Management.Supervision

In Pursuit of Accountability and an Accountability Culture

by Jeanne Knutzen | February 12, 2015

0 Blog, INFO AND RESOURCES FOR EMPLOYERS, Management.Supervision

Despite the countless management and leadership books written about the virtue of accountability, according to most employees there are significant gaps between managements knowing and doing. … Read More »

Countdown to ACA Compliance – Part III

by Jeanne Knutzen | October 28, 2014

0 ACA Affordable Healthcare, Blog, Legal Issues - Staffing, Management.Supervision ACA and Temporary Staffing, ACA compliance, Affordable Healthcare – ACA Smart, Employment Agency Bellevue, Employment Agency Everett, Employment Agency Kent, Employment Agency Seattle, Employment Agency Tacoma, Employment Agency Washington State, Hiring Bellevue, Hiring Everett, Hiring Seattle, Hiring Tacoma, Temporary Staffing Bellevue, Temporary Staffing Everett, Temporary Staffing Kent, Temporary Staffing Seattle, Temporary Staffing Tacoma, Temporary Staffing Washington

The PACE Staffing Network has been preparing for the employer mandates of the ACA for well over two years. As members of the American Staffing Association (ASA), we provided input into several areas of proposed regulation, and attended countless hours of ACA related training. With the ACA’s employer mandates ready to launch January 1 2015, we wanted to share information on the specifics of how the ACA impacts your use of temporary/contract employees. For ideas on how to better manage your needs for staff in light of new ACA mandates, contact a member of our Partnership Development team by contacting infodesk@pacestaffing.com or calling 425-637-3312.

In what ways has the ACA already impacted your temporary and contract workers?  

The Individual Mandate has been in effect since 2014, requiring all temporary and contract workers to purchase ACA qualified insurance for themselves and their dependent children. While we do not know what percentage of temporary/contract employees complied with these mandates in 2014, we suspect that number will increase in 2015 as penalties for non-compliance increase.

What changes go into play in 2015?

The Shared Responsibility component of the ACA, known as the Employer Mandate, goes into effect on January 1, 2015. This provision requires that all staffing companies employing 100 or more employees offer affordable and ACA qualified insurance to 70% of its eligible employees or pay significant fines and penalties. The taxes/fines/penalties for not offering insurance are $2K/year ($167/month) per eligible full time employee—excluding the first 80; if the insurance offered does not meet ACA requirements or isn’t affordable, the fine/tax penalty is $250/month (up to $3K annually) for any employee going to the exchange for insurance and receiving a subsidy. This mandate will impact most but not all staffing companies in 2015.

Are most staffing agencies already offering insurance?

The short answer is YES. PACE along with most staffing agencies has been offering some form of health insurance for well over a decade. Unfortunately these health insurance products do not meet ACA requirements, so new products for our industry had to be developed over the last year.

What requirements must be met in order for a temporary or contract employee to become eligible for ACA benefits on January 1st, 2015?

There are several ways an employee can be qualified for coverage as of January 2015. Using a look-back period, any temporary or contract worker of a “large” staffing agency who has been on assignment through their staffing agency for at least 1560 hours during 2014 must be offered insurance. These look-back periods will continue on through 2015 so that all employees meeting the full-time requirement must be offered insurance within 30-days of the end of their look-back. For all full-time employees hired after October 1, 2014 they will become eligible for insurance on the first day of the month following the completion of their administrative period—no later than the first day of the fourth month from date of hire. Full-time employees are considered any employee intended to work 30-hours per week or more at the point of hire.

What must a staffing company contribute to the employee’s insurance costs in order to ensure “affordability?”

Staffing firms must contribute to the employees’ premium so that no employee is required to pay more than 9.5% of their base pay for their own personal coverage. For example, if an employee earning $10/hr. is offered an ACA compliant insurance plan that costs $400/month, the employee cannot be required to pay more than $123.50/month for their own coverage, requiring their staffing firm employer to pay $284.80.

How will newly assigned temporary and contract employees become eligible for coverage in 2015?

Starting in October, 2014, PACE will categorize all new hires as one of the following:
  • Full-time – working 30 or more hours per week and projected to work at least 1560 hours in the coming 12 months,
  • Part-time – working less than 30 hours a week, or
  • Variable hour – employees whose status as either full- or part-time can’t be determined at point of hire.
  • Seasonal – employees working 6 months or less at specific times throughout a calendar year.
While you might assume that all the employees we hire are either Variable Hour or Seasonal, there are very specific rules staffing companies must follow to put an employee into those categories. What’s at stake is that for employees categorized as Variable Hour, they are allowed to work for their employer for a defined “measurement period” (typically 12 months) without the benefit offer requirement. The IRS is not going to give this classification away easily.

How will most staffing companies decide to become compliantwill they pay or play?

To be ACA compliant, a staffing agency can either offer benefits or pay the $2000 per employee “did not offer” penalty. They can also offer a qualified benefit but not participate in its costs, running the risk of incurring the $3000 per subsidized employee penalty for not making their plan “affordable.” Each approach to ACA compliance has offsetting costs and risks, requiring each staffing agency to choose a strategy that meets their customer’s needs for cost containment and their positioning in the marketplace.  The American Staffing Association commissioned a study by Towers Watson (2014) which provides insight into the choices likely to surface over the next 60 days. According to the TW study, 54% of staffing companies will be offering some level of insurance to its eligible temporary and contract workers. The remaining 46% are either planning to pay penalties or are too small to be covered during the transition year. A popular compliance strategy used by many staffing agencies, including PACE, will be to offer two insurance options:
  • A plan that meets both the “minimum value” (MVP) and the “minimum essential coverage” (MEC) definitionswith a 60% actuarial value covering core services. This plan will meet all the requirements of the employer mandate.
  • A plan that meets only the “minimum essential coverage” (MEC) definition – A less costly plan that meets only individual mandate requirements.
This strategy provides a low cost way for our employees to become compliant with the individual mandate (avoiding their own fines and penalties), while protecting PACE from penalties stemming from employees taking subsidies because our plans don’t meet ACA requirements or are unaffordable.

