Author Archive

How Culture Affects Employee Engagement

February 22nd, 2013 by Mike Yoder

Does your company have employees who are actively engaged? Does it really make a difference? Watch as Leah Elms, Customer Service Representative at Servant HR, shares research findings on the relationship between profitability and employee engagement. Plus, get tips on how to analyze your culture and boost engagement.

Visit the Servant HR video page to learn more ways to strengthen your HR. If you can’t see the video above, visit http://youtu.be/7yl1veH1OSo.

how to fire someone

Most U.S. states have an at-will employment policy.  This means that you as a business owner or employer may fire someone for a good reason, a bad reason or no reason at all — as long as your reason isn’t illegal. While this does provide more freedom for employers, it is not a free pass to fire someone without regard for how it is handled.

What’s the issue here?

If you as an employer discipline or terminate an employee and do you it badly, you create risk for yourself. A former employee could potentially sue you for discrimination, wrongful termination or a similar claim.

In at-will states, you can terminate someone’s employment for almost any reason as long as it isn’t illegal. If you can’t prove just cause, the employee can file for and get unemployment compensation. More concerning, the person can claim you released them from their job because of their protected class status. Those characteristics could include being over the age of 40, being a certain race or sex, or having a disability.

Generally, as HR professionals, we want to be able to prove that an employee has earned the right to be terminated. There should be some level of just cause when they broke company rules, were insubordinate, etc. We use that information to defend an unemployment compensation claim or discrimination claim.

What are my risks?

While no recent legislative changes have modified how unemployment compensation is handled, the U.S. Equal Employment Opportunity Commission (EEOC) under the current administration has become more proactive in addressing such issues. Employers should be even more mindful of these kinds of HR issues than they perhaps were in the past.

Most frequently, we see the biggest problems arise when an employer discharges someone who is in a protected class (e.g. they are disabled or practice a certain religion) and chooses to fire them at will. In such cases, the employee can come back and successfully say there was not just cause so they have a right to unemployment compensation. They can use that judgment to file a claim with the EEOC. From there, the EEOC hears those claims and if the employee is successful, the employer could be obligated to settle with the individual (in the form of money and/or the offer of getting their job back), or the EEOC gives the employee a “right to sue” notice so the person can potentially find an attorney and take the issue to federal court.

How can I limit my risks?

There are ways to protect yourself from risk or potential losses before an actual termination takes place or becomes necessary. A process of progressive discipline is a prudent, widely used method to follow. With progressive discipline, you follow steps to help document and show evidence of the employee’s bad behavior or failure to follow policy.

For example, if someone does something wrong, you first talk to them about the issue, giving them a verbal warning. If the problem persists, you may follow with a written warning. If this warning is not heeded, termination might be justified and necessary. Normally, the state wants you to walk through a progressive process so employees are warned and understand that if they continue down this road, they could lose their job.

If you can show just cause for terminating an employee, you as an employer are improving your chances that a terminated employee is unable to collect unemployment compensation and sue you.

What’s the bottom line?

Firing an employee comes with risk, and while a state employment at-will doctrine may lead an employer to believe they can fire someone for no reason, there are potential consequences if progressive discipline is ignored. Considering a progressive discipline process based on a just-cause standard is a recommended part of a company’s HR policies. When a policy is developed, it must be part of the company handbook, where you document just-cause offenses. HR professionals, such as those at a PEO, can walk you through the ins and outs of this policy development.

If you have any questions about this issue, contact me, Mike Yoder, at 317-585-1688. 

The IRS controls what makes a person an employee or an independent contractor. If you incorrectly classify someone, back taxes, penalties and fees can come into play. Mike Yoder, CEO of Servant HR, walks us through three areas of control that play a role in determining whether someone is an employee or an independent contractor.

  • Behavioral
  • Financial
  • Type of relationship

Find out more about these categories and how they may relate to you in the video.

Visit the Servant HR video page to learn more ways to strengthen your HR. If you can’t see the video above, visit http://youtu.be/gpJfg_m41NI.

Should I Outsource my HR?

January 8th, 2013 by Mike Yoder

Outsourcing human resources isn’t the right choice for everyone, but it is an option that all business owners should carefully consider as part of their overall growth strategy. If you’ve ever asked, “Should I outsource my HR?” following are six of the Twelve Identifiers we at Servant HR use to help prospective clients figure out whether they are a good fit for our PEO services. These indicators would be useful for any business owner considering working with a PEO. (To get the complete “Are You a Good Fit: Servant HR’s Twelve Identifiers” digital workbook, download it now for free.)

