(10-15 minute read)
Staying ahead of the curve when it comes to compliance, hot topics, and breaking news in the world of human resources is what Axios HR does best. Recently, we underwent an intensive review of every article in our resource library and found the top 5 topics that business owners, human resource managers, and educational leaders have been searching for in Quarter 1 of 2019.
The HR-to-employee metric is a much-debated topic. If properly interpreted, it can help you establish HR staffing needs and determine how well the department delivers its services. But, if you don’t understand how it works, it can lead to a dangerous situation. For example, executives may use these metrics as an excuse to cut HR staff, which can become the source of ongoing staffing shortages.
2017 HR Staffing Needs are at an All-time High
According to Bloomberg BNA’s HR Department Benchmarks and Analysis report for 2016/2017, HR staffing ratios have risen to 1.4 per 100 employees – an all-time high, and in sharp contrast to the marked drops we have seen in recent years. The metric previously peaked at a record high of 1.3 per 100 employees in 2013/2014, after which it dropped to 1.1 per 100 employees in 2015, representing a more recognizable metric, and around where it has steadily hovered for more than a decade. This is primarily attributable to unprecedented workforce growth and an increased need to support the added HR burden.
Structuring Your HR Department
No matter what size your company is, HR is one of the most important functions of business. If your human capital is the lifeblood of your organization, human resources is the pumping heart that keeps it alive. Keeping pace with the needs of your business, the HR team needs to be structured in such a way that it can cope with whatever may come to pass. Unless it’s a very small company that needs to rely on a single person for all HR functions, the department should be structured to include separate teams that each specialize in key HR management functions.
For example, the structure for a medium-sized business might be:
Each of these units is crucial to the overall success of the human resources department. In smaller organizations, some of these tasks can overlap, but there should always be key personnel dedicated to the management of each division.
Does the HR-to-Employee Metric Really Matter?
If you’re using the HR-to-Employee metric, and given that the metrics only account for your full-time HR staff, there will always be a gap between your calculations and your actual need. You will first need to assess how much value HR can add to the company, and in what areas your needs are greatest. The measure used to be to hire one HR person for each member of your executive management, but today a ratio of one HR to every 500 employees is not uncommon.
Always factor in the skills your HR practitioners bring to the table, as not all will be strong in all six of the abovementioned units. It may be more advantageous to outsource certain aspects, such as payroll and benefits or even staffing. If your HR operations are automated or outsourced, you can safely reduce the ratio. Ironically, HR departments are largely in place to dictate staff quotas and value, but there’s rarely a yardstick by which to measure the same qualities in your HR department itself.
Ready for Michigan’s Paid Sick Leave?
Although passing paid sick leave in Michigan was anticipated, now that it is really here are you ready to administer it correctly? The new law has a March effective date, so you still have a few more weeks to get ready.
The original proposal adopted in September, 2018 would have required Michigan employers to provide employees with paid sick leave at an accrual rate of one hour for every 30 hours worked, with a maximum of 72 hours per year. After adoption of the proposal, however, the legislature amended the terms. Under the new paid sick leave law, which only applies to employers with 50 or more employees, workers accrue one hour of paid sick leave for every 35 hours worked. On this accrual system, employees are permitted to carry over up to 40 hours of paid sick leave.
However, employers are not required to allow employees to use more than 40 hours of paid sick leave per year, and can limit employees’ accrual to a maximum of 40 hours per year. As an alternative to the accrual system, the law also permits employers to provide all 40 hours to an employee at the beginning of the year. If an employer front loads the paid sick time in this manner, it is not required to carry over any unused sick time. For employees who begin work in the middle of a benefit year, employers can pro-rate the amount of paid sick leave provided in the employee’s initial year.
Under both the accrual and front load options of the law, paid sick leave can be used for: the employee’s own health condition; the health condition of a family member; time off due to domestic violence or sexual assault, including for medical or counseling services, relocation, or legal services or proceedings; or the closure of the employee’s workplace due to a public health emergency. The new law defines a family member as a child, parent, spouse, grandchild, grandparent or sibling. Employees requesting leave under the law must still comply with the employer’s customary notice, procedural and documentation requirements.
As is common with other paid sick leave laws, if an employer already has a paid time off benefit for its employees — one which provides at least 40 hours of paid leave per year — the paid time off can cover the paid sick time requirement under Michigan’s new law.
Are You Ready?
Need help reviewing your Paid Time Off policy? Or your entire handbook? Give Axios HR a call.
Prominent sexual harassment and assault claims are appearing in the news every single day. Understanding that these can be sensitive issues, and appreciating the good which can result from re-examining corporate practices, we thought it would be appropriate to discuss policy strategies that protect both employees and employers.
Employees often act in accordance with the standards that they believe their employer encourages or allows. This idea is based on the principle that we “are products of our environments.” Regarding sexual harassment and violence in the workplace, acquired or accepted behavioral practices can easily foster a work environment that tolerates harassment and violence.