Do you need to know if and how a company providing temporary or contract staff to your organization is ACA compliant?

Theoretically no. Provided you have the right contracts and agreements in place you will have no responsibility for your staffing vendor’s decisions regarding how they will get and stay compliant with ACA mandates. Thinking more pragmatically, the expertise your staffing vendor brings to the table to not only ensure their own compliance with the ACA but to help you with yours, can be invaluable. First of all, a vendor who hasn’t prepared to become compliant can easily find themselves facing fines and penalties of a size that can end their business. Secondly, like most overly ambitious legal undertakings, the ACA contains opportunities for smart employers to use the provisions in the ACA to create new and more competitive ways of doing business. If staffing agency does not understand the ACA and its nuances, they likely won’t be able to offer fresh ideas on ways to lower your ACA related costs!

What will be the” added costs” for staffing agencies to become compliant with the ACA in 2015?

There are two categories of costs associated with ACA compliance:
  • The increased costs of ACA related administration which will be considerable—starting with changes in point of hire administration, monthly reporting, annual reporting to both employee and the IRS, etc.
  • The increase in direct costs associated with either offering the required insurance coverage or paying the penalties associated with not offering.
The direct cost increases will be agency specific, depending on several factors:
  • How many "full-time" employees they have in their workforce relative to their total workforce?
  • What percent of their eligible full-time employees will take the insurance once offered?
  • The eligible employees rate of pay to arrive at the costs the agencies will incur to make their plan "affordable."
  • The costs of the insurance products they are offering.
Based on the costs we are currently projecting, PACE is anticipating a 3-5% increase in our direct costs with another 15% increase in our current administrative costs.

For staffing companies who elect to “pay,” are they subject to taxes/penalties on all their temporary employees?

No. The application of taxes and penalties for “not offering insurance” only applies to full-time employees (minus 80 in 2015). Excluded from penalties for unaffordable insurance are employees who either reject an offer of coverage, elect coverage that isn’t affordable or delivering minimum value, or who are enrolled in state Medicaid programs.

What ACA related costs are still unknown/unclear?

Historically, the staffing industry has faced serious challenges finding a health insurance product that will serve their high turnover, low participation workforces. Six months ago there were no insurance products available to the staffing industry that would meet ACA actuarial standards. We now have insurance products, but it is not clear if these products will be attractive enough to our temporary and contract workers to incent their participation. We’ll all know much more in six months than we know now about what percent of the people being offered insurance will chose to take it.

How will the individual staffing company deal with their cost increases?

There are as many different pricing philosophies and strategies as there are staffing companies—with the key factors being geography, local business and government taxes, employee type, market positioning, and service offerings. While the pricing structures of staffing companies providing long term professional staff typically have room for premium level healthcare benefits, for staffing companies working in more competitive markets, there is little room to absorb any increased in direct costs. Some staffing companies will offer only the low cost MEC plans, taking the chance that the employees electing their insurance will not go out to the exchange and seek subsidies for better plans. We consider this strategy risky. The ASA study by Towers Watson study revealed that 91% of the staffing firms polled are planning on passing their ACA costs (penalties or insurance costs) back to their clients in the form of across the board increases in bill rates. Most (38%) are planning 2-5% increases. 9% are looking to increases of 16% or more. 19% are still not yet sure how much they will increase bill rates.

How will the price increase be handled?  

Most of the pricing programs we have viewed are designed to smooth out the costs of providing insurance to all eligible employees and spreading those costs across an entire workforce and customer base.
The Towers Watson study indicates that employers can expect their price increase to come in a number of forms. Some will simply do an across the board increase in bill rate; others will see increases in mark ups; some will be adding a line on each invoice for ACA Costs.

How will the increased costs of temporary and contract workers compare with the increased costs associated with the ACA for other types of employees?    

Since the passage of the ACA, actuarial firms have been predicting increases in overall employee costs to be in the area of 5-8%. If this projection plays out, the per hour increase in costs for a temporary or contract employee may end up being much less than the increase in costs associated with the same employee, hired directly. For example, an employee earning $15/hr. hired directly may cost an additional $3.25-3.75/hr. in healthcare benefit costs in 2015 compared to 2014. The same employee provided by a third party staffing agency, might cost $.45-.70 more per hour than they did in 2014. For a more detailed discussion of ACA related “staffing math” and to compare the relative costs of employees hired directly with employees placed through a third party employer, contact our Partnership Development Team at 425-637-3312.

What other cost increases will employers experience in 2015?

We anticipate ACA related cost increases will touch just about every part of our customers’ businesses in 2015. Administrative cost increases alone could be staggering.
Part of the services and costs savings we are delivering to customers in 2015 and beyond is full administration of ACA related compliance.

When it comes to managing staffing providers, are there other elements of the ACA that employers should be paying attention to?