Human resources can be tricky. If you don’t make it a priority for your business, serious legal and financial repercussions can result. When an employee termination is bungled, a tax change isn’t heeded or payroll is mismanaged, that’s an HR issue. When you add a new employee, revise benefits or are faced with worker’s compensation issues, that’s HR too.

Not everyone needs to outsource their human resource services. If you own a small company that isn’t going to grow, and you don’t mind managing the paperwork and compliance issues that come with having employees, then you’re probably okay. If you don’t fit into that mold, read on to see if you identify with one or more of the following Twelve Identifiers.

Ask yourself these questions and — here’s the important part — answer each one honestly. If your answers show that you do relate to one or more of these scenarios, contact us. We would be happy to discuss your situation and see how we can help.

No. 1

You aren’t spending as much time generating revenue as you should be. As a business owner, your energy is best spent carrying out revenue-generating tasks. Getting bigger and better requires focus and time. If you need to put more energy into capturing market share, increasing sales or flexing your marketing muscle, you may need Servant HR. Would product or service improvements make you bigger

and better? Would your people be more efficient and happier if you had time to dedicate to their development? If you know that you could be more effective and work more in depth with clients if you only had more hours in your workday, outsourcing your HR might be a good option for you.


ASK YOURSELF:

What are you not doing to improve your business or your life because you’re taking care of HR tasks? List 3 things:

1.      
2.      
3.      

Were you able to list 3 things? If so, you should consider outsourcing your HR.

No. 2

You have more risk than you bargained for. When you’re engaged with Servant HR, you get knowledge on demand. There are real deliverables, tangible tasks and constant access to HR resources and advice. There is also the peace of mind knowing that you aren’t solely responsible for all HR-related issues. As a “co-employer,” Servant HR partners with small and mid-sized companies through an administrative employment agreement. This arrangement makes Servant HR the coemployer of all of a company’s working staff. As a result, employment responsibilities are shared between Servant HR and the client. This allows the client to manage the work performed by employees and farm out the HR obligations. Servant HR assumes responsibility for a wide range of employer responsibilities and risks; pays and reports wages and employment taxes out of its own accounts; and administers clients’ benefits to employees. Are you taking unnecessary risks? Does co-employment sound smart to you?

ASK YOURSELF:

Are you…

1. Relying on your own knowledge to make wage and hour decisions?

2. Assuming job descriptions are not necessary?

3. Assuming your forms and documents are sufficient to reduce compliance risks?

4. Under the belief that your “good relationships” with employees are sufficient to eliminate risk of lawsuits?

If you answered “Yes” to any of these questions, you are assuming too much risk as an employer

No. 3

You want to be a top employer. Your internal and external audiences know that you make a high-quality product and provide a great service, but what about your reputation as an employer? Take a look at how your employees characterize you and how current and potential clients describe you as a leader of your team. Is your business considered to be a great place to work? Managing administrative HR tasks by yourself can give the impression that you aren’t as professional as you should be. Correct that false impression.

ASK YOURSELF:

What do others think about you as an employer? List 5 adjectives:

1.      
2.      
3.      
4.      
5.      

If these answers aren’t what you want to hear, you should consider outsourcing your HR services.

No. 4

You manage multiple vendors who handle separate HR-related services. You’re proud that you are big enough to need all of this help, but managing relationships with more than one vendor isn’t worth the hassle. Streamlining not only simplifies the situation, but it also can help you identify areas that have been falling through the cracks.

ASK YOURSELF:

What services and areas of expertise are my HR vendors providing?

If you can’t thoroughly and confidently answer this question, that’s a red flag.

No. 5

You aren’t doing what you should when it comes to worker’s comp. This is a big one. If one of your employees gets hurt on the job, are you prepared? Do you want to carry all the risk if you aren’t completely sure of your preparedness? With a barrage of forms, compliance requirements and law changes, worker’s compensation management and reporting is best left to professionals.

ASK YOURSELF:

What are you doing when it comes to worker’s comp?

If you can’t thoroughly and confidently answer this question, that’s a red flag.

No. 6

You can’t answer your employees’ HR questions. As your company grows more sophisticated, so do your employees. Can you answer the questions they are asking, or are you wasting time tracking down answers that you’re only vaguely sure are accurate? Your workforce requires a more sophisticated process and sound HR knowledge.

