How to identify the indicators in your industry that signal change

Through a company’s human resources department run many signals of how an industry is trending. For example, logistics and distribution of goods, workforce levels and compensation rates are all predictors of how an industry is trending relative to the economy.

Looking back before the onset of the Great Recession, Sequent CEO William F. Hutter says there were signs that problems were coming.

“We learned through hindsight that there were trends that occurred nine months earlier than any of the other major indicators — losses on the stock market, for instance — that were predictors of what was coming,” Hutter says. “Knowing what we know now, it may be possible for businesses to use their HR departments as a bellwether indicating possible turbulence in their industries.”

Smart Business spoke with Hutter about how companies can use their HR departments to get ahead of trends affecting their business.

What are the signals that run through HR that can indicate larger trends?

In late 2007, HR departments noticed a change in the logistics industry. Transportation businesses are linked to supply chain businesses, and trends in consumer products offer a strong indication of the health of an economy.

At the same time there was a slow down in janitorial businesses. Companies were discontinuing their commercial cleaning relationships — an important service, but not a core business function.

Occurring simultaneously were pullbacks at the two ends of the cycle: supply chain and clean up. The declines were happening in late 2007, and by mid-2008 those companies had shrunk their staff by 50 percent. It wasn’t apparent at the time, but there was a deeper message. It escalated to an unprecedented decline localized to a few industries.

Today, logistics and janitorial are experiencing growth through hiring and investments in facilities. This is a welcome trend as the concerns around federal regulation ebb.

How can CEOs and business owners find these signals?

Every industry has a class of businesses or group of clients that are the barometer of their business. The responsiveness of the business cycle has compressed so rapidly that CEOs and business owners must now watch a number of indicators to get the true picture of the changing climate.

A good first step for business leaders is to determine which companies are the bellwether predictors for their business that can indicate when things are headed in a good or bad direction. Activity in consumer goods, for example, is a strong indicator of the general health of the economy, which is why it’s wise to watch the movement, growth or retraction of companies in that industry — Amazon Prime, for instance. But there are unique industry indicators worthy of monitoring. These are likely well-known clients that are a critical component of the revenue stream. If they struggle or grow, it can have consequences that ripple through the industry. Keep an eye on the health of these businesses to stay ahead of larger economic trends.

Once the signals have been identified, how can they be used to protect a business or generate opportunities that come from economic changes?

The agility of business is more important than it ever has been. It’s up to the leadership of today’s businesses to identify the early bellwether indicators and monitor their behavior.

It’s also critical for companies to diversify their revenue streams to protect themselves from being overleveraged in a particular market.

Organizations have a responsibility help protect their assets and employees are a company’s most important. A business is only sustainable when its leader is not the central component of its revenue generation capabilities. Companies that have hired and trained people to make an impact on the revenue stream are more likely to succeed than one that relies too heavily on one person to bring in money.

Though it may sometimes seem as if changes occur rapidly, there are typically indicators that precede it. Identifying those indicators and acting before a macro change occurs is critical to business success.

Insights HR Outsourcing is brought to you by Sequent

High-deductible plans reduce health insurance costs by skipping copays

There is a significant misunderstanding about copays that has employees and employers mistakenly believing that copays are an important part of their health insurance coverage, says Sequent CEO William F. Hutter.

“Physician copays increase out-of-pocket expenses, and by extension, the cost of insurance to the consumer,” he says. “The copay gets accumulated to nothing.”

The misconception of the role of copays shelters individuals from understanding the true cost of an office visit and the cost of all the procedures that were performed during that visit, he says. The copay is paid to the physician, but it does not count toward an individual’s deducible or out-of-pocket use. That money, then, is unaccounted for in the total cost of a person’s health care.

“And that’s just a person’s primary care person. What if he or she has a specialist?” Hutter says. “All of these copays get lost. So the person might have a chronic condition and need lab work or frequent checkups with specialists, and none of those copays get accumulated to his or her deductible. It’s a hidden cost of insurance that’s part of the design of a plan that was sold as a convenience to the employee, but just adds expenses and obscures the true cost of service.”

Smart Business spoke with Hutter about a health insurance coverage option that forgoes copays and how to introduce it to employees so they understand the benefit.

What is an example of a health insurance plan that doesn’t include copays?

One option without copays that is now being delivered in the market is called a high-deductible health plan. That word, high-deductible, scares people.

