In my last blog, I wrote about how important it is during this season of giving to give back to your community, either through monetary gifts or in-kind services, or by providing volunteers. This time, I’d like to talk about the “thanks” part of Thanksgiving. Here are some ideas for saying “thanks” to your employees, customers and vendors.

Thank employees

Say “thank you” in person. Encourage managers to make the time to walk around and thank each person on their team for contributing to the success of the organization. A personal thank you is much more meaningful than an email or a thank you during an “all hands” meeting.

Give a gift or cash award. Include a gift, cash or gift card with the personal thank you. It doesn’t have to be expensive, but it should be meaningful.

Take your team to lunch. Have each manager take their team out to lunch to celebrate the holidays and say “thank you.”

Give a half-day off for shopping. Help employees avoid the weekend crowds by giving them a half-day off during the season to do some shopping.

Thank customers and vendors

Send a written thank you note. Yes, it sounds “old school” but emails can get missed and easily deleted. Write a personal note expressing your gratitude for their business and include something specific to make it personal.  It will be remembered and appreciated far more than a form letter or template.

Hold a customer-appreciation event. Invite customers to your facility for food and beverages and give them the opportunity to meet (and hear “thank you” from) the people they may only know via phone.

Send a gift. Send cookies, a logo item, or some other treat to show your gratitude for their business.

Acknowledge them. Say “thank you” to your top customers and vendors in your company newsletter, on your website, or through your social media channels.

Make a referral.  Word-of-mouth is the best form of advertising, and referring someone to one of your vendors is a great way to say “thank you.”

And don’t limit saying “thank you” to just this season. Make your employees, customers and vendors feel appreciated every day.  It’s a small investment with a very big return.

Thank you! For following my blog and providing your comments and feedback!

Happy Thanksgiving!

Corporate Social Responsibility (CSR) is becoming more important to candidates (especially Millennials) and consumers in their choice of companies to work for and buy from.  According to a 2013 study by Cone Communications and Echo research, 82% of U.S. consumers consider a company’s approach to social good when making a purchase.  Although some may think that only the “big guys” are in a position to make a difference, there are a number of ways that small companies can – and should – give back to their communities.  Here are some ideas.

Sponsor a charity. Involve employees in selecting a charity to contribute to on an annual or semi-annual basis. Designate an amount to contribute, and encourage employees to add to the amount with their own contributions. If the charity has volunteer opportunities, encourage employees to volunteer individually or as a team.

Match employee contributions to their charities of choice. Designate an amount up to which the company will match employee contributions to their favorite nonprofit.  This encourages giving, and helps a variety of organizations.

Give employees time off to volunteer. Allow a certain number of hours per month or per quarter for employees to volunteer for their favorite nonprofit. Some companies also provide a dollar match to the hours volunteered to the charity organization.

Organize a team volunteer event. Some of the best team building is done when employees are working together for a good cause. This is also an opportunity to build skills. Put someone who is not in a leadership role in charge of the event. Put someone else in charge of communications. Build collaboration by letting the team research and decide on the organization they will help.

Giving back is good for the community, good for employees, and good for business. Research shows that companies who give back to their communities have better brand visibility, more highly-engaged employees and stronger relationships with their customers. A study by Ernst & Young and the Fidelity Charitable Gift Fund found that of entrepreneurs who give back, 62% say it makes their companies more successful in the long run.

December 1 is “Giving Tuesday.” How will you give back this year?

In a recent Mercer survey, 78% of employee respondents said they would remain longer with their employer if they saw a career path with the current organization.  Employees want opportunities to learn and develop, and want to know they have a future with you. Providing them with opportunities to build on their strengths, learn new skills and prepare for the future needs of the company demonstrates in a very real way that they are integral to the organization and its success. And when employees feel that kind of connection they will be more engaged and loyal.

Many business owners shy away from career conversations with their employees because the company isn’t large enough to provide a “next level” or there just isn’t a budget for learning and development. Yet avoiding the conversation could result in losing that employee as the employee looks for growth elsewhere.  Here are some easy and economical tips for providing growth for your employees and keeping them.

Keep job descriptions current. Having clearly defined job descriptions for each job in the company is the first step in creating an environment for growth. Identifying and documenting skills and requirements will also help you with recruiting and hiring, performance management, and promotion decisions.

Create career paths, if applicable. For jobs where there is more than one level, be sure that your job descriptions define the additional skills, competencies and experience required for each level. This will ensure consistency in making promotions and help employees understand what they need to know or do to achieve the next level.  Once you’ve defined career paths, document them and share them with employees so they can see the opportunities.

Have the career conversation. Show interest in your employees and their aspirations by having a career conversation. You may find that they have under-utilized skills or interests that you could leverage elsewhere in the company, or call upon for a new project or business opportunity. The career path doesn’t necessarily have to be vertical; especially in smaller companies, providing cross-functional experience can be beneficial to both employees and the organization.

Tie career planning to performance management. Too often performance reviews focus on fixing what are perceived to be “weaknesses” even though the employee may not need or want to use those skills. Certainly if it’s a job-related skill, development is necessary. Be sure it’s tied to the employee’s career goals and that you are also leveraging and developing their strengths.

Be creative. Remember that development can take many different forms: on-the-job training, personal development, cross-functional projects, working with a coach and/or mentor, special projects, stretch assignments, training courses, reading and personal study, online courses, peer coaching, job shadowing. The important thing is that it is available and encouraged.

Follow up, follow through. Once the career plan is in place, follow up with the employee to check progress and follow through on what you said you would do to help in their development.

Demonstrating that you care, and showing employees that they have a future within your company is key to helping both your employees and your business thrive.

Fourth quarter is a good time to begin planning your HR budget and programs for next year.  If you are planning to hire in 2016, and/or you want to retain your top employees, developing and implementing a comprehensive “total rewards” program can give you a distinct advantage.

A “total rewards” program generally includes: compensation; benefits; work-life programs; performance  and recognition; and development and career opportunities. Offerings in each of these categories may vary, based on the company and their budget.  A total rewards program helps shape the company culture, and can be a key differentiator in attracting and retaining employees. Here are some things to consider as you put your program together.

Compensation.  Think about base, variable (bonuses, commissions, profit sharing) and long term (stock options, pension plan) compensation. To be competitive, be sure you stay up-to-date on the market through surveys or other research. Establish a framework of pay levels for consistency, easier administration, and improved employee satisfaction.

Benefits. Benefits may include medical, dental, and vision insurance; life insurance; paid vacation; leave policies and 401(k) programs. Some companies choose to match 401(k) contributions up to a certain amount, which is another attractive benefit.  Review your health benefits annually to ensure they are cost effective and that you are getting the appropriate level of service from your broker.

Work-life Programs. This is a relatively new area, and gives companies the opportunity to be creative and provide some unique and generally low cost “perks” to their employees. Some of the things offered in this category are telecommuting, flexible scheduling (e.g., every other Friday off), onsite daycare centers, and onsite services such as car washes and dry cleaning. Wellness programs are also increasingly popular. These may include Employee Assistance Programs (EAP), legal referrals, money management clinics, nutritional counseling, disease management programs, and programs to help employees quit smoking.

Performance and recognition. Employees need – and want – regular feedback. In addition to your annual performance review, be sure you factor into your plan training for your managers on the value of regular feedback. Recognition can include cash awards, or non-cash awards such as sports event tickets, travel vouchers or other “thank you” gifts. I always recommend that managers take the time to find out from individual employees how they like to be recognized.

Development and career opportunities. This is one of the areas that comes up most often in employee engagement surveys as a weakness. Too many companies sacrifice learning and development because of time or budget concerns. As you plan for next year, think about how you will provide your employees with opportunities to develop in their current position and prepare for the next one. In my next blog, I’ll give you some ideas on how to do this effectively.

There have been some changes recently to the Affordable Care Act. Thank you, Michelle Cassidy of Integra Insurance Services, for putting together this article to inform us about those changes.

Known best in common nomenclature as Obamacare, the Affordable Care Act is not a type of insurance, but simply a law signed into existence by President Barack Obama in March 2010.  The Act was passed with the intent to improve the quality and affordability of health insurance.  We in the insurance industry have seen a number of changes to the healthcare system over the past few years.  Some changes, like the removal of pre-existing conditions and addition of preventive care covered at 100% by plans, are obvious wins.

However, come this fall, small employer groups (with fewer than 50 employees) renewing December 1, 2015 are in for a rude awakening.  The Affordable Care Act is, in my opinion, going to prove the furthest thing from affordable for a lot of families, and rough for small business owners.

With the advent of Covered California, California’s answer to the Marketplace, income-based subsidies were made available if one qualified.  Premium assistance and/or cost-sharing subsides might impact the immediate cost to some subscribers, assuming they haven’t over-estimated their projected annual household income at the time of application, but it doesn’t actually change the cost of coverage or premium calculations on the back end.

Beginning January 1, 2014, a suite of changes took place to the small group market (under 50 employees).  The plans we had come to know and love were being discontinued and replaced by metal tiered plans to comply with the Affordable Care Act’s health plan values and Minimum Essential Coverage (MEC).  Where groups once had the option to offer upwards of 50+ plans, there are now closer to ten plans available ranging from Bronze to Platinum.

The method of charging premium changed as well.  All insurance carriers were forced to make an adjustment from the age-banded and tiered premium calculations (employee age band + tier choice) and establish a Member Level Rating system based on 5 factors: age, geographic location, family size, plan design, and tobacco use on ACA plans.   Where there were once 7 age-bands and 4 tier choices (employee, employee + spouse, employee + child/dren, employee + family), there are now 45 age brackets: one rate for dependents 20 and younger, 43 individual rates for those aged 21-64, and one rate for those 65+.

Every person enrolled on the plan will receive a rate based on their date of birth at time of renewal, or in some instances (because no carrier interprets the law the same way) at the time of enrollment during the contract, the sum of those rates being the total monthly premium.

For example: An employee is 37, their spouse is 38, and they have 4 children (9, 7, 6, 3) covered under the plan. Each family member is assigned a rate based on their age.  The total of the employee, spouse, and first three children is the monthly premium the carrier will bill.

The “saving grace” for a family is that the premiums are capped at 3 children for those under the age of 18.  In the above example, only the first 3 children are billed.  If one of the children were 19, there would be a total of 6 individual rates culminating into a family rate.

Having established the 2014 plan and premium changes, we may now look back down the timeline to Fall 2013 when the insurance carriers allowed all small business customers, regardless of renewal date, to renew their 2013 medical and/or specialty benefit coverage with an Early Renewal Option. The Early Renewal Option provided small groups the choice to change their annual renewal date to December 1, 2013.  Electing this option prolonged the inevitable ACA transition.

In July 2014, Governor Jerry Brown signed Senate Bill 1446 referred to as the Grandmothering law.  The bill enabled small employers that were currently offering health insurance policies that were in effect as of December 31, 2013, the option to renew existing coverage for one year.  Essentially, all the small groups who had renewed their policies early had the ability to keep their plans for an additional year (December 1, 2014 – November 30, 2015).  Their plan designs and rating structure would remain intact.

The time of extensions through legislation has expired.  Grandmothered plans end November 30, 2015. All small group plans will be transitioned to Affordable Care Act compliant metal-tiered plans with Member Level Rating.  All employees and their dependents will be subject to member-level rating.  The fourth quarter rates were released, and for many employees, namely those with families, the increases are outrageous.

With limited plan options available under 4 tiers, each Grandmothered plan is being siphoned into a similar-but-not-equal metal tier plan.  For instance, a group offering 5 different plans might be mapped into 1 or 2 similar ACA plans. When a group’s current plan selections are being mapped to a Silver plan, and the increase is anywhere from 40-90%, the only option to decrease the rate burden is a Bronze plan.  No one wants a Bronze plan; it is limited to no doctor visits before the $5-6,000 deductible is met. It’s good for catastrophic coverage, but not when one is trying to retain talent.  This doesn’t even take into account the increase to the employer contribution when the majority of Bay Area employers are paying 100% of employee only rates and at least 50% of dependent rates.

What we have noticed is that some of these family increases are so high because adult children are still on the plans.  Remember, one of the ACA changes allowed dependents age 26 or under to stay on a parent’s plan.  This was a great idea when the rating structure was different, but now that each member has their own rate it may be time to look at individual rates for them or through their employer.

At Integra, we’ve already reached out to our clients to present their December renewals and plan options.  We anticipate many clients shifting from their current insurance carrier to a more competitive carrier, and reevaluating dependent contribution schedules.  Needless to say, Q4 is going to be interesting!

Integra Insurance Services combines over 60 years of industry experience to provide progressive and strategic solutions to meet a wide range of insurance needs. With offices in Los Gatos and Campbell, California, we focus on serving the local community and California as a whole.  The Los Gatos office focuses on Personal and Commercial insurance, while our Campbell location is dedicated to servicing Employee Benefits, Individual and Family plan needs.

As we head into the final stretch of the year, it’s a good time to begin planning for annual performance reviews.  Of course, performance reviews are only one component of effective performance management. If the only time your employees receive feedback is during an annual conversation with their manager, you are doing both the employees and the organization a disservice.

Performance management should be a process, not just an event. In support of the annual evaluation, there should be mini-reviews throughout the year. This helps both employees and managers track accomplishments and address areas for improvement in a more timely manner. There should be no surprises during the annual review.  Here are 5 steps for effective performance management

Establish and communicate a timeline.  Determine when the annual performance review will be conducted and the activities leading up to it, e.g., gathering 360 feedback.  Create a timeline, allowing adequate time for all activities to be completed by the target evaluation delivery.

Train managers. Train every manager on their role and responsibility in the performance management process. Communicate that feedback conversations – both positive and developmental – should held all year long, not just during the annual performance review. Provide guidelines for effective feedback. Make managers’  implementation of performance management part of how they are evaluated.

Gather feedback. Give employees the benefit of feedback that is as comprehensive as possible. There may be strengths or development areas that, as their manager, you don’t observe. For example, if they are a remote employee or are customer facing.

Have employees self-evaluate. Give employees the opportunity to tell you where they think their strengths and development areas are. You may discover some strength “hidden gems” that you didn’t know about. Likewise, they may share areas where they are struggling and ask for help. People are more likely to accept feedback from others if they’ve had a chance to give their input.

Conduct the evaluation. Revisit the employee goals set at the beginning of the year and have an honest, interactive conversation with your employee about progress, challenges, improvement needed. Think of the review as a development opportunity rather than a “report card.” Consider both the employee’s strengths and how to further develop them, and areas where the employee needs to improve in his or her current role, or to advance to the next level.  Work together to create a development plan.

Please feel free to contact me if you need help planning and/or implementing a performance management process.

We all know that making bad hires is costly, both in terms of direct replacement costs and indirect “people” costs, including declining employee morale and eroding customer relationships.  Having a structured process for defining requirements, evaluating candidates and mapping the two together is a good way to improve your chances of making a good hire.  Here are some tips.

1. Know what you want and don’t want. Develop a detailed job description, including both job specific and transferable or “soft” skills required for the role. What are the skills and competencies that have helped a “star” in that role succeed? What experiences and characteristics will help the ideal candidate succeed in your environment and culture? Also, consider the characteristics that would make a candidate less than ideal for the role or for your organization. A clear definition of what you want and don’t want will help you be more objective in your candidate assessments.
2. Create and use a structured hiring process. Developing a repeatable process makes life easier for everyone – interviewers, candidates and those who are coordinating the meetings. It ensures objectivity (which will keep you legal!) and provides a good first impression for potential employees. Remember, you are “selling” the company to them as much as they are “selling” themselves to you.
3. Ask behavioral questions. Getting the candidate to describe a specific example of how they demonstrated a skill or behaved in a certain situation will give you more insight than hypothetical “how would you…” questions. Build the questions around the skills and competencies defined in the job description. And ask the same questions of every candidate for the role so you have a consistent basis of comparison. There are plenty of books and websites that provide canned answers for behavioral questions so follow up with some probing questions for more detail.
4. Train your interviewers. Too often interviewers are handed a resume and asked to interview a candidate without any preparation or training. That’s unfair to both the interviewer and the candidate, and could lead to legal issues if the interviewer asks an illegal question or treats one candidate differently than the others. No one should interview candidates unless they’ve been trained in interviewing best practices and legal/illegal questions. Also, each interviewer should be prepared, in advance, to ask specific questions of each candidate for the role. That prevents candidates from being asked the same questions by five different people! After the interviews, convene the interviewers to share input on the candidates.
5. Check references. How many stories have we read about credentials that were fudged or experience that was bloated? Yes, checking references takes time, but may save you money and/or embarrassment in the long run.
6. Embrace diversity. It’s a well-known fact that people tend to hire people who are like them.  In theory, that would accelerate the acclimation process, but in practice it may not be the best solution for the team. A better option is to look for diversity of thought, skills and experience that will complement existing viewpoints, skills and experience to achieve organizational success. Someone once said, “if both of us think exactly alike, one of us is unnecessary.”

If you need help putting together a structured hiring process, please contact me.

The California Legislature has amended the new paid sick leave law, which went into full effect July 1, 2015, to change some of the rules and clarify others. Here’s an overview of the amendments (AB 304) which were effective July 13, 2015:

Pay rate for sick leave. Under the original law, employers had to use a special formula to determine the sick leave pay rate for employees whose rate was different during the previous 90 days, or were paid commission, or by piece rate. The amended law deletes this calculation, and defines rate requirements based on exempt/nonexempt status. For non-exempt employees, sick leave is paid at either: (a) the employee’s regular rate of pay during the workweek in which the employee uses sick leave or (b) an hourly rate equivalent to the employee’s total wages (excluding overtime pay) during full pay periods in the previous 90 days divided by the number of hours worked.  For exempt employees, sick leave pay is calculated the same way as vacation or paid time off (PTO) is calculated.

Sick Leave accrual. The amended law allows employers to grant sick leave using either an accrual or lump-sum method, as long as the method provides for regular accrual, and no less than 24 hours of sick leave by the employee’s 120^th day of employment.

“Grandfather clause.” Under this provision, employers can maintain certain sick leave or PTO policies that existed prior to January 1, 2015, if they meet the following requirements: 1) in effect prior to January 1, 2015; 2) permit accrual of sick leave or PTO on a regular basis; and 3) provide for accrual of at least 8 hours of sick leave within the first 3 months of employment each calendar year, and 24 hours of sick leave within the first 9 months of employment.

30-day eligibility rule. The amended law clarifies that employees must complete 30 days of work in California with the same employer within a year of employment start date to be eligible for paid sick leave.

“Unlimited” sick leave. Employers are required to notify employees in writing of the amount of sick leave available to them. If an employer allows unlimited sick leave or PTO, they can meet the requirement by indicating “unlimited” on the written notice or paystub.

Usage cap definition change. Originally, the law stated that employers could limit an employee’s sick leave usage to 24 hours per year of employment. The amended law clarifies that this cap can be applied on a year of employment, calendar year, or 12-month period.

Sick leave reinstatement. The original law required employers to reinstate unused sick leave (PTO) for employees rehired within a year of leaving their employment. According to the amended law, employers are not required to reinstate balances if the PTO was paid out at termination.

It’s always a good idea to check with legal counsel if you have any questions about how the amended law affects your particular organization. And don’t forget, San Francisco and Oakland have their own sick leave laws. Be sure you are also in compliance with local ordinances.

This week marks 25 years since Congress passed the Americans with Disabilities Act (ADA). I thought it would be a good time for a little refresher about what ADA means for you as a business owner.

The Americans with Disabilities Act of 1990 prohibits “private employers, state and local governments, employment agencies and labor unions from discriminating against qualified individuals with disabilities in job application procedures, hiring, firing, advancement, compensation, job training, and other terms, conditions and privileges of employment.”

An individual with a disability is defined as a person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such impairment; or is regarded as having such an impairment. ADA applies to both visible and invisible disabilities.

A “qualified employee or applicant with a disability” is someone who, with or without reasonable accommodation, can perform the essential functions of the job.

