consists of a ‘welcome new employee powerpoint’, an orientation and training schedule to follow, organizational chart review, job description review, employee handbook script and a 90 day performance review template. ALL of these documents are designed to get new employees to ask questions and participate in their development, so they can stay involved, engaged and motivated.

When new employees swim, rather than sink, you’ve got your ROI.

Click the link to view our recent blog: HR Due Diligence When Buying a Franchise or check back next week for more on human resources, payroll, insurance and benefits.

Source: http://inspiringhr.com/new-hire-onboarding-that-motivates.html

HR Due Diligence When Buying a Franchise

September 18, 2013/in Blog/by Mindy Flanigan

franchise seminar For an increasing number of entrepreneurs, running a franchise can be seen as an attractive proposition. Simply put, franchising is the practice of using another firm’s successful business model. You may be coming into franchise ownership with a good business background. You may even be fortunate enough to understand the basics of hiring, management and even how to run payroll.

If you are interested in owning a franchise that has a reputation of being well run, before you buy is a good time to gain an understanding of all that is involved with launching this type of business. A franchise business is set up differently than a normal business. While this is attractive to many, there are also different factors to consider such as paying royalties to the franchisor and having the necessary capital up front to go into business. This blog will explore why doing your due diligence is important in regards to labor laws and other HR-related issues surrounding buying a franchise.

Before you buy a franchise, understand labor laws. If you want to protect your profit and loss from penalties, fines, complaints and lawsuits, here are some numbers to be aware of:

Failure to pay overtime can results in two to three years of back wages per affected employees, plus the cost of payroll taxes.
An incomplete I-9 can cost on average of $1,100 per form.
Punitive and compensatory damages for harassment, discrimination and Americans with Disabilities Act violations average between $50,000 to $300,000.

Other costs to consider:

A resigning or terminated employee will cost your business one to two times the position’s annual salary–statistically speaking.
Higher than necessary state unemployment tax costs. Every employee that successfully claims unemployment will increase your payroll costs. Do you know how to defend yourself during the claims process?

At minimum, every business–franchise or not–should have the following:

Labor law posters.
Employee handbook.
Labor law compliance plan and job descriptions.
Standard processes and forms for hiring, new hire orientation, annual reviews and employee counseling (also known as corrective or disciplinary action).

Far too often, a new franchise owner thinks they get human resource management support from the franchisor and are disappointed to find out (post purchase) that the corporate office has no intention of involving themselves in your daily operations. Other key questions to answer include:

What payroll service should you choose? Do they offer benefits administration and workers’ compensation insurance?
What time and attendance software is offered to keep accurate records of hours worked?
How will you orient and train new hires?
Who will keep you abreast of federal and state labor law obligations and changes?
Who can you turn to for help in answering questions and preventing you or your supervisors from making mistakes?

You would think the larger the franchise operation (or the more expensive the franchise), the more support you get. This is NOT always true. Even if the franchisor does not have internal human resources support, they may have strategic partnerships with preferred vendors who can offer you support at a discounted rate. Make sure you get all your human resources support questions and concerns answered before you buy.

We recommend making a comprehensive checklist of questions and interviewing other franchise owners of the organization.

Click the link to view our recent blog: Minimizing the Cost of Turnover Starts with Good Hiring Practice or check back next week for more on human resources, payroll, insurance and benefits.

*Original Post: http://inspiringhr.com/hr-due-diligence-when-buying-a-franchise.html

Minimizing the Cost of Turnover Starts with Good Hiring Practice

August 28, 2013/in Blog, In the News/by Mindy Flanigan

Employees are an investment. At some companies, they are the most expensive investment. Would it surprise you to know that the cost of turnover for a $40,000 a year position (when factoring in hard and soft costs such as lost productivity) could cost you as much as $40,000 to $60,000?

Employees who are in their first year of employment are the most expensive to turnover, because the process of making a hiring decision costs time and money. Many turnover cost calculators are available for use and will ask you to factor in expenses such as cost of time for the interview, cost of overtime or temporary help and even the cost of a drop in morale if the departing employee was influential or well liked.

Let’s look at a simple example of an employee who only worked for 30 days at a small manufacturing firm and was hired as a floor manager at $60,000 per year.

Associated Costs

Multiple Interviews (rate of pay for those involved x time) $600
Cost of Company Vehicle $700
One Week of Off-site Training $1,400
Laptop $800
One month of Salary $5,000

TOTAL COSTS $8,500

In the above scenario, the employee just didn’t show up on day 31. No call, no notice. So do you have the option to withhold pay to recover some of this money? NO! In researching this situation further, it became clear that some good hiring practices could have saved this organization the time, aggravation and cost of turnover. At Infiniti HR, we don’t want this happen to you and so we have provided a couple of key steps to avoid a situation like this from arising.

Step One – Understand the Position

If you are tasked with filling an open position, first obtain permission to hire, determine your salary budget and establish a timeline. The best way to understand the position and determine the necessary skills, qualification and abilities is through a job description. If you don’t have one, draft one. If you need help with content, ask someone who has done the job in the past or ask the person who supervises the position. When outlining skills, qualification and abilities, gather information specific to the essential duties of the job such as computer skills, education level, need for heavy lifting, driving requirements, etc.