ASK YOURSELF:

1. What is the IRS’s differentiation between employee and independent contractor?

2. When is an employee appropriately considered salary and exempt from overtime?

3. What is enough documentary proof to terminate an employee with minimal legal risk?

4. What is the difference between PTO and vacation or sick time?

5. What criteria do you use to prioritize employee benefits decisions and compliance?

6. How do you remove a long-term employee with integrity?

7. What are employers’ federal, state and local reporting requirements?

8. How do you discipline employees without setting precedent that ties your hands in future situations?

If you can’t thoroughly and confidently answer these questions, that’s a red flag.

Congratulations! You are halfway through this self evaluation. Don’t lose your momentum. Download the complete “Are You a Good Fit: Servant HR’s Twelve Identifiers” digital workbook for free now.

 

Don’t allow a COBRA misstep to show its fangs and trigger thousands of dollars in potential penalties. Loren Elms, Payroll Administrator at Servant HR, shares five questions every employer should ask about COBRA to help keep themselves out of harm’s way. Get a primer on the following:

1. Is my company subject to COBRA?
2. Who qualifies for COBRA coverage?
3. How long does COBRA coverage last?

Get all five questions and Loren’s expertise on each in the video. Watch more ways to strengthen your HR here. If you can’t see the video above, visit http://youtu.be/_WwKJsrLdBs.

Pros and Cons of a ‘Hidden Paycheck’

December 4th, 2012 by Mike Yoder

What's really in that bag?

You pay your employees an hourly wage or salary. You know that number. They know that number. It’s the one they use to pay bills, put food on the table, fill their gas tanks and clothe their families. You remind your employees of that number on a regular basis by way of a paystub or check. But that number is just part of the investment you make in your employees.

Showing your employees a more complete picture of how and how much you are spending on them can help you hire and retain top employees, and assist in compensation analyses to inform your salary and wage decisions.

This complete picture is often called a “hidden paycheck.”

Employers invest so much more in their employees than just a base salary. One of things that human resources professionals can do is explain to a controller or accountant how much the business spends on the employee beyond base wage or hourly rate. Those things can include overtime pay, FICA tax, Social Security payments, unemployment compensation fund payments made to the state, workers’ compensation, and benefits such as health, dental, vision, life, disability and retirement. All those tangible dollars or benefits that are paid on behalf of the employees are part of the hidden paycheck.  A Human Resources Information System (HRIS) can tally up the numbers and uncover the hidden “pay” employees receive.

But a hidden paycheck isn’t for every business. Here are some pros and cons for employers to consider before proactively divulging their numbers.

PRO: They can bring to light your best assets.

For companies with robust retirement plans or benefits plans — paying for substantially more than 50 percent of employee benefits — a hidden paycheck can accentuate the positive. Other programs like tuition reimbursement, bonuses and commissions can be quantified and should be part of a hidden paycheck.

CON: They can uncover your shortcomings.

If you don’t have a strong benefits plan, you probably don’t want to draw attention to that fact.

PRO: They help make you competitive.

When an employer can quantify just how much an employee costs, you can use that information to execute a compensation analysis to see how competitive your company is in the marketplace. As a result, you might want to make wage, salary or benefits adjustments to help keep you well staffed and on a growth track.

CON: Employee response is unpredictable.

One risk of providing a hidden paycheck is that you never know how employees will react. You don’t want to come across as self-serving, as though you’re saying, “Hey, you’re lucky to have all these perks,” which would certainly bring a negative response. Instead, the hidden paycheck should be provided as a demonstration of the employer’s transparency and as a way of saying, “Yes, we value you. And here are the numbers that show how much we appreciate,” so the response will be more like, “Wow. I didn’t know you were covering all those costs on my behalf. Thanks.”

PRO: They can help you keep good people.

If you have spent time developing your employees to be valuable assets to your company, you don’t want them going anywhere. If they are only familiar with their annual salary total, they might be tempted to find a bigger number elsewhere. A hidden paycheck can help them understand that they are getting much more than what they see on a paystub, putting you in a better position to have loyal employees.

CON: They can encourage employees to look elsewhere.

If an employee sees his or her hidden paycheck and decides the numbers don’t add up in his or her favor, a job vacancy might be in your future. If you are taking steps to retain employees with a solid benefits plan, this should not be a problem. But if other parts of your HR machine aren’t in place such as employee engagement strategies, fair policies and a healthy company culture, an unimpressive hidden paycheck could be the straw that breaks the camel’s back.

PRO: They divulge administrative costs.

Besides the legal obligations and benefits you pay for each employee, there are administrative dollars spent. Equipment, office/building space, vacation time, holiday breaks — all of these things cost money, and it’s useful for employers to know how much they are spending or saving with their current choices and HR policies.

