Measuring quality of hire

2 Mar

Quantifying the quality of a new hire is simple using these metrics.

Every HR manager understands the importance of hiring great employees. For many businesses, it means a higher rate of turnover if employees are unsatisfactory. There are ways for human resource managers to find the best hires and prevent turnover by using quality-of-hire metrics. These metrics are variables that set one employee apart from another. While no single metric can be applied across all industries, different metrics can be applied for various stages of employment. Here are the different ways human resource managers can use quality-of-hire metrics at their companies today.

What to measure
According to the Society for Human Resource Management, hiring for high-quality candidates is fundamentally different than hiring candidates for the lowest cost. However, metrics such as company enthusiasm often cannot be quantified. According to Inc. magazine, many recruiters complain that they can only measure a quality of hire after seeing their work performance for three to six months. This simply isn't the case. Human resource managers and human resource generalists can measure the quality of their hires using six to eight performance objectives. Skills, behaviors and competencies can be measured in these quantifiable forms as well as team spirit and go-getter attitudes.

How to measure it
When measuring these six to eight performance objectives or skills, behaviors and competencies, use a scale of one through five with one being unsatisfactory and five being the most impressive. These six to eight KPIs can be anything from volume of work produced to satisfaction by managers and teammates. Require each employee to score at least a 20 out of 25 to keep employment after checking in during the first month. Over the course of that month, track their trend of growth or work volume by requiring employees to fill volume logs and meet quotas by the end of a week or month. If a customer has not completed their quotas by the end of the month, they could face termination.

Other options
Many other factors can be taken into account when rating the quality-of-hire for a candidate. If scales are an unsatisfactory form of quantifying data at a company, use an equation in a spreadsheet to measure their productivity. It is also possible to use human resources management software to track the quality of your hires. With these tools, every human resource manager will be able to easily measure and keep the most effective talent for an organization.

Tips for the HR department of one

22 Feb

An HR department of one is possible with the right planning.

Human resource management system software can give small-business owners the assistance they need to make important decisions, but what do you do when you're a HR department of one? You might have just a small pool of employees to look after, however, how can one individual tackle all of the administrative work along with face-to-face interactions with employees all at the same time? The workload might send many people running for the exits.

Being the sole HR representative for your business means it's up to you to explain yearly benefits packages, file important documents and handle any personnel issues that might arise. While the work might seem overwhelming, it's still doable. With that said, let's take a look at a few tips and tricks to help you get started: 

1. Let your company know the power you hold
There's a lot of administrative work that goes into HR, but that's not all. Let the rest of your business know you also play a strategic and vital role in decision making. As an HR department of one, you can always outsource the more paper-pushing tasks to enterprises that offer payroll software programs. However, you know your business best and you can provide the strategic human resource management it needs. 

2. Make a schedule
It's easier said than done for an HR professional to make a schedule and stick to it. Being the lone HR representative means you have to perform triage most of the time. However, prioritize your time wisely. Set aside an hour or two during the week to work on specific tasks so you're not scrambling to get crucial paperwork completed at the last minute. 

3. Always stay up to date
Since HR includes many legal matters, you must stay current with labor laws. With that said, look for a few good resources you can turn to if you need help in this area. There are a number of resource books, websites and blogs you can use including "The Complete Guide to Human Resources and the Law."

4. Use technology to your advantage
Besides using a third-party service to handle payroll, you can also look for other services or download programs to search and organize job applicants. Also, put social media platforms such as LinkedIn to use to find potential candidates. 

An HR department of one is possible if you prioritize your time and think strategically

2016 Contribution Limits: What businesses need to know

17 Feb

The IRS has released the contribution limits for 2016.

Every company offers its employees different benefits and perks. For those business providing workers with 401(k) or other savings plans, it's important to know how much the government allows in terms of contributions. The IRS released these breakdowns toward the end of 2015. Let's take a closer look:

Caps in 2016: Most will stay the same
Information from the IRS focused on four programs, in particular: 401(k), 403(b), 457 and Thrift Savings. In 2015, the limit for employees utilizing these initiatives raised $500 – from $17,500 to $18,000. This cap will remain the same for 2016, as will the 401(k) catch up amount which is set at $6,000 for employees aged 50 and older.

