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LaDonna Kearney

SEP IRA
HR Insight: What is a SEP IRA? 940 788 LaDonna Kearney

HR Insight: What is a SEP IRA?

A SEP IRA offers employers and their employees a tax-friendly way to save for retirement. As it currently stands, with a traditional IRA you can contribute $6,500. This is a decent amount of money. However, with a SEP IRA you can place nearly 10 times that amount in your account during the current tax year. That’s upward of $66,000 per SEP IRA.

At the same time, keep in mind that SEP IRA annual contribution limits can’t exceed the lesser of these two conditions:

  • 25% of your total compensation.
  • $66,000 total in the 2023 tax year.

The first limitation states that your annual SEP IRA contribution cannot exceed 25% of your total compensation. This is equivalent to the limit regarding how much money you can contribute for each of your eligible employees. This year, the amount of compensation that you can use to calculate the 25% limit is $330,000. Also, there’s no catch-up contribution at the age of 50 or older for SEP IRA contributions like there is for traditional IRA contributions.

SEP IRAs are generally best for people who are self-employed. This type of IRA is ideal for small-business owners who have few if any employees. If you have employees whom the IRS considers eligible participants in your plan, then you have to contribute on their behalf. Plus, the contributions you make for them must be an equal percentage of compensation compared to your own.

What makes someone an eligible participant in a SEP IRA?

Eligible participants are people who are 21 years of age or older. They must have worked for your business for at least three of the past five years. While working for you, it is required that they also make a minimum of $750 this year alone. For example, if an employee who worked for you in 2019, 2020 and 2021 made $850 over those three years, you would need to contribute to an SEP IRA for them this year.

How are SEP IRAs managed?

Employees own and control their own SEP IRAs. That said, a SEP IRA is easy to set up and administer, so it can be combined with a traditional IRA or a Roth IRA. Even better, a SEP IRA is very flexible because you don’t have to commit to making contributions year after year.

If you’re a sole proprietor, you can deduct contributions that you make to the plan for yourself. You can also deduct the fees of trustees if contributions to the plan do not already cover them. Earnings on the contributions are generally tax-free until you or your employees begin receiving distributions from the plan.

How does a SEP IRA work?

An SEP IRA follows the same investment, distribution and rollover rules as a traditional IRA, which means employees can receive your contributions to their SEP IRA. They can also make regular and annual contributions to their traditional IRA or Roth IRA simultaneously. One does not negate the other. Also, employer contributions to an employee’s SEP IRA won’t affect the amount of money that employees can contribute to their own IRA.

You can set up your SEP IRA so that you’re immediately eligible to participate. After you’ve established your plan, you can amend it and create more restrictive eligibility requirements. However, you must meet the new eligibility requirements if you want to continue your participation in the plan moving forward.

How to set up an SEP IRA

To set up or alter the eligibility requirements of your SEP IRA, use FORM 5305-SEP. It is an IRS-approved prototype that is offered by banks, insurance companies and other financial institutions. You can set up an SEP IRA for one year as late as the due date of your business’s income tax return for the year in question. This yearlong period of time includes any applicable extensions.

A self-employed person can set up a SEP IRA plan even if the employee chooses to participate in an employer’s retirement plan through another job. That said, any partners or members of a limited liability company who are taxed as a partnership cannot maintain separate SEP IRA plans.

For retirement plan purposes, those people would be considered employees of the partnership, so things would contradict and become confusing. People who reach the age of 72 after Dec. 31 can delay the reception of their required minimum distribution until April 1 of the year after they turn 73 years old.

Your contributions to your employees’ SEP IRAs won’t be included as part of your gross income. Participants may be able to transfer or roll over certain property from one retirement plan to another.

But even so, your contributions to their SEP IRAs are made in cash. Also, since an SEP IRA can’t be a Roth IRA, your contributions to an SEP IRA won’t affect the amount of money that an employee can contribute to a Roth IRA or a traditional IRA.

You have to give your eligible employees a statement each year. On that statement, you must clearly show the number of contributions and the value of each that were deposited into their SEP IRAs. You can use a SEP IRA plan instead of setting up a profit-sharing or money purchase plan with a trust.

SEP IRAs can boost the size of your retirement nest egg while doing the same for all your eligible employees. This is due to the higher contribution maximum values and the flexibility of SEP IRAs. The extra perks and overall simplicity make SEP IRAs very desirable for employers looking to offer an employer-sponsored plan.

