By RSL Media
Laws are changing and demographics are evolving—and those issues present big challenges for human resources and benefits professionals, particularly the stretched-thin HR teams in smaller businesses.
To address today’s hot workforce management issues, Complete Payroll Solutions and Kronos convened several dozen Massachusetts-area professionals to share strategies on three big questions:
- How can small and mid-size businesses mitigate the proposed changes to the Fair Labor Standards Act (FLSA)?
- How can they find and keep the best talent?
- How can companies be sure they’re compliant with ever-changing Affordable Care Act (ACA) requirements?
The roundtable event attracted workforce management professionals from a wide range of industries, including retailers, social service providers, technology companies, hoteliers and more.
“Though we work with a diverse range of companies, we often see that all small and mid-size businesses face similar challenges,” said Michael Pettengill, vice president of channel management for Complete Payroll. “We chose these three issues for discussion based on feedback from our clients about issues they wrestle with most.”
Tracking Time: More Important Than Ever
For 2016, the Department of Labor (DOL) has proposed a significant change in the FLSA.
Under the act, employers must pay overtime to employees who work in excess of 40 hours in a given week. However, a widely used exemption excludes “white collar” (executive, administrative, and professional) employees who make above a certain weekly salary from this requirement.
The DOL proposes a new way of calculating eligibility for the exemption. If approved, it will most likely become effective in mid-2016, or in 2017. Under the proposal, an employee who makes less than $50,440 yearly would be eligible for overtime, compared to 2015’s threshold of $23,660.
As a result, some companies will be expanding their timekeeping procedures beyond hourly employees to include salaried employees. Several participants maintained that having robust time-tracking technology in place has become critical to easing the tracking burden on employees as well as on the company.
One option advocated by several of the roundtable participants is to raise selected salaries (those that are near the threshold) for the purpose of avoiding time-tracking and paying overtime. However, concerns about possible perceived unfairness were noted, since employees whose salaries are either already above or considerably below the threshold would not be considered for a raise.
Other HR managers said their companies could not afford either significant salary increases or increased overtime, and would likely be reducing employee hours in order to avoid the issue.
How to Find (And Keep) Talent
Smaller businesses know they have a lot to offer—but the challenge is getting the word out to the best candidates, professionals at the roundtable said.
Companies in the Cape Cod area must address the relatively high cost of living facing potential employees, several said, while area tech companies compete with the higher salaries of the Boston area. A Rhode Island company specializing in home-based behavioral therapy contends with strict state requirements for employees. And just about everybody reported a dearth of high-quality, well-prepared candidates, particularly at entry level.
Where to find the best applicants? Advertising on a free site is likely to yield a large number of off-target applicants, but paid sites can be too expensive, roundtable participants agreed. One attendee recommended Indeed.com for job postings, and another noted specialized job sites, such as Dice.com for tech talent. Other suggestions included:
- Word of mouth: Ask for references from and network with nearby schools or certification programs; state or local organizations, such as young professionals organizations and chambers of commerce; and professional peers at industry events.
- Social media: One HR pro suggested using a clean, simple graphic in a job listing on LinkedIn in order to get more attention. Another said that posting about a job opening on her personal Facebook page and asking others to share had been effective.
- An in-house referral program: Make the program robust and announce openings with great fanfare to build excitement, said one expert.
For promising candidates, one experienced interviewer advised, probe to find out what is most important to the applicant. Is it learning, advancement, a flexible schedule, or vacation time? Emphasize what a smaller firm can offer in those areas to offset the attractions of a larger company. For example, because smaller companies allow employees to wear many hats, candidates can be assured that they’ll have the ability to “stretch” and won’t be confined to a narrow role.
Suggested retention tactics included:
- Encouraging managers to think out of the box about career paths within the company to give the best workers opportunities for advancement.
- Sponsoring monthly employee events, such as a “painting and wine” night, to build staff cohesiveness.
- Using employee surveys to drill down into what staff members like and don’t like. One participant, noting employee survey concerns about communication, instituted regular “CEO Forums” in which five or six employees meet with the CEO for a no-limits discussion.
The Affordable Care Act: Who and How Much?
As of 2016, all businesses with between 50 and 100 full-time employees are required not only to offer affordable health care to their employees, but to prove it to the IRS.
Human resources and benefits managers at the roundtable admitted they were less than fully prepared to meet the challenges of compliance, including:
- Calculating which employees are considered “full time,” particularly when a business employs many seasonal employees.
- Deciding what health care plans to offer, especially when there is a broad range of salaries within a company. The ACA mandates an employee must be offered an insurance plan for which his or her contribution equals no more than 9.5 percent of the individual’s annual salary.
In smaller businesses, HR professionals often don’t have the time or resources to keep up with the complexity of the law. Some roundtable participants confessed that they had done little to prepare for new ACA requirements, partly because they were expecting the regulations and deadlines to change yet again. Others said they are relying on their insurance brokers, payroll providers and accountants to guide them through the process.
Technology is proving a lifesaver for some HR professionals. For example, while most people in attendance said they are using spreadsheets to track and report employee hours, others reported success with using automated “time and labor” and workforce management software with specific ACA monitoring functionality. Proactive managers are also reevaluating their HR software packages to make sure they can quickly and easily run the necessary reports to complete the required IRS Forms 1094-C and 1095-C. Overall, many agreed that automation is critical to staying compliant with the ACA and simplifying the overall process.
Said Pettengill of the roundtable, “We are consistently impressed by the energy, resourcefulness and problem-solving skills of workforce management professionals in small to mid-size businesses. We know that they always come through for their companies and employees, and we are pleased to have had this opportunity to help them share ideas.”