The total contribution limit – for both workers and their employers – will hold steady at $53,000. The IRS also announced that individual contributions to Individual Retirement Arrangements (IRAs) will remain at $5,500 for the upcoming year.

This information wasn't the only news the IRS released that related to business benefits. The agency also issued updates on Medicare and Social Security.

Medicare and Social Security witness no changes
Both employees and their companies pay a portion of the Medicare Tax Rate which will remain at 1.45 percent for 2016. People whose annual salaries exceed a particular threshold will likely trigger the Additional Medicare Tax. Yearly compensation that is more than the following amounts will provoke the extra tax:

  • $125,000 for married taxpayers who file separately.
  • $200,000 for single and all other taxpayers.
  • $$250,000 for married taxpayers who file together.

Social Security will also experience no increase in 2016. Employees and employers will still be subject to the 12.4 percent tax rate – split in two, which results in a 6.2 percent tax rate for each party. The maximum amount of wages subject to the Social Security Tax will remain at $118,500. As a result, anyone making or exceeding this amount will be able to make a $7347 contribution at most.

Companies that offer employees competitive savings, as well as Social Security and Medicare contributions should be aware of the changes to these programs as the years pass. The government keeps businesses well-informed of these updates, but it is the role of employers to remain compliant with these limits and the responsibility of human resources teams to ensure workers are cognizant of individual contributions and tax laws.

Release Schedule for OT Rules

11 Feb

Flexible software solutions help businesses respond to changing payroll requirements.

Employee overtime rules in the U.S. will change, the question is when? The Society for Human Resource Management reported the Department of Labor pushed back its original expectation for when updated overtime regulations would go into effect. Current estimates suggest this drastic change to payroll operations won't become law until late 2016, and even then, it may be a slow adoption process.

Here is what is currently known about the DOL's schedule for OT rules and how small businesses can prepare for the legislation:

The late 2016 start date
The DOL wants to raise the minimum salary threshold for overtime pay from $23,660 to $50,440. This would be a drastic increase and industry experts predict the final number will probably be something closer to $40,000.

The ongoing debates about terms is one of the reasons OT regulations keep getting pushed back. If current projections hold, rules will go into effect in late 2016 – July is a front runner. The DOL may push the deadline late enough, however, that businesses won't have to comply until 2017. At this point, companies may want to create projections for all possible outcomes but should favor a start date before the 2016 election.

The 2016 presidential election
Should a Republican nominee win the 2016 presidential race, it's quite possible the party will alter or outright kill the proposed changes to the overtime rules. For this reason, the DOL is motivated to pass the regulations before the election results.

If a Democrat wins, however, it's more than likely that he or she will be in complete favor of the changes. Small businesses should follow the election to anticipate schedule shifts. Depending who's in the lead, OT alterations could come much faster or slower than expected.

A phased-in approach
Using the current approach, businesses have 60 days to comply with OT rule changes. The election and the example of cities that passed similar regulations may create a different schedule for compliance, however.

It's possible the DOL will introduce regulations through a phased-in approach. The rules may pass incrementally, with the first part going into effect before the election, making it harder for a conservative president to stop it. This option is much more likely if the DOL regulations try to change a number of things like introducing automatic increases to the threshold and duties test to qualify applicants.

However and whenever the DOL passes the new OT rules, small businesses needs flexible HR software to respond to alterations. 

Salary growth expected for 2016

3 Feb

With salaries expected to rise this year, companies need to make a budget for bonuses.

Unlike the wage stagnation that marked the previous few years, 2016 looks to be a good one for employee salaries. Numerous institutions from the ERI Economic Research Institute to consulting firms such as the Korn Ferry Hay Group project real wages – salaries adjusted for inflation – will increase by 2.7 percent. With that being said, businesses need a thorough and detailed system and budget in place for rewarding employees. Ensure you have a set plan in your employee management system.

Planning for a raise
Performance-based bonuses and promotions are two tried-and-true ways of compensating your top talent. Also, bonuses and promotions that include pay raises can help your company retain employees as the job market and the economy bounce back from the recession. Landing as well as keeping good employees will get harder as the economy improves.

To formulate your bonus and salary raise budget for the year, you'll want to first  examine the markets from the previous 12 months. Keep track of movements in the Consumer Price Index, the unemployment rates for both the country and your state as well as any fluctuation in the gross domestic product. Also, keep the current minimum wage in mind along with any mandated increases to pay by contractors or unionized staff members.

