HR is tasked with providing support to departments or employees who participate in philanthropic activities, including:

• Charities
• Non Profits
• Community Events

 
This community outreach also includes monitoring and influencing how the company is viewed socially. Many consumers/customers are now very conscious of how companies spend their money, how they affect the environment, and what they stand for morally. This can have a much larger impact on profits than many realize until it’s too late. HR can play a key role in advancing this element of the company.

While having a business plan is vital to starting a new venture and creating a strategic vision is necessary for success, few business owners think about creating a talent plan for their human resources department. An HR talent plan, however, is just as vital as a business plan. This plan allows you to prepare your team to fulfill your vision and execute your business plan. It helps you with employee onboarding process development, prepares you for turnover, and outlines a process for hiring.
 
Without an HR talent plan, your managers may not hire the best employees or be ready when employees leave. This can lead to disruptions, especially if a high-level executive decides to leave the company unexpectedly. With an HR plan in place, you’ll be ready for this situation and others. Since most businesses don’t have an HR talent plan, many don’t know how to go about creating one.
 
Here are four steps that will assist you in preparing your plan:

If a critical manager, supervisor, or executive leaves, it can be very disruptive to the company. Entire departments may suddenly be leaderless, which can lead to a drop in profits and productivity. A succession plan will reduce these disruptions by creating a clear path forward. When a vital employee leaves, you will know which of your employees have the knowledge and skills needed to immediately step up into the vacant position. This will ensure that there’s a seamless transition should the need arise.
 
Having a succession plan doesn’t mean a business never looks outside the company for new talent. The company should always be evaluating its internal talent against the outside market. There will be instances where there may be no likely internal successor. This is one of the key reasons to conduct succession planning. By understanding these gaps early on, one has the chance to develop an internal successor or, when hiring for other positions, look for someone that could be a successor for a gap in the organization.

Employees turn to HR for some different services. HR support in the employee development process is vital for those employees who want to grow and move beyond their current position. By putting together a development plan, you can offer employees a clear path to learning new skills and moving forward in their careers.
 
Employees need to play a key role in developing this plan. While supervisors and HR personnel may have their own goals and ideas about how employees can move forward, it’s the employees themselves who will implement this plan. They should have a seat at the table during its development.

While a succession plan will ensure that your business doesn’t see a disruption when a critical employee leaves, it doesn’t necessarily touch on how you can increase your human resources when your company needs to grow—including your HR department.
 
Eventually, you will need to bring in more professionals to continue growing as a business.
 
Your hiring plan should look at what positions you need to create, which ones need to be filled first, and which potential employees will fit those positions the best. Once you’ve done this, you’ll be able to see if any of your current employees should be promoted or if it’s time to bring in outside talent.
 
This is also an area where you can look at bringing in contractors or outsourcing some of your functions. Fractional HR teams, for example, may offer you the skills you need during the awkward period where you’ve grown beyond what your current team can do but aren’t yet ready to create a new position.

HR planning isn’t something you do once—like all of your strategies—it needs to be regularly reviewed and updated as necessary. If you’re not sure how to get started with your HR talent plan, you can get assistance from Lauber Business Partners.
 
We’re experts in the area of HR strategy and planning. If you’re ready to develop an HR talent plan, contact us today. You can reach us by phone at 414-273-8060 or by email at [email protected].

Maintaining an up-to-date analysis of effective labor rates for different categories of employees in your business is an important tool. It can be used to monitor the labor cost used for:

• Quoting
• Job Cost
• Benefit Administration
• Compensation Plans
• Benchmarking

While this tool has always been important, we believe having this information will become more critical because of the unknown impact on employee costs of health care reform..

The Concept:
To calculate your Effective Labor Rate, you accumulate for a year all of the costs that go along with the pay rate including benefits, taxes and insurances and divide by the actual hours worked. This can be done by individual employees or on an average basis for a group or class of employees.

The Components of the Effective Labor Rate:

• Hourly Base Pay Rate –  from the payroll system. The actual straight time rate paid to the employee.
• Paid Time Off  – often referred to as PTO. This would include vacation, holiday, sick, funeral or bereavement, jury duty, personal time, etc. In some businesses, mandated training or recertification time would be included as it is not time directly related to the production of revenue.
• Health Insurance – from your monthly invoice. If you are averaging a group of employees, pay attention to the mix between levels of coverage like single vs. family. If you are self insured, your COBRA rate is an approximation of your cost per employee.
• Other Insurances – similar to health insurance, the actual rates for dental, disability and any other insurance coverage will need to be determined.
• Workers Compensation – from the policy, you can determine the rate for each class of employee. You may want to increase or decrease the base rate to take into consideration your unique experience modification, discounts and refunds.
• Employer Retirement Plan Contribution – depending on the type of plan, this might take the form of a percentage match or an annual fixed dollar contribution.
• Payroll Taxes – determine the employer’s share of FICA (6.2%), Medicare (1.45%), Federal Unemployment  (0.8 ) and State Unemployment (varies based on experience). Your rate is shown on your quarterly U/C Return.
• Other Costs – uniforms, employer sponsored lunch, education reimbursement, etc.

