Employer Solutions Blog – Sage HRMS

In response to the tens of millions of “unbanked” workers in the U.S., many employers have begun issuing payroll cards to their employees. These items work just like debit cards from banks but allow workers to dip directly into their company payrolls, as opposed to the more resource-intensive process of cutting checks.

Most payroll debit cards allow all employees within an organization to be enrolled in direct deposit, regardless of existing banking relationships. There are a number of benefits for both employers and workers. For example, companies are able to reduce the cost of issuing paper paychecks. Such devices are also more secure, as they minimize the risk of check fraud, offering an additional employee benefit as a result.

Workers benefit most directly from their convenience and security, as their wages are immediately available on payday. Furthermore, individuals without checking accounts or established bank relations do not need to establish one, and families can even receive multiple payroll cards for use.

Businesses of all sizes are looking for ways to improve payroll efficiency and employee satisfaction while also maintaining adequate security standards. Complete electronic payroll systems allow employers to meet these goals.

With the growing popularity of payroll cards, especially amid rising discontent with banks, a number of HR management and payroll associations – including the Association for Financial Professionals, Electronic Payroll Coalition, Electronic Payments Association and the American Payroll Association – have collaborated to develop a series of core principles for payroll debit cards. Employers and payroll managers considering electronic payroll systems should consider some of these standards:

• Employee should have access to full wages at least once each pay period without cost.
• Terms and conditions should be disclosed in a clear manner before the employee is enrolled in the payroll card program.
• Employees should be allowed to check account balances via telephone or electronic platforms, such as online networks, and these services should be offered without cost to the employee.
• The funds in a payroll card account shall not expire.
• If the card has an expiration date, the employee should be provided with a free replacement card prior to that deadline.

Have you considered offering your employees access to a payroll card?  You can learn more by registering for our weekly live webcast, Paperless Payroll with the Sage Payroll Paycard.

As we close the books on 2011, many businesses are looking at strategies and tactics for the new year. Given recent waves of market uncertainty, this year poses a unique challenge for decision-makers and C-level executives. While there are numerous financial considerations ranging from healthcare compliance to tepid consumer confidence, human resource managers have been forced to align their practices with the evolving global economy.

With these considerations in mind, here are my five top HR trends to look for in 2012.

1. Succession Planning

With an aging U.S. workforce and an anemic job market, HR teams will need to develop strategies to help mitigate employee turnover and assuage executive departures. A Mercer survey released late last year found roughly one-third of U.S. workers are considering leaving their jobs, with younger workers more likely to quit.

The Mercer study pointed out that workers are feeling less attached to their organizations, both emotionally and psychologically. They don’t necessarily believe that the organization they work for has their interests in mind.

On top of low employee morale, the aging baby boomer generation will present even more challenges to HR managers. For these reasons, succession planning for leadership and high-skills professionals will be extremely important in 2012. Have you thought about how you could quickly replace certain positions at your company?

2. Social Media

While its role within the realm of marketing and customer service has been clear, social media has been more of an enigma to many HR professionals. Problematic workplace issues can arise when employees engage in social media without a formal company policy in place. For example, they may divulge trade secrets, violate confidentiality, or lessen their productivity.

The National Labor Review Board also ruled on a few cases this year regarding the role of social media in the workplace. Generally, the NLRB sided with employees and their freedom to post content without fear of work-related repercussions. However, savvy HR managers will tap the considerable benefits of a workplace social media strategy to engage employees.

3. Human Resources Technology

HR management systems and related technologies help boost efficiency and increase productivity in areas such as payroll compliance, employee scheduling, data management, recruiting, and security.

With a variety of budgetary, hiring, and regulatory constraints looming in 2012, HR managers and executives are apt to be overwhelmed. Demand will rise for HR technologies that help to allay these burdens.

 4. Aligning HR and Corporate Goals for Increased ROEI

In an uncertain business climate like today, HR mangers are consistently being asked to explain the costs and benefits of employee-related programs and benefits, their Return On Employee Investment or ROEI. But this is not readily quantified. Relative to other business units, HR departments cannot point to costs and revenues as a measure of effectiveness. This is a problem for HR managers. One evolving solution is “strategic alignment,” using HR metrics as appropriate. 