The law covers employers with 15 or more employees and requires that covered employers make a reasonable accommodation to the known disability of a qualified applicant or employee. A “reasonable accommodation” is an adjustment or modification that enables the employee with a disability to work without causing “undue hardship” to the employer’s business. “Undue hardship” refers to an action that is considered too difficult or expensive relative to the employer’s “size, financial resources, and the nature and structure of its operations.” It’s important to note here that accommodations are based on individual needs and may differ from person to person, even when two people have the same disability.

In California, the Fair Employment and Housing Act (FEHA) provides greater protection for employees with disabilities than the ADA. FEHA requires that employers with 5 or more employees provide reasonable accommodation for individuals with disabilities. Under FEHA, a person is considered disabled if he or she is “limited” in one or more major life activities. ADA uses “substantially limited” in their definition. Under both the ADA and FEHA, AIDS and HIV-positive status are considered protected disabilities. In 2012, California adopted Amended Disability Regulations that prohibit discrimination based on perceived disabilities or perceived potential disabilities. The new regulations also require accommodation for the residual effects of disabilities and provide guidance regarding the interactive process and medical documentation.

Determining the appropriate accommodation should be an interactive process between employer and employee. In general, an employer does not have to provide a reasonable accommodation unless an individual with a disability has asked for one. Examples of reasonable accommodation include: improving workspace accessibility, modifying work schedule, and providing qualified readers or interpreters.

The ADA restricts employers from asking job applicants about disabilities. The employer may ask the applicant about their ability to perform specific job functions and may, if they do so for all applicants, condition a job offer on the results of a medical examination.

If you’d like to learn more about ADA, please consider signing up for my workshop this October. I will be conducting a 3-day Certificate Program in FMLA & ADA Compliance, Monday, October 5 through Wednesday, October 7, 2015 in Santa Clara. To register, please click here. Register by September 9, 2015 for the early bird discount.

In my last blog I provided a brief recap of the federal Family and Medical Leave Act (FMLA). Of course, there’s a lot more to the law and ensuring that your policies and practices are in compliance. I’m happy to announce that I will be conducting a 3-day Certificate Program in FMLA & ADA (Americans with Disabilities Act) Compliance, Monday, October 5 through Wednesday, October 7, 2015 in Santa Clara. This will be a great opportunity for you to get up to date on these two important laws while learning best practices for administering them. By attending the workshop you will earn 18 PHR / SPHR re-certification credit hours.

Here’s a brief overview of this comprehensive, interactive 3-day program:

On Day 1 we’ll focus on FMLA, including who is covered and why; paid and unpaid leave options, employer posting requirements; medical certifications; fitness-for-duty testing; return-to-work options; FMLA job and benefits restoration; tracking and ending leave; RIFs involving protected employees; and documentation strategies that protect your organization. You’ll have the opportunity to hear and discuss various case studies on eligibility and administrative requirements.

On Day 2 we’ll focus on ADA, and you’ll do some hands-on exercises analyzing reasonable accommodation requests. Topics for the day include the laws protecting disabled individuals from discrimination; who is covered and why; employment practices that are prohibited by the ADA; identifying essential job functions and qualified individuals; reasonable accommodations; job restricting/additional training; confidentiality of medical information and accommodations; and collective bargaining agreements.

On Day 3 you’ll learn FMLA and ADA best practices, plus how to integrate and comply with other leave laws. You’ll have plenty of opportunities to practice applying what you’ve learned through various case studies on overlapping leave and disability law dilemmas. Topics will include: Workers’ Compensation; state family leave and paid family leave laws; state laws for jury duty, voting, bereavement, school activities, vacation, and more; pregnancy leave and accommodation; military leave; distinguishing between an FMLA “serious health condition” and an ADA “disability”; handling Workers’ Compensation claims that have ADA and FMLA ramifications; options for refilling positions while an employee is out; and strategies for reducing absenteeism and impacts to productivity.

If you are managing or coordinating any type of leaves for your company, you know that it can be challenging. I hope you’ll take the opportunity to update your knowledge, learn best practices and become a Certified Administrator!

For more information and to register, please click here. Note that there’s an early bird discount if you register by September 9, 2015.