Category: Human Resources

Do you know what work your employees really enjoy doing? Most business owners and managers have no idea, according to a recent Harvard Business Review article authored by three Facebook executives and a university professor. “It spills out in exit interviews — a standard practice in every HR department to find out why talented people are leaving and what would have convinced them to stick around,” the article says.

A smarter approach is to figure out why people leave before they actually do. A recent study from the ADP Research Institute found that 5% of all workers leave their job every month, and most employee turnover is voluntary.

“Unemployment is at a 17-year low, and job switching is at a record high,” says co-head of the ADP Research Institute Ahu Yildirmaz. “It has always been important for employers to minimize turnover, but it is more critical now than ever before given the current state of labor market.”

40 Reasons for Leaving

The ADP study determined 40 factors that contribute to voluntary turnover. Those factors can be categorized as: “Pay, promotion, overtime/premium time, commute, experience-and-tenure, and other job characteristics.”

The specific influence each of these categories has on causing employees to leave varies by industry. Pay and promotion are the main drivers of voluntary turnover. Commute time, the study found, is a more important factor than experience and tenure.

Understanding why employees leave can help a company in a couple of ways. First, this can guide you in hiring. If you know that a long commute is a significant factor in why a certain class of employees tends to quit, you might re-consider whether to hire someone who will spend an hour on the freeway each day getting to work.

These insights can also help you determine which of your workers are likely to leave.  They can also help to uncover workplace issues you need to address. Perhaps you can offer remote work or a flexible schedule to that worker with the long commute. If good workers are going elsewhere because of benefits, you may need to reconsider your benefits package.

Conduct Stay Interviews

What’s the best way for a company to figure out what is causing its turnover issues? You no doubt have done interviews when you were deciding to hire someone.  And, many of you might have conducted “exit interviews” after someone leaves.

Susan Heathfield, a people management expert for TheBalance, suggests you also conduct “stay interviews” to determine the reasons that employees remain at your company. “Then, pay attention to and enhance the factors they identify that keep them coming back every day,” she suggests.

If you pay close attention to the reason employees leave, there’s a good chance your turnover will decline. And the workers who stick around will be more productive.

Sizing Up a Prospective Employee

When Chase Hillenmeyer takes a job applicant to lunch, something usually goes wrong — on purpose. For instance, Hillenmeyer, who runs a landscaping business in Lexington, Kentucky, will quietly go up to the server and ask that the applicant be brought a salad instead of the cheeseburger he ordered.

Hillenmeyer isn’t playing games; he’s determining how the potential hire deals with adversity. If the applicant treats the server with respect, and handles the mistake well, Hillenmeyer knows he’ll fit with the culture of his fifth-generation business.

Sizing up potential employees is one of the hardest and most difficult tasks for a business owner. A good hire can take the company to the next level, but a bad one is costly. “For a small company, a five-figure investment in the wrong person is a threat to the business,” writes entrepreneur Falon Fatemi in Forbes.

Ask Behavioral Questions

Knowing the importance of hiring well, some companies are shifting to “behavioral interviewing”.  This approach bypasses vague questions, like “What are your strengths?” that often lead to canned answers lacking any real substance or insight. Instead, applicants are quizzed on how they handled actual situations.

For example,Inc. Magazine suggests saying: “Describe a time when you recognized that you were unable to meet multiple deadlines. What did you do about it?” If you want to check an applicant’s communication skills, pin them down by saying: “Give an example of a time when you persuaded a boss, customer, or peer to your point of view, even when that individual may not have agreed with you.”

While this is a better approach than standard interview questions, you should still keep any eye out for any potential pitfalls or problems. Ron Friedman, a social psychologist and author of the Best Place to Work, found that 81% of applicants lie in interviews because they give the answer they think is expected. “In many cases, job interviews are entirely disconnected from the reality of people’s day to day job,” he says.

Run a Job Audition

Instead of interviews, some entrepreneurs favor “job auditions” where an applicant handles the actual tasks of the position. For example, a sales rep position will come in and sell to the company’s team. Or a web designer may be asked to create a landing page.

Friedman’s research shows these tryouts are a better indicator of success than job interviews. This is because they show how a person actually does the job rather than simply what’s on their resume.

Observe All Actions

Candidates are typically on their best behavior when being interviewed.  This makes it difficult to get a true feel for their personality, attitude and demeanor. Since one very important aspect of the interview process is determining whether a candidate will be a positive addition to your team, it’s important to figure out if the person is an “unsavory character” prior to bringing them on.