©2023

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Overqualified
HR Insight: Overqualified Employees 940 788 LaDonna Kearney

HR Insight: Overqualified Employees

Hiring Overqualified Employees Can Raise Your Game

Why hire the overqualified?

Here are two important questions. Why should an overly accomplished candidate want to work for you, knowing that the position may represent a step down from their expected level? On the other side of the coin, why stick your neck out to hire them rather than make a more conventional choice?

There are, in fact, a number of valid reasons a job candidate might opt for a less high-powered position. They may be seeking to plug a pay gap or be focused on particular benefits, such as broader health care coverage. A host of personal reasons may be dictating their preference, like a more convenient location or the need for a more flexible schedule. Perhaps their family life has been changing, like a recent marriage, the addition of children or keeping an eye on elderly parents.

Do not discount the curiosity factor and the appeal of new workplace adventure. For example, suppose they have been out of the workplace for a while and are getting bored with retirement. Yet they may be hesitant about reentering a stressful environment by returning to the former treadmill. Some candidates may be in the process of switching careers or moving into a fresh industry and are being realistic; they know they need to build experience from the ground up.

Be diplomatic, but ask about what is motivating them as much as possible during the interview. For instance, clarify why they would be willing to forgo potential prestige and money.

From your side, why are you open to taking this plunge with an overqualified hire? Perhaps your workload has increased. You are in a hurry to find someone who will be able to complete tasks quickly, independently or with minimal supervision. Or you may be looking for someone with a genuine passion for the role, who is sincere about contributing value and not just collecting a paycheck. In the end, if you spot a cultural fit, that may be the key factor.

What could go wrong — or right

You might find yourself pleasantly surprised or sadly disappointed by an overqualified hire.

The upsides include:

  • Improved productivity and performance.
  • Reduced training time and costs.
  • Innovation and knowledge to share with team members.
  • Maturity.
  • Industry experience.
  • Interpersonal skills.
  • Networking connections.
  • Broader talent pool.
  • Fast-tracked responsibility.

However, on the downside, they may:

  • Be more expensive.
  • Be more resistant to training.
  • Have outdated skills.
  • Be less stable — they may quit and may even take others with them.
  • Be complacent and easily bored, leading to working on autopilot.
  • Perceive inequity across the team.

One risk is that talented and overqualified workers show up second-rate managers. Current managers who are preoccupied with protecting their own turf may be wary that a more experienced worker is reflecting badly on them.

Practice give and take

You may need to modify your management style to adapt to more qualified team members. In general, it may make sense to give them some extra room and allow them leeway for developing new processes. While both you and they may realize you are underpaying them, you might be able to make up for salary shortfalls by providing perks such as extra flexibility or opportunities for growth.

Be mindful to show your appreciation. There’s no need to play down their experience, especially since you want them to feel valued.

Once you have a better sense of their abilities, you may be able to tweak their role to dovetail with their skills. If you cannot offer a direct promotion, you may at least tailor their responsibilities to maximize their capabilities.

©2023

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Employee complaints
HR Insight: Employee Complaints 940 788 LaDonna Kearney

HR Insight: Employee Complaints

4 Common Types of Employee Complaints

Whenever employee complaints are filed with the HR department, the issues at hand should be taken seriously. Failure to properly address the matter, whether intentional or not, can result in the employee feeling demoralized. Employees who do not feel heard may turn to the internet or media outlets and air their grievances publicly.

You may run the risk of losing the employee to your competitors or being the receiving party of a lawsuit. None of these possible outcomes is favorable, and all of them stand the chance to damage your company’s reputation and cost you expensive monetary consequences in the form of penalties or fines while decreasing overall employee morale.

For these reasons and more, it is imperative that you make an effort to reduce the likelihood of employee complaints about the workplace. This all starts with understanding the types of complaints that employees often make. Below are four of the most common.

1. A lack of clarity regarding job responsibilities

According to a recent Gallup report, “only 60% of workers can strongly agree that they know what is expected of them at work. When accountability and expectations are moving targets, employees can become exhausted just trying to figure out what people want from them.”

In other words, employees need to have a clear and defined understanding of what their job duties entail so that they know what they must do on the job.

2. Problems pertaining to payment

While certain federal and state requirements speak to how payroll must be handled via wage and hour labor laws, employee complaints about pay remain rampant. In fact, in 2022, the U.S. Department of Labor distributed more than $9.1 million to over 1,600 workers who were owed wages. In that situation, 1,600 employees received $1,393 in back wages.

