Work Babble

Human Resource Management - Basics For The Startup Business

Startup business owners are noted for their ability to provide employment opportunities and create marketplace innovations. Currently, small businesses employ 50% of all private sector workers in the U.S. As an entrepreneur, you are in a unique position to boost the economy and improve your community by creating new jobs. Expanding your business by hiring employees is a serious commitment. Understanding the basics of Human Resource Management (HRM) is crucial to the growth and success of your enterprise.

According to U.S. Small Business Administration, fewer than 45% of new employers stay in business more than 4 years. You want your company to be one that lasts. With small companies, the performance of each worker has a big impact on business outcomes. You need to know how to hire and retain the best people.  You must also understand how to avoid costly lawsuits. If you have only a few employees, you may be able to take on all the responsibilities of Human Resource Management yourself. However, you should be aware of how much work this entails:

Basic HR Functions

·         Recruiting new employees and ensuring adequate staffing levels

·         Providing orientation, training, and development

·         Tracking time and attendance

·         Planning and administering benefits and compensation

·         Handling employee relations such as dispute resolution

·         Creating and enforcing company policies

·         Maintaining accurate employee records

·         Administering payroll and paying relevant taxes to the IRS

·         Ensuring compliance with all State and Federal employment laws

Human Resource Management Options

As you can see from the list above, HRM could take up a pretty large chunk of your time. In addition, you may not have the skills, the knowledge base, or the personality to handle HR administration. If you have fewer than 50 employees, you might not need an actual HR “department”. An office manager may be able to handle many of these duties for you. A safer bet would be to hire an HR generalist who is familiar with the liability issues surrounding employment.

Either way, you will need to locate a reliable source you can turn to for questions regarding employment laws or best practices for small business Human Resource Management. Fortunately, virtually any HR function can be subcontracted to an outside agency. You can choose to hire a consultant as needed to assist you with your strategic planning. Or, you can outsource an entire process such as benefits management or payroll. This will allow you to focus on the core of your business initiative while ensuring that your workers are in good hands.

Human Resources Outsourcing - The Future of HR

By Tony Deblauwe

If you have been keeping up with trends in human resources, you are aware that HR outsourcing is becoming steadily more popular. According to a 2003 Conference Board study, over 85% of large U.S. companies currently have at least one major HR function managed by a third party. The more recent 2009 Hewitt Associates survey reveals that employers are now 34% more likely to take advantage of human resources outsourcing (HRO) than they were 2 years ago.

In 2006, the main focus was on talent management. Now, cost reduction is the driving factor behind employer decisions to hand processes over to specialist firms. This is true for startup businesses as well as established companies. Small to mid-sized employers use HRO in two distinct ways: Administrative tasks are subcontracted so that HR can focus on strategic planning. Specialized third party agencies are hired to deal with complex issues that a small HR department isn’t equipped to handle in-house.

Top 10 Areas Targeted For Human Resources Outsourcing

1.       Retirement Planning - 401(k) and pension plans

2.       Stock Option Administration

3.       Health & Welfare Benefits Management

4.       Employee Training & Development

5.       Recruiting & Staffing

6.       Policy and Handbook Creation/Updating

7.       Compensation Program Planning

8.       Human Resource Information System Implementation

9.       Organizational Development

10.   Compliance & Risk Management

PEO - The New Face of Human Resources Outsourcing

One of the most interesting trends in human resources is the development of Professional Employer Organization (PEO) relationships.  When you sign up with a PEO, the organization becomes the employer of record for your workforce and you become the organization’s client. The concept of co-employment in its current form is less than 20 years old but has already gained a significant following.

PEO services typically bundle benefits management, workers’ comp, payroll, and HR functions under one outsourcing provider. Accounting and tax services are also included in some package deals. Employee leasing is a simplified form of PEO that can be used by businesses that do not want to outsource their entire HR process.

Pros and Cons of PEO

A Professional Employer Organization offers several advantages for small/mid-sized businesses:

·         Reduces time and money spent on administrative tasks

·         Shifts many compliance and liability responsibilities to the PEO

·         Offers access to the same benefits programs available to large employers

·         Still allows the co-employer the autonomy to make important decisions

On the downside, switching to a PEO can have a number of negative consequences:

·         Employees may respond poorly to being told they now work for an unfamiliar employer

·         Small businesses may be required to observe laws targeted at larger employers (e.g. FMLA)

·         A client could potentially be held liable for any discriminatory practices on the part of a PEO

·         A PEO may suddenly go out of business if it has insufficient cash reserves

If you are considering HR outsourcing, take the time to investigate your potential business partner thoroughly. It can be difficult to disentangle your company once you integrate your HR processes with a third party. Always ask for a free trial period to allow a human resources outsourcing firm to prove its worth before you sign a contract.