To help get a better idea of whether a candidates “in interview” personality is fake or authentic, observe how they are interacting with individuals outside of the actual interview – those who aren’t involved with the interview process. Were they pleasant and friendly with the receptionist? Were they cordial to other employees they passed along the way to and from the interview room. Closely watching their interactions with others, when the candidate doesn’t feel as if they are being closely watched.  Doing so can give you an idea of their true colors.

Hold a Brainstorm Session

Similar to a job audition, conducting a brainstorm session during an interview can indicate how a person can actually do the job. In addition, it can showcase how well you and the individual can effectively work together to complete projects and solve problems.

Before the Interview

The above tactics are great options once you get someone in FOR an interview.  But how do you go about narrowing down the candidate pool to determine who you should bring in to interview? With job postings sometimes receiving hundreds of applications, culling through resumes and cover letters can become extremely time consuming. Here are two ways to save time in assessing top candidates to interview.

Request a Video Introduction

Consider requesting a video introduction as part of the application/resume submission process – especially if presentation is a key part of the role. Video introductions can allow you to quickly gauge a candidates personality, skill set and enthusiasm for the role prior to bringing them it. Remember to note in your job description and directions for submission that the video does not have to be great quality and remember be sure to set a time limit on the video.

Nix the Cover Letters

Instead of requesting cover letters that are often templated, consider requesting candidates to “describe in 100 words”. You can ask them to describe why they’d be a good fit for the role. Or you can ask why this opportunity excites them. Or you can have them describe how they’d tackle a specific aspect or responsibility of the role. Descriptions of this nature require candidates to showcase their ability to think creatively (you can’t template unique thoughts!).   It can also show you bits of their personality and how they communicate. And, it’s a lot less time consuming and can be a lot more entertaining for you.

As an owner, it can be hard to keep track of everything at the start of the new year, including changes and additions to employment laws. In 2019, there are plenty of important human resource and payroll changes to consider.  These changes are especially important to small business owners. Here are few:

Retirement Savings Contributions

While SEP contribution levels stayed the same, contribution levels for 401(k)s, SIMPLE IRAs and Roth IRAs increased for 2019.

401(k) contributions for employees increased to $19,000, along with 403(b) and most 457 plans. SIMPLE retirement accounts increased to $13,000.

For Roth IRAs, income phase-out range increased. Married couples filing jointly will see the amount increased from $189,000 to $199,000. For singles and heads of household, the income phase-out range bumped up with a range of $122,000 to $137,000. This is an increase from the previous range of $120,000 to $135,000.

Both traditional and ROTH IRAs contribution limits rose by $500 to $6,000 (over the $5,500 limit in 2018).  However, catch-up contributions if you’re 50 or older remain at $1,000.

Medical and Healthcare

• FSAs If you offer a flexible savings account for medical expenses, the amount employees can contribute increased from $2,650 to $2,700. There is one caveat: the amount for dependent care is fixed at $5,000.
• Healthcare Savings Accounts: Employees with individual coverage can contribute $3,500 (up from $3,450 in 2018), and $7,000 for a family plan (up from $6,900 in 2018).
• Adoption benefits: If you’re looking to adopt, the annual Adoption Assistance Limit increased to $14,080 (up from $13,810 in 2018).
• QSEHRA: If you’re offering a Qualified Small Employer Health Reimbursement Arrangement, also called QSEHRA or a small business HRA, self-only coverage increased to $5,150 (up from $5,050) and $10,450 (up from $10,250).

New thresholds for the Small Business Health Care Tax Credit

If you enrolled in a Small Business Health Options Program (SHOP) or are considering doing it, you can then apply for the small business health care tax credit.

To do so you must have, according to HealthCare.gov:

• Fewer than 25 full-time equivalent (FTE) employees
• Pay at least 50 percent of your full-time employees’ premium costs
• The maximum average employee salary must be $54,200 or lower (up from $53,200 in 2018)

It’s also important to note, for eligible small employers the average annual wage level at which the tax credit begins to phase out is $27,100 (up from $26,600).

Unemployment Details

Taxes for unemployment vary on a state-by-state level. The rate usually depends on the size of your company and how long you’ve been in business, as well as other factors like the number of former employees who have applied for unemployment benefits, your company’s historical turnover rates, and your industry .