Yes. It may be time to review your staffing contract or agreements. The ACA has its own common law provisions, reinforcing the notion that it is the common law employer who is responsible to offer and pay for ACA mandated benefits. In most temporary or contract staffing arrangements, there is clear legal precedence for the staffing company to be the common law employer, accountable for ACA compliance. That said, we recommend that employers consider adjusting agency contracts to clearly spell out each party's respective roles in managing ACA mandates. PACE is happy to provide language recommendations upon request. For employers purchasing payroll services from their staffing provider, the law is less straight forward and the need for contractual adjustments more important. Again, we recommend that the role of your third party payroll service provider be spelled out clearly and contractually in any ongoing payroll services agreement. We recommend that specific indemnifications related to the ACA liability should become standard clauses of all payroll service agreements and contracts. NOTE: A nuance of the ACA regs specifically requires that if there is a chance or a reason for a payroll agent to not be considered the common law employer, the costs of providing insurance to an ACA benefit eligible employee should be passed back to that client as an increase in rate for the particular employee. Between now and early January, PACE will be speaking with all clients to ensure the proper ACA compliant contracts are in place.

Do we need to be concerned about “abuse” clauses?

The IRS has been very clear that it will be looking closely at staffing firms and their clients to ensure that ACA benefit requirements are not purposefully skirted. For example, an employer who turns their entire 50 person workforce over to a staffing firm, so as to avoid falling into the “large employer” category, would be highly suspect. An employer who employees 48 people and regularly uses a staffing company to provide 5-10 employees for its peak busy periods, on the other hand, is likely not suspect, even though their use of temporary staff keeps them below the 50 employee benchmark. The difference? Their temporary staffing strategy was designed to address a business need—not to avoid offering benefits. Splitting employees between a staffing company and their client or between two staffing companies so that no one “employer” reaches the 50 employee benchmark has been specifically prohibited. While PACE will continue to be strong advocates for all of the business reasons to use more flexible staffing strategies, we will only recommend changes that are based on business need, not ACA avoidance.

Is there future ACA stuff that we should be thinking about for 2016 and beyond?

Yes.
  1. Discrimination Issues. Current thinking is that all the ACA specific regulations related to discrimination will come out in 2015 and be implemented in 2016. The ACA is clear that any plan or employer contribution that provides a differential benefit in favor of highly compensated employees will be specifically disallowed. This means that once discrimination regulations have been written and put into play, employers will no longer be able to provide special plans or higher levels of contribution to their higher paid employees—short of making them available via post-tax dollars.
  2. Special tax on Cadillac Plans. In 2018, employers will be taxed on Cadillac benefit that cost more than $10,200 ($850)/month per individual. The tax on Cadillac plans is 40%—making these plans prohibitive for most employers. Employers with Cadillac plans will likely look for alternative approaches.
We hope you have benefited from reading this primer on the ACA and how it will impact your use of temporary and contract workers after January 1, 2015. For more personalized consultation, please contact our infodesk@pacestaffing.com or by calling 425-637-3312 to arrange an appointment with one of our ACA Specialists.
jeanneThis article was prepared by Jeanne Knutzen, CSC, the President and Founder of the PACE Staffing Network. PACE remains committed to full compliance with the ACA and offers a variety of staffing products and services designed to ensure that our clients have options for containing the costs associated with ACA compliance. For a confidential discussion of how these services might be applied to your workforce, particularly your temporary and contract employees, contact a member of our PSN partnership team at infodesk@pacestaffing.com or 425.6376.3312.    

Beware of the Counteroffer: What it Really Says . . .

by Jeanne Knutzen | October 23, 2014

0 Blog, Management.Supervision counteroffer, Don Charlton, Employee Raises, Employee Retention, employment counteroffer, Employment Staffing, The Resumator

By Don Charlton Think about it: an employee successfully went through the process of finding, interviewing, and accepting a new job, only to be pulled back in by the company they already committed to leaving. It may make you ask, "Should I make a counteroffer?" We've talked about instances in which it might actually be beneficial to have employees who are motivated by money, but this isn't one of them. Whether their reason is salary, position, a better company, or sheer boredom, there are very few instances, if any, when a counter offer should be made–or accepted. The reality is even if a counter offer is accepted, the employee will soon fall back into the funnel of unhappiness or doubt that originally caused him to look for a new job. More often than not, the offer just delays the inevitable. What does a counter offer truly say from an employer? "Hey, you know what? You called our bluff! We have been underpaying you for years. You are truly worth a lot more than we are currently paying you, so let's make this right." "We understand your frustrations. This $20k increase in your pay will make those frustrations disappear." "Now that we have "committed" to you as a vital cog in our organization's success, we expect you to up your game. You didn't expect that $20k raise to come without more responsibilities did you? You owe us!" What accepting a counteroffer truly says about the employee. "For sale!" "I'm going to go with whoever makes me the best deal! Their commitment to me doesn't matter." "I'm probably going to do it to you, too! Each day without a raise starts the clock ticking!" What does giving a counter offer tell your co-workers? "Wait a second–two days ago, that guy was hacked off and out the door. Now he's walking into a bigger office with a bigger smile? Gee, I wonder what could have happened. . ." "The only way to get a raise around here is to threaten to leave." "That guy gets $10k more than me, so shouldn't I have to do $10k less work? Or should I just tell them I got a better offer?" Sounds bad, right? Here's the alternative. Great employees don't act randomly. They're too talented, and in too much demand for that. Instead of scratching and clawing to keep them, ask yourself: "Why is this super-talented person leaving my company? And how can I stop it from happening again?" The effects of counter offers–even juicy ones–are temporary. Bad workplaces are much longer-term. Put the $20k to good use and invest in your current employees. Use the savings to invest in the employees that deserve to be invested in. Simply put: counter offers may work for professional athletes, but leave them out of the office! Don Charlton is the CEO and founder of The Resumator, a Pittsburgh-based company founded in 2009. The Resumator provides a social hiring platform to companies of all sizes. Boasting over 10,000 users, it has helped over 1,300 companies generate 1.5 million resumes in only three short years and is also the chosen hiring system of Pinterest, Instagram, and Atari, among others. Charlton can be reached at editor@mamumediallc.com or via Twitter at @Dontrepreneur.

