SHOULD YOU SET UP AN HR DEPARTMENT OR IS AN HR CONSULTANT BETTER RIGHT NOW?
Growth is great, but along with it comes challenges. Many organizations find themselves having to decide when to outsource human resources functions to a consultant, or how to create a dedicated department for organizational support.
As a small business owner you most likely had to handle all HR functions to manage costs, and then later realized that you were spending a lot of your time navigating uncharted waters when the number of employees increased and issues became more frequent and complex.
Besides, in order to grow your business you need to focus on what you do best and then surround yourself with the right team of experts to handle the rest.
In this article, get answers to the following:
● What is the right HR solution?
● The Cost of Hiring an HR Professional vs. an Employee
● What are the benefits of human resources?
As a small business owner, you most likely had to handle all HR functions to manage costs, and then later realized that you were spending a lot of your time navigating uncharted waters when the number of employees increased and issues became more frequent and complex. Besides, in order to grow your business, you need to focus on what you do best and then surround yourself with the right team of experts to handle the rest.
Deciding what type of solution is right for your company is a big decision, and one that has no one-size-fits-all answer. Expert opinion varies on how large your business should be before hiring an HR professional. Some industry reports recommend hiring a full-time, professionally trained human resources staff member at around 50 employees, while others in the field say 100.
I’ve worked in both small businesses and large corporations as a consultant, so I’m not here to tell you that you should do one or the other if you have X number of employees. But I do think that you need to bring some sort of human resources professional onboard as soon as you hire your first employee so that you build a solid business foundation and avoid making costly mistakes. You can read my reasons why here.
Like all pros, HR consultants charge different amounts for their services, depending on experience, skills, location, size of the company and your specific needs. Your cost will also vary on whether you hire them on a retainer basis so they are always available to you, or if you want them to get you set up with everything you need and then train someone on your team to manage the day-to-day personnel activities.
If you decide an HR department is the best option, you will be required to put them on your payroll and benefits and manage their time. If you have a bigger company that will benefit from an in-house person or people, and the resources to do so, this might be a good choice for you.
In that case, I encourage you to hire someone with the breadth of HR knowledge and experience who not only understands employment laws and regulations but also knows how to strategically lead the function. This person will be your go-to professional and be there to brainstorm ideas with you when it comes to growing your business and maximizing talent.
Commonly, small business owners should expect to pay a junior staffer with an HR college degree an average salary around $48,000-$60,000 (the average salary in the US is $56,641). If you want someone with more experience and certification —and you should—that number will go up.
Many companies I’ve worked with start thinking about implementing a dedicated HR department once they hit about 50 employees, especially if they foresee the company growing.
The good news is that you don’t have to hire an entire team right away. You can always start with a consultant or one employee and grow from there.
No matter what you decide, here are some of the benefits of having human resources support:
● You’ll spend less time sifting through resumes and interviewing candidates who aren’t qualified. My blog post on hiring the right candidate every time can also help.
● S/He provides a neutral third party for complaints and sensitive issues.
● You will have a bullet-proof handbook along with policies & procedures that protect your business and guide your decisions.
● If you do need to fire someone, hiring an HR consultant ensures you’re doing so legally, and you won’t get burned later.
● You won’t have to try and figure out paperwork around employee benefits, maternity/paternity leave etc.
● S/He can implement valuable standards and policies to drive your business and keep expectations consistent.
● It can improve company culture, morale, productivity and customer service.
Before you make the decision to hire an HR consultant or an entire department, let’s chat. From employee benefits to succession planning, I work with small to mid-sized employers with different budgets to improve employee and organizational performance while minimizing employment issues. Contact me today for a free consultation.
SEVEN STRATEGIES FOR HELPING EMPLOYEES MAKE MEMORIES
Many companies incent and reward their employees with cash. Only top performaners receive 100%+ of their annual bonus. Spot awards and gift cards are great for finishing a project early. Completing your health assessment and participating in biometric screenings and reduce your insurance contributions!
Cash is king. However, the stickiness, engagement and behavior motivation that companies are looking for come in a different from helping employees make fantastic memories with the company, with their spouses and with their families.
Here are 7 strategies for helping employees make lasting memories that incent behavior:
1. Be genuine in celebrating organizational and personal milestones. Do not just hold a town hall and share a slide listing everyone's name. Boring! Ask your CEO to send a personal or handwritten congratulatory card or place a phone call. Send a balloon or flower to an individual's desk. This makes the recognition memorable and creates a story for the future.
2. Hold theme days. BrightHR and Professor Sir Cary Cooper conducted research that said that young employees that have fun in the workplace, from belly laughs to bringing your pet to work day take less sick leave, work harder and are more productive. Hold a theme day like a Prom Party or Pajama Day!