A qualified high-deductible program is predicated on a person’s deductible being met before the insurance carrier contributes any expense to the person’s medical claims. The range of the deductible can vary from $1,300 to $3,000, depending on the plan. The difference is that there are no copays, so all medical expenses are paid out of pocket until the deductible is met.

Typically the monthly cost of a high-deductible plan will be lower because it protects the insurance carrier from any first-dollar claims, which means if a person never hits his or her deductible there is never an insurance claim. If the carrier can shield itself from a claim expenses by eliminating office copays, the consumer wins in lower monthly premiums. It also means that the total cost of insurance to the employee, including his or her premiums and any out-of-pocket dollars, will be less than it was under a copay plan.

Given what you’ve just highlighted regarding copays, how should employers use that information?

Companies should consult their broker for plans that count all out-of-pocket dollar expenses by the employee. That protects the employees’ interests because it allows employees to accumulate all health care expenses toward their out-of-pocket or deductible. All insurance carriers have a version of this plan, but the habit of including a copay continues to have its appeal because most people don’t understand how it factors in to overall plan costs.

How can companies introduce high-deductible plans to employees who believe copays save money?

One aspect to highlight when presenting it to employees is that high-deductible plans can be paired with a health savings account. Typically there are enough savings available when switching to a high-deductible plan that the company can, in the first year, seed fund employees’ health savings accounts to offset the initial out-of-pocket expenses. Typically in a transition year, employers seed fund a single individual $500 and a family $1,000 into employee-owned accounts. This helps ease employee concerns that may pop up around paying for office visits. The money stays in the account and will roll over until it’s used.

The important thing is communication. Be sure that everyone understands the architecture and structure of the high-deductible plan.

Companies cannot buy insurance solely based on the cost of the monthly premium. There are other costs to consider. Companies should take a balanced approach and analyze the total plan costs, considering all the factors.

Insights HR Outsourcing is brought to you by Sequent

Business owners shouldn’t try to do it all. Fortunately, there’s help.

For business owners, especially those who lead small and midsize organizations, the pace of business is often frantic. The business leader needs to stay focused on the needs of the customer and put out the inevitable fires. That means important functions such as payroll, benefits administration and HR end up getting shuffled to the back of the line and are often given to someone without specific experience in these areas.

“Whether a person knows anything at all about payroll, benefits or HR, the regulations that guide it, or the associated reporting requirements becomes irrelevant,” says William F. Hutter, CEO of Sequent. “These functions are done haphazardly or as needed, rather than with the guidance of a proactive plan and knowledge of the legal boundaries. That can create a very large gap in compliance.”

Smart Business spoke with Hutter about the challenges smaller business face with essential but secondary functions, and how these responsibilities can be better managed.

How can those who own or operate smaller businesses keep up with these responsibilities so they can focus on their company’s core functions, those activities on which the business was established?

It’s almost impossible for an organization to keep up with all the legal changes that happen day in and day out. Under the Obama administration, some 6,000 new regulations have passed that impact employers. Unless there is a specific effort to understand how these laws affect a company today and in the future, it’s impossible for smaller companies to be proactive.

That’s why some companies choose to outsource their benefits administration, HR and payroll functions. Contracting with a specialist means working with an expert. It’s their primary business, not an afterthought.

Typically companies are outsourcing a number of these functions — taxes, workers’ compensation management, insurance, retirement plans and legal help.  And while they outsource to various service providers, they maintain liability for their actions. Working with a comprehensive service provider, however, can protect the business from associated liability, while consolidating and very often reducing the total cost, which is an efficient way to manage those aspects of their business.

There still needs to be internal HR staffers involved in the exchange with any provider, whether it be multiple providers or just one. No outsource service provider can manage a company’s employee relations. The people inside the company should be in a position to leverage their partners to create an ongoing dialogue that adds value to the company, while freeing up staffers to focus on their core responsibilities.

What reasons do business owners have for not utilizing an outsource service for these functions?

The No. 1 reason business owners don’t outsource is that they fear they’ll lose control. That’s complete fiction. In fact, business owners find they have more control because they’re not spending hours trying to understand their compliance requirements. Instead, the work is passed over to people who are well-versed in that area, which also offers peace of mind. Owners get to focus on the company’s more meaningful activities — those that drive the business forward — while having the assurance that they’re not running afoul of the law.