The Number of Employees Testing Positive for Marijuana Is Up Significantly

by Jeanne Knutzen | October 21, 2014

0 Blog, Legal Issues - Staffing, Management.Supervision drug testing, Employment Agency Bellevue, Employment Agency Everett, Employment Agency Kent, Employment Agency Seattle, Employment Agency Tacoma, Employment Agency Washington State, hiring, Hiring Bellevue, Hiring Everett, Hiring Tacoma, Marijuana testing, Marijuana testing Colorado, Marijuana testing Washington, Temporary Staffing Bellevue, Temporary Staffing Everett, Temporary Staffing Kent, Temporary Staffing Seattle, Temporary Staffing Tacoma, Temporary Staffing Washington

As reported by Allen Smith, Manager of Workplace Law for the Society for Human Resource Management (SHRM), in a mid-September announcement. Using data provided by Quest Diagnostics for calendar years 2012 and 2013, the increase reported represents the FIRST INCREASE in marijuana positives since 2003! After reaching a high of 13.6% in 1988, positive drug testing outcomes had been steadily decreasing. In 2013, positive test results were up 3.7%, following a 3.5% increase in the positive rate the year prior. The connection between this increase and the legalization of recreational marijuana in Colorado and Washington did not go unnoticed. Positive results for marijuana use in Washington increased by 23% and in Colorado 20%, compared to a 5% increase among the US general workforce covering all 50 states. The PACE Staffing Network has been offering and then administering drug testing on our client’s behalf since the early 1990s. Initially, our clients got a lot of push back on their drug testing policies, but today, both pre-hire and random drug testing practices are considered the norm with only an occasional challenge from the ADA related to screenings for prescription drugs. While “for cause” testing is more frequently contested, according to Quest, it is the most common reason why workers are drug tested. At the current time, our clients range from zero tolerance employers who require all applicants for either permanent or temporary employment to be rigorously drug tested, to employers who openly request that we not drug screen, concerned that recruiting results will fall short of the numbers of employees needed—particularly when the workers are being used for short term, temporary assignments where product out the door is the driving factor in HR policy. Some employers claim that while some of their workers are known weekend marijuana users, they are amongst their best workers and don’t want an unnecessarily “restrictive” HR policy to interfere with their “business as usual” mentality. The type of drug testing our clients ask us to administer provides some clue as to their level of “tolerance” they are willing to enforce and at what cost. Employers who are serious about eliminating any type of drug use from their workforce typically require hair testing over urine or saliva testing because of its ability to uncover signs of drug use for up to 6 months. Unfortunately, we anticipate these will be the first types of drug testing methods to be legally challenged. While at the current time employers in both Washington and Colorado retain the right to restrict the recreational use of marijuana by employees and can impose sanctions on employees testing positive for marijuana whether it was ingested during a work day or on the weekend. Many believe that the court test of these “one size fits all” types of drug testing policies and sanctions are just around the corner.

How Long Should I Keep Electronic Recruiting Correspondence?

by Jeanne Knutzen | September 29, 2014

0 Blog, Management.Supervision Electronic Recruiting Correspondence, Hiring Practices, HR Management, Inc., Strategic Human Resources

By Strategic Human Resources, Inc. Question: Much of our recruiting is now done online and via email. Do I need to keep the emails generated from our last round of hiring? Does it matter if the candidate followed through with a response or not? Answer: You need to keep any records from the search for one year–those that you were considering AND those that you were not (even those that applied but may not have followed through with a response to your email). Keeping them in an electronic file is great–date it and pitch it next year. The U.S. Equal Employment Opportunity Commission (EEOC) requires employers to keep employment records for one year. After that time, employers can either discard the record or archive it, provided they maintain the confidentiality of information contained in each record. Suppose you have a resume, cover letter, list of references, and brief notes from a telephone screening, yet you decided to select other candidates for in-person interviews. The records generated, including electronically, during the course of the preliminary screening are, in fact, hiring records. They must be kept for one year, pursuant to EEOC regulations. Another important reason to keep hiring records on file even if the applicant wasn't hired is so applicants don't have possible recourse if they are rejected during the hiring process. Applicants who claim they weren't hired based on factors not related to the job (i.e, race, sex, national origin, age or religion) have up to one year to file a formal discrimination charge with the EEOC. Should the EEOC decide to investigate the applicant's complaint, the agency can ask employers to produce records used during the hiring process. The company's hiring practices don't look favorable if the employer can't comply with the request because it has discarded the hiring materials. Strategic Human Resources, Inc., is a national full-service HR management firm based in Cincinnati, Ohio. Our president and founder, Robin Throckmorton, can be reached at Robin@strategichrinc.com.