HR Manager Alert! Don’t Get Cut Out of the Strategic Planning Process

By Tony Deblauwe

When it comes to strategic planning, employers should be eager for input regarding how their human capital is being handled. However, the HR manager/director is often left out of important decisions or merely given token attention at meetings. Human Resource executives have developed an undeserved reputation for only understanding the soft and fuzzy side of business (check out Fast Company’s scathing overview of HR).

Another recent scathing article in CFO.com highlights this attitude perfectly. In this piece, a Rutgers University professor is quoted as telling an audience of 300 financial executives: "HR people try to perpetuate the idea that job satisfaction is critical; but there is no evidence that engaging employees impacts financial returns." With misinterpretations like this running rampant, it is no wonder the average Human Resources Director has difficulty gaining a place at the table for strategic planning.

Put a Price Tag on It

Departments like Production, Sales, and Engineering have something that HR doesn’t: numbers that can be readily interpreted. You actually have plenty of data at your disposal. This information just needs to be presented in a way that is easy for other executives to understand. You may have to begin with the basics to get your points across. A comprehensive turnover calculator is a good place to start.

Besides company specific data, you should also be familiar with larger trends. For example, the BLS has shared these important findings:

·         Over the long term, increases in real hourly earnings for workers are linked to productivity gains

·         Since 2003, gains in the manufacturing sector have been due to a decrease in hours worked  relative to output

In other words, the key to productivity and a healthy U.S. economy is a well trained, efficient workforce.

 

Explanation Time

Don’t assume company officers know what HR terminology means. One reason the term “employee engagement” is getting a bad rap is because people think it just means making employees happy. Not true. Some workers may be perfectly “happy” sitting around twiddling their thumbs all day. In contrast, engagement is typified by increased productivity, fewer mistakes, and innovative problem solving.

U.S.Data analysis performed by Global 360 reveals that lost productivity is costing businesses $4.4 billion dollars per day. When upper management understands this, they are more likely to agree that employee engagement is a vital aspect of strategic planning. Of course, you need to put in the time and effort to understand the big picture as well. If you don’t grasp how other departments operate and what their goals are, you won’t be able to come to an agreement about the company’s larger vision.

 

Honing Your Negotiation Skills

·         Go into every meeting with clear objectives, an open mind, and a win-win solution

·         Over-prepare with numbers and data but don’t present it all at once

·         Try to remain emotionally detached

·         Spend more time listening than you do talking

·         Find common ground with each person at the table

·         Avoid making unnecessary concessions

·         Be prepared to compromise if you must

·         View constructive disagreement as a way of moving forward

·         Don’t give ultimatums - instead, always leave the door open for further discussion

 

Finally, be patient. Learning successful negotiation skills takes time. Start small by doing strategic planning within your own department. When other executives see positive results, they are more likely to accept your input.

Leverage Organizational Development To Advance Your HR Career

By Tony Deblauwe

Organizational development (OD) may sound like just another management buzzword. However, OD theory and practice have actually been honed and improved over a period of 40 years. The original process was simply a structured, people oriented method for problem solving. Now it has evolved into a comprehensive “holistic” approach to proactive change management.

Who Needs It?

Any business that is facing a challenge or seeking to secure its future is a good candidate for improved OD. According to an August ‘09 Wyatt Watson survey, 42% of companies believe they have already hit rock bottom or are currently at their lowest point. 27% think they may now be on the road to recovery. These companies are in a prime position to make improvements in how they set and achieve goals. OD can take place from within; but many employers choose to hire an outside firm to do the heavy lifting. As an HR professional, you need to be aware of what to expect.

10 Steps in a Typical Organizational Development Intervention*

*Keep in mind that buy-in from every department is an integral part of each of these steps:

1.       A working definition is created for what “success” would look like for your company

2.       Underlying issues preventing success are tentatively recognized

3.       Data is collected to measure current processes/performance

4.       Analysis of this data reveals the actual barriers to success

5.       Recommendations for change/improvement are crafted

6.       Potential adverse consequences are examined

7.       Alternative courses of action are explored for optimal organizational change

8.       A measurable, results oriented implementation plan is developed

9.       A reward structure is designed to incent employee engagement

10.   Follow up evaluations ensure changes have the desired outcome

 

Using OD to Your Advantage

HR is often the first department to be targeted for transformation. This is because human resource development is central to many OD programs. You may not like the idea of an “expert” coming in and telling you how to do your job. However, if you play your cards right you stand to benefit greatly from cooperating in the process.