What do third-party consultants offer to smaller businesses?

The real value of third-party consultants working with a company is that they have fresh eyes. They get to look at things dispassionately, above the day-to-day activities, and see the operation in a way that owners often can’t.

Consultants shouldn’t just be brought in when there’s a problem. It’s when things seem to be going well that businesses get complacent. And that’s when owners need to look toward the future and make improvements. That’s easy to say and hard to do because the pace of business can be relentless. Third-party consultants can step in and give business owners a chance to catch their breath.

There are always opportunities to improve how a business is run. But it requires change. A business can’t improve and stay the same. Sometimes the best thing to do is ask for help.

Insights HR Outsourcing is brought to you by Sequent

What foreign companies should consider before setting up in the US

There are many companies outside the U.S. that would like to establish a presence in the country. But before doing so, there’s a lot to consider.

“Regulatory compliance and organizational structure are concerns for foreign companies looking to establish a presence in the U.S., especially small to midsize businesses,” says William F. Hutter, CEO of Sequent. “But there are other hurdles such as living arrangements for foreign employees, location of the business and onboarding. It’s important for a foreign company to think through these decisions and processes before establishing a presence in the U.S. in order to function well in the marketplace.”

Smart Business spoke with Hutter about what foreign companies should consider before setting up a business in the U.S.

What should foreign companies understand in terms of regulatory compliance before they can operate in the U.S.?

It’s important to ask a lot of questions when determining the organizational structure the foreign company will establish in the U.S. For instance, is the company wholly owned as a foreign subsidiary? Will it be a standalone business? And if it’s the latter, will there be officers of the corporation in the U.S? How will the company repatriate the funds back to its home country? These are all interconnected issues to consider before getting started. Too many companies rush to set up in the U.S. and then need to backtrack. It’s better to find a knowledgeable adviser that can offer a broad perspective of considerations before business is established.

Another issue is the collective insurance environment. Corporate insurance from a foreign parent company likely won’t extend to the U.S. Foreign subsidiaries will likely need to purchase insurance from a carrier recognized in the U.S.

Understanding the differences between the U.S. and European health care environment is critical but very difficult. It’s hard to explain the cost factors and deductibles and co-insurance to a European company. But the most difficult concept is that of workers’ compensation coverage. European companies tend to think that by having general liability and health care coverage they’re set, but they aren’t. The European system covers everything, so it’s a big difference.

What are the challenges overseas companies face when it comes to HR functions and how can an outsource partner mitigate them?

The HR function for foreign domiciled companies in the U.S., again, is about the foundational items. Companies certainly need to meet compliance guidelines to protect themselves from exposures, but HR functions to nonresident aliens in the U.S. involves advocacy — help negotiating the various systems, explaining health care insurance benefits and explaining the pension or retirement plan system.

The employees coming to the U.S. from a foreign company’s headquarters to work are typically accomplished. They’re not sending rookies. They’re sending senior employees who have agreed to live in the U.S. for a period of time to plant the seeds of the parent company. And it typically takes a year before a foreign company hires local employees because its primary focus is on business development activities.

Among the basic considerations for these employees is determining where they will live in the U.S. and where to locate the business. Socioeconomic data of a region can show consumer lifestyle, which is compared to the company’s target clients to determine where the best opportunities exist. There are relocation specialists that can help companies make best decisions regarding location when expanding into the U.S. They can help employees think through their personal living arrangements based on the work they’ll do and where potential customers are located.

Foreign companies interested in establishing themselves in the U.S. should start with the end in mind. They should ask a lot of questions to determine what the goal is for those setting up the business, such as the lifestyle they expect, family issues such as schools and community, and also the business needs and client locations. It’s not something to jump into blindly. Develop the strategy and a road map to the goal well ahead of any permanent move and that should relieve much of the anxiety associated with setting up a business in the U.S.

Insights HR Outsourcing is brought to you by Sequent

Save money by identifying the true costs of being an employer

Here’s a novel exercise: Ask your employees to gather all the binder clips in your office that aren’t currently being used and put them in a box in the supply area. You’ll likely collect hundreds if not thousands of unused clips. It’s also very likely that, while so many unused binder clips were scattered around your office, many new boxes of clips were purchased when employees couldn’t find them in the supply area.