In broad terms, strategic alignment means using HR processes to align business units and individual employees with the strategic goals identified by senior management. For example, management needs clear, direct, and constant communication with employees to implement strategies. More specifically, it means that HR managers modify traditional HR processes—recruiting and hiring, employee retention and development, and compensation—to implement the strategies developed by senior management.

Human resource departments that align their goals with their organization’s goals will accomplish more and increase their productivity in 2012.

5. Healthcare Reform

The Patient Protection and Affordable Care Act will continue to be implemented in 2012, and it will impose new compliance burdens each year until 2018. While the law is likely to remain mostly intact, the U.S. Supreme Court is expected to make a monumental ruling on its constitutionality this summer.

Either way, HR managers will likely need to collaborate with other departments to address healthcare compliance standards. A recent Towers Watson survey found 38 percent of finance executives believe strategy development will be more of a shared role, compared to 24 percent among HR leaders.

Companies are only beginning to address the complex decisions triggered by healthcare, says Towers Watson. But these decisions will have a direct impact on the broader set of employee rewards.

So there you have it, my five key human resources trends to watch in 2012. I’d love to know what you think. Comment below or let me know on Twitter by replying to @SageHRMS!

As 2011 draws to an end, companies large and small are closing out their payrolls to comply with state and federal reporting requirements. In addition, all employers are faced with the challenge of getting W-2’s to their employees.  Employers must give copies B, C, and 2 of Form W-2 to each employee and they must be received or postmarked by January 31, 2012.

Yet despite the clear advantages of HR software and automated payroll systems, many employers still rely on outdated methods of delivering W-2’s  and complying with payroll taxes and standards. The old way of doing things -  printing W-2’s  forms, addressing and stuffing them in envelopes and mailing them -  is simply unsustainable in today’s fast-paced, mobile economy.

Aside from the operational burdens associated with the old method, employers are forced to pay administration staff to complete such tasks, or worse, to pay knowledgeable and experienced HR workers to handle them, thereby pulling focus from more pressing workplace duties and responsibilities.

Companies such Altec, make pressures sealed W-2’s and checks, while companies like PSMailers, and Versaseal, make machines that allow you to seal your checks and w-2’s, saving you the time from addressing and stuffing envelopes and avoiding the almost inevitable mix up that comes with placing one person’s W-2 in an envelope addressed to someone else.

Another solution is to take full advantage of HR technology that offers users the ability to create tax forms and file documents electronically. For a nominal fee services, such as Aatrix, allow you to have all your W-2’s filed with Federal and State, mailed to your employees, and posted online for future access.  Furthermore, reports can be automatically completed, reviewed and edited on screen, then e-filed in minutes for processing. These services ensure total compliance by including guaranteed delivery methods and eliminating filing expenses associated with printing or mailing activities.

If you’d like to transform the tedious task of year-end payroll processing into an experience free of errors, penalties, and stress be sure to download the white paper, the Payroll Manager’s Guide to Year-End now!

Today we’re back with our TGIM series, or Thank Goodness It’s Monday.  Each Monday our posts will focus on employee engagement and we hope to hear your thoughts on Twitter using the #TGIM hashtag or with a reply to us @SageHRMS.  

Engaging employees is a constant challenge for managers. Factors ranging from the state of the job market to the natural lethargy of a Monday morning have the power to plague energy if not handled properly. Accordingly, managers often equip non-monetary incentives to keep workers confident, productive, and loyal.  It’s the type of incentives they employ though that impacts overall engagement levels. Usually, they boil down to this: rewards and awards. But what’s the difference?

Employee Awards

Employee awards are a fitting topic of discussion given the approach of the year’s end. While the enthusiasm for year-end awards tends to fluctuate from company to company, many organizations rely on them to inject some excitement into company culture. The end of the year is the perfect time to publicly acknowledge the specific accomplishments of individual employees. Organizations may want to create a host of categories and nominate several workers for each.

