Non-Profits Offering Paid-Time-Off Banks

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

According to the 2012 ERC Non-Profit Benefits Survey, the non-profit sector in Northeast Ohio appears to be a bit ahead of the curve in terms structuring the paid time off offered to employees. The more flexible, all inclusive, “paid-time-off” or “PTO” banks are being used by 45% of the non-profit respondents, while other ERC surveys from earlier in 2012 have reported numbers closer to 30% or even lower. Although there is some variability in the samples from year to year, the Non-Profit Benefits survey shows a clear trend with the use of PTO banks hovering just under the 50% mark from 2009-2012.
Read this article...

The Top 3 Benefits Trends You Need to Know

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

Three types of benefits have seen the most significant changes in 2012 trends, based on our research nationally, locally, and among employers of choice. Find out what they are and how these trends impact your organization as it plans and budgets for 2013.

Health Insurance & Wellness

Survey data released by Towers Watson and Aon Hewitt show that the widespread majority of employers plan to offer health care benefits to their employees in the future. Most employers, according to their surveys, do not foresee eliminating health plans, even in light of health care reform.
Read this article...

Non-Profit Salary and Benefits Data Published

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

In collaboration with United Way of Greater Cleveland, ERC is pleased to announce the publication of the 2012 Non-Profit and Health & Human Services Compensation and Benefits survey results. By drawing upon both United Way’s strength as a preeminent organization in the non-profit community as well as ERC’s reputation as Northeast Ohio’s leading publisher of local workplace information and salary data, these surveys provide current and reliable compensation and benefits benchmarks to non-profits across the region.
Read this article...

2012/2013 Salary & Benefits Budgeting Guide

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

We’ve compiled a brief compensation and benefits budgeting guide to help your organization make important pay and health care decisions for fall 2012. The guide summarizes the latest and most important trends as of September, 2012 related to administering compensation and health care benefits, which affect your organization as it plans for 2013. 
Read this article...

Wrapping Up 2011: A Year-End Checklist for HR

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

We've compiled a checklist of common year-end HR tasks spanning compliance, benefits, payroll, salary administration, and general HR planning to prepare for 2012. 

Compliance

  • Review your policies and procedures and make sure they still apply and/or comply with changes to laws and regulations that occurred throughout the year.
  • Conduct an HR audit, preferably with a third-party. Make sure your HR and filing systems are in compliance.
  • Review record retention guidelines and dispose of appropriate records before the new year.
  • Review job titles and revise job descriptions for employees whose jobs, duties, or roles have changed within the course of the year. Be sure to also check FLSA exemption statuses to make sure these are still accurate.
  • Add critical HR filing and reporting deadlines to your calendar. 
  • Prepare for any regulatory updates that go into effect January 1.

Benefits

  • Make sure that new disclosure requirements and summary plan descriptions for retirement and health plans have been incorporated.
  • Revise benefits levels per IRS 2012 limits for defined contribution and benefit plans.
  • Review limitations on deferred compensation and check for excess contributions to qualified plans, especially for your highly compensated employees.
  • Determine which employees have life insurance over $50,000 to report taxable imputed income for taxable group term life insurance.
  • Check social security withheld to determine if an employee exceeded the 2011 limit. If so, make an adjustment or refund.
  • Re-evaluate your benefits package, including disability, life, and health insurance policies and obtain competitive bids.
  • Remind employees to spend the remaining balances on their flexible spending accounts before the end of the year so that their leftover money is not forfeited. You may consider reminding employees of reimbursable expenses. For a list of these, click here.
  • Send COBRA rate increase notifications to COBRA participants, if applicable.

Payroll/Salary Administration

  • Make sure employees review their W4s if they have changed their status during the year or anything else that would change payroll withholding.
  • Review taxable fringe benefits for W2 reporting, as these must be reflected in payroll for W2 reporting.
  • Distribute W2s by the end of January 2012.
  • Update employee address, demographic, and emergency information, including municipal information for local tax filing.
  • Have salary conversations with each of your employees and provide expected 2012 compensation in writing.
  • Issue final year-end paychecks which include year-end bonuses and holiday/overtime pay.
  • Adjust payroll to reflect changes in salary/wage adjustments, merit increases, minimum wage increases (note: Ohio minimum wage will increase January 1), and changes to benefits withholding.
  • Integrate new federal and state withholding tables. Remember that the temporary payroll changes which went into effect in 2011 are set to expire unless the federal government decides otherwise.

Planning

  • Distribute vacation and attendance calendars/planners to your supervisors and managers.
  • Determine your organization's 2012 holiday schedule and post or communicate it to employees. 
  • Plan, update, and post any critical  company activities or events for 2012.
  • Ask supervisors to assess current staffing levels in their departments/teams and submit job requisitions. Also take note of pending retirements, terminations, and expected turnover.
  • Conduct a training needs assessment and establish employee training and development plans for 2012. 
  • Review employee performance reviews and determine which employees...
    • are eligible for promotion
    • need additional training or skill development
    • require a performance improvement plan
    • should be terminated
  • Schedule recently promoted supervisors or managers for new supervisor training.
  • Plan your most critical projects for 2012. If you don't know what you should focus on, consider conducting an employee engagement survey in the first quarter to uncover areas of the workplace your department could improve.