The excess expenses related to being an employer stay hidden in your company like binder clips because waste can’t be discovered until you go looking for it. It’s possible, however, that by scrutinizing and better classifying your costs, you could reduce expenses related to employment significantly.

Smart Business spoke with William F. Hutter, CEO of Sequent, about how looking closer at employment-related expenses could save companies considerable money.

How does improper categorization lead to greater expenses?

It’s becoming critically important as employers’ costs increase to look for new ways to save money. It’s often the case that expenses directly related to employees are inadvertently hidden in the profit and loss statements, because they are improperly categorized.

Employers tend to look at taxes, workers’ compensation and health insurance and mistakenly believe that’s all of the employee expenses they have. In truth, for every dollar spent on wages there are costs over and above those that employers either can’t or choose not to identify. For instance, let’s say an employer pays for an outside expert to help with Affordable Care Act (ACA) reporting requirements. Where does that expense get tallied? Often it’s reported as a one-time vendor expense, but it’s really an employee expense.

As compliance issues continue to pile up, it will become more important to identify these expenses.

What do employers miss when it comes to the cost of employment?

There are many expenses directly related to employees that are often improperly classified. Those can include:

  • The cost of new hire reporting to the state to determine if there are wage garnishments that should be served against new employees.
  • Training, whether mandated or required.
  • Employment records management.
  • Recruiting efforts.
  • Unemployment or workers’ compensation hearings.
  • Records storage.
  • Employee Retirement Income Security Act compliance work.
  • Creating plan documents.
  • Required ACA notifications that must be printed and mailed to employees.

Depending upon the source cited, the cost of being an employer and meeting all the compliance guidelines could be $5,000 per employee. Knowing the source of those expenses is the first step to bringing those costs down.

How can employers better account for all employee-related expenses?

Companies seem willing to spend a lot of time negotiating the lease for their copiers, scrutinizing it down to what they pay per page printed to try and save as much as possible. But considering that employee expenses, including wages, are likely 60 to 70 percent of a company’s gross profits, it would appear that it’s a better use of resources to identify the sources of those expenses and work to control them.

To get a better sense of what is being spent on employees, identify the areas of spending so the costs can be managed. Many times those spending areas are spread across multiple areas or even among several vendor relationships, so employers need a strategy to manage that in a comprehensive fashion.

Very large companies have vendor management departments, which may or may not be an internal department — it could be contracted out to an independent company. These exist so these companies can begin to control all the various expenses that go out of the building by multiple decision-makers spent with third parties. While your company may not have the resources for such a dedicated department, committing time to equating specific costs to employee expenditures gives credence to the task. Identifying expenses can help a company better manage them.

Insights HR Outsourcing is brought to you by Sequent

How to compete for talent in today’s knowledge economy

In today’s knowledge economy, the value of employees has increased exponentially. The talent that exists in a company has become a key differentiator in a market in which products or services can be easily replicated. Midsize companies, however, often lack the resources to effectively manage the talent acquisition and retention process, putting them at a competitive disadvantage.

“Human capital is more important today than capital equipment,” says Joe Cole, executive vice president of business strategy at Sequent. “A company’s greatest asset is its people. The companies that realize that are the more successful in this new economy.”

Smart Business spoke with Cole about competing for talent in the knowledge economy.

How can midsize companies compete for talented employees?

Many times companies attract talent by developing or fostering a culture in the organization that people can relate to at an emotional level. Many midsize companies, however, don’t have the resources to drive this employee experience. They compensate by harnessing their managerial assets, specifically the time and attention of their executives, for the business of hiring and on-boarding employees.

When the time and attention of management is diverted from their company’s core products and services, that company is now compromised — it’s not functioning at its highest level because management’s attention is a finite resource. Often through business process outsourcing — outsourcing non-core functions — leadership regains the time to focus on the business by leveraging the outsourced partner’s expertise and its technological infrastructure.

How does business process outsourcing translate to improved employee retention?

Look at it from the perspective of an employee who has decided to join a company. The new employee shows up for his or her first day and the first thing he or she realizes is the company is not ready. He or she has paperwork to fill out, the office may not be set up, there’s no one to sit and explain his or her benefits package. Is that the experience new employees should have?

Employers want their new hire to come to the office excited, and that excitement can be sustained if you show them you’ve anticipated their arrival and can manage the basic functions of on-boarding. Otherwise, you risk early disengagement, doubt and possibly the employee’s early exit.