Ultimately, it takes only one employee’s act (or even implied act) of harassment or violence, absent an employer redress, to encourage a workplace culture of harassment and violence. Like a rumor or seasonal flu, this harmful ethos can quickly spread throughout an organization.
A comprehensive policy that includes education and training can help significantly in discouraging sexual harassment or violence in the workplace. But, to be truly comprehensive, this policy should fully enforce prevention. Upholding this policy requires maintaining a tenor, a decorum, and protocol that kills toxic environments at the roots.
First, Develop a Clear Policy
Employers should first define what constitutes harassment and violence in the workplace so that they can develop a clear and effective policy and training program to prevent or punish offenses.
According to the HR Daily Advisor, an online human resources tool provided by Business & Legal Resources, there are two general types of sexual harassment:
It’s also prudent to recognize in your policies that sexual harassment does not only occur in one direction (male towards female). In Wayne County, Michigan, a sheriff’s officer sued the county law enforcement agency because it ignored his original complaint of harassment by a female boss, according to a Detroit Free Press article. The article also noted that hundreds of men nationwide are filing similar complaints.
The case reminds all HR departments that employers can be liable if they knew or should have known that harassment was taking place and failed to take the necessary measures. This case also reminds employers that their policy’s language should be gender neutral regarding.
6 Practical Steps for Policy Adherence
So, how do you foster a work environment that discourages sexual harassment and violent behavior beyond the employee’s handbook? Here are six important steps that employers can take:
Beyond the legal and moral harms of sexual harassment or assault at the workplace, it makes good business sense to adhere to strict protocols in these arenas, as a hostile work environment is not conducive to productivity, creativity or career longevity.
If you have further questions or concerns about how to create and enforce sustainable policies that help create healthy, safe company cultures, please reach out to us below. Preventing harassment or violence in Michigan workplaces is paramount to achieving our own company mission of adding value and improving the quality of life for the individuals, families, and communities we serve.
According to WorldatWork, employers are increasingly moving away from traditional leave policies—which allocate vacation, sick and personal time off separately—and towards paid time-off (PTO) bank-type systems, which pool all three PTO benefits into one comprehensive program. With a pooled PTO program, employees are able to clearly see how much total time they have to use, and they are able to use this time according to their discretion.
Modern PTO programs provide employees greater flexibility and peace of mind. This can be a valuable tool for attracting talent to your organization as younger employees tend to value flexibility over other “perks.” Employers tend to favor PTO plans because they are less expensive and easier to administer than traditional leave plans. For example, the reason that an employee uses leave time does not have to be tracked or managed—a plus for small and midsize companies operating on a tight budget.
In one fell swoop, a well-designed PTO program covers five essential “Cs” (you might recognize this same approach from our broader strategy for defining HR elements):
Care | Investing in Your Employees’ Well Being
Cost | Clear Standards for Paid and Unpaid Time-off
Culture | Makes a Positive Statement About Your Company
Compliance | Adheres to Applicable Government Regulations
Competitive | Helps Secure Top Talent in a Competitive Market
Behind a successful PTO program are well-documented policies and consistent procedures. Therefore, we recommend considering the following steps when preparing your PTO policy.
Identify mandatory paid leave requirements. Under the Fair Labor Standards Act (FLSA), private employers do not have to provide paid leave; however, some states and cities mandate paid sick leave and a few states have enacted paid family leave programs. Although the FLSA does not require paid leave, it has specific rules regarding the conditions under which you can dock the pay of exempt employees who are absent due to sickness or disability.
Make sure the PTO policy does not discriminate against employees based on race, color, gender, national origin, age, sexual orientation, pregnancy, age, or disability, as mandated by the Equal Employment Opportunity Commission.
State what PTO may be used for (e.g. vacation, illness, and personal time off) and which categories of employees are eligible, such as full-time and part-time employees. Specify what constitutes “full-time” and “part-time” under company policy.
Explain the accrual rate for PTO, which is typically based on the employee’s length of service and whether the employee is full-time or part-time. Per WorldatWork, the average accrual is between 16 and 27 paid days off each year.
Clarify whether active employees can carry PTO over into the next year or whether they can cash it out. If allowed to cash out, state the criteria for eligibility, including how much PTO employees should have in order to qualify for the cash out, and the cash out rate.
Consult state law before implementing a “use-it-or-lose it” PTO policy, as this is not allowed in some states. If it’s not permitted, employees must be allowed to keep their unused PTO (though you may be able to limit the accrual rate). Note that Michigan does not address the issue; therefore, employers in Michigan can establish “use-it-or-lose it” policies.
Specify what happens to PTO balances when employees leave the company. Some states require that employers pay out unused vacation time upon termination, regardless of how the employee left the company. In Michigan, PTO must be paid out according to the written company policy. Accordingly, if there is no company policy on the issue you do not have to pay out unused time to departing employees.