Retain Employees. Manage Turnover. Which Is It?

by Jeanne Knutzen | September 9, 2014

0 Blog, Flexible Staffing Strategies, Management.Supervision Employment Agency Bellevue, Employment Agency Everett, Employment Agency Kent, Employment Agency Seattle, Employment Agency Tacoma, Employment Agency Washington State, hiring, Hiring Bellevue, Hiring Everett, Hiring Seattle, Hiring Tacoma, Temporary Staffing Bellevue, Temporary Staffing Everett, Temporary Staffing Kent, Temporary Staffing Seattle, Temporary Staffing Tacoma, Temporary Staffing Washington

Okay…while not a pure play contrarian, I’m finding myself reacting less than enthusiastically to all the talk on employee retention that has been hitting the airwaves lately—apparently the hot topic in the staffing world. For me, the mandate that companies do what is necessary to retain their high value talent is HR 101. So when I read all the hoopla on the value of retention, I want to make sure our readers also hear the other side of the story—that for some jobs, the goal can’t always be about reducing turnover/improving retention, but needs to be more about better managing the turnover they have—smartly, proactively! MANAGED TURNOVER is a different sort of staffing strategy that I believe has a legitimate place in any hiring manager’s arsenal of staffing options.    Most (but not all) of the MANAGED TURNOVER staffing models we put together for our clients are developed in response to scenarios involving what we call High Impact/Low Appeal (HI/LA) jobs! You know those jobs—ranging from that pesky front office job that was crafted from all the work no one wants to do, to the folks in your warehouse doing that boring, repetitive assembly type work that no one could pay you enough to do. No matter how great the manager’s motivational skills or generous the company’s pay programs, the nature of HI/LA work lends itself to workforce issues—increases in absenteeism, accident rates, and other workplace mischief that makes HR shutter. Sooner or later most HI/LA jobs suffer from high levels of voluntary or involuntary turnover, directly impacting team or company performance. When asked to find employees for HI/LA jobs, one of the first things we explore is the option of ending the uphill battle for retention, and replacing it with a staffing model involving a strategically rotating group of temporary workers. Here’s why:

  • New temporary workers can come to HI/LA jobs fresh, ready to perform at high levels when their motivation to meet a new challenge is at its highest.
  • Temporary workers are easily rotated out of HI/LA jobs when the work is no longer new; the employee is no longer fresh.
  • Turnover (for the client) goes away, replaced by assignment starts and ends,
  • …as does the costs and hassle of recruiting and vetting new employees. That work is shifted to a third party staffing agency.
MANAGED TURNOVER programs are built around statistically measured cycles of performance that exist for all jobs, all employees. While specific timelines and measurement units (ex. productivity, attendance, etc.) vary, each employee’s performance in an HI/LA job usually comes out in some version of a bell shaped curve. When the employee is new, they are motivated to learn and fit in with the team. Productivity increases until the newness wears off and the signs of boredom or discontent start to surface in the form of issues with attendance, carelessness, and other forms of worker misconduct. Chart for Blog The goal of a MANAGED TURNOVER staffing model is to optimize the number of workers in the earliest, most productive, stages of the performance cycle, while systematically cycling out employees just before they start into the downward cycle. When done proactively, the employee’s temporary assignment begins and ends at predetermined times, most correlated with optimized worker performance. One of the important benefits of a MANAGED TURNOVER staffing model is that it side steps all the negativity embedded in a core employee staffing model applied to HI/LA jobs. Employers no longer spend time outlining their defense of a decision to terminate a core employee. Employees no longer struggle with a job that is no longer challenging. Assignments begin and end in accordance with a custom designed staffing plan based on the performance cycle typical of that particular job or workforce. Minimal hassle, minimal complication. The heavy lifting of replacing departing employees is assigned to a third party staffing agency, reducing if not eliminating internal recruiting costs. Another side benefit of a MANAGED TURNOVER staffing model is that your temporary workforce becomes an always-available pool of candidates for hire. As all hiring managers know, when it’s time to hire the ramp up time, costs to find, screen and hire a new employee can be significant. And there is no guarantee that who your hire will work out. Having a large number of auditioning workers continuously available for hire allows employers to hire in a timely way, selecting only the very best to become a part of their core team, reducing the costs and disruption of hiring errors. Not to worry, a MANAGED TURNOVER model doesn’t mean your entire workforce becomes "temps." Depending on the work to be performed, there are identifiable ratios of core and non-core workers that optimize overall performance. Too many temps and stability suffers. Too many core workers and your operational costs will eat away at your bottom line during your less busy periods. Ratios of temp to core workers can range anywhere from 10-15% to a high of 85-90%, depending on your business cycles and the nature of the work. Here are two examples where one of our PSN partnership teams implemented “managed turnover” staffing models that improved worker outputs, dramatically reduced recruiting costs, and/or improved overall team performance and morale: Some of our earliest converts to a managed turnover staffing model were call center clients who were hiring large numbers of entry level employees for service roles. One particular call center was facing a serious issue with first year turnover which was both increasing their internal recruiting costs, while also impacting service levels. 1. In partnership with our client’s HR team, our call center recruiters augmented the client’s recruiting team, reducing our client's internal recruiting costs. We worked in partnership to implement a uniform staffing process where all employees, sourced either by the client or our own recruiting teams, were screened and onboarded in the same way. All new call center reps were employed by PACE during the first 90-days of their employment. This “audition period” allowed employees who were unable to meet the client’s expectations to be systematically removed from their assignment so that at the end of the audition period, the client offered employment only to those employees who were able to meet the full scope of their expectations. Those not measuring up were either given an extended “audition” period or their assignment was ended. Using this “managed turnover” staffing model in effect transferring most of the first 180-days of turnover to PACE, the client’s first year turnover rates were cut in half. Employees whose assignments were ended during the audition period became available to be placed on other PACE assignments, better suited to their personality or skill sets.  2. A second example is provided by one of our large healthcare clients who were experiencing turnover, attendance and workplace injury issues in their laundry area. After viewing the work, it was easy to see the classic HI/LA profile—physically demanding, repetitive, and ultimately boring work. While the client initially asked us to help them improve their hiring outcomes (i.e. reduce turnover), our recommendation was that they focus instead on better managing the turnover we suspected was there to stay. With the client’s guidance, we implemented a MANAGED TURNOVER staffing model.  As each core employee left we replaced them with a temporary employee, whose assignment varied in length depending on our client’s anticipated needs. The employer’s workforce was soon “mostly temps” who were hired for specific work performed for a specified time period—and were oriented and managed accordingly. The PSN partnership team set up a performance management system which, with our client’s help, was used to manage the employee’s performance. When an employee started to fall below defined standards, PACE, not the client, invested its recruiting resources to find a replacement candidate. For this client, the MANAGED TURNOVER staffing model delivered a level of orderliness and predictability to their staffing process they hadn’t experienced in the past. It eliminated the negative impact of unexpected turnover, as well as taking away the pressure on their internal recruiting teams to staff a high turnover workforce. For our temporary employees, it provided them with assurance that when their assignment ended, their performance would earn them the opportunity to be placed elsewhere.   Workplace injuries were reduced by cycling temps in and out of the performance cycle, avoiding the burnout that had been a contributing factor to both attendance and workplace accidents.             Obviously this MANAGED TURNOVER staffing model can’t be applied to all jobs and all work environments. And even if you determine that one of the HI/LA jobs you manage would lend itself to a MANAGED TURNOVER staffing model, there are some basics that need to be in place: The Right Staffing Partner. A staffing agency who only knows how to recruit people is not the partner you need to implement a MANAGED TURNOVER staffing model. Look for an agency who knows how to address productivity issues, has tools and systems in place to help you manage employees, and can bring you ideas about how to implement a managed turnover staffing plan. Look for a staffing partner as interested in solving your operating challenge as you are. The Right Financial Model. You will need to keep your CFO aware of what you are doing and why as you will be purposefully expanding your budget for temporary staffing while decreasing the monies you spend on high cost core staff. While the per hour costs of temps and core employees is almost identical (by the time you factor in all the regulatory and benefit costs of core employees), depending on how your company organizes its budgets and expense allocations, the costs of these two different types of employees can end up in different places on your financial reports and may trigger questions from “up the chain.” You will likely need at least one senior manager on your team who understands the shift you are making in how you are doing “staffing,” and why. The Right Mindset. Most of the MANAGED TURNOVER staffing models we implement with clients tend to migrate into very objective, data driven, staffing processes. Even though you are no longer managing core employees, the need for clear performance standards, transparent metrics, and fair administration does not go away! jeanneThis article was written by Jeanne Knutzen, the founder and CEO of the PACE Staffing Network. The PSN partnership teams are well versed in a variety of flexible staffing strategies, including MANAGED TURNOVER programs. For a complimentary consultation on what flexible workforce recruiting and staff strategies might work in your organization, contact us via our InfoDesk at infodesk@pacestaffing.com or by calling 425-637-3312.