Step Two – Interviewing

You’ll start with an application and resume review. Aside from making sure that the applicant’s skill sets matches the position requirements, here are some key areas to focus on: grammar and spelling, gaps in employment (obtain an explanation) and relevant experience (a good resume will quantify successes). Once you have narrowed down your candidate pool, use phone screens to gather information on some very basic areas to determine if it is worthwhile to bring them into the office for an interview. Prepare ahead of time and make sure you don’t ask anything discriminatory such as marital status, race, national origin, religion age or disability. Effective in-person interviews start with preparing open ended, behavior-based questions typically formulated based off content in the job description. For instance, when hiring a customer service manager, you may want to ask the candidate to provide in detail an example of a situation where they were called on to resolve the complaints of an angry customer. The interviewer should be doing no more than 30% of the talking, particularly during a first interview. Put your best listening ears on and tune in for red flags.

Step Three – Selection

How do you make the right hiring decision? Many times one candidate shines far above the others and the decision is easy. Sometimes you may have to choose between two candidates. In that case, do second or even third interviews to gather more information. Before you make that official offer of employment, be as thorough as possible, starting with reference and background checks if necessary. Reference checks can often be done in-house and can be as simple as asking the applicant to sign a release of liability that can be sent to the former employer so more detailed information can be divulged. Background checks are typically outsourced to a third party and can often be worth the cost. Once a decision is reached, make your offer of employment both verbally and written. Verbal sends the message that you are excited for the new hire to start and opens dialogue in terms of benefit questions, salary negotiations and scheduling. Written offers of employment send a professional message, commence the expectation-setting process and should outline position status, compensation, benefits salary terms and any information related to first day of work and paperwork requirements. Finally, remember the importance of a good orientation and training. You only get one chance to make a good impression. Let the first day lay the groundwork for a successful employment relationship.

Following these good hiring practices will ensure you’re being diligent in hiring the right person for your company. It will also minimize the likelihood of any associated turnover costs.

Click the link to view our recent blog: Cutting Unemployment Claim Costs for Small Businesses or check back next week for more on human resources, payroll, insurance and benefits.

*Original Post: http://inspiringhr.com/minimizing-the-cost-of-turnover-starts-with-good-hiring-practices.html

Cutting Unemployment Claim Costs for Small Businesses

August 9, 2013/in Blog/by Mindy Flanigan

As a small business owner, you might be having a tough time coming to grips with unemployment insurance. At Infiniti HR, we want to help you better understand what this is and how it works so that you may cut down on unemployment insurance costs. It’s a joint federal-state program that allows unemployed workers to receive cash benefits. But as a small business owner, you have to pay every time a payroll is processed, until your employees meet the wage ‘cutoffs’.

Per the Department of Labor website, “The federal-state unemployment insurance program provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined under state law) and meet other eligibility requirements of state law.”

It is the no fault of their own part that tends to trip nearly every company up, resulting in a rising state unemployment tax rate. Why? Because the burden of proving no fault of their own rests on the employer, and state agencies tend to have a different definition (often a moving target) of this no fault of their own definition.

Unemployment taxes paid to your state are traced back to your company. New businesses are typically given a new business rate that will go up or down each year, depending on how many former employees are able to successfully claim benefits after leaving your company. If your company has a high claims rate, you are likely to see the SUTA rate increase, perhaps to a point where SUTA tax becomes unnecessarily costly to the business.

Say you have 10 employees on payroll. You started out with a 2.7% SUTA rate. If your state maximum is the first $8,000 in wages per employees, that means you will pay about $2,160 in SUTA tax. After a few years, five of those employees have been terminated and have collected unemployment benefits. Now your rate is 6.5%, which results in a tax of $5,200—a $3,040 increase. Yikes!

In order to keep your state unemployment tax costs down, you must put your company in a position to successfully defend itself when a claim is processed.

Here are five ways to minimize unemployment claim costs:

Hire people who are qualified and can do the job. This starts with clear job descriptions and effective candidate screening processes. Hiring someone who you hope will work out and who isn’t trained well, will succeed at collecting unemployment. The state agency will likely say it was your fault for hiring them.
Collect employee signed and written counseling documents. Make sure you can prove the employee was provided with counseling and guidance for a reasonable period of time and simply chose not to improve. Why? Because it may not look like ‘no fault of their own anymore’. You should also collect document dates, times and subject matter of job training decided to help an employee improve.
Reasonableness and timing. If you are terminating an employee for poor performance or policy violations, don’t wait! If there is sufficient prior documentation and this was the last straw, terminate the employment on the business day of or the business day closest to the final infraction. If you terminate an employee for a policy violation on March 1, but your documentation indicates they last violated a policy on February 1, you will lose. They were so bad that you could wait that 30 days? This does not look reasonable.
Respond to your state’s notice of an unemployment claim on time. Missing deadlines means you may lose.
Never be late to a scheduled hearing whether it is in person or via phone. In Virginia, you should be early for a call. If you are late, you may lose.