Keeping it clear
When coming up with a bonus budget for your staff, make sure your employees understand how to get from point A to B when it comes to receiving a bonus or a promotion. Don't keep them in the dark. You not only want to offer competitive salaries to attract and retain talent, you also want to use bonuses and promotions to reward them and raise morale within the company. Your employees, though, must know what kind of work you expect of them in order to move up the chain of command in your business. 

Keep your staff members on track by checking in with each of them on a quarterly basis to go over questions, concerns, their job performance and what they need to do if they want a bonus or raise. Create an office culture of constant learning and development to maintain employee engagement and to keep everyone on the same page. 

A good, solid plan for allocating your bonuses will strengthen the relationship between your staff and company and keep every happy. 

How HR can fill the toughest jobs of 2016

2 Feb

Trade positions are challenging for HR staff to fill.

In any human resource professional's career, there will be roles that are challenging to supply employees for. However, since recruitment is HR staff's responsibility, these workers need to develop effective strategies to fill these positions. Let's look at some of the most difficult jobs to find people for and how to overcome that struggle:

Marketing managers
Digital advertising is growing in today's business world, and companies need proper leaders to run their campaigns. However, marketing managers can be in short supply since they usually average a six-figure salary from the get-go. Communications-based candidates have highly transferable skills sets though and could be trained, over time, to take on a larger management role. By finding applicants with similar skill sets and providing on-the-job preparation, organizations can educate workers to retain knowledge most pertinent to the job.

Trade workers
Industries like manufacturing are having a tough time locating skilled employees who can fill the number of open positions they have. Instead, they're left to bring uneducated workers on board. While these candidates are paid less money, they may also have less of a work ethic as they're not professionals within the trade. It's crucial for businesses in this industry to make sure their future employees are receiving adequate training in both high school and postsecondary school. Collaborating with these institutions on curriculum and preparatory methods will assist trade organizations locate capable workers.

Engineers
This role has been a tough position to fill for years. As engineers retire, there aren't enough additional employees to take their jobs or workloads. Past workers had a variety of skills at their discretion, which the new set struggle to obtain, making the role even more difficult for them. In order to hire efficient people for these positions, HR teams should look at candidates who are a few years from entering the job market. While recent college graduates may not be able to fill these roles right away, given two years or so, they could be perfect for the careers and all its necessary skills and responsibilities.

Just like any other year, 2016 will have jobs that are challenging to fill. It's important for HR leaders to think ahead and develop recruitment strategies that will find the best candidates for specific roles. While these tactics may be unorthodox, they can have astounding results.

How to prepare for proposed overtime rules

15 Oct

Human resource departments should prepare for the government's proposed changes to overtime.

If enacted as it currently is the new proposed changes to overtime pay by the U.S. Department of Labor will give nearly 5 million Americans extra pay, according to the Pew Research Center. Those millions of employees that could be eligible for overtime pay are working in salaried white-collar jobs where payment for working over eight hours a day isn't an option.

The new regulation could have a great affect on human resource planning and payroll management if it becomes law. Human resources will need to process more paperwork. Also, if a company wants to cut costs, it'll mean human resources and supervisors will need to keep track of how long employees work to ensure staff members don't go over eight hours a day or 40 hours a week. 

A new motion
As it is, the proposal raises the threshold for workers currently exempt from overtime pay. The current baseline, set in 2004, is $455 per week or $23,660 per year for employees who work over 40 hours a week. The new recommendation would allow staff members making $970 per week or $50,440 a year to be eligible for overtime compensation, too.  

According to the Pew Research Center, the threshold would rise each year if the government ties it to the Consumer Price Index or wage percentiles so it can keep up with inflation.

Remaining compliant
Companies and their human resource departments should draw up a plan of how to deal with any changes the motion could bring if it becomes law. According to the Society for Human Resource Management, business can prepare now while the Department of Labor reviews the public commentary about the proposed regulations. The department allowed anyone to comment on the proposal via a government website until Sept. 4, 2015, and so far it received nearly 200,000 responses, the SHRM reported.

"For critical positions that often result in overtime pay, employers should consider hiring more full-time, part-time or seasonal employees, or restructuring their workforce to offset a potential expansion of overtime pay," Phyllis Cheng, an attorney with DLA Piper, told the SHRM.