Need Your Temporary Employee to Make A Difference? Try Beefing Up Your Onboarding Process!

by Jeanne Knutzen | May 6, 2014

0 Blog, Management.Supervision Contract Employee, contract staffing, Flexible WorkForce, hiring, Onboarding, Orientation, Seattle Staffing, Seattle Staffing Agency, Seattle Temporary Staffing, Temporary Employee

Speaking as a company who takes the time to 1) understand the work our temporary employees will be doing for our customers, 2) determine the skills, knowledge, and experience our workers need to have to do the work at the levels needed, and 3) evaluate each employee in terms of the soft skills important to placement success – we know that even the “right fit” isn’t always good enough to ensure that a temporary employee will hit the floor running. If our clients have high stakes work in play and need our temporary employee(s) to perform at high levels right out of the gate, we suggest a thorough onboarding process to get our employees up and running quickly. It goes without saying that the days of greeting a temp, showing them their work station, lunchroom and bathrooms, and then leaving them alone to figure out what to do next, are long gone – if they ever existed. Work is much too complex, the importance of following work policies too critical, etc. to leave a temp’s orientation to chance. While temps are known for the ability to figure things out, because work environments are almost never the same, when it comes to temporary or contract workers more time needs to be spent up front, explaining all those things that are unique about you, your work environment, and your expectations of their work. In some ways, because you need/expect productivity quickly from your temporary/contract workers, the timing and importance of their orientation may even be more important than the timing and importance of the orientation you provide to your core workforce. The two orientations are, of course, quite different. Orienting your temporary/contract employees must be done quickly and efficiently, requiring a clear roadmap or checklist of what they need to know. Here are FIVE THINGS you likely will want to cover: 1.  The Circumstance – the reason why you chose to hire a temp rather than a core worker.  Why does their job, even if temporary, exist? What goals must be reached in order for the employee’s work to be considered successful? You might be amazed at how important it is to share your reasons for hiring a temp instead of a core employee – it gives the temp a sense of purpose, sometimes showing them how they are both a unique and special contributor to an important team goal, “I chose to bring on as a temp, because I needed a level of skill and experience I didn’t have with my current team. Your skills are so strong in (describe) we are going to let you take the lead in those areas where that skill is needed.” A temp, who clearly knows you value them as a “contributor” if only for a short period, is an employee you can count on to go out of their way to “make a difference.” 2.  Your Expectations and Priorities.  “In order for our time together to be considered successful, I need you to__________________.” Define the work outcome you are trying to achieve, how success will be defined and the impact of success. Examples of goals might be, 1) “I need you to complete this project within the time frame frames we’ve discussed,” 2) “I need you to work very cooperatively with our accounting team who is watching this project with a very critical eye” or, 3) “I need you to bring any issues to my attention right away as it is important that we work through any and all problems very quickly. Senior management has their eyes on this project.” The impact of their work is also an important element to be communicated, “This project is one of three projects we will be working on this year that are most related to our company’s ability to compete for business in South America.” 3.  Explain when, how and how often they need to be checking with you.  If you need quick updates at the end of each day, let them know. If you want them to stop by your office at least once a week, let them know. Knowing what you expect from them in terms of keeping you informed is a key element of placement success. We’ve seen very talented temporary or contract employees not meet our customer’s expectations simply because they didn’t know when or how often to communicate with our client. 4.   Identify challenges and what they should do when they encounter them.  “I want you to know you are likely to uncover challenges with_______________________. When that occurs, I want you to get help from George who knows how to push through these types of obstacles.” Fill in the blank, honestly and completely, so that your temporary worker knows what to expect and how to get issues resolved. 5.  Your hiring policies. The employees’ chances of being hired.  Don’t beat around the bush – implying there is a chance your temporary employee can be hired if that chance is minimal. At the same time, if the chances are good that their time as a temp is looked on as an audition for a direct hire opportunity, let them know. Describe the policies and processes in place that allows a hiring manager to consider (or not consider) hiring a temporary employees and what they would need to do in order to be considered. If you have clear policies, you can expect your staffing vendor to have shared this information with their employee prior to their placement, but re-stating these policies during an onboarding process, is a good way to reinforce the rules. Some hiring managers will imply a higher probability of hire than actually exists as a way to keep the temporary employee motivated. In fact, just the opposite is what’s created when the offer of employment isn’t forthcoming. Kyle Update SignatureThe onboarding of temporary employees is another area of managing a flexible workforce that needs careful planning and preparation. The PACE Staffing Network typically works closely with our employer clients to share the responsibility of a well engineered communication process where both PACE and our clients need to pay a role. For more information about employee onboarding and other factors important to managing a high impact flexible workforce, contact me, Kyle Fitzgerald, at kylef@pacestaffing.com. I am PACE’s Director of Business Operations and part of what I do is consult with employers on how to use temporary/flexible employees in ways that create a competitive advantage.  