An outsource partner choreographs on-boarding with technology that makes it easy to fill out the necessary paperwork with a few keystrokes because the information generated from the interview can be used to populated the necessary forms for them. Through these systems, companies can even have a benefits advocate talk to the new employee about benefits, or deliver a personalized message from the CEO welcoming him or her to the company.

First impressions are very important. It’s essentially a company making a deposit in an employee’s emotional piggy bank, so to speak. It builds loyalty, gives a good impression of the culture and a sense that they’re a part of a team.

How can companies ensure employees maintain a high level of engagement?

A big part of the employee experience is having someone who advocates on their behalf. Having someone at the employees’ reach to answer questions about payroll, their 401(k) and medical coverage can ease anxiety and keep employees focused on their role and productivity.

Health insurance is increasingly complex and expensive. Employees want to maximize their coverage, but that takes education and support. Having an employee advocate helps bridge the gap between the insurer and employer, and can go a long way toward making an employee think twice about leaving the company.

Business process outsourcing is widely embraced by midsize companies. It can cost less than one employee’s annual salary, but offers companies the resources, technology, people and processes of a department.

If your employees are not the recipients of a great employment experience or feel as if they’re not part of a team, they may find what they’re looking for with your competitors. An outsource partnership can provide the resources you need to attract and retain the best and brightest, and align employees with organizational goals.

Insights HR Outsourcing is brought to you by Sequent

What you should know about health insurance in 2015

Complexity will define health insurance coverage for businesses in 2015. There are myriad considerations companies must make to provide affordable coverage for employees and avoid penalties.

“The move to consumerism is very challenging for the users of health benefits, which are employees,” says William F. Hutter, CEO of Sequent. “In anticipation of this, companies should be figuring out how to fill an advocacy role for employees to help them with health benefit issues.”

Smart Business spoke with Hutter about health insurance considerations for 2015.

Are companies with fewer than 50 employees affected by new health care laws?

The regulatory reporting and penalty environment created by the Affordable Care Act (ACA) does not impact companies with fewer than 50 full-time employees. They will, however, be impacted by the changes insurance carriers are required to make by the ACA. Insurance carriers and their distribution systems will be impacted by cost increases. We won’t really understand the full impact this will have until the additional tax to carriers that’s being subsidized by the government to offset carriers’ costs expires.

Why might a company with very few employees pay different rates?

Under the ACA, small groups now fall into a community rated pool. Geographic area, self-only or family, age (not more than 3:1) and tobacco use are the only factors allowed now. Community rating, then, can be good for smaller groups.

How will the 9.5 percent affordability calculation affect companies with more than 50 employees?

Employees who are charged more than 9.5 percent of their monthly income for health insurance benefits are eligible for a subsidy for coverage in the health insurance marketplace. That also means the company has not provided employees with a plan that meets the affordability definition and will pay a $2,000 penalty for each instance.

Employers may want to establish a policy that sets the cost of health care coverage at 8 percent of income to make sure they stay under the threshold, especially during the measurement period for affordability.

Companies with more than 50 full-time employees need to account for age rating scenarios because age is one of the determining rate factors. That can be a very complicated transaction that must be closely considered to avoid the after-tax penalties.

What is a measurement period?

Companies with more than 50 employees in a variable hour workforce must establish a measurement period to take averages and determine benefit eligibility on a look-back basis. Eligibility changes from year to year and is based on the actual hours worked in a given measurement period. The administrative burden of establishing a look-back period is going to be challenging.

There are important limits on the length of an administrative period and important exceptions regarding the permitted length of the stability period.

How will companies that are geographically separated but have one owner be treated under the ACA?

Under the ACA, two companies are considered one when they’re under common control. This prevents owners from subdividing their companies to receive more beneficial treatment. If one company has 26 employees and the other has 25, the ACA treats that as one entity with 51 employees, requiring the entity to comply with the law.

Companies in this situation should consider their network coverage issues in the context of both geographies. Establish comparable coverage in which everyone is treated the same from a financial perspective.

How can employers ensure they comply with the new regulations?

Tracking data is very important. Companies need strong reporting and data management to provide the required reports to the federal government to show their plan affordability and to stay within the safe harbor rules.

Companies must also have that data formatted properly, which can be challenging for those without a good HR information system. There are seminars that offer training on reporting to help HR staffs keep up with the requirements.