Career advancement in HR is based on 4 factors: education, real world experience, good communication skills, and the ability to deliver tangible results. Participating in organizational development gives you a boost in all of these critical categories.

Education & Experience: During the OD process you will be exposed to the latest HR management tools and ideas. Actually seeing this change management method applied within your own company is more enlightening than attending any seminar. Take advantage of this opportunity to ask questions and learn new approaches to problem solving.

Communication: Candid communication is one of the fundamental tenets of organizational development. This may be difficult at first but can eventually cement your relationships with other managers and executives. Learn to demonstrate a mixture of flexibility and assertiveness during this process.

Results: Do you want to be promoted within your organization or land a higher paying job with a new company? Collecting and using hard data to achieve measurable results in HR is the single most useful thing you will take away from an organizational development experience. Using these techniques on an ongoing basis will allow you to effectively demonstrate (and document) your true abilities. This applies equally whether you want to become an HR generalist or specialist.

Where does HR go? Using Social Networking as a Virtual Water Cooler For HR Professionals

By Tony Deblauwe

The HR role can be very tough. You have the HR team and your clients coming at you from all angles to raise, or resolve issues. Not to mention the endless projects and policy stuff that can bog you down operationally. After a while, it becomes difficult to be everyone else’s coach and decision maker. Sometimes, you need someone to turn to.

HR professionals are employees too, and every employee needs to vent occasionally. However, as an HR employee, you don’t usually get to express your opinions at work. Social networking within your company can be difficult. You have to monitor your conversations carefully so you don’t accidentally divulge sensitive information. You must also build a reputation for not “playing favorites”. This tends to curtail friendly, supportive interaction between HR staff and workers in other departments.

So, where can you go when you feel the urge to gripe, gossip, or just get help with handling a tough situation? If your company has an employee assistance program, you can always call the hotline to talk about work related stress. A Human Resource consulting firm can counsel you on specific issues (if you have the money to pay for it). Friends and family members can be a big help if they aren’t too busy dealing with their own problems.

A New Alternative

If none of those options sound appealing, online social networking may offer a better solution for you. The Bureau of Labor Statistics projects that by the time 2016 rolls around there will be over 1 million HR managers and specialists employed in the U.S. That’s a pretty big pool of people to network with. LinkedIn alone currently features over 500 professional HR groups.

HR Online Forums

Message boards and forums are great places to go when you need to talk about the challenges of working in HR. Let’s look at a couple of the best free options for social networking:

 

·         HRM Today - This site has a main forum, groups that focus on specific topics, and a full roster of bloggers. There are plenty of opportunities for discussion. The forum is pretty active in terms of new posts, but the comments section is a little sparse. Much of the actual interaction takes place between members who comment directly on each other’s profiles (a lot like Facebook).

 

·         World At Work - This is the hot spot for real back and forth group discussions. Plenty of new posts and responses are posted every day. Compensation, Benefits, and Work-Life are the three basic categories, but you can post on any topic you wish. This is a great place to brainstorm with other HR professionals and find creative ways to solve your problems.

Tips For Social Networking

1.      Feel free to talk about “hypothetical situations” online. Use appropriate forum posting etiquette. Just don’t give out any details that could identify your company or specific individuals in any of your discussions.

2.      Set up one professional profile to promote yourself and a pseudonymous one that will allow you a little more freedom of expression.

3.      Remember that your boss may read everything you post (especially if you do this from work). Keep all your interactions professional.

4.      Online forums are not the place to chat about serious legal issues. If you are experiencing harassment or discrimination, contact a lawyer. Willful, ongoing violations by your employer should be reported to the appropriate government agency (DOL, DOJ, IRS, DHS, OSHA).

At the end of the day, the outlets for HR beyond close professional contacts or networks outside work are few and far between. The stress is always there and in most cases, HR folks make the best of it.

Remember that effective social networking offers some advantages to working through issues or finding others who can connect with you on similar workplace challenges. Just don’t feel alone to the point you withdraw or explode. Take a cue from those you help - don’t be afraid to ask for help, be aware of your stress levels, and if you need to take a break, take it.