Describe the process for requesting PTO (including how much notice employees should give before taking time off), the maximum amount of time off that employees can take consecutively, any minimum amount of PTO that employees must take before a certain date, and the process for approval—such as supervisory approval and restrictions based on role or department.
The final step is to document these policies and clearly describe PTO terms in the employee handbook. As employment laws and company policies change, update the policy and communicate the changes to your employees. If you’re interested in learning more about how to create a competitive PTO program that’s part of a total benefits compensation package, contact us today!
The United States labor force is more diverse than ever. For employers, this change in demographics can offer substantial benefits.
Per multiple studies, organizations that embrace diversity have a higher chance of sustaining a competitive advantage than those who don’t. In 2015, Forbes reported that racially and ethnically diverse companies are “35 percent more likely to have financial returns above national industry medians”—which reinforces the business case for diversity.
In this post, we’re going to examine how the workforce is expected to change in the near term, how diversity is defined, and how properly promoting a diverse workforce can produce a significant payoff.
Diversity is Always Changing
Just because workforces are always changing does not mean that they consistently change in the same ways. Diversity will be reflected differently today than in 5, 10 or 25 years. Recent studies strongly indicate the following shifts in the US labor pool:
–Women now comprise nearly 47 percent of the U.S. force, according to the U.S. Department of Labor. This percentage is expected to grow moderately by 2020.
–The white working-age population was predicted to drop from 82 percent to 63 percent from 1980 to 2020, according to The National Center for Public Policy and Higher Education (NCPPHE).
–From 1980 to 2020, the minority portion of the labor force is expected to increase from 18 percent to 37 percent, with the Hispanic portion projected to rise from 6 percent to 17 percent, according to the NCPPHE.
–In 2015, Millennials became the largest generation in the American labor force, according to Pew Research Center. Additionally, 44.2 percent of Millennials reportedly belong to a minority race or ethnic group, according to the US Census Bureau’s 2015 report.
Notably, many employees and job seekers want to work for a diverse organization. A survey by corporate research website Glassdoor revealed that 67 percent of job seekers view a diverse workplace as important, and 57 percent of employees would like their workplace to be more diverse.
Esty, Griffith, and Hirsch (1995) defined diversity as acknowledging, understanding, accepting, and valuing people’s differences with regards to race, age, class, gender, ethnicity, disability, education, sexual orientation, spiritual practice, and more.
In a diverse workplace, competitive advantage is realized not by merely acknowledging diversity but also by creating an environment of inclusion, where employees work toward a common objective while feeling supported—resulting in greater productivity and employee commitment.
The clear benefit of a diverse and inclusive workplace is that it allows employees and employers to embrace the backgrounds and perspectives of different individuals. As we noted in our last blog post on multi-generational workforce challenges, different perspectives and experience typically produce better business solutions. Each new way of looking at a problem presents a new way for that problem to be solved.
It is important to remember that diversity is reflected inwardly and outwardly. External physical, geographic or socioeconomic traits are not the only elements to a diverse workforce. While these attributes are sometimes the most obvious, they can be primarily extrinsic. Diversity of thought, personality, professional experience and education can all revive a stale business with fresh insight and perspective.
Considering each employee’s whole background is crucial, especially when matching them to specific roles (not only when considering them as part of the overall workforce). Regional businesses can struggle to break outside of a typical candidate profile, ultimately creating a workforce with very similar personalities and backgrounds (even if they are outwardly different).
What Can Diversity Do For You?
Harnessing the power of diversity requires business owners to understand its potential properly, and promote the right kind of environment. In 2016, Thomson Reuters conducted a study of over 5,000 global companies on diversity and inclusion. Part of the study involved speaking with key executives who shared their understanding of how to leverage workplace diversity. Based on their responses, Thomson Reuters concluded that workplace diversity is most likely to create positive financial performance when executives and owners understand the following:
Aligning understanding of diversity at the executive level and hiring a varied workforce can payoff significantly. According to an article in Business Insider, diverse teams are more likely to:
It bears repeating that managing diversity is about more than recognizing that people are different. It’s also about seeing the value of those differences, combating discrimination, and fostering an inclusive workplace in which employees feel valued, supported, and respected.
Negative perceptions and behaviors are obstacles in a diverse organization because they can impede employee relationships and hurt morale and productivity.
Effective managers have a keen grasp of discrimination and its ramifications, are aware of their own biases and prejudices, and are willing to change the organization in order to facilitate diversity and inclusion. They understand that because each individual is unique, there is no single solution to an inclusive workplace. They know that diversity management is a comprehensive process that requires ongoing training because people generally do not change their attitudes and behaviors overnight. Lastly, they are willing to promote a safe place for employees to communicate their ideas and opinions.
May 20, 2019
Article Business Owners Under 50 Employees Compliance