Insights HR Outsourcing is brought to you by Sequent

Staffing agencies must meet ACA changes head on

Staffing agencies that supply companies with professional consultants, such as IT professionals, face a significant problem once the Affordable Care Act (ACA) rolls further into implementation this coming year. Those regulatory changes also will affect companies that utilize those services, and may uproot a long-held relationship between agencies and some of the state’s largest employers.

“The entire staffing industry is going to be reshaped by full implementation of the ACA,” says William F. Hutter, CEO of Sequent.

Smart Business spoke with Hutter about the coming ACA changes and how they will affect staffing agencies and those that use their services.

What is the problem staffing agencies face because of the ACA?

The staffing agencies like to think of these W-2 employees as independent workers/contractors. While they are legally W-2 employees of a staffing agency, they have historically been considered benefit ineligible under ‘carve out’ privileges and have not qualified to receive health benefits from the agency through which they work. The ACA, however, complicates this relationship. In January, those individuals are legally eligible for benefits, which are offered by the staffing agency.

Many firms have long-term contracts with their end-user companies and independent contractors at a pre-determined hourly rate that normally does not account for the cost of health care benefits. The impending change is going to dramatically increase the costs staffing agencies bear and most likely make it difficult for agencies to rebid long-term contracts with large-scale employers.

What are staffing agencies likely to do in the face of these significant changes?

Fundamentally, staffing agencies need to have a real depth of understanding about the law. For instance, some staffing companies believe that only those people working on staff — salespeople, administrators — are considered employees under the terms of the ACA. That’s not the case. When we flip the calendar to 2015, all those independent contractors working in the field who are W-2 employees of that agency are no longer exempt from employer-sponsored benefits. If benefits are not made available to these employees, employers will face potentially heavy fines.

Staffing agencies need to devise a comprehensive strategy to deal with the new conditions because, fines and penalties aside, the costs of providing benefits will be disruptive to their current business.

How does this affect those who typically find work through staffing agencies?

This may not bode well for those working as independent contractors through staffing agencies. Large companies are using some 80 percent of all the professional contractors. And Ohio’s state government likely uses in excess of 2,000 independent contractors supplied by staffing firms. When the ACA drives costs up for staffing agencies that must afford benefits for so many employees, the cost will go up for the end users to help pay for those benefits. That will cause end users to reconsider many of these relationships.

How might end-user companies react?

We’re going to have to take a wait and see attitude to examine whether or how companies change the way they manage contingent staffing. Third-party employers now provide a specialty service to companies because the skill sets contractors bring no longer reside within a single company.

Further, so many things have become complex from a regulatory and compliance standpoint and that has driven the rise of outsourced specialty services. Companies likely can’t go back to the days of employing myriad specialists under one umbrella. That model carries too much overhead. Reducing fixed costs has allowed companies to be more flexible and agile, to expand and shrink with market demands.

How prepared are staffing agencies?

With changes imminent as of January 2015, it’s clear that many staffing agencies, and the end users of those services, are not prepared. It’s a complex subject that’s important for those utilizing this model to understand.

Staffing agencies should seek advice on how to deal with these changes. Don’t try to deny the inevitable. Figure it out now while there’s still time to assemble a plan.

Insights HR Outsourcing is brought to you by Sequent

Training on HR systems helps staffers better utilize the timesaving software

Human Resource systems are software programs designed to help HR staffers better execute their job functions. However, there are often barriers to implementation with even the best systems that can be attributed to poor training, system incompatibility and unfriendly usability.

An unused HR system is no good to companies. Fortunately, there are solutions to help staffers use software that can ultimately make their jobs easier.

Smart Business spoke with Brian Donovan, managing director at IntegreatHR Technologies, about overcoming the common barriers to adopting HR systems.

What are some common complaints about HR systems?

The user experience is always top of mind when it comes to HR systems. While many systems are feature-rich, they are not as intuitive as many staffers would like, so many of the features go unexplored and unused.

Another issue is the level of vendor support. These systems are in demand, so vendor resources are not always available at a time of need and users get irritated.

Other common concerns include how systems integrate with existing systems, having multiple logins, the ease with which data is imported and exported, the look and usability of dashboards, and the system’s ability to generate business intelligence, measurements and analytics.

These issues can make adoption a common challenge. Beyond staffers who inherently resist change, insufficient training at the onset can lead to slow adoption.