Common issues with employee pay often manifest in the following ways:

  • Violations in terms of minimum wage or overtime pay.
  • Employers pay employees less than the market rate for the position.
  • Lower pay based on gender, race or ethnicity.
  • Mistakes resulting from payroll errors during data entry.

To the best of their abilities, employers should prioritize the adoption of equitable and compliant pay practices while doing all that they can to reduce the likelihood of payroll mistakes.

3. Work environments that feel hostile

By definition, a hostile work environment is a workplace that is disruptive to the point where it impacts the ability of employees to properly perform their work duties. Hostile behavior is typically illegal when it is discriminatory in nature, intense, pervasive, frequent and unwelcomed.

To give you an idea of what a hostile work environment may look like, here are several signs to watch out for:

  • Discrimination.
  • Harassment.
  • Bullying.
  • Toxic relationships.
  • Threats.
  • Violence.
  • Employees who do not feel psychologically safe at work.

A hostile work environment is one of the main reasons employees pay HR a visit. HR should resolve the complaints in an objective and fair manner and take steps to prevent the problem from reoccurring.

4. Performance reviews that seem unfair

In a 2019 study, a shocking 85% of employees stated that they would consider quitting their jobs if they were to receive a performance review that they perceived as unfair. Now, in many cases, employees have the wherewithal to challenge an unfair review and request that HR revise the review they were given rather than resorting to quitting right away, but not all employees understand that they can do this.

Regardless, the best way to mitigate the chances of employees receiving unfair reviews is for managers to provide their employees with accurate, fact-based and unbiased feedback on a reasonable and regular basis. Doing so can help employers justify their formal performance reviews, and employees will be more likely to accept the feedback they receive as well.

©2023

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401(k)
HR Insight: How to Avoid 401(k) Compliance Mistakes 940 788 LaDonna Kearney

HR Insight: How to Avoid 401(k) Compliance Mistakes

Avoid 401(k) Compliance Mistakes

As an employer, one of your main goals should be keeping your employees happy. And you can keep your employees happy without losing favorable 401(k) tax benefits, paying penalties or facing liabilities.

In the process, don’t forget to take the changes caused by the SECURE 2.0 Act into consideration, namely in terms of retirement savings plans. SECURE 2.0 might mean you have to make amendments to any of your company’s existing plans or retirement account offerings.

When you’re looking to avoid costly mistakes while keeping everyone satisfied, keep the following 401(k) compliance requirements in mind.

Amend all retirement plans

Amend all retirement plans in line with changes that are made to the law. These changes can either be statutory, regulatory or government mandated, so stay in the know and pay attention to all the possibilities.

More specifically, take a moment to revise the changes caused by SECURE 2.0, especially because over 90 changes have been enacted. There are also differences between discretionary and optional plan adjustments.

Define the details of the plans

It’s important to make sure the 401(k) plan operates in alignment with the terms associated with it. If this is not the case, negative tax consequences or a breach of fiduciary duty, if not both, may result. Properly define the meaning behind compensation and then use that definition to determine allocations for each employee’s 401(k) plan. 

Confirm your employees are eligible for the plans

Always ensure that applicable employer-matching contributions as well as nonelective contributions are distributed in a timely fashion. Making sure the proper allocations are distributed to each employee is essential as well. Double-check the eligibility of your employees and whether they can reap the benefits of your 401(k) plans. 

Pay attention to the administrative side of the plans

As an employer, it is important that you ensure all of your employees’ 401(k) plans are properly managed and handled. Employees who participate in work-related 401(k) plans can borrow from their 401(k) plan if that is an option you make available to them.

However, if employees choose to withdraw from their 401(k) plans, then legal compliance must be intact. Ensure your employees understand that the money they borrow must be repaid in a timely fashion in order to avoid interest fees or additional taxes.

Stay on top of tax-related matters

When offering 401(k) plans to your employees, you must file Form 5500, which details your annual returns-related information. This form must be submitted to the Department of Labor so that you can avoid having to pay significant late fees or deal with associated penalties.

Also, it’s your responsibility to deposit elective deferrals on behalf of your employees. Provisions implemented by SECURE 2.0 yield a lot of new benefits that are intentionally designed to make offering retirement plans to your employees more attractive for you as an employer.