The proposed regulation could cause logistical problems for companies, leading some businesses to slash employee hours or cut back on benefits in order to pay out more in overtime salary. 

To curb this potential problem, employers should pinpoint which employees still fall under the overtime threshold and which ones are closing in on it, Paul DeCamp, an attorney, told the SHRM. A company could raise the salary of a staff member who's current salary is already near the overtime brink. Bumping up the employee's salary would keep him or her above the threshold and ineligible for overtime pay.  

Businesses might need to move workloads around, splitting them up among multiple employees to ensure none work overtime.

The proposal could also have a chilling effect on work-life balances. Employees who take work home with them or on the road could see their hours cut or monitored more closely. 

Social media’s use in hiring

15 Oct

Using social media to recruit employees has its perks and downsides.

Social media is playing an increasing role in human resources, especially when it comes to engaging the public and recruiting new employees. According to Business 2 Community, the many different platforms for communicating such as Facebook and LinkedIn can make hiring even easier. A simple job description and a link to a position opening is a great way to get a company noticed by individuals who wouldn't otherwise visit a company's website.

It's also great for human resources solutions since the hiring department may also view a prospective candidate's social media accounts to see whether they'd be a good fit or not. 

Social networking
Platforms such as Google+, Facebook and LinkedIn are great ways for human resources to find someone who might be right for a job opening but isn't an active candidate, according to Forbes. Sending that person a message along with information on the position could get him or her to switch jobs to your firm. 

Advertising job openings via social media also cuts down on legwork and expenses since human resources can simply post openings for free online instead of taking out a classified ad like in the old days. 

According to The Society of Human Resource Management, using social media for hiring purposes is the new norm as a 2013 study from the trade publication showed 77 percent of companies used social networking websites to recruit employees.

Risks involved
If a human resource department does use social media to recruit, it should be wary of the risks involved. The same survey by the SHRM found that 74 percent of respondents were also concerned with the legal risks involved in using LinkedIn, Facebook or other websites to assess a potential job candidate. According to the SHRM, employers can learn a job prospect's age, race and health issues by searching for the person online, which is information they cannot take under consideration when hiring or passing on a candidate.

Some employers choose to avoid social media when it comes to the hiring process, CGMA Magazine reported.

"I don't look at [candidates] on social media," Robert Blumberg, an employment lawyer for Littler Mendelson PC, told CGMA Magazine. "I could. I affirmatively choose not to, because I don't really want to know that information. I think there are too many dangers. There are too many things that you shouldn't know and shouldn't be part of the hiring process."

Noncompete clauses pose issues for human resources

7 Oct

It pays for human resources to ask if a job candidate is under a noncompete agreement.

Human resources should be aware and wary of job candidates still under noncompete clauses. According to HRMorning.com, hiring someone still under one or not asking during the interview process could cost a company millions. A business could have the best employee management system to aid human resources in their work, but recruiters and HR need to be vigilant when asking job candidates necessary questions.

Costly mistakes
BioSense Webster, a cardiac medical device manufacturer owned by Johnson and Johnson, had to pay $1.2 million after knowingly hiring someone who worked for competitor St. Jude Medical, HRMorning.com reported.

When BioSense Webster hired Jose de Castro he was still under a three-year noncompete agreement with St. Jude Medical and he performed similar job duties with his new company. While the judge in the case subsequently threw out St. Jude's lawsuit, the judge ordered BioSense to pay attorney's fees, the cost St. Jude incurred from losing de Castro as well as lost profits.

Noncompetes becoming more commonplace
According the The Washington Post, noncompete agreements are becoming more prevalent in many different work sectors. They're no longer just used to keep executives and developers from jumping ship to another firm and potentially passing on proprietary information, The New York Times reported. Even fast-food chain Jimmy John's made news when it came to light that the company had employees sign two-year noncompete clauses, CNN Money reported. Employees agreed that they would not work at another sandwich store within three miles of one of the chain's restaurants.

"There has been a definite, significant rise in the use of noncompetes, and not only for high tech, not only for high-skilled knowledge positions," Orly Lobel, a professor at the University of San Diego School of Law, told The Times. "They've become pervasive and standard in many service industries."

More noncompete agreements means more lawsuits, The Washington Post noted. And this is why it's important for hiring managers and HR to ask potential employees about any clauses they signed with their former employers, HRMorning.com advised.