Why “Hands Off” Always Starts with “Hands On”

by Jeanne Knutzen | January 20, 2014

0 Blog, Management.Supervision direct hire, Seattle Temporary Staffing, staffing agency Bellevue, staffing agency kent, staffing agency seattle, staffing partnerships, Temp to hire, Temporary Staffing

Part of our “How to Get the BEST from your Staffing Partner” Tool Kit       While many staffing companies, the PACE Staffing Network included, will advertise their services as a  “hands free” staffing solution, in reality we all know that getting to  “hands free” always starts with our customer’s “hands on” commitment to building a staffing partnership.    Here are 7 “hands on” things you can do to get the best out of PACE or another staffing partner of your choice, when it comes time to use our services to hire the “just right” employee. 1. COMMIT TO A PARTNERSHIP, NOT A SCRAMBLE.  Some hiring managers believe that the best way to ensure hiring success is to bomb the market - to send out written job descriptions to multiple staffing agencies, post their job on multiple job boards, and then sit back and wait for the response. The motive for this approach is to hire quickly and efficiently, finding the employee amongst the sea of candidates that will be uncovered using this approach.   In reality, the result is often an unintended and unwanted opposite. Here’s why… Most high performing staffing companies will not commit internal resources to work on requests where they believe success is either not likely or determined more by luck than skill. They are also reluctant to represent jobs that have been commoditized, i.e. widely available in the candidate marketplace. They know that when multiple agencies are asked to scramble for candidates, the candidates that are assembled quickly are often not the right fit, lengthening the hiring process and expanding the time spent screening unqualified candidates The alternative? Select one, possibly two, staffing companies who have a financial incentive to invest in the time necessary to ensure quality screening. Spend YOUR time making sure your staffing partner has the information they need to source the right candidates and screen them according to your criteria. Let your staffing partner decide how best to source for the right candidates, so that you no longer have to worry about job postings. If you have given your staffing partner enough time to do their work in a quality way, and they don't perform in the timeframes needed, you've likely selected the wrong partner—a staffing company that doesn't have the resources you need. The right staffing partner will align their services with your work style and standards. 2. PLAN FOR SUCCESS. One of the best ways to start a partnership is to spend time at the beginning of your HIRING project, planning for a successful outcome and all the steps in between. Share all you know about the job you need filled and the type of candidates you believe are most likely to be successful in the job. Your pre-hire homework should include talking to those people who know what the job entails; who have a perspective on what type of candidates will do the job well, and where there have been problems with certain types of candidates in the past. Make sure the information you are providing to your staffing partner captures current work content and all the nuances important to placement success. Job descriptions are helpful, but typically need to be updated when it's time to replace an existing employee.  And if you’re hiring a temporary or contract worker to fill a job formerly filled by a core employee, make sure you assess exactly what you need from that temporary or contract worker. The work to be done and the skill requirements for the right candidates are typically quite different for temporary compared to core hires.   Create a realistic timeline for each step in the hiring process—sourcing, evaluating, interviewing, selecting and onboarding the right candidate. Know what’s at stake if the steps in the timeline aren’t completed as planned so all eyes stay focused on addressing the business need, knowing where you have wiggle room and where you don’t. Memorialize your timeline so that both you and your staffing partner know exactly what’s expected, and by when. Reach agreement about how, when, and what will be communicated throughout the hiring process so that you stay in sync throughout the process – no surprises for you or your staffing partner. 3. DEDICATE THE TIME NEEDED! In today’s job market, the competition for talent often translates into the need for hiring managers to give the hiring process their undivided attention. Once your staffing partner has sourced, recruited, evaluated and submitted candidates, there are critical steps in the process—interviewing, evaluating, and deciding—that, only you can do. Trying to sandwich in resume reviews or candidate interviews in-between other work you consider more important, is not a formula for hiring success. So, we like to make sure our client’s work schedules are arranged to have enough time to review submittals, conduct interviews and provide timely feedback. Because the best candidates are typically in the job market for short periods of time, we recommend that you stay prepared to respond to candidate submittals within 24 hours of receipt and be available for a candidate interview 1-3 days from their submittal.    You also must be available to provide feedback, field questions, or address issues with your staffing partner as they come up. Your staffing partner’s recruiters need to know that the work they are doing to attract candidates to their client's jobs will have a payoff for themselves and their candidates. In the staffing business, we refer to customers who request and then don’t respond to candidate submittals, as “black holes.” Too many “black holes” and even the most sought after clients can lose recruiter attention, reducing the chances of a positive outcome. 