Furthermore, the Consolidated Appropriations Act of 2023 adds to SECURE 2.0. Ultimately, SECURE 2.0 addresses a number of issues that deterred employees from participating in employer-backed 401(k) plans in the past.

Always make sure you adhere to the rules of contributing and withdrawing from retirement accounts. For example, you have to let your employees make automatic withdrawals or contributions without being subject to the 10% penalty resulting from early withdrawals.

Also, SECURE 2.0 has expanded the Employee Plans Compliance Resolution System, allowing for more leeway when it comes to the correction of internal errors. New rules have been added in terms of handling overpayments as well. To see the specifics of the rules surrounding 401(k) compliance, visit the DOL and Treasury Department websites.

©2023

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Remote Employees
HR Insight: 3 Tips for Keeping Your Remote Employees Engaged 940 788 LaDonna Kearney

HR Insight: 3 Tips for Keeping Your Remote Employees Engaged

3 Tips for Keeping Your Remote Employees Engaged

The COVID-19 pandemic has transformed remote work and created a new understanding of today’s “normal.” Multiple studies reveal that employees are reluctant to return to the office, and employers have responded by offering both fully remote and hybrid work solutions.

Notably, a 2021 PwC study stated that “remote work has been an overwhelming success for employers and employees” alike. Specifically, 83% of employers said that they have found success with remote work, as compared with only 73% in PwC’s 2020 survey.

More specifically, employees often report higher productivity levels while working from home, and more than 50% of them want to work remotely for at least three days, if not more, per week. Despite these successes, remote work also has its challenges, particularly when it comes to employee engagement.

With employees who work outside of the office, you might struggle to keep them engaged from a distance. But don’t worry! We have some suggestions. Below are three ways to keep your remote employees engaged.

1. Reduce the risk of remote work burnout

According to a 2022 Zippia report, “[Eighty-six percent] of employees who work from home full time experience burnout.” Additionally, “[Sixty-seven percent] of remote workers report feeling pressured to be available all the time.”

When employees are burned out, there are significantly higher rates of absenteeism, unproductivity and turnover. However, spotting burnout in remote employees can be tricky, particularly due to the lack of in-person contact between employees and management teams. Given the nature of remote work, employers should establish guidelines for preventing remote work burnout. Training managers on how they can spot burnout in their direct reports is a good idea.

2. Prioritize the well-being of your employees

The Zippia report also said that approximately “[Forty-eight percent] of remote workers feel as though they have no emotional support from their employers.” Other than offering core benefits, including health insurance, paid time off and 401(k) plans, consider providing your employees with perks that can improve their emotional well-being.

Here are several ideas to inspire you:

  • Reimburse them for reasonable home office expenses.
  • Urge them to take breaks to eat, decompress or rest.
  • Provide mental health resources.
  • Establish a supportive remote work culture.
  • Promote work-life balance.
  • Assign work based on the abilities and interests of each individual employee.
  • Provide career advancement opportunities to prevent qualified remote employees from feeling stuck.
  • Keep track of and celebrate the accomplishments of your remote employees.

3. Adopt a collaborative remote work environment

Isolation and loneliness are common side effects of remote work. You can combat them by developing a collaborative virtual workplace. For example, build rapport by creating online social events, such as morning coffee chats, book clubs and team-building games. Encourage managers to be reasonably accessible to their remote employees.

Additionally, make sure remote employees know whom to contact and how in the event that their manager isn’t available when they need assistance. This way, they won’t feel alone or overwhelmed in moments where critical work-related situations arise and they’re not sure how to handle the circumstances.

You can also try implementing tools that simplify collaboration among remote employees, such as Zoom, Slack, Trello and Google Docs. Conduct weekly one-on-one meetings to boost manager-employee connections and enable two-way feedback in real time.

Ultimately, it doesn’t necessarily mean that you need to do too much or go overboard. At the end of the day, if you show your remote employees that you appreciate their efforts, your engagement rates are more likely to grow.

©2023

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HR Policy
HR Insight: When to Change an HR Policy 940 788 LaDonna Kearney

HR Insight: When to Change an HR Policy

When to Change an HR Policy

Human resources policies set the rules and guidelines for an organization’s workforce practices. These HR policies include:

  • Workforce planning.
  • Recruiting.
  • Hiring.
  • Training.
  • Employee development.
  • Compensation.
  • Employee benefits.
  • Performance management.
  • Setting work schedules. 
  • Payroll.
  • Employee relations.
  • Health and safety.
  • Organizational culture.
  • HR technology.
  • HR compliance.
  • Employee retention.