Generally, a hidden paycheck is a well-received, effective way to communicate the value an employer places on its employees. If you are interested in more information on producing a hidden paycheck, contact me, Mike Yoder, at 317-585-1688.

 

6 HR Principles for the Modern Workforce

November 27th, 2012 by Mike Yoder

Human resources isn’t what it used to be. If your HR relies on the traditional model, you’re probably missing opportunities for growth. Watch Mike Yoder, Chief Executive Officer at Servant HR, discuss 6 principles that a modern workforce should heed in this video.

Principles include:

  • Engaged employees are the key to business success.
  • Starting with a process to recruit, onboard, train and retain
  • An HR focus on developing that talent…

Get all 6 principles in the video. Watch more ways to strengthen your HR here. If you can’t see the video above, visit http://bit.ly/WtMkZE.

If you’re a startup business, you have probably already experienced the stress of all of the details you have to manage. You didn’t go into business to become an expert in accounting, insurance or HR. When it comes to HR, there are three critical steps you need to focus on as a startup.

Watch Jeff Leffew, founder and president of Servant HR, deliver his three steps in this video. If you can’t see the video above, visit http://youtu.be/t9DFedWQQ0Q.

Donovan CPAs and Advisors

When you’re talking about the business of human resources, it’s all about the people. But when you’re talking about the business of accounting and advising, people may not be the first things that come to mind. Jeff Donovan, a partner at Donovan Certified Public Accountants and Advisors, a Servant HR client, says that is what sets apart his firm from many others.

“The key to our success is that we are focused on developing close relationships with people,” he says, and not just people who own big businesses or small businesses. Donovan, based in Avon, Indiana, has clients that include startups and large corporations, high-net-worth individuals and students.

One such individual has been a client of Jeff’s father, Bob Donovan, for more than 40 years. It was Bob who founded the firm, purchasing a small “tax shop” in Danville, Indiana, in 1972. “A lot of other shops don’t have that kind of loyalty,” Jeff says. Through the years, Bob developed his business into a premier, full-service firm.

Jeff joined his father in business in 1994 after working at KPMG Peat Marwick LLP. At KPMG, Jeff cut his teeth working in Guam and Saipan, gaining an international outlook and invaluable experience in the fields of tourism and international accounting.

Donovan’s payroll and footprint grew quickly when it merged with another firm in Plainfield, resulting in two offices. When the Danville office outgrew its parking lot four years ago, Jeff says, the firm consolidated its staff and moved to Avon.

As a smaller firm, Jeff says they had kept a lot of administrative responsibilities in house. The internal payroll, for example, was being handled by his wife. But she was becoming overburdened with all of the HR aspects such as health insurance and payment deadlines. In the meantime, things such as management training were not getting the attention they deserved, and the quality of the employee handbook left much to be desired

“We knew about Jeff [Leffew] and Servant HR,” Jeff says of Servant HR’s founder and president. Jeff Donovan had heard about Servant HR’s services but they didn’t seem necessary at the time, but with the growth of Donovan came more HR requirements and wants that they couldn’t easily handle on their own. Donovan became a Servant HR client in 2009.

By taking responsibility for many of Donovan’s HR needs, Servant HR helps Jeff and the 23-person Donovan staff focus on their clients and their needs. For example, Servant HR helps Donovan keep its payroll confidential, administers health insurance and manages benefits such as a 401k. Servant HR also upgraded Donovan’s antiquated handbook from a 10-page document of dos and don’ts to a comprehensive handbook that guides Donovan’s modern-day workforce.

Servant HR has also trained Donovan’s management team on performance appraisals during lunch-and-learn sessions and consulted them on the value of outsourcing HR so they can share that knowledge with their clients when appropriate. “It’s nice to have that expertise in your hip picket,” Jeff says.

Jeff says Servant HR is a good fit for Donovan’s culture. Being guided by Christian-based values and a servant attitude are in line with the way Donovan treats people and does business.

For more information on Donovan, click here. To contact Servant HR to see how we can help with your HR needs, CALL 317-585-1688 or complete our contact form here.

We are often asked, “Can I tell an employee what to wear, or tattoo, or pierce?” The answer is generally, “Yes.”

Times have changed. Thirty years ago, 1 percent of Americans had tattoos. Today, 16 percent of people aged 18-24 have both tattoos and piercings.

Employers have a legitimate interest in professionalism in the workplace, and they can take steps to ensure their image reflects their standards of professionalism. Watch Mike Yoder, Chief Executive of Servant HR, discuss the issue in this video.

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