3. Have fun team building events. Take half a day on a Friday or a day that's slow for work to go to an arcade, carnival or even an amusement park. Or have activity based contests like ping pong, nerf darts or chili contests. They may seem silly yet employees are jazzed by them and make memories!
4. Help employees have fun with their families. For example, provide a tool to save for vacation. A vacation savings account is where they can save with paycheck contributions. Even contribute into that vacation savings account as a reward for a job well done. Or instead of giving away cash, give away a weekend staycation at a local hotel or tickets to a concert, sporting event, movie or festival.
5. Take pictures and video, and urge employees to do the same. Make sure they are posted on employee Yammer! Or on social media sites (with employee permission, of course). You can even encourage employees to share their vacation picture showing of your company SWAG. Share those special moments inside and outside of your organization.
6. Recognize the spouse and family. If an employee has been traveling or working many hours of overtime, thank her and provide a reward for her family. Perhaps send the spouse a round of golf or a day at the spa or order meals for the family, or hire a cleaning service to come and clean the employee's home.
Families will be thankful you thought of them and the time sacrifice their partner has made for your company. You could even contribute to that vacation fund anytime a spouse participates in your wellness program too.
7. And most importantly make sure you talk with your employees about time off. Even President Franklin D. Roosevelt took vacation during the Great Depression. Make sure that employees are recharging their batteries and taking an appropriate time off and away from the office. Certain employees aren't comfortable with taking time to refresh, recharge and relax and need to be reassured that it's ok and even encouraged. You can't make outside memories if you are always in the office.
When you look back on your career what do you think about? How hard you worked or the fond memories you created with the people you worked with? I'm guessing the latter. Now, if you looked back and said, that company was amazing, I loved working there, the people were family AND I got to go on some amazing vacations all with the company's help! Wouldn't that be your fondest memory?
Employees who make memories are more inclined to bleed your logo, who will happily work 80 hours a week (not that I'm advocating that - but you get what I mean) because they believe in your mission, vision and values - those who give their heart and soul each and every day.
Laurie Brednich is an employee total rewards expert and the founder of the HR Company Store that helps HR professionals find, rate and review vendor partners. She has spent the past 25 years working with Fortune 500 companies create healthy and engaged workforces through great benefits. She has helped companies get onto the Fortune's Best Place to Work List and has been instrumental in starting health and wellness programs.
THE PITFALLS OF UNLIMITED VACATION
One of the latest trends to help mitigate cost and create a value-add for organizations is the concept of "Unlimited Vacation". Organizations tout (especially those in the technology sector) that this allows employees to take as much time off as they need to recharge, refresh and relax. Where philosophically this is great - a world where employees are free to manage their busy schedules by incorporating work into their life versus trying to incorporate a life around their work sounds like nirvana, unfortunately, it's not all rainbows and unicorns.
This type of program isn't for the faint at heart; this can cause some real heartburn for you as an HR professional. Here are some things you may want to consider before you jump on the unlimited vacation bandwagon.
DON'T CALL IT UNLIMITED VACATION
This can have negative implications, especially if you have employees in California. Because California law is so employee-friendly you don't want to be in a position where you need to shell out substantial vacation pay because you said you had an "unlimited vacation policy". Instead, call it Flexible Time-Off.
HOLD YOUR MANAGERS ACCOUNTABLE FOR TIME OFF
Employees will resent your organization and will stop trusting your leadership if you don't hold your supervisors accountable for ensuring balance within their teams and the organization as a whole. Nothing will ruin a program like having two departments where one supervisor highly encourages employees to take time off and another that never approves time off requests. You need to educate your supervisors on your expectations and hold them accountable just like any other goal.
SET REALISTIC ORGANIZATIONAL GOALS
One of the biggest pitfalls is that employers create a long list of goals each year without any consideration to the number of employees who can do the work or the number of hours it takes to meet the goal. Employees will resent having so much work that they feel they can't take time off, or feel that it is looked down upon if they do.
CREATE A SEPARATE MEDICAL LEAVE POLICY
Develop specific guidelines on how Flexible Time Off is separate and distinct from a medical leave. Outline how each is reported and approved. If you don't, you may wind up in court for violating a Federal or state protected leave law.
FIND AN ABSENCE MANAGEMENT CONSULTANT
Unless you are an expert in this field, don't go it alone. Hiring a consultant to help you strategically align your leave program with business needs, develop the actual policies and determine the incremental cost savings for the organization will be worth every penny. You can find several qualified consultants on HR Company Store.