Such policies provide the HR department with an operational framework and communicate workforce-related information to employees at all levels.

For best results, the policies must reflect current business requirements. But with so many policies to navigate, how can you tell when it’s time to revise your company’s policies? Following are four ways.

1. The governing law has changed

Most HR policies are tied to regulatory compliance — meaning that federal, state or local government requires the implementation, enforcement and maintenance of the policy. When the governing law changes, employers must make policy adjustments. 

Oftentimes, the regulatory changes take effect at the start of the year. However, it’s not uncommon for some changes to happen midyear. Either way, HR professionals must remain on the lookout for regulatory developments and implement the policy changes by the required deadline.

These changes may pertain to minimum wage, overtime, paid sick leave, health and safety, equal pay, and more. 

2. Problems with the current policy

If an existing policy is ill structured, it’s time to revisit and repair it.

For instance, deficiencies in these and other policies are likely to cause organizational problems:

  • Bullying.
  • Harassment.
  • Discrimination.
  • Code of conduct.
  • Drug and alcohol use.
  • Time off from work.
  • Clocking in and out.
  • Social media use.
  • Performance evaluations.
  • Disciplinary procedures.

If your code of conduct, for example, doesn’t say what constitutes unacceptable behavior at work, then you need to update it accordingly.

3. Organizational changes

Organizational changes can stem from external and internal sources.

For instance, the COVID-19 pandemic prompted many employers to go remote or to adopt hybrid work models. HR professionals for these employers had to  establish appropriate remote or hybrid work policies.

Moreover, changes in the following organizational areas may prompt HR policy adjustments:

  • Company mergers.
  • Leadership hierarchy.
  • Workforce management technology.
  • Workplace communication.
  • Workplace culture.

Economic growth and decline  can spawn a number of organizational changes, including policies on promotions and layoffs. Your HR policies should address the relevant organizational changes.

4. A competent source recommends the change

If a qualified source suggests that you change an HR policy, then be sure to consider it. Such recommendations may come from department heads, industry consultants, or business partners, such as vendors and service providers.

HR should get expert legal advice to ensure proper application and communication of revised policies.

©2023

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Job Sharing
Job Sharing: When Two Heads are Better Than One 940 788 LaDonna Kearney

Job Sharing: When Two Heads are Better Than One

Job sharing is not new, but it has always been more prevalent in the public sector than among private companies. Across the entire workplace, about 19% of all organizations now allow it, while the government actively promotes the practice. The CARES Act of 2020 encourages the pattern and even provides incentives to firms that divide duties on the same budget line.

Many employees became more accustomed to alternative working arrangements during the pandemic. Both companies and workers are recognizing the clear benefits for both sides. As it is not covered by the Fair Labor Standards Act, structures for part-time job sharing are essentially left up to the parties to sort out. They may end up with formal contracts. There is no one correct way to implement it. If the concept is new to an organization, a candidate might even propose it at the interview stage, or an employee might suggest a particular co-worker as a partner.

How to slice the pie

A shared position involves at least two people engaged on a part-time or a reduced schedule in a joint role that would otherwise be a full-time position. Normally, the time requirements are divided either by days, hours or partial days, like mornings and afternoons; the duties and responsibilities are likewise shared. The hours might not necessarily be apportioned 50/50. The two employees may work together sometimes, or they might never see each other. Often it makes sense to include at least one overlapping day, however, to unclog bottlenecks.

Shared jobs are generally organized according to one of two models. A “twin” model assigns the same tasks and responsibilities to each member. Alternatively, in an “island” model, duties are partitioned according to the relevant skill set and capabilities of each participant. The island model may generate maximum work quality. For example, between two information technology specialists, one might focus on software security, while the counterpart deals with systems analysis or supports engineering.

Salaries and benefits must be divided equitably. Clearly, if there is only one pie to slice, either the workers or the firm may have to make concessions. In an intergenerational arrangement, ideally each member brings their own strengths. For instance, the more senior side might be more experienced in the overall job function, but the junior might be more up to date and conversant with digital techniques.