How overtime is incorporated in an Effective Labor Rate Calculation will vary from company to company. When calculating overtime costs,  only the hourly rate paid an employee  ( typically time and a half )  plus payroll taxes,  workers compensation and retirement plan match are considered.  All other benefits are already absorbed in the straight time rate.   Often the overtime cost approximates the fully loaded straight time cost, but, depending upon your individual circumstances it may be more cost effective to work OT than hire new employees, or vice versa.
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Click here for a calculation for an employee making $18.00 per hour.

A question we often hear is: “How do we determine the appropriate staffing level in our Accounting Department”?  A helpful tool to facilitate this evaluation is a Department Staffing Analysis.

In the example below we take a look at an accounting department that needs to add staff, but this tool can also be used throughout the company and can be very helpful in situations where the goal is to reduce hours due to downsizing or a lean initiative.

To create a Department Staffing Analysis, list all the tasks done in the department and estimate the time required for each task, by person.

Getting credible information is the difficult part. It is helpful for people to maintain a daily diary or time sheet to help determine where they are spending their time. It also requires a healthy dose of discussion and input from the supervisor.

Employees often fudge on the time because they anticipate what the manager wants to see. You need to reassure them what the goal is. Emphasize that accurate information is important and that their job is not in jeopardy.

To get started:

• Set up an electronic (Excel) spreadsheet.
• List the tasks in the first column.
• Have a separate column for each employee.
• Have 3 sections of columns, one for current, one for changes and one for the resulting staffing level.

This would be a good time to retrieve the sample. Click here for a sample Department Staffing Analysis and follow along.

We have found it is easier if you break down the tasks into broad categories. This may vary depending on your unique circumstances but a simple scenario would be:

• Daily
• Weekly
• By-weekly
• Monthly

The Situation at Sample Company:

•  CFO already has too much on her plate and does not have the time for key strategic initiatives.
• Accounting Manager is capable and would be able to take on additional responsibilities but is already working considerable overtime.
• Clerk 1 is currently working about 1.5 hours of overtime per day.
• Clerk 2 is borrowed from another department approximately 16 hours per week and they need him back.

Goal:

• Redistribute the work load.
• Reduce Overtime.
• Free up the CFO and Accounting Manager for more value-adding tasks.
• New hires should be part-time to avoid the additional benefit costs.
• Provide flexibility to deal with vacations, peak demands, etc.

Result:

• Using the Department Staffing Analysis, work was redistributed creating 2 new positions of 24 hours per week.
• These positions picked up work from the Accounting Manager freeing her up to take on work previously done by the CFO.
• The 2 new staff also picked up work from Clerk 1 reducing his overtime.
• This redistribution freed up Clerk 2 allowing him to return to his home department.

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A word of caution, as mentioned earlier, the hardest part of this analysis is getting credible time estimates of what is currently happening. This will need to be reviewed and edited. Seldom is the first pass anywhere close to reality.

An employee resignation is rarely a “fun” experience. For businesses, such resignations are almost always disruptive. Yet, there are steps you can take to smooth that transition. Just as importantly, there are proactive measures you can take to ensure that the now unfilled position is filled quickly and with the best possible talent.

Why do employees leave?
There are so many reasons that we could never possibly list them all. Maybe they weren’t performing their duties or they got a better opportunity elsewhere. Maybe their spouse landed a big promotion in another city, and the whole family is relocating. Perhaps the employee just needs a change of scenery or wants to change careers.

HR departments and business managers need to consider how they can reduce unwanted staff turnover. However, staff turnover is inevitable. It is always useful to try to truly understand why employees leave. This information can be very instructive in improving the company.

So how can you handle staff turnover? This includes:

•  How do you announce departures and handle the farewell itself?
•  Should you let the employee send out a farewell email or even hold a break room goodbye party?
•  How do you handle generic reference letter requests?

Let’s review some of the important considerations to simplify the transition process.

Start the Process Right With a Dated Resignation Letter

•  Among the first things to do it to make the resignation official.
•  This means having the employee write and sign a letter. A verbal announcement is generally not enough. You want an official, signed letter that specifically states the final date for the employee. Often, this will involve some sort of notice, commonly a couple of weeks.
•  What to do when the resignation letter is “welcomed”?
•  Sometimes, the employee leaving is a good thing. This can be for one or both parties. Often, you will pay the employee for their time, say two weeks, but you won’t require their services. If so, spell this out clearly.

