Growing Economy Further Complicates HR

Even before the recent economic recovery, California was always one of the most complicated states in which to be an employer. This has always been an especially difficult burden for small to mid-sized employers. Now, however, with economic activity increased in most industries and virtually all areas of the Golden State, it seems that all companies are struggling to keep up with a myriad of laws, regulations, and rules. If you are not careful, this can easily take critical focus and resources away from your business and you can feel as if you are in the business of human resources instead of the business of serving your customers and making money for the company.

Unfortunately, this is a common theme, and the economy is forcing all companies to deal with increased turnover, employee retention issues and recruiting challenges, in addition to the usual changes and additions to State and Federal law.

Our best advice is to be proactive in your approach. Take the time to review your company policies, audit your HR infrastructure for compliance, and ensure that you and your team have access to the most current information in a succinct form that enables you to make critical decisions in a timely fashion. Specifically, we recommend:

HR Compliance: Now is the time to look at how well you are doing and allocate time to fix little problems before they become big expensive ones. Here are a few areas to be sure to look at:

  • Employee Handbook – Your Employee Handbook is your first and best line of defense against employee claims. Honest answers to these questions will protect you and your company:
    • When was it last reviewed and updated?
    • Do you have documentation that employees signed off on the latest version?
    • Are there changes that need to be made to stay in compliance with recently enacted regulations, including California specific ones?
  • Employee Recordkeeping – Documentation, not just the minimum set of required paperwork, is also critical to not only protecting yourself but to motivating and coaching your employees. Do your employee records include:
    • Updated and/or correctly completed forms (e.g. I-9, W-4, employment application, handbook acknowledgment, changes to the payroll/employee profile information, etc)
    • Separation of protected and confidential information
    • Documentation of verbal coaching, performance, goals and objectives and other trends (good and bad)
    • Documentation of any accidents, safety training, etc.
    • Documentation and tickler of any expirations of required licenses, certifications, skills, etc.
    • Required Postings – Do you have all the required postings in all of your locations? Are they current and do they reflect accurate, California-based information?

Increase Retention, Attract Top Talent, Support You Mission: HR policies and practices play a critical role in employee retention, recruiting, and supporting the goals of your organization. When is the last time you evaluated if what you are doing (or not doing) relative to HR conflicts with how you want your employees to treat your customers, your critical suppliers and each other? Here are a couple of areas that often cause conflicts between HR policies, turnover/recruiting issues, and company goals:

  • Leave Policy – If you just copied your leave policy from a handbook template that you got off of the internet, your leave policy may be more generous than it needs to be and may put you in a position of critical staff shortage when you least expect it.
  • Compensation – There are so many ways that compensation can create work habits that are right in line with your goals. And, unfortunately, compensation practices can also create a conflict between how your company should operate for optimum success and what your employees are doing based on compensation incentives (or disincentives). Don’t forget that compensation is not just salary, it is the full complement of employee benefits, time off, retirement, and salary.

Do You Have The Time Or Expertise? It’s not as simple as doing Google searches and seeing what other companies are doing or joining an HR association. Be honest with yourself and if you don’t have the time or knowledge to get these important things done, ask for help. Help can take many forms:

  • Hire an HR Consultant – Bring in a local HR professional to help you tackle a specific project. Be sure to get references for the type of work you need to be done, a Scope of Work and estimate of hours prior to engaging them. And, be sure you feel comfortable that you can work with the consultant’s “style”.
  • Outsource – Outsourcing usually takes one of two forms:
    • Hybrid HR Outsourcing, which involves keeping some tasks in-house and partially outsourcing other tasks. This can create a collaborative HR team that emphasizes the strengths of the internal and outsourced team members.
    • Total HR Outsourcing, where day-to-day HR Administration (payroll, HR, workers’ comp and benefits administration) is entrusted to a single partner. It is one way to ensure not only ongoing compliance but also best practices and periodic reviews of your policies and practices. This is an excellent fit for small to mid-sized organizations.

The pace of the recovery is picking up and that’s good news. Take time now to ensure that human resources don’t constrain your organizations’ ability to benefit from current conditions. Regardless of the strategy you take for the business, be proactive in your approach and honest with yourself.

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