Some critics of these programs, however, argue that they isolate certain workers and may even breed resentment as a result. Proponents hold that they nurture healthy competition and engage workers by offering recognition. Even employees who are dissatisfied with their jobs may enjoy a spark of enthusiasm if granted an award. Another added benefit, that many of these awards are low to no cost to employers.

If you plan to initiate an awards program, you need to be careful about how it’s implemented. What kinds of traits do you want to address? There are a range of categories, such as most-improved, best salesperson, best attitude, top idea, most productive department, etc. Employers can also take a less serious approach, and offer awards in categories such as “funniest sales mistake” or “coolest office.”

Employee Rewards

Rewards programs are different in that they are ongoing and based on more measurable performance criteria, such as sales figures and growth projections. They are similar to awards programs in that they aim to motivate employees, but they differ in their fundamental strategy.

Rewards may be monetary – such as year-end bonuses and pay raises – or procedural – such as vacation days and scheduling benefits. They also vary in terms of their managerial strategy. Some rewards programs may be aimed at retaining or attracting talent, while others are focused on driving sales figures.

Like awards, rewards programs are usually based on individual performance and recognition. However, rewards tend to be less public, as they are focused on driving the motivation of an individual team member.

What are some other ways managers can engage employees through rewards? Let us know what you think on Twitter by tweeting with the hashtag #TGIM, or reply to us @SageHRMS.

Over the course of an interview, hiring managers will ask the job applicant tough questions about work history, professional skills and future plans for growth. But as the session winds down and approaches the money topic, the tables will turn. Now you have to answer the difficult question.

What is the best way to bring the subject up and talk hard numbers? Here are a few ideas:

Survey the battlefield, and don’t go in unarmed. Before telling the applicant what you’re ready to give, ask him or her what kind of salary they are expecting and maintain a poker face. You will have to gently lower their expectations if the figure suggested is too high.

Have an open discussion. Employee pay is about more than the check – there may also be benefits, stock options, tuition reimbursement, the value of a short commute and more. Talk about these bonuses with the applicant to get a feel for the type of compensation he or she is looking for.

Don’t tie yourself to a price until you’re ready to offer the position. It’s better to give a price range and a summary of benefits rather than a concrete figure. Skill sets, past experience and salary history can all factor into the final offer.

Do you have a special technique for discussing pay?

Small business owners, particularly founders, are understandably concerned about delegating responsibilities to employees or new hires. After building a company from scratch, it is difficult to trust new faces with tasks that the owner has come to perfect.

However, doing exactly that, delegating, is what it takes to grow a business. To adhere to old ways, to insist on certain methods, or generally discourage personal styles of doing business will only dampen a company’s productivity.

While micromanaging is rarely a valued management tactic, there is one area where it should be discouraged at all costs: human resource management.

Business owners want to focus on building team of people they can trust, but sometimes they let their own personal preferences get in the way of making important hiring decisions.

Chief executives and other managerial leaders need to leave compensation, benefits, healthcare and other personnel strategies – no matter how consequential – to the HR specialists. Of course, input and communication should always be stressed.

Interested in learning how human resources can provide strategic information to the C-Suite?  Download the What the CEO Needs From Human Resources white paper now.

With the continual uncertainty of the job market, employers need to recognize a few basic truths. First, conditions will eventually improve, even if it takes years. Second, when the market does begin to progress, it will become more difficult to hold on to talent and even top performers, as many will begin seeking opportunities elsewhere.

For that reason, HR departments need to implement effective retention strategies that include competitive compensation structures and benefits programs. More importantly, as this trend unfolds, HR teams need to assert their role as part of a greater corporate strategy.

Compensation may be the most costly aspect of running a business, but employee perks and benefits, which are usually credited for generating retention levels, are the second most expensive budget segments.

In recent years, the cost of benefits has been growing even more quickly than wage gains, especially with the skyrocketing cost of healthcare insurance. In fact, healthcare costs are also exceeding inflation rates and generating waves of uncertainty regarding compliance with new regulations such as the Patient Protection and Affordable Care Act of 2010. Accordingly, HR executives are finding a larger, more important role within the C-suite and executive strategy.