Figure Out the “Why” If An Employee Leaves On Bad Terms
As soon as the employee leaves, you need to send out a letter informing the team. There’s no need to get negative or to share unnecessary information, just say something like “the former employee is searching out different opportunities effective immediately.”

You also need to reassign responsibility and to reassure the team that you are working to find a new team member.

Next, you will need to determine why the employee is leaving on bad terms. Assuming your investigation reveals legitimate concerns, the goal is to eliminate or reduce such problems in the future. It is important to consider the following questions:

•  Was there a problem with a co-worker?
•  Toxic office politics?
•  A bad cultural fit?

Learn from each situation and document what you can do differently the next time. Ask yourself:

•  What can you do to relieve those issues going forward?
•  Are there employee interpersonal skills issues?
•  Is it a result of faulty talent management?

What To Do When a Good Team Member Leaves
Sometimes, you will not want to see the employee leave and he or she will fulfill their duties until the end of their notice. In some cases, there are conditions you can “mitigate” to keep the employee on staff. For example, you might offer them a pay raise or a change in their current status. When good employees leave it is, again, necessary to find our their reason(s) for leaving. If you are able to keep a desired employee by some action, what do you need to do to ensure other desired employee don’t get to the point of quitting. This is valuable learning for the the company.

However, the employee may have made a firm decision to leave. In this case, let them know how much you appreciate their contributions and that they were a valuable part of the team. A good employees is normally very respected by his or her peers. While you may be frustrated that he or she is leaving, remember that how you treat this employee on their way out will be seen and internalized by many others in the organization. Being respectful and appreciative to this valued employee upon exit will enhance your and the company’s standing in the eyes of the other employees.

The soon-to-be ex-employee can use that two weeks to train team members to take over their responsibilities. Of course, even a valuable employee won’t necessarily be valuable during their final two weeks. If they are going to be a distraction, it might be better to let them resign immediately.

If you do require their expertise for training purposes, make their exit as easy as possible. They will not respond in a positive manner if you slap an enormous workload on their desk on top of asking them to show someone how to do it. Leverage their notice to tap into their skill sets they have developed over their career with your company.

Handling the Notification Process/ Exit Interview
Often, HR departments are the first to learn of an employee’s resignation. This means you may have informed his or her department. At this stage, you need to provide a timeline both for the employee’s departure and also a tentative timeline to replace him or her. Always be gracious as it sends a powerful message to other employees.

Next, conduct an exit interview. The goal is to find out why the employee is leaving and if you can avoid similar situations in the future. Exit interviews can be immensely helpful for self-improvement.

Finally, if the employee is a respected member of the team, you can let them send out a farewell email approved by management. It may also be appropriate to allow them to hold (or even have the company host) a farewell lunch or to invite team members out after work.

Have a Referral Letter Ready
Never overlook a valuable employee’s considerable contributions. If the employee is leaving without a next job, send him or her off not just with a farewell letter but a recommendation letter as well. This will help him or her further their career. Even if you don’t want them to leave, it still makes sense to help them in the future.

It’s quite likely that they’ll recommend your firm to potential clients and future employees. It’s wise to have a basic template and approach for your recommendation letters.

Fill the Position With the “Right” Replacement
It’s smart to ask both the departing employee and their team to list out responsibilities. This will help you when looking for the right future employee. Often, job roles change so the responsibilities may have evolved. By figuring out how the role may have changed, you can better identify your next great employee. This is also a perfect time to reassess departmental structures and look for opportunities to promote from your employee base.

While seeking a replacement it may be smart to use an interim external resource to fill the gap if you do not have the right resource to plug in or if there is just too much work to accomplish with the remaining employees. A bungled transition can weigh down your company, reducing productivity and even hurting your company culture. However, a well-managed transition will ensure that your business continues to hum along. Lauber Business Partners can frequently fill such interim positions with experienced resources that can hit the ground running.

Transitions are a Challenge but also Provide Opportunity
Transitions are rarely a good thing in and of themselves. Even if it’s an undesired employee who’s leaving, you have to ask yourself how you got to that point. Bad hiring practices? Office politics? If it’s a desired employee, you need to figure out what you could have done to retain their talents. Pro-actively managing the transition can help ensure a smooth process while also learning lessons for the future.

When it comes to high-skill positions, such as senior software developers, key executives, or business leaders, the transition will be even more difficult. However, by working with HR consultants and fractional HR companies, you can smooth even these transitions.
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Give us a call at 414-273-8060 or contact us via email at [email protected] to learn more about what will work best for your company.