Each state has a program to fund its unemployment pool via the State Unemployment Tax Act, better known as SUTA. Employers must pay this on behalf of their employees. American Payroll Association has a free chart of State Unemployment Insurance Taxable Wage Bases.

States seeing a wage base increase include: Alaska, Colorado, Hawaii, Idaho, Iowa, Kentucky, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, Utah, Washington and Wyoming.

Missouri and Vermont will see decreases.

The Federal Unemployment Tax Act — also called FUTA — tax rate in 2019 is 6 percent.  This applies to the first $7,000 you paid to each employee as wages during the year. According to IRS.gov, you can usually take a credit against this tax if you’ve paid state unemployment taxes. If you’re entitled to the maximum 5.4 percent credit, then the FUTA tax rate, after the credit, is reduced to 0.6 percent.

Minimum Wage

Nineteen states increased their minimum wage at the start of 2019.  Another two states—Washington and Oregon—will see increases in July.

Social Security Taxes and FICA

Payroll taxes can be complicated. An employee’s paycheck typically includes taxes for federal income, Social Security, Medicare and in many locations, state income tax.

The Social Security tax rate of 12.4 percent is split between employer and employee who each pay 6.2 percent of the gross pay — while the tax rate remains the same for 2019, the tax cap increased to $132,900 in annual earnings for 2019 — up from $128,700 in 2018. This means the maximum amount of Social Security tax employers and employees will each pay in 2019 is $8,239.80. This is a $279 increase from the $7,960.80 amount in 2018.

The one exception, if you’re self-employed, then you pay the full 12.4 percent.

Social Security are then combined with Medicare taxes for FICA (Federal Insurance Contributions Act) taxes. (Federal law also requires employers to withhold an additional 0.9 percent for anyone who earns more than $200,000.) The Medicare tax rate remained the same at 1.45 percent which is applied to all earned wages since there aren’t threshold limits for Medicare taxes.

According to the IRS, for wages that don’t exceed $132,900, the combined social security tax rate and Medicare tax rate is 7.65 percent each for the employee and employer for wages paid in 2019.

For those who are self-employed, FICA tax rate is 15.3 percent — which combines the Social Security tax rate of 12.4 percent and Medicare tax rate of 2.9 percent.

Transportation Benefits

Extra perks, like qualified transportation fringe benefits help many employers who are working with millennials. If you offer these benefits which include vanpooling or transit passes, the tax-free amount increased to $265 a month, up from $260 a month in 2018.

If you need more insights, review the IRS’ Employer’s Tax Guide to Fringe Benefits.

For business owners, it can be hard to attract and retain younger employees — especially when they are expecting and asking for more.

Google searches for the term “employee experience” have increased 130 percent over the past five years, according to a 2018 report published by IBM and Globoforce. The same study found organizations that scored in the top 25 percent on employee experience netted nearly three times the return on assets when compared to organizations in the bottom quartile.

Positive buy-in from employees means potentially more productivity and more revenue for the business; however, keeping employees happy can be difficult.

Many companies have gravitated towards a Silicon Valley, “work hard/play hard” mindset.  In these environments employee perks help with retention.  Many employees, however, want forward-thinking rewards from a company. These often include an environment that embraces gender equity and the ability to work on a flexible schedule.

Here are some things to consider to improve your bottom line this year by compensating your younger employees more creatively.

Offer a flexible schedule or telecommuting options.

Many employees don’t want a 9-to-5 workday. Allowing employees flexible schedules or telecommuting options may be seen as a good benefit to younger employees. Consider this if you have employees who are parents that are juggling daycare constraints.  Or if your company is in a high-traffic city where commuting on off-peak times or telecommuting might be a benefit.

Even though 40 percent more U.S. employers offer flexible workplace options than they did five years ago, according to Global Workplace Analytics, only 7 percent make it available to the majority of their employees.

Upwork, headquartered in Mountain View, California, has “Work Online Wednesdays”.  This perk allows their employees to work from anywhere as long as they are online. Blinds.com, a 150-person operation in Houston, allows call center employees to telecommute, as well as other staff members. Before employees began working remotely, Blinds.com set up training sessions to help employees learn how to maximize their home office productivity.

Have gender equity.

According to the “Winning the Fight for Female Talent” report by PwC, 50 percent of women say there’s a pay gap between equally qualified male and female counterparts.