4. GET CLEAR ON KEY REQUIREMENTS – REALLY! It’s easy to create a long list of “attributes” that you’d like to see in the hired employee. It’s much harder to prioritize that list so that you know which requirements are key to placement success! If you ask your staffing partner for candidates lucky enough to have “everything” on your list, be prepared either to get no candidates or too many candidates, who perhaps more problematically, lack the requirements you believe to be key. Make sure you are clear on the difference between attributes candidates “must have” and the attributes that are better left as “would like.” The take away from any planning process is full agreement with your staffing partner on a SHORT LIST of candidate attributes considered “key” to placement success. And here’s an important tip, once you’ve agreed on key requirements, ask your staffing partner to present prospective candidates using a summary worksheet of how each candidate meets your key “must have” requirements. Don’t let yourself get distracted by impressive resumes or cover sheets that cover up a lack of skills or experiences in areas considered key—a common cause of hiring errors.     5. MAKE SURE THE CANDIDATE YOU REQUEST IS THE CANDIDATE YOU CAN AFFORD. The candidates who CAN DO the job come in a wide variety of shapes, sizes and costs. They will have different skill sets, work experiences, each dictating the amount of money they will request as their pay and benefit package. Be prepared for your staffing partner to share information about the realities of the current job market—things you need to know about what type of candidate’s are available in the marketplace, at what price. If you find that the information you are getting differs from what you thought, don’t shoot the messenger or ignore their message by continuing to insist on the impossible. To make the right hiring decision, the type of candidate you are looking for has to be available in the marketplace and meet the parameters of your budget. Sometimes this requires both discovery and negotiation. For example, let’s say you need to hire an administrative employee to manage your calendar, schedule appointments, and remind you of upcoming tasks. This is a job requiring a very specific set of mechanical skills and a mastery of calendaring technology. If, in addition to these skills, you want to hire someone who will work independently, use their own judgment to arrange meetings and activities on your behalf, keep others informed of projects you are managing, etc. that’s a different set of skills and experiences. Do you need to pay for the higher of the two skill levels? Only you can decide. However, your staffing partner should be able to point out the impact of each requirement on the required pay package. Some employers will simply elect a “developmental” strategy and hire the lesser skilled candidate in order to stay within budget requirements. Others will spend the money on the more highly skilled employee because they need the services of an assistant, not just a technician. 6. BE PREPARED TO BE FLEXIBLE – TO ADJUST THE PLAN. While pre-hire planning is important to an organized, efficient, hiring process, some of the steps in the process or plan often need to be adjusted when faced with the nuances of candidate needs and availability. A candidate who needs to relocate in order to accept your job offer may delay the starting date, requiring you to decide if the candidate is “worth the wait.” A highly skilled candidate whose pay requirements are considerably more than what you had budgeted may or may not be the right hire—but you need to be prepared to decide. Our point? Be prepared to deal with real life candidate situations as they come up, knowing that hiring in today’s marketplace often requires flexibility and creativity. Don’t be afraid to use your staffing partner as your marketplace expert. If you don’t hire the candidate that needs to relocate, what are your chances of finding a similar candidate locally? Is the job you have going to be meaty enough for the higher skilled candidate? Let your staffing partner guide you through your search for answers to these questions. 7. COMMUNICATE CANDIDLY AND OFTEN.  When things change for you, make sure you let your staffing partner know. The work it takes to source, screen, and prepare a candidate for specific work requirements takes time. Your staffing partner doesn’t like wasting time any more than you do and that’s what happens when they don't have the information they need to do their job efficiently. Reciprocally, expect your staffing partner to keep you posted on their candidate sourcing successes as well as information they gather as they track their candidates throughout the placement process. Many times they will be privy to candidate information that will let you know if your preferred candidate is actually going to accept your job offer if extended. We recommend daily touch-points between our recruiting team and our clients to make sure we stay current on what each of us is experiencing as we interact with potential. Feedback processes should be honest, candid and ongoing. This is particularly true with regard to submittal reviews and/or follow-ups after interviews. Your staffing partner needs your feedback ASAP, as they use that feedback to make adjustments in their sourcing and evaluation activities. Don’t be embaNancyrrassed if you don’t think the candidate your staffing partner thought “should be perfect” was not the right fit for you. Selecting the right candidate isn’t about being “right or wrong” in your assessment, but is about gathering as much information as you can on each candidate so your hiring decision can be based on a broad base of information and perspectives. For more information on “how to get the best from your staffing partner” contact me, Nancy Swanson, at nancys@pacestaffing.com or (425) 454-1075 ext. 3010. I’m PACE’s Vice President of Partnership Development – I am focused on helping our customers develop the type of recruiting partnerships that we know will optimize their staffing results.