Everyone can win with some give and take

Employees who crave more flexibility or are motivated by wellness as much as by compensation can benefit from sharing their workloads. Do they seek to reduce stress? It may be more practical than a standard part-time solution, especially if the job requires full attention and commitment and they have child care or family obligations. A partnership can provide added time off while reducing child care costs. They can perhaps cut back on commuting. Moreover, an officially shared position may help protect their schedules against the risk that the company might try to shoehorn a part-time role into a full-time obligation. If they are anxious about opportunities for career advancement as a part-timer, sharing may also establish the duo’s joint identity as full-fledged team members.

Employers, on the other hand, have much to gain. They can use the arrangement as a perk to retain talent or as a stepping stone for training a newer employee. In addition, if they co-train, they can be confident of coverage at least half the time when one member is on vacation or leave. It’s to be hoped both will also hold the other accountable. Ultimately, firms may save on costs by combining skills at little added expense.

The right partner

It is essential that participants in job sharing build and cultivate a good working relationship with mutual trust and transparency. First, they must not be tempted to compete. They need to understand each other’s responsibilities and communicate effectively, using tools like instant messaging, regular reporting, sharing email and voicemail programs, and sharing workspace equipment and computers.

Most important are work styles and common values. They must avoid squabbles. How does each prioritize work time and projects? Their individual perspectives can enhance creativity and spark ideas, letting them celebrate triumphs together, which adds an element of interpersonal satisfaction.

©2023

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Direct Deposit
HR Insight: Direct Deposit 940 788 LaDonna Kearney

HR Insight: Direct Deposit

The Many Wonders of Direct Deposit

Are you unsure about how to set up direct deposit for your employees or contract workers? Though it may seem daunting at first, especially if you’re not familiar with the process, direct deposits can be set up rather quickly.

Let’s start by defining direct deposit. In essence, a direct deposit is an electronic payment of funds from one bank account to another. It’s that simple! You transfer the appropriate funds from your business bank account to your employees’ bank accounts, all without having to worry about physical checks or cash.

When the direct deposit goes through, your employees will receive the electronic payment equivalent to their salary, and the payment goes directly from your bank account to theirs. Direct deposits result in an automated clearing house, or ACH, payment. Ultimately, direct deposits eliminate the need to pay employees physically. Instead, all payments are processed digitally.

How do direct deposits work?

You’ll need to initiate direct deposit payments with your bank. As you strive to set up direct deposits, the ACH will receive the direct deposit orders and then allocate them to the appropriate bank accounts in accordance with each of your employees. From there, your employees’ banks will receive those orders and distribute the proper amounts to the accounts of your employees.

The process of directly depositing funds into your employees’ accounts generally takes between one and two days. There are also many rules in place to eliminate safety and privacy risks.

Now, the exact timing of the direct deposits will often depend on your bank, the banks of your employees, the payroll software that you use and national holidays that may affect bank operations. Your payroll software and your bank can usually help you plan out your payroll schedule and subsequently your direct deposit schedule.

Cost of setting up direct deposits

So how much will it cost you to set up direct deposits for your employees? The exact amount that you can expect to pay will depend on a few different factors; namely, which direct deposit provider you choose.

Alternatively, if you use a bank, the costs of setting up direct deposits will depend on your bank’s fees and regulations. Generally speaking, banks often charge a setup fee that usually ranges anywhere from $50 to $149, according to the National Federation of Independent Business.

Some banks charge ongoing monthly fees, though many do not implement this practice, and others charge transaction fees as well. These transaction fees might be charged per pay period or employee. Once again, it all depends on your specific bank’s procedures and requirements.

Likewise, the dollar amount of the fees will vary, depending on the bank, the size of your business and your direct deposit agreement. According to NFIB, the average dollar amount of transaction fees can vary from $1.50 to $1.90 per deposit.

If you utilize payroll software or some sort of technology that has payroll capabilities, the fees that you pay will depend on the individual software. Many software programs give you access to direct deposit services at no additional cost, but not all software options include the direct deposit service as part of the subscription price. So look into these details before deciding which software program to utilize.

Setting up direct deposits with your bank

If you set up direct deposits through a bank, be prepared to provide recent financial statements to verify that you have the necessary finances to set up direct deposits for your employees. If you opt for a payroll software instead, you’ll need to input your business’s bank account information and respond to a verification email to confirm that you are the administrator of the account.

Most setup processes will require a direct deposit test as well as a small withdrawal from your bank account. From there, you’ll verify that the transaction was successful to confirm that the direct deposit process is working as it should.

You’ll also need to receive a signed authorization form from each of your employees before you can transfer funds to them electronically. With the help of HR software that employees can log in to and monitor as they please, employees can give direct deposit authorization within seconds.

It can take anywhere from seven to 10 days to officially set up direct deposits. The pay schedule that you set up for your employees will be up to you, but make sure the schedule you impose is one you can stick to so that your employees can rely on consistent payments.

Communicate the payment schedule with your employees and payroll administrators so that everyone is on the same page. Finally, you’ll want to set up a cutoff date so employees know when they must submit their hours for review and timely processing as part of payroll.

The benefits of direct deposits

From an employee’s perspective, they can expect to receive their direct deposit every pay period. Direct deposits arrive in employees’ bank accounts on a regular basis, so they will always know when to expect their payment and how frequently they’ll be paid. The predictability factor will also help them plan their personal finances accordingly.

For you, the employer, direct deposits can provide you with much better control over your business finances because you’ll know when money is going to be withdrawn from your account every month. Additionally, you won’t have to worry about the possibility of payments being stolen or having important data about your business in the hands of thieves with ill intentions.

The drawbacks of direct deposits

A potential hassle that you may face when setting up direct deposits for you and your employees comes down to the maintenance involved in creating new accounts. There will likely be undesirable fees and security requirements.

But at the end of the day, direct deposits are worthwhile for everyone involved. For more information about setting up direct deposit payments for your employees, contact us.

©2023

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Unconscious Bias
HR Insight: Unconscious Biases to Avoid In the Workplace 940 788 LaDonna Kearney

HR Insight: Unconscious Biases to Avoid In the Workplace

Before we begin, it’s important to define unconscious biases. According to the University of California San Francisco’s website, “unconscious biases are social stereotypes about certain groups of people that individuals form outside their own conscious awareness.”

Just as important is the fact that “everyone holds unconscious beliefs about various social and identity groups, and these biases stem from one’s tendency to organize social worlds by categorizing.” Now, the main problem with unconscious biases is that they have the potential to cloud people’s judgment-making abilities and result in poor decision-making outcomes.

How unconscious bias impacts the workplace

One study in particular found that employees may respond in the following ways if they perceive themselves as being the victim of negative unconscious biases at work:

  • Withhold new ideas and solutions from their employer.
  • Refrain from referring others to available positions with the company.
  • Look for another job and quit as soon as possible.

For many reasons, these are not preferrable outcomes for many reasons, namely because they can result in numerous retention issues, which are not only time-consuming but also expensive on part of employers. Therefore, it is imperative that employers understand the concept of unconscious biases and the disadvantageous side effects that stem from them.

To help you better understand unconscious biases, we have included eight different types of bias down below. Keep in mind that these biases are categorized as unconscious but that doesn’t mean they cannot occur consciously as well, so awareness and responsibility of your own biases is key.

1. Gender bias

When people are treated differently based on a certain detail that sets them apart, bias is at play. In the case of gender bias, treating men and women differently in the ways that they are recruited, compensated, promoted and disciplined at work is indicative of gender bias. 

2. Racial bias

According to Healthline, “racial bias happens when attitudes and judgments toward people because of their race affect personal thoughts, decisions, and behaviors.” In other words, racial bias results in discriminatory behaviors towards people based on their skin color and background in ways that are beyond unfair and inappropriate. 

3. Age bias

This is a form of bias that refers to the act of making assumptions about someone solely based on their age. As an example, the internal belief that younger employees cannot be entrusted with the responsibility of leadership roles, or that older employees do not have the capacity to understand or value technology in the workplace, are two forms of age bias.

4. Confirmation bias

Per an SHRM article, confirmation bias is when “our views are influenced by people around us and usually occurs when we are seeking acceptance from others.” For instance, if an employee agrees with a fellow coworker about their coworker’s opinion on a work-related project because the employee wants to be friendly despite secretly disagreeing with the other person, the confirmation bias stems from agreement for the sake of friendship, not authentic agreeance.  

5. Affinity bias

When an employee favors a fellow employee simply due to the fact that they share similarities with one another, affinity bias is at play. For instance, if a hiring manager selects a certain job applicant over another because they have similar hobbies and interests, then the hiring manager is operating from a place of affinity bias.

6. Appearance bias

When someone judges another person and then acts on those judgements based on physical traits, such as weight, height, skin color, hairstyle or subjective level of attractiveness, the person forming the judgments is engaging in appearance bias. A work-related example of appearance bias would be hiring someone strictly because they are deemed to be physically beautiful or attractive, meaning they are offered a position based on how they look rather than their job competencies.

7. Horns effect bias

When someone perceives a negative trait in another person and then uses that one trait to form other negative assumptions about that individual, horns effect bias is at play. For instance, say an employee calls in to let their employer know that they are running late one morning. From there, if their boss then goes on to view them as being an unreliable employee, even though they have a reasonable excuse.

8. Halo effect bias

The halo effect bias is the polar opposite of the horns effect bias, meaning the halo effect causes people to let one good detail about a person cause them to assume multiple other positive things about that person regardless of whether those assumptions are accurate or not. The problem with this type of bias is that those other “good” assumptions may be wrong, leading people to think more highly of individuals than they otherwise would.

Keep in mind that there are many other forms of biases that can arise in the workplace, both consciously and unconsciously. These eight examples are just a handful of the many possibilities, and it’s important to be mindful of how bias may arise in the workplace to avoid treating people unfairly at work.

©2023

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HR Insight: Is the Hybrid Work Schedule Here to Stay? 940 788 LaDonna Kearney

HR Insight: Is the Hybrid Work Schedule Here to Stay?

Hybrid Work Schedules – The New Norm?

The hybrid work schedule experiment has gained traction. By 2023, Gallup research indicated the numbers among U.S. workers had stabilized at about 28% performing exclusively remotely, 20% on-site and 52% working in a hybrid arrangement. Whether those proportions persist will depend on the overall economy and labor market and whether recession tilts the balance.

The best of both

The main models used for hybrid work are simple enough:

  • Shifts — the whole team works in-house a few days per week and remotely the rest of the time.
  • Split teams — some people work remotely, and others work on-site.
  • Flex — employees can choose where they prefer to work.

Most hybrid work schedule employers have tried out weekly configurations of three days in the office and two days remote. While three days in the office is seen as a sweet spot, patterns vary. For instance, Harvard Business School research advocated just one day on office premises!

Different employees gravitate to different styles, though it should be noted that executives are three times as likely as are worker bees to want to return to offices full time. But preferences cut across all seniority levels. Gallup ran a survey in late 2022 among 8,090 respondents to examine the pros and cons of hybrid arrangements.

The findings demonstrated compelling benefits:

  • An improved work-life balance.
  • More efficient use of time.
  • Freedom as to where and when to work.
  • Higher productivity.
  • Reduced fatigue and burnout.
  • Smoother coordination, collaboration and cross-functional communication.

A Stanford study discovered hybrid employees get more accomplished away from noisy office spaces, reduce commuting time and costs, gain self-esteem, and enhance trust with their managers.

Employers appreciate the availability of wider talent pools as well as cost savings on space (rent and utilities) and materials (supplies and food).

On the downside, respondents cited noteworthy challenges. They listed a lack of access to resources and equipment and a distance from office culture and relationships. It may also be emotionally draining to be constantly switching between schedules and spaces. It also may not be feasible for those with client- or customer-facing jobs, and it may create resentment over other colleagues’ more-flexible deals. Should those who are toiling in the office be paid more?

Making hybrid succeed

Managers can take steps to ensure hybrid arrangements operate as smoothly as possible.

Start by designating which days are for in-office work. Research from Prodoscore reveals that workers are most productive Tuesday through Thursday from 10:30 a.m. to 3 p.m. Interestingly, those assigned boring chores perform better at the office, while those undertaking more creative tasks excel at home. If an entire team works from home, however, the whole group underperforms, as no one wants to commit extra time.

Managers should set initial expectations. They should ponder why they actually are going the hybrid route. Will team members schedule their own hours? While on-site, they can help employees interact with teammates and utilize equipment.

Maintain clear policies for communication. Provide feedback in person. Use constant updates and virtual tools to link remote and in-house employees. You may need to customize software platforms to incorporate data visualizations, progress reports and project management.

Hybrid work can be a plum perk

There is still insufficient longitudinal data to confirm whether hybrid workers are more productive. However, it is clear the opportunity for flexibility attracts and retains talent. Whether it is for child care duties, mental well-being or regular access to outdoor green spaces, ensure your employees understand their side of the bargain. How do they spend their at-home hours? Gallup reports a combination of working (86%), training (27%), innovation (26%), meetings (24%) and exercise (22%).

Take that with a pinch of salt. Some are probably watching TV. Managers recognize some trade-off is necessary to keep their teams contented.

©2023

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