Creating gender equity may help attract and retain key female talent. The report found three traits which make a potential employer more attractive to female employees: Being given fair and equitable compensation to their male employees, having opportunities for career progression, and an atmosphere of flexibility and work-life balance.

Many companies are following this trend. Social enterprise firm Equileap pulled publicly available data from 3,000 companies around the globe across a variety of sectors with a market capitalization above $2 billion. General Motors was identified as one of only two global businesses with pay equality across the entire spectrum of business with no overall pay gaps in the company. It also has an equal number of men and women on its board of directors.

Consider on-site and off-site offerings.

On-site childcare, gyms, nap rooms, yoga and massage sessions are some of the additional perks companies are offering to attract and retain talent. Twitter offers acupuncture and improv classes to its employees. Blinds.com brought therapy dogs into their office to help employees during a stressful month.

If you don’t have options on-site, consider a stipend to help reduce the cost for your employees.

For example, Eventbrite offers its employees $60 wellness stipends that can be used for a variety of healthy options from juice cleanses to gym dues. Microsoft’s StayFit program reimburses employees $800 annually ($66.66 a month) for gym memberships and fitness programs.

Evaluate parental leave.

American millennials are taking a lead from their European counterparts, according to Forbes, and want paid maternity and paternity leave — the longer the better.

Birthing mothers typically receive an additional 6-to-8 weeks under salary continuation for medical leave. Breastfeeding moms also get access to a 24-hour lactation consultant. They can also ship their breast milk home for free if they are traveling.

Netflix takes a European-approach with one year of paternity or maternity leave for parents.  They couple this leave with the ability for its workers to return to work on a full or part-time basis.

Give stash instead of cash.

Unscratched lottery tickets and gift cards are ways to reward positive employee behaviors without handing out dollar bills for a job well-done.

Sure Amazon and Starbucks gift cards are good standbys. But you should also consider other options – maybe a gift card for a car wash or a manicure. Experts suggest you ask your employees what they would value the most to to determine the best fit. Don’t assume you know.

Training and teaching.

SMBs don’t always have time to train their staff adequately, and employee development may be a key factor in retention. Consider offering to send an employee to a national conference or paying for Lynda.com training.

Offer to bring in guest speakers that employees would like to hear and then sponsor a lunch. Make this a reward to whoever does something above and beyond.  Make it even better by allowing them  to earn the right to choose the next speaker.

Bring your … to work day.

In the past many parents would bring their kids to work once a year. Now the “kids” want to bring their aging parents to work to show them what they do. They also want to bring their pets, kids, or significant others.

Cement-making Ozinga Bros in Mokena, Ill. and Cornerstone OnDemand, a cloud software company in Santa Monica, Calif. both allow employees to bring parents to work. The 22-person PR firm, EvolveMKD in New York skews towards Generation Z and Millennials and morphed its parents night into a family night.

Give the gift of time.

Personalized perks can make a big difference. Consider gamifying the options so once a week or once a month an employee earns a unique reward.  Rewards could be anything from getting a longer lunch break or the ability to leave work early on a Friday. Or maybe it’s offering an hour or two of flex-time or the ability to work from home once a week.

The software company Salesforces gives employees seven paid days off per year to volunteer on the project of their choice. REI employees get two paid “YAY Days” a year to go outside and do something fun.

Regardless of what creative perks you offer, pick benefits that align with your company values and will make your employees feel appreciated which will help them to work harder and grow your business.

Managing payroll can be tedious and time-consuming, but it’s a necessary task if you have employees. Finding ways to streamline the process can make it a less onerous chore, and rethinking your current payroll software provider may be the answer.

If you’re looking for ways to make payroll a less stressful part of your business operations, here are four features to look for.

1. Employee self-service

If you ask your employees whether they’d like to take a DIY approach to managing payroll, the answer might be a resounding yes. According to a Paychex survey, 73 percent of workers would prefer to use self-service tools for things like downloading or viewing payroll information and checking their hours, versus contacting human resources.

Adding a self-service component to your payroll system can also make it easier for employees to handle more mundane tasks, such as changing their address, notifying your business of a life status change (like a marriage or birth of a child), submitting time off requests for holidays or sick leave and filing expense reports – taking those administrative burdens off your shoulders.