What improvements have been made that can solve these issues?

As with all software, HR systems are evolving. Vendors continue to improve usability, feature availability and system capabilities by developing mobile platforms and apps for self service, data entry and access.

There is also a movement to systems that offer ‘hire to retire’ capabilities that follow employees throughout their working life, and systems through which data exchange and ‘reuse’ is possible. The latter has a feature that allows forms to be populated from information provided in other functions, which improves the user experience while reducing errors.

Why might HR staffers not get the most out of the available technology?

Training and continuing education on the system’s features are often lacking. As with anything, staffers need to practice and apply what they’ve learned or it’s forgotten. Further, the power users — the administrators — are usually swamped with work, which makes it difficult for them to dive deeper, learn more and share knowledge.

While perpetually evolving software can bring improved usability, the consequence is that users must keep up with the changes. Some of these changes are system based, some are regulatory and compliance driven, and others are simply because of the number of systems a company may be using.

What help is available to facilitate better use of HR systems?

Most vendors have in-depth websites, both online and in-person training programs, and help desks that can deliver answers to address issues with the actual products.

But what is more important than the system is looking at the processes, workflows and business rules that the systems are designed to execute.

There are companies that provide assessment and system review services to help identify where improvements can be made and how to make an investment in the system to produce better returns.

In most cases, a customer knows where the problem areas are and where challenges and worries exist. It then becomes a matter of examining the processes and improving the workflows to address the business realities. All systems can be optimized, but they don’t need to be in every area. Find the critical functions — the areas taking the most time or causing the most errors, calls to the help desk, etc. — break them down and improve and train. Technology companies with consulting practices can help get that done, and can provide training and ongoing support. But for companies using HR systems, it often just takes an investment of time to improve a system’s implementation.

Insights HR Outsourcing is brought to you by IntegreatHR Technologies

Align your employee training strategy with the strategy of your business

Business leaders know that it’s critical to see how important employee learning and development is to their organization. What they may not know is that the days of 40-hour classes are gone. The one-size-fits-all approach to learning is being scrapped in favor of new ways of training.

The benefits are many: higher morale, productivity and profit, to name a few. Employees are likely to be better equipped to adjust to changes and challenges.

“Training used to be the first thing cut from the budget,” says Beth Thomas, executive vice president and managing director of Consulting Services for Sequent. “Now if you can show the value it has in alignment to the business goals, it should be the last thing cut from the budget.”

Smart Business spoke with Thomas about new ways to train employees through prescriptive approaches.

What is the workforce looking for regarding development?

Millennials are coming to work looking for development even more than compensation. They want to know, ‘What’s in it for me?’ or ‘How are you going to get me to the next level?’ They are interested in growing their career, but it is a two-way street. It is not just that the organization has that responsibility. The employee does as well.

It’s critical to maximize the on-the-job experiences and create a learning culture where development is expected and mentorships are offered for which leaders and managers understand how to teach and coach employees.

What is a prescriptive approach to employee training and development?

It is targeting training based on what the business needs and what each employee needs.

To get to this point, the company performs an assessment to get an understanding of what the organization actually requires, particularly to determine how the employees learn best.

People want to learn lessons from short snippets of business scenarios that they can apply immediately. They want to be trained on the job in an informal way through storytelling, coaching and gamification — learning through goal-oriented games that entertain as they train.

How effective for most employees is this type of training?

Many people I have interviewed said the best learning they have had was not from a classroom; it was from stretch assignments that push people beyond their current skill set.

These types of assignments, combined with succinct training tools, lead to higher application rates.

An example is the use of mobile devices for learning. With mobile technology on the floor through a tablet or smartphone, employees can implement new learning immediately. This allows for in-the-moment customized training, providing consistency, better retention and metrics that help ensure ROI.

How does a company invent a new training process?

When an organization is looking to create, turn around or customize its learning strategy, it has to do an assessment. It needs a broad-based survey as well as interviews with key stakeholders, highly motivated talent, people who are early in their career all the way to those tenured to determine what development is needed for the current talent pool.

This would help the talent move the business forward based on the company goals and to decide how to help employees grow their careers.

By developing your employees, it will help recruit, retain and prepare your talent and your bench strength in order to support your business for increased profitability.

It is so critical for organizations to get this right. Not only will it help recruit better talent, it will also help keep talent and develop those with high potential to the next level.

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