Chief executives need to leverage the most accurate data available in order to forecast revenue and expenses over extended periods of time – be it a year, two years or even five. However, HR planning is notoriously difficult, and given its emerging role within corporate and financial planning, assessment can become even more challenging.

For that matter, HR managers need to provide their CEOs and financial executives with HR expense projections for the coming year as soon as open enrollment is completed. Of course, such projections are much more difficult to obtain over longer time frames, so HR teams should narrow down projections as accurately as possible and include best- and worst-case scenarios.

Businesses also need to factor in the impact of healthcare legislation, as the new law is expected to roll out over the next decade, imposing new financial and regulatory burdens on small and large businesses all the while. For example, small firms that are not mandated to offer coverage for employees will need to weigh the ups and downs of doing so – while eliminating coverage may save money, it may also discourage workers and lead to departures.

To help paint a picture for executives regarding the company’s cost of benefits, HR teams need to provide them with an accurate assessment of the average employee’s share of total benefits costs. To do this, divide the total benefits costs by the total number employees. In drafting a benefits budget, be sure to Include healthcare costs, retirement plans, savings plans, tuition, life and AD&D insurance plans, reimbursement and automobile expenses.

If the total benefits expense is high, HR managers need to provide the executive team with analysis that narrows down and targets what it is that is driving up costs. It may simply be rising healthcare premiums, in which case managers may want to adopt wellness programs to improve health or cut coverage for some employees altogether. Retiree benefits may also be racking the company’s benefits budget.

Such an analysis should also tackle how benefits are affecting employee retention and engagement levels. Draft ideas and strategies that could help contain and ultimately reduce these expenses.

Interested in learning more business metrics that can help human resources provide strategic information to the C-Suite?  Download our What the CEO Needs From Human Resources white paper now.

It used to be that human resources professionals were relied upon to manage data, diagnose problems and offer solutions for all concerns relating to employees and the various emotional factors that influence productivity levels.

But within the past several years, HR professionals have taken a strong footing within the day-to-day management and strategy concerns of running a successful business. After all, what drives a business can ultimately be delineated to its personnel, specifically their level of happiness and engagement, as well as the various strategies involved in hiring new talent.

Even so, what makes a business function is employee compensation – if workers are not afforded apt monetary rewards, productivity and retention rates will plummet. Even worse, poorly compensated workers – especially high-performers – may be lost to competitors.

However, payrolls are a business’ most expensive budget item, and over-compensation can inhibit corporate profitability goals. For this reason, CEOs need to engage directly with human resources executives to determine compensation structures that befit employee value.

HR departments should consider a number of factors in drafting compensation rates, including specialized skill sets and professional certifications, employee experience, the industry in question, business location and what competitors pay for similar skills.

Salaries are a frustratingly fragile business consideration. Deciding appropriate salaries is like striking a balance, with the need to reward and retain top performers on one end and a business’ bottom line on the other.

Strong salaries assert a business as an ideal employment opportunity and discourage departure to competitors, but they need to be as low as possible while still achieving such an end. Accordingly, chief executives and HR managers need to determine how much competitors are offering for equivalent positions and develop benefits packages that incentivize employees, including bonuses, stock options and retirement packages.

HR executives should provide corporate management with comparative analysis for both the industry and the business’ location. Determine how your company’s salaries compare to market rivals and how wages relate to your specific location’s average cost of living, as well as creative programs that can enhance the overall attractiveness of a compensation package.

In developing a compensation analysis for the C-suite, HR executives should include a common metric known as compa-ratio, which refers to the proximity of an employee’s salary to the midpoint of the salary range established by your company.

To determine compa-ratio, divide an individual employee’s salary (or the salary average of a group) by the median of the company’s salary range.

A compa-ratio of exactly 1.00 means a worker’s annual compensation is exactly at the company’s midpoint average, with higher figures indicating greater than the midpoint. These employees may be overpaid – a condition that requires careful maneuvering to address. Some HR managers would be better off leaving such salaries as they are to avoid discontent.