2. Mobile functionality

There’s an app for just about everything these days, including payroll processing. Payroll mobile apps are designed to coordinate with your payroll software so you can review hours and approve payroll payments from anywhere, at any time with just a few taps on your phone or tablet.

Some apps do even more than that. You may have the added benefit of being able to set up direct deposit for your employees and/or calculate and schedule your payroll tax payments from your mobile device for even more convenient payroll management.

3. Notifications and alerts

You may already use notifications and alerts to manage your business banking activities and they can be equally helpful for managing payroll. If you struggle to keep up with payroll or tax filing deadlines, for example, you can simply set up an alert to notify you when those due dates are approaching.

Alerts can also be helpful in detecting payroll errors. Your payroll software may automatically send out a notification when the information on an employee’s record doesn’t match up with what’s listed on their pay stub. That can help ensure that employees aren’t being over or underpaid.

4. Diverse payment options

Printing paper checks may not be cost-efficient if you’re shelling out big bucks on ink and paper. Writing out checks by hand can be a huge drain on your time. Adding electronic payment options — such as direct deposit or pay cards — into the mix makes paying employees less of a hassle. Using direct deposit or pay cards can reduce the potential for payroll reporting errors and your employees may appreciate being able to access their money faster.

Switching up your payroll software may require an initial investment but think about the potential return. Upgrading your payroll system could save you time and money, both of which are invaluable for growing your business over the long term.

What are the best human resource apps for small businesses?

Though human resource departments in big, multinational companies look a lot different than they do in a small business setting, both deal with similar issues on all levels of business.

And both could use some help from technology.

To help streamline processes and make your business a better place for you and your employees, here are 12 must-have human resource apps and how they can help your business.

For easier on-boarding.

With new hires, there’s always paperwork. But with WorkBright, you can cut out all the paper documents. The process is remarkably simple. New employees receive an email and a link that opens all on-boarding documents for them to read through and sign. This saves a lot of time on the first day.

Payroll made easy.

You don’t need to outsource your payroll to a third party. With Gusto, you get an easy-to-use interface that allows you to simplify payroll onboarding and also automates the process by calculating taxes, benefits and submitting payroll filings.

Schedule easier.

Coming up with a schedule can feel like an elaborate math problem. With Deputy, juggling who works where and when just got a lot easier. With spreadsheets, time clocks and a mobile-first approach, it also allows you to send out schedules to employees and to payroll with just one click.

Know your employees.

Whether in the hiring stage or 10 years into their career, it’s important to have a way to measure how your employees are performing. PeopleFluent is an app that helps you track an employee’s development at your company. Career development, pay management and applicant tracking – all at your fingertips.

A healthy workplace is a happy workplace.

The app Nudjed is designed to make workplace wellness programs more effective. Employees create profiles, input information and through deep analytics, receive personalized health advice. It also allows you to track the progress of everyone in the program.

Manage with ease.

For projects small and large, every HR manager can benefit from DropTask, a visual project management app that clearly defines workflows and responsibilities while eliminating juggling and guessing.

For your to-do list.

Stop relying on all those scraps of paper! With features like due dates, reminders and the ability to assign tasks to others, Wunderlist will help you prioritize and follow through.

Because we can all be forgetful.

With payroll and insurance portals, benefits pages and any number of other secure sites they need access to, HR managers have a lot of passwords to remember. LastPass basically takes care of this by storing all your passwords in one place.

Keep track of those expenses.

Make receipts stapled to expense reports a thing of the past. Expensify is an Intuit app that makes it easy for employees to submit claims and for you to track spending and budget more effectively.

Learn from your employees.

Many small businesses conduct surveys every quarter to get a sense of morale and where the company is at. Peakon is an app that prompts employees with questions and gives HR managers real-time analytics based on the feedback. The genius in the app is its design, which helps get a 90 percent response rate.

The HR behemoth.

Namely is one of the most widely used, and most exhaustive, pieces of software available for a company’s HR needs. Its centralized platform can be easily customized and allows you to do everything from track time off and automate workflow to store documents and more. Oh, and you can do this all from their app as well.

All-in-one for the small players.

If Namely is widely used across the spectrum of businesses, Zenefits is the all-in-one choice for small-business owners. Its dashboard allows you to access and manage benefits, time tracking, payroll, compliance and more. The easy pricing system lets you select the features you want.

There are dozens of other options out there, but if you only looked at this list, you would surely find a few that could transform how you do HR.