Additional Resources

HR Project Assistance
For assistance conducting HR and FLSA audits, revising and auditing job descriptions, workforce planning, employee engagement surveys, and a variety of other HR projects, please contact consulting@yourerc.com.

Benefit Plan Audit
Do you have 100 or more employees enrolled in your defined contribution plan(s)? Your plan is required to be audited, and must accompany your 5500 filing. Now is the time to save! ERC members receive a No-Cost 2011 Benefit Plan Audit, and can lock in your 2010 rate for the next five years, through our exclusive partnership with Skoda Minotti. Click here for details!

Employee Handbook Service
As you revise your policies and procedures, keep in mind that ERC and Employer Risk Solutions Company (ERSco) offer a unique and innovative service exclusive to ERC members that provides an employee handbook for private employers that is easy, legally compliant, customized and affordable. For more information about this service, click here.

Training
Schedule your employees for training sooner than later! For a list of training topics offered by ERC, which can be customized to your organization's needs, click here. Or, to register your employee(s) or yourself for an upcoming public training event in 2012 offered in our Workplace Center, click here.

Elements of an Incentive Program

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

Looking for a way to motivate or incentivize employees to meet a goal or objective? Whether it’s sales, productivity, service, quality, teamwork, or just a change in behavior, incentive programs can be an effective tool to meet your organization’s needs and objectives. Here are the most important elements of an incentive program.

 

Clarify the objective of the incentive program.

What is the purpose of providing the incentive? Will it be designed to improve the productivity of your production staff, increase sales, improve customer service, and enhance management? Usually, the objective of an incentive plan is tied to meeting some organizational or departmental goal or objective or motivating/changing a specific behavior. This may be general or specific to a certain work group or department.

Define the incentive.

Define the type of incentive you will provide and make sure that it aligns with the objective. Individual incentives should be tied to individual goals and performance, team incentives should be tied to team goals and performance, and so on. Also, will it be offered in addition to a salary increase or instead of one, and will it be considered part of the total compensation package? Below are three (3) types of incentives to consider.


Type of Incentive

Description

Individual incentives

  • Tied to the achievement of individual and/or organizational goals
  • Typically only distributed to specific individuals
  • Differentiates top, average, and bottom performers

Gain-sharing

  • Tied to the margin of profit or savings attained through a group or team’s performance
  • Typically only distributed to certain groups or teams
  • Rewards and encourages teamwork

Profit-sharing

  • Tied to the margin of profit attained by entire organization
  • Typically distributed to all employees or certain executives/managers
  • Provides employees with “line of sight” – how their contributions impact the organization’s success

 

Create a measure for the incentive.

Having a clear objective will make measurement easy. Measurement could be as simple as determining whether the goal was achieved or not achieved. You may also weight what percent of an objective was met (i.e. 75% of goal achieved or 110% of goal achieved). One key question your organization will need to consider is if you will payout for not reaching goals completely or if you will payout extra for exceeding goals.

Determine who is eligible to receive the incentive.

If the objective of the incentive plan is specific to a certain work group or department, eligibility should be constrained to only employees in those areas. If the objective is general, eligibility may be widespread, applicable to nearly all of the workforce. We find that incentive plans typically follow one of these two tracks.

Establish the size of the incentive.

This is, first and foremost, dependent on what your organization can afford to pay – which may vary from year to year and depend on cash flow, revenue, and profitability. The size of the reward may be a fixed dollar amount or a percentage of salary. On average, we find that variable pay costs account for 3% of revenue (variable compensation divided by total revenue) – compared to compensation costs which typically account for 25% of revenue. Below are average target percentages, maximum threshold percentages, and percentages of total cash pay that incentive/bonus pay represents.


Type of Employee

Average Target %

Max. Threshold %

% of Total Cash Pay

Production, Maintenance, Service

4.4%

6.6%

4.1%

Clerical, Technical

4.0%

7.7%

4.3%

Supervisory, Managerial, Professional

8.1%

12.1%

6.6%

Source: 2011 ERC Pay Adjustment & Incentive Practices Survey

Identify the form of payment.

Some incentive/bonus payments are paid out in lump sums annually, while others may be distributed across paychecks throughout the year. Annually is by far the most common frequency of payout, but quarterly is a close second. Monthly and semi-annual payments are extremely rare.

Incentive programs can be effective in promoting the behavior and results we want in our organizations, but in order to do that, they need to constructed effectively. This starts with clearly identifying the objective of the program and then aligning all of its pieces and parts (type, work groups eligible, size, form of payment, etc.) with that purpose.

Additional Resources

Pay Adjustment & Incentive Practices
Benchmark your organization’s pay adjustment and incentive plan practices with our ERC Wage & Salary Adjustment Survey. For more information about this survey (including pricing information), please click here.