At the end of the day, employees see time off as an entitlement and not a benefit. If you design your Flexible Time-Off program correctly your employees will not feel that you are just implementing the program to save on the accounting accrual. They will see it as you really care about them and their families and want to help them have the best life they can have. In the end, your Flexible Time-Off program will turn back into the benefit is was originally meant to be!
MONEY AND WELLNESS
Everyone these days is thinking and talking about wellness in the workplace. When companies spend, on average, $10,000 an employee annually for healthcare (not to mention absenteeism costs) helping people become healthier makes smart business sense.
The real question is how do you create a program that will remove the obstacles that are in the way of employees engaging in your wellness program and get them to actually take charge of their health? That's the million-dollar question, isn't it (or in some companies the multi-million dollar question)?
Well, speaking of money, financial wellbeing is the linchpin to the success of any wellness program, but it's usually the last component that's ever, if ever, implemented. Think about it for a moment, if your employees feel they don't have enough money, this stresses them out and that stress then causes medical issues (e.g., high blood pressure, obesity, etc.), which your organization pays for. So helping employees get their finances under control helps their mental wellbeing, and in turn, once they feel less financially overwhelmed, they will have the time and energy to focus on their health. Win! Win! Win!
Like most components of wellness, people are in different phases of their financial life so one size doesn't fit all. You need to offer a variety of financial management programs for your employees - from broad based programs to ones designed to help a specific life situation. And they need to be in a variety of delivery system (e.g., in-person, telephonic, webinars, etc.). The most important piece is to give them the time during working hours to attend, without that, they won't ever get started.
You can find several vendors who can fill these needs for your organization on HR Company Store. Here's a list of programs to get your financial juices flowing:
- Debt Management - more than just budget creation, these programs help employees negotiate interest rates, reduce late fees and help stop evictions and foreclosures.
- General Financial Education - learning the fundamentals to the credit score, basic budgeting etc.
- Retirement Planning education around 401K's, IRA's, etc.
- Situational Financial Planning - targeted programs for specific life scenarios
- Children with special needs
- Investment strategies for nearing retirement
- New to investing
- Planning for college
- Planning for woman
- Planning for members of the military
- Planning for caregivers
- Life after divorce
- Newly married/new parents
By helping your employee gain control of their financial situation and showing them there is a light at the end of the tunnel and it's not an on-coming train, your employees will be more engaged at work and you will impact their lives at a level that is much deeper than any gym class can do.
THE ART OF THE RFP
Mastering the art of the RFP is an essential skill for almost all HR professionals. It's the foundation in which we use to decide which service or product we are going to put into place for our employees or our business. Picking the wrong one can bring you to the brink of insanity, picking the right one and your team will be singing your praises and throwing roses at your feet (ok, not really, but they will appreciate the time you put in to help find the perfect vendor partner).
Here are five tricks to help you through this process:
KEEP IT SHORT!
You know you want to ask every question that you've ever thought of around how that service works in your RFP. Don't! Remember in the end, you are the one that's going to need to read through it all and figure out who you do or do not want to move forward with. Keeping your questions to a maximum of 20 most important (10 if you can do it), will keep you from spending hours of reading. Additionally, if possible, multiple choice is best as it's less for you to read, straight forward answers from the vendors - win/win!
If you work for an organization that has a purchasing or procurement group, get them involved! These folks want to help you, and you need them. Negotiation is tough, and these experts can help you even if it's just by playing the ˜bad guy". Remember, at the end of the RFP, you still need to work with the vendor.
Also, this team has great tools to help make your life simple. They can manage the whole RFP process - setting deadline, sending reminders, collecting electronic bids and the collateral that vendors will ultimately send, all on your behalf.
WHICH VENDORS TO SEND IT TO?
Age old questions that faces HR professionals, there are hundreds of vendors that all do what is needed, for the most part, who are the best ones? In the past you would call your friends and your consultants for advice, now you can log into HR Company Store and search thousands of vendors to find the ones that most align with what you need. And you can read reviews and see how other HR Professionals rate their services (all for free).
Use this tool in conjunction with your consultant/broker. Find a few vendors that seem to be a good fit for you, then take your list and talk with your consultant/broker about your choices, and together you can decide who are the best vendors to receive your RFP.
TALK TO YOUR VENDORS
Schedule a call for all your vendors to attend before you even start putting together the RFP. Tell them what you need, and what your expectations are of them if they were to be awarded the business. If it's an area you aren't 100% comfortable with, this is a great time to ask them to supply you with 10 of the best RFP questions they've ever received. This will give you a great start on your top 20 questions.
Allow the vendors to ask questions. While they are all on the one phone call, everyone can hear the answer and your direction, in the end making your life simpler.