More importantly, employees who have been determined to have compa-ratios of lower than 1.00 are at risk for disengagement, dissatisfaction, lack of motivation and even departure.

This is one point where HR management begins to converge with business expansion and management and become an integral aspect of executive strategy. Tread this line carefully and be sure to involve the C-suite in such circumstances.

Interested in learning more business metrics that can help human resources provide strategic information to the C-Suite?  Download our What the CEO Needs From Human Resources white paper now.

If your company offers an internship program, or takes on additional workers to handle a busy summer, that means human resource managers receive waves of applications from job seekers hoping for a temporary position.

Here are a few ways you can handle the extra work of processing temporary or seasonal hires.

How your company views the internship program – whether it’s to expose less experienced workers to the industry or just serves as a way to inexpensively reduce full timers’ workload when many take vacation – will probably dictate the extent of salary and benefits you offer. Payroll software can help track hours interns or seasonal employees work, which helps maintain labor compliance, and can also be used to set up 401(k)s or a direct deposit for paychecks.

Consider giving summer workers or interns a review at the end of the season. It’s great practice for them, and if you find a particular person who has really excelled, you can save their data in a human resource management system for future internships or positions with the company.

Does your company have an internship program, or take on seasonal workers, if so how do you handle the extra talent management issues?

The recession and its aftermath left virtually no industry unscathed, as unemployment skyrocketed, credit markets tightened and consumer confidence tumbled. But as troubling as the downturn was on a market-wide scale, individual businesses were forced to confront some rather unfortunate circumstances regarding workforce management, payrolls and their overall bottom line.

While reducing staff, maintaining labor costs and boosting morale may have been the most common strategies for surviving the downturn, most employers and human resource management professionals have acknowledged that the actual implementation of these practices is easier said than done.

For instance, labor costs – including both compensation and benefits – account for roughly one-third of a business’ overall operating costs, meaning employers and HR officers need to strike a balance between profitability goals and employee motivation – a window that has become increasingly fragile and narrow through the course of the economic recovery.

Accordingly, managers may want to consider aligning their strategies with the goals of the company. This means adopting managerial techniques that adhere to revenue and growth projections, as well as expectations of overall company culture. It may also mean organizing payrolls and labor costs around work quality and productivity. Such practices can drastically improve a company’s bottom line.

However, accomplishing this requires a greater level of involvement among HR professionals and executives – an endeavor that has been challenged by the gap that has traditionally existed between corporate strategy and HR management. But many leaders are beginning to stress the need for HR executives to define their roles and responsibilities within the context of an overall growth plan, marketing strategy or profit goal. Even so, such an outlook is still somewhat bare.

Only 19 percent of senior HR leaders are part of their company’s executive team, and only 16 percent of businesses claim HR is the key to positioning their organization for growth.

To begin to align labor costs with that of corporate objectives, businesses need to evaluate precisely how much revenue is being invested in payroll, benefits and other employment-related costs.

This metric serves as a sort of return on investment for labor costs. Divide total annual labor expenses by revenue and express it as a percentage:

In determining the result, consider how organizations spend, on average, 22 cents on labor for every dollar of revenue earned. Of course, these figures vary from industry to industry and business to business, so HR professionals should weigh their specific findings against the norms of their market.

While it may be that the trend of HR executives and managers taking on the role of corporate strategist has been slow to develop, most analysts and industry leaders see it as likely or perhaps even inevitable.

But corporate strategy involves a greater understanding of and involvement with tasks that are unfamiliar to most HR leaders – such as relations with clients and business partners, finance and accounting, sales and marketing, operations, information technology and the employees themselves. Without understanding these issues and concerns, HR officers will be hard pressed to develop relevant corporate strategies.

Ultimately, it is a workplace’s culture that determines its productivity, and it is up to HR professionals to help forge and guide that environment. More importantly, the most effective way to accomplish such an objective is through coordinating managerial and employee engagement strategies with overall business objectives.

Interested in learning more business metrics that can help human resources provide strategic information to the C-Suite?  Download our What the CEO Needs From Human Resources white paper now.