A company can be sued if they knew their employee was under a noncompete agreement with his or her old employer. Businesses can also be taken to court if their was a reasonable expectation that the person they hired was under an agreement but they failed to ask before hiring him or her, HRMorning.com stated.

Lawsuits on the rise
The number of court cases regarding noncompetes are on the rise, The Wall Street Journal reported. The percentage of lawsuits involving the breach rose by 61 percent from 2002 to 2012, according to research law firm Beck Reed Riden LLP did for the newspaper. Most noncompete clause suits are settled out of court, The Journal noted.

Some companies already decline to hiring candidates who are still locked in a clause from their former employers due to possible ligation and court costs. Many just don't want the headaches or worry and because of that it can keep some businesses from growing.

"We're around $8 million in revenue," James Keating, CEO for commercial insurance broker, Keating Group. "I'm confident we would be double our size if we didn't have that to deal with."

With noncompetes and lawsuits both on the rise, it pays for human resources and hiring managers to ask the right questions of candidates in job interviews. It can save a business both time and money by avoiding court or paying someone until the clause the ends. 

Even if human resources doesn't suspect a job candidate is under a noncompete agreement, they should ask anyway to keep their company safe.

Get your office active with moving desks

5 Oct

Standing desks offer both health and productivity benefits to employees.

 The eight-hour work day didn't always exist. Before the Industrial Revolution, people rose with the sun and concluded their work by sunset. The eight-hour work day only came into existence in the the U.S. 99 years ago, once the Adamson Act, regulating railroad workers' shift hours was made law, PBS reported. And just as the 40-hour work week and eight-hour day are relatively new inventions, so is sitting down to work. 

According to Fast Company, sitting down at work only became commonplace when other inventions such as the telephone and typewriter entered the office environment necessitating chairs. However, standing while you work is making a comeback and is even becoming a trend at many offices across the U.S. Even The New York Times recently published a style guide of what to wear when using a standing desk that includes recommendations on pencil skirts and jumpsuits.

Taking a stand at work
So, what are the benefits of a non-sedentary office, and what can human resources departments do to encourage healthier workplaces? Employee engagement ideas such as asking staff members what they think of standing desks and if they'd test them out for a period of time may help. Introducing standing options for employees is a great way to test the waters at first instead of making a complete change to non-sedentary desks, according to Human Resource Executive Online. 

"I think the biggest and clearest takeaway for HR is to explore the idea of using non-sedentary workspaces beyond just standing desk stations, which are starting to become more prevalent in organizations, but to also explore their use during meetings, especially those that last less than an hour," Andrew Knight, an assistant professor of organizational behavior at Washington University, told Human Resource Executive Online. "Those standing-oriented workspaces not only might be more efficient, as prior research suggests, they might lead to actual enhancement of creative thinking and problem solving."

Knight recently studied the effects of standing at desks or in meetings can have on employee behavior and found people are more receptive to collaborating and working as a team when they stand.

Out of 214 students who participated in his study, those that stood saw an increase in their physiological arousal, Knight told Human Resource Executive Online, which makes them more adept at working toward a shared goal.

Health and productivity
Being continually sedentary can be just as unhealthy as smoking, according to the American Heart Association, and if a company's human resource department wants to encourage healthier lifestyle habits along with better employee productivity it could introduce standing or treadmill desks. Standing and walking gets the blood pumping and enables staff to be more alert. Less sitting down may also minimize the number of sick or absent days employees take, Human Resource Executive Online noted.

"The trouble is, it's hard to measure the effect on productivity, unless you are making a widget," Rose Stanley, a WorldatWork practice leader. "If you look at it in terms of how much more alert a person is standing or being active, it makes sense. Also, think of an employee who is suffering from obesity, high cholesterol or diabetes –  those take away from productivity, too. It's a good idea to step out of the box to help employees create behavior modification. Not sitting as much is one more tool in your arsenal."

Many staff members might think eight hours of standing is too long, but Fast Company advises employees and supervisors to slowly integrate the practice into their workday routines. Those new to placing their feet on a cushioned mat should start off by getting up for two hours and then gradually work their way up to eight hours. Desks with adjustable heights can also help employees get acquainted with a more active workday as they allow you to raise it when you want to stand and lower it when you need to sit.

Switch to our mobile site