This is where you can get into the nitty gritty of all the questions. Create yourself a scorecard of all those questions you wanted to put in the RFP. Ask them in the Finalist Meetings and take notes. After each meeting recap them for the vendor and ask they approve what your understanding of their answers..
In the end, RFP's are all about picking the best fit for you and your company. Taking the time to the necessary pre-work and streamlining your process will save you from a lot of sleepless nights.
DATA TRANSFERS, NOT “AUTO-MAGICAL”
Have you ever asked yourself, “What did we do before electronic data transfer?” because it is impossible for Human Resources (HR) professionals to do our jobs effectively and efficiently without them. Employees don’t get their benefits, paychecks and tax forms unless data transfers are successful.
At some point in time, nearly every HR professional needs data sent from their HR Information Systems (HRIS) to a vendor of some kind -- whether benefits, compensation or a government agency for reporting.
It is the data exchange where the magic happens yet most HR professionals want to stay out of the weeds and let others handle creating these information jewels. Here is some guidance on how to be productive, efficient and on top of data transfer.
1. Make time for your HRIS department: Do not rely solely on your HRIS department and/or vendor to create files. You have an active role in ensuring that data is accurate and complete. HRIS is there to create the actual file, not necessarily ensure that it meet the mark. They aren’t mind readers, and normally they are not HR professionals either, so they need your expertise.
2. Read every single word of your file specifications document: Every vendor has a file layout which is a document that provides the nitty-gritty details on how the vendor wants to receive your data. Become intimately familiar with this document.
Most files ask for the same basic information; however, defining the information isn’t always that simple. Here is guidance for cutting through:
• Date of Hire – Seems easy right? Well, is that Original Date of Hire, Last Date of Hire, Adjusted Date of Hire, Date of Hire in a given business unit or some other Date of Hire that your organization uses? This can be different depending upon the type of file you are programming.
• Effective Date – For many benefits this is straight forward yet what happens when there is a life event? For example, an employee adds benefits on her date of hire, gets married three months later, and adds their new spouse. Which effective date is the vendor really looking for?
• Active Employee Status - What does that mean in your organization? To a vendor and possibly to your HRIS team, this means anyone with an Employee Status Code of “A”. To an HR professional (depending on the program) that can mean any employee who falls into any one of these categories – active, paid leave, unpaid leave or suspended.
• Benefits Termination Date – This may or may not be the same as the termination date. For companies that provide benefits until the end of the month in which an employee terminates, this date is different from their employment termination date. And depending on your system, that date may actually be the day before the date in the system.
For example, your system may display the first date that the benefit was terminated not the last date that the benefit was active. If that is the case, your HRIS team may need to program the file to subtract one day from the Benefits Termination Date listed in the system and display that date on the file.
If this isn’t enough, there are several additional key decisions!
• Full-file or Change-only file - Is this a full-file or a changes-only file? A full-file is always preferred, as this will ensure that nothing is missed. Having a full-file also helps with your error reports. After every file is run, you’ll receive an error report (the data that the vendors systems doesn’t like for one reason or another). By having a full-file, you will see all the errors all the time; with a changes only file, you may or may not.
If your vendor insists on have a changes-only files then you’ll need to discuss the look-back period – files generally will look backwards for an effective date of some kind. Usually vendors will say they “want changes that are effective between x and y dates.”
This may not necessarily capture all the changes that had taken place in your system though, what about those inevitable retroactive changes that occur (e.g., an employee who won his/her position back after a lawsuit). Your best bet is to ask that the file display all the changes that were “entered” since the last time the file was run, regardless of effective date. This will ensure that nothing is missed.
• Run Date/Time – Vendors usually don’t care what day they receive a file, as long as they receive it at the same time each day, week or month. HRIS cares that the file is run when the least number of people need to use the system (e.g., the middle of the night or on a weekend) in order to avoid slowing down the production system.
You need to determine when is the best time for the file to be run so that it provides the most accurate information from your system. For example, should it be run before or after payroll is processed, or does it need to be run several times a day to capture immediate changes?
• Raw Files – Make sure you get a copy of every raw file. No matter what your vendor or your HRIS department says, you want to know that you will have access to the actual file that was sent from your system at all times, you will be able to see exactly what was sent and exactly when. Keep these files in case you need a written history and to avoid being in the dark when troubleshooting an issue.
Once you start handling file interfaces, it can be intricate and overwhelming. There is a cadence in how these work, similar to the geometry proofs we learned in the 10th grade. They are relatively simple and formulaic to create.
In the end you’ll win the hearts of your partners and you’ll have a great product that may not be “auto-magical” but will simplify your busy day!