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November Hot Topics:
- Eliminate Your Biggest Hiring Mistakes
By Alden Reynoso, VP Recruitment and Client Services, Human Resources Professional Group
- California State Fund Board Lowers Work Comp Rates
By Eric Sheetz, Commercial Insurance Broker, The Michael Ehrenfeld Co. - New CA Sales Commissions Law Takes Effect January 1, 2013
- Planning a Safe Holiday Party
Eliminate Your Biggest Hiring Mistakes
By Alden Reynoso, VP Recruitment and Client Services, Human Resources
Professional Group
As we have discussed in our recent articles, we have seen an uptick in recruiting activity across our client organizations over the past few months. As more employers eye first-of-the-year hires, now is a good time to examine and refine your current hiring practices. Below is a summary of two of the most common hiring mistakes managers make followed by an outline for an inexpensive and simple way to avoid these pitfalls
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Hiring With Your Gut And Not Your Brain
The biggest issue for some companies is that the people they hire are only mostly competent. Typically, I see this with managers who rely on a “hiring by gut" process. Hiring based on intuition allows personal bias to unduly influence candidate selection. For example, I have never seen any personal bias eliminate more talented candidates faster than “industry experience." Hiring Managers who rely on intuition to guide the selection process may incorrectly assume that strength in one area (industry experience) correlates with strength across the board. This is also true with regards to weakness in a single area (a lack of industry experience). When considered objectively, it becomes clear that except under limited circumstances, industry experience really is unnecessary for most positions. Truly agile learners with the ability to draw on past experiences to solve novel problems will be able to pick up the nuances of any industry very quickly. Uncreative, inflexible thinkers will never be effective problem solvers no matter how many years of experience they have in a given industry.
Passing On A Good Candidate For A Not So Good Reason:
Making hiring decisions solely based on the candidate’s resume will likely cause you to miss out on some really talented people. When you are considering candidates for employment, it is important to remember that for most positions, a person’s ability to do the job should be assessed, not how well they sell themselves or how handy they are with formatting documents in Word.
Also, bear in mind that high-performing employees are frequently not good interviewees. Conversely, people who are great in an interview aren’t always top performers. (Have you ever hired a sales person who performed well in an interview, but then could never close a sale?) In order to learn from their selection mistakes and improve the overall process, some innovative companies now track the candidates they didn’t hire because they didn’t quite make the cut. If those individuals go on to be very successful for a competitor - they may be worth revisiting.
So, given that hiring managers are human, cannot help being biased and in most situations all they have to go on to make a hiring decision is a resume and an interview - what are they supposed to do to eliminate these mistakes? Happily, the solution is fairly simple.
Correcting the Course
The quickest way to correct these opportunities for error is to establish a consistent process that allows interviewers to be conscious of personal biases and remain objective throughout the selection process.
Abandon traditional job descriptions for recruiting purposes and use a performance profile instead. While a job description describes the minimum required skills and experience, a performance profile spells out the top six to eight performance goals the person will accomplish with that expertise in order to be considered successful in the position. Laying out expectations before recruiting even starts and then communicating those expectations to candidates goes a long way to removing personal bias and will segue selection to performance management when a hire is made.
Create an objective interview assessment tool. As previously mentioned, many managers make emotional or intuitive hiring decisions based on gut instinct. First impressions play into this practice and can create significant bias in the selection process. While there is no way to eliminate this aspect from human nature, bringing the first impression bias to the conscious level is important to reducing its impact on hiring decisions. One way to do this is to objectively measure first impressions. For example, have managers track their reaction to the candidate when they first meet them. Follow that up by having them track how they feel about the candidate a few hours after the end of the interview. Forcing managers to treat this emotional reaction thoughtfully can help reduce the bias and keep the focus on the candidate’s ability to do the job.
Conduct an interview debrief where opinions must be tied back to examples. A recruiter-led interview debrief can go a long way to eliminating intuitive hiring by helping managers articulate the reasons for their emotional responses. For example, to say someone has strong interpersonal skills because the person “clicked" with the interviewer is insufficient. Before making a hiring decision on that criterion, the interviewing team should be able to provide specific examples offered in the interview of when the person helped co-workers to succeed in previous employment situations. On the flip side, eliminating a candidate on cultural fit because the person “just didn’t feel right" is also unacceptable. The hiring manager should be able to provide specific examples of responses the candidate gave which did not reflect a good cultural fit for the team. In this way, an objective assessment may be made of even as subjective a criterion as “cultural fit."
Make the process the practice. The ROