HRMN 395: Plan to Change the Organization

(800) 543-2055 • www.theHRSpecialist.com Business Management Daily

Your guide to cost savings, total rewards & legal compliance Vol. 9, No. 1 • January 2014

In The News

In this issue Execs set pay? Watch out! ..............................................................3 Winter weather woes: How to pay ...............................................4 Expert Advisor: 5 ways to turn good into great..........................5 What terrifies pre-retirees ................................................................6 What’s Working: Benefits trends around America .................7

Track the HR metrics that really matter You probably track several HR-

related numbers, but are you sure you’re tracking the right ones? When it comes to metrics, most HR departments fail to focus on strategic HR information.

Sure, turnover rate is important, but it may not help your top execu- tives when they have to make diffi- cult business decisions. So offer them metrics that do. Your statistical savvy will enhance HR’s role as a strategic partner in guiding the enterprise.

Here are some of the more com- mon metrics that experts say HR pro- fessionals should know how to track:

Organizational effectiveness • Revenue factor: Revenue ÷ num-

ber of full-time employees (FTE). • Human capital value-added:

Revenue – (operating expense – [compensation cost + benefit cost]) ÷ number of FTE.

Compensation • Compensation-to-revenue ratio:

Compensation cost ÷ revenue. • Compensation expense-to-revenue

ratio: Compensation cost ÷ oper- ating expense.

HR SPECIALIST

Manage a year’s worth of seasonal distractions Sure the holidays are over—but

January is simply the start of another year of holidays, vacations and seasonal celebrations that can divert employees’ attention from their work, invite unscheduled absences and affect productivity.

Your best bet: Head off problems by anticipating extra absences and distractions. Here are 12 unofficial “holidays” that staff will likely observe —even if they aren’t on the calendar.

January: Flu! Achoo! Sometimes a little absenteeism is a good thing, especially when the health of co-workers is at stake. A Kimberly-Clark Professional survey found that 59% of people go to work when they’re sick. Thirty percent of said they were so important, they couldn’t skip a day! Result: They infect others with contagious illness such as the flu.

Tip: Insist that employees with the flu stay away until 24 hours after their symptoms have subsided.

February: Love is in the air Some polls show as many as 59% of employees have dated a colleague, and one in three of those dalliances results in marriage. Timely tip: Valen - tine’s Day might be a good time to remind employees of your organiza- tion’s policy on office romance.

Examples: Some employers ban re la - tion ships within teams, departments or chains of command. Supervisor- subordinate relationship bans are essen tial—the threat of coercion could trigger harassment lawsuits. Plus, co-workers may resent per- ceived favoritism.

March: Pure madness! Nearly one-third of employees polled last spring spent at least three work- ing hours during the NCAA’s “March Madness” college basketball tourna- ment keeping up with the games. The annual cost to American busi- nesses: an estimated $134 million in

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You bet benefits matter! More than three-quarters of workers say that the benefits package an employer offers is an extremely important (33%) or very important (45%) factor in their decision to accept or reject a job. The finding comes from the 2013 Health and Voluntary Workplace Benefits Survey conducted by the Employee Benefit Research Institute.

The U.S. Supreme Court will tackle birth control provisions written into the Affordable Care Act (ACA). The law requires employer- provided health in surance to cover contraceptive services. Two compa- nies have fought the rules in federal circuit courts of appeal, arguing that the First Amendment and federal law grant them the right to refuse on reli- gious grounds to cover health care they object to.

The Supreme Court will re solve the issue with oral arguments in March, followed by a decision in June. Learn more at www.theHRSpecialist.com/ ACA_contraception.

ACA online SHOPs have been delayed a year, to November 2014. Healthcare.gov website woes mean small employers can’t go online yet to buy health in sur a nce for employees through the ACA’s Small Business Health Options Program. They can do it the old-fashioned way—with a paper application or through a broker. Details at www.theHRSpecialist. com/ACA_SHOP_delay.

Compensation & Benefits Join us

at LEAP 2014 in

Las Vegas ... see page 8

8 Compensation & Benefits • January 2014 www.theHRSpecialist.com

LEAP 2014

When: March 12-14, 2014 Where: The legendary Bellagio in Las Vegas

To register: LEAP2014.com or (800) 543-2055

Our 10th Annual Labor & Employment Law Advanced Practices (LEAP) Symposium

30+ Expert Speakers • 17 HRCI Credit Hours • Breakout Sessions FREE Pre-Conference Workshops • FREE Post-Conference Seminars

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Special guest speaker: EEOC Commissioner Constance Barker

Employers will use both carrots and sticks to keep workers healthier

and stem the tide of higher health care costs, according to the 2013/2014 Towers Watson Staying@Work Survey.

The carrots: Financial rewards for employees who achieve good num- bers on tests that measure fitness and health. The sticks: Financial penal- ties—higher insurance premiums and deductibles—for those who don’t, or who continue to smoke.

The survey found that employers are increasingly placing the health- cost containment onus on employees.

According to Towers Watson, 70% of employers say getting em ployees to take more responsibility for their health is the top priority of their health programs. Over the next sev- eral years, they’ll increasingly use financial rewards and penalties to hold workers more accountable and improve health outcomes.

In 2014, the survey found, 36% U.S. companies will use penalties such as higher health insurance pre- miums and deductibles for employees who do not participate in health man- agement activities. In 2015-16, that

number will jump to 61%. Outcome-based incentives that

reward or penalize employees based on tobacco use will grow from 54% next year to 71% in 2015-16. What’s more, rewards or penalties for other biometric outcomes (e.g., health- contingent targets such as body mass index, blood pressure or cholesterol level) will dramatically increase from 26% in 2014 to 68% in 2015-16.

Eighty-four percent of employers say they plan to increase support for workplace health and wellness pro- grams over the next two years.

Employers to use carrots, sticks to promote healthWellness

Staffing/hiring • Turnover: Number of employees

leaving ÷ average number of FTE for the period.

• Turnover percentage: Number of employees leaving – number of employees who were desirable to lose (such as terminated or poorly performing employees) ÷ average number of FTE for the period.

• Time to hire: Average number of days from job vacancy to when a new employee accepts a job offer.

• Cost per hire: Total recruiting costs (including advertising, search firm fees, HR staff time, hiring manager time, background checks, etc.) ÷ number of new hires.

Choose the right metrics (Cont. from page 1)

3 strategies for making the most of HR metrics How do you pinpoint which metrics matter most for your organization? Use these strategies:

1. Ask execs about factors that help the organization and departments run more smoothly, satisfy customers and turn a profit. A key question to ask managers: “What department numbers does your boss bug you about the most?” If you keep hearing the same answer, chances are you should be tracking a related HR metric.

2. Provide information, not just numbers. As you identify what’s important to your organization’s strategic success, the metrics that matter most should rise to the surface. But remember, your goal is not to deluge executives and man agers with numbers. It’s to provide information that they can use in mak- ing decisions about business issues.

Example: If employee turnover is hurting customer service, tracking turn- over rates is important. But it’s even better to provide information gleaned from exit interviews about why employees are leaving.

3. Boost your knowledge of HR metrics. Metrics can be scary to many HR specialists who’ve built their careers dealing with people, not numbers. You can demystify metrics by reading up on the topic and networking with other HR pros to find out how their organizations use metrics.

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