Consulting & Project Support
For assistance in developing incentive/variable pay plans and compensation systems or benchmarking compensation practices, please contact consulting@yourerc.com.

12 Implications of Health Care Reform

Share on LinkedIn Share on Facebook Share on Twitter Share on Google Plus Share this Page

In response to the 2011 health reform, insurance carriers increase premiums. As employers start dealing with the law’s new requirements, there is a heightened focus on providing better education and communication to employees, on negotiating and investigating alternative options, making smarter benefits decisions, and enhancing wellness programs. Here are 12 ways in which health care reform impacts how we do business now and in the future.

1. Increased cost-sharing

Cost-sharing between employers and their employees for health insurance continues to increase. This is one of the easiest ways to manage health insurance costs, but naturally has effects on employee engagement and morale that employers need to consider. The average cost-sharing arrangement has steadily increased in the years preceding 2011.

2. Education about health benefits

Education about how employees can be better health care consumers is becoming more imperative. Often employees do not understand how usage affects costs and need to be educated buyers when using their health insurance plans. Ideas for education efforts other employers have initiated include:

  • Explain the costs associated with health care decisions (i.e. going to the emergency room vs. their primary care physician).
  • Show employees the drivers of health care costs at the organization.
  • Communicate what employees can and need to do in order to maintain or reduce their current costs. Specific actions steps are recommended.
  • Expand education to spouses who are also users of the plan.
  • Provide employees with key questions to ask their doctor.
  • Make health insurance an on-going conversation and communication effort with quarterly meetings to discuss trends, employee forums to discuss suggestions, and other media to disseminate wellness and health insurance information.

3. Use of benefit statements

Benefit or total rewards statements are a widespread and important communication tool that show employees how much the organization is investing in their benefits, and particularly their health insurance. Showing employees actual dollar amounts and levels of coverage your organization has been shown to enhance satisfaction and improve understanding.

4. Review of plan design

Reviews of plan design are increasingly occurring. Plan design should be reviewed carefully and different scenarios should be run and analyzed. Raising deductibles or co-pays to offset other costs or providing a health savings account (HSA) or health reimbursement account (HRA) are options to consider. But it’s also important to pay attention to the level of benefits that other employers are providing. Conducting an annual benefits analysis can help determine where employer benefits could be modified without compromising competitiveness.

5. Negotiation of options

Taking responsibility for your health care costs and seeking additional bids from other carriers is a necessity. Inquire about other options from your broker that reduce costs and provide greater wellness resources to help employees better manage their health. Your broker may not freely offer this information, so take initiative and ask.

6. Implementation of restrictions or penalties

Increasingly, organizations are implementing more restrictions in their health insurance plans such as spousal carve-out provisions and higher premiums for smokers. Shifting additional costs or penalties to unhealthy workers, although not widespread, is becoming more popular and may help reduce or manage health care costs.

7. Offering of incentives

Incentive use for wellness program participation is expanding. A chief reason that wellness programs may not reduce your organization’s health care costs is lack of participation. Studies continue to show, however, that employees are more likely to participate in programs when meaningful incentives are offered, such as discounts on health insurance premiums.

8. Health risk assessments

Usage of these assessments is becoming very common as they can be valuable data-gathering tools for both organizations and employees. Employees can attain greater insight into health risk areas and organizations can receive an aggregate report of areas where employees need wellness assistance. Wellness programs can then be targeted to those needs. 

9. Free prevention services

Services like flu shots, health screenings, cholesterol and blood pressure checks, vaccinations, and other yearly screenings are increasingly offered in the workplace.  By providing free wellness services on-site, you can decrease usage thereby managing costs better. Also, educate employees to take advantage of the new provision of health care reform which provides free annual preventative services.

10. Wellness initiatives tied to health insurance costs

Wellness initiatives are obviously one of the best ways to reduce health care costs and the majority of employers either have one in place or are planning on initiating one. When planning wellness initiatives, be sure to not only emphasize how your organization is supporting employees’ well-being, but also how these programs are intended to assist employees in better managing and maintaining their health care costs. Employees need to see the connection.

11. Promotion of healthy habits

Recently, we’ve found that more organizations are promoting healthy habits to deal with increasing health care costs through internal nutritional standards, on-site fitness activities, and educational efforts like seminars, paper materials, and online information. Create the “norm” of healthy behavior in your workplace to manage health care costs.

12. Make it a team effort

Involving employees in solving health insurance problems can be effective. Encourage them to get involved in suggesting or implementing wellness activities and to provide their feedback on health insurance options. Collaborating and creating a conversation with your staff can help generate greater buy-in about health care decisions and limit negative perceptions of change.

Navigating health care reform and its effects won’t be easy, but we’re seeing many employers taking a proactive approach and implementing a variety of initiatives to cope, educate, and manage the law’s changes and effects on their businesses. 

Additional Resources

ERC Health
Visit www.erchealth.com to learn about our health insurance offerings for small and mid-sized businesses.

HR Help Desk
For more information and guidance pertaining to any of the content in this article, please contact hrhelp@yourerc.com.