There is no need to let the costs associated with unnecessarily high unemployment tax eat away at your profits! Put your business in a position to keep the rate down.

Click the link to view our recent blog: The ROI of an Employee Handbook: Does My Company Really Need One? or check back next week for more on human resources, payroll, insurance and benefits.

*Source: http://www.dol.gov/dol/topic/unemployment-insurance/

*Original Post: http://inspiringhr.com/cutting-unemployment-claim-costs.html

The ROI of an Employee Handbook: Does My Company Really Need One?

July 24, 2013/in Blog/by Mindy Flanigan

As the business owner, you probably know the basic policies and practices you want included in an employee handbook so that current and future employees follow. But do you know what labor laws you are required to comply with, and what optional policies might benefit your organization? As a national professional employer organization (PEO), one of the most common questions we get asked by small business owners and clients is how much does an employee handbook cost. In short, the answer is that it depends. Books or software can run anywhere from $50 to $100, and then you must decide whether to do the work yourself or delegate to an administrator who may or may not know appropriate content for the handbook.

Several often ask if it would be more efficient or effective to hire a consultant to aid in the process of creating an employee handbook. Experienced human resources consultants run from $80 to $120 per hour, and legal counsel costs can tend to run much higher than that. So, is the cost worth it? YES! Here is why.

Time is Money

First, let’s evaluate how much your time is worth. On average, it is likely that your time or that of other senior managers is worth at least $100 per hour. You and these other senior managers likely handle day-to-day employee questions and spend time focusing on revenue generating activities such as sales or business development. So if you spend just 15 minutes, four times a month answering the same company policy questions over and over, you are losing $100 a month or $1,200 a year. Not to mention diverting attention away from generating more revenue for your business. To avoid this, simply invest in getting an employee handbook created so the answer to these questions can easily be found and accessed. While an employee handbook project may initially cost $800, in just one year (in this scenario), you would save $400.

Consistency and Accountability

There is no better way to create an equitable, non-discriminatory organization where employees are held accountable for their conduct and performance, than through the implementation of a compliant and thorough employee handbook. It clearly informs your employees of the rules and provides a roadmap for managers and supervisors on how to handle policy violations, performance concerns and other employee management challenges. This roadmap will save you time and money; allowing you to comfortably delegate to your supervisors. Without an employee handbook in place, it is likely that you would be called on to address an employee management concern. Perhaps this occurs just once a month for a 30 minute session. But wouldn’t you rather save the $600 of your time for more productive activities?

Wage and Hour Guidelines – Cost of Overtime

Do you have hourly employees who are bleeding you dry in unnecessary overtime? Do you have to pay them if the overtime wasn’t approved? While the answer is yes, why not let a policy in your employee handbook address how to handle the matter? The compensation section of your handbook should not only include paycheck and payday information, but also a very clear policy on non-exempt overtime and that supervisor approval is required before working overtime. If an employee continues to violate that policy, it is grounds for corrective action–including termination–if repeated.

Employee Conduct and Performance

Did you make a bad hiring decision? Has a complaint about harassment or a hostile work environment landed on your desk? Whatever the challenge, don’t delay in correcting the situation and taking appropriate action. An employee handbook should always include a section on standards of conduct, clearly state zero tolerance in regard to harassment and outline your right as an employer to correct the situation with the appropriate disciplinary action–up to and including–termination. Let an employee handbook give you peace of mind that you can trust your supervisors to handle any type of misconduct properly. A charge of discriminatory treatment from the equal employment commission or a complaint of harassment is a huge hassle and can be very expensive. The contents of your employee handbook are your best assurance and best defense that a situation has been handled in a fair, consistent and compliant manner.

Get a Signed Acknowledgement

Addressing employee misconduct or poor performance is never easy and is often dreaded and avoided by those of us who don’t like confrontation. But that underperforming employee may be costing you money; directly or indirectly. If the situation has been properly addressed, you’ll have the documentation to show for it. This will include proof that the employee handbook has a policy regarding conduct and performance and discipline, along with signed acknowledgement by the employee. If you can show both of these things and the problem hasn’t been resolved or continues, don’t be afraid to terminate. When you do decide to terminate, you don’t want the employee collecting unemployment benefits. Protect yourself from an unemployment rate increase with good documentation and a signed employee handbook acknowledgement.

In conclusion, you may also want to consider an employee handbook in order to better communicate attendance standards, update your email and internet policies, add a privacy policy, or amend your family and medical leave information to include military Leave changes. Whatever the reason, the costs of creating or updating an employee handbook are far outweighed by the return on investment.

Click the link to view our recent blog post The Fair Labor Standards Act (FLSA): Four Things Every Business Should Know or check back next week for more on human resources, payroll, insurance and benefits.

Original Source: http://inspiringhr.com/the-roi-of-an-employee-handbook-does-my-company-really-need-one.html

5 HR Basics for Any Small Business

We Have an Employee Handbook, Now What?

5 Tips for Successful PEO HR Services

1. Determine Who Internally Can Implement Delivered HR

2. Ask for an Overview of Options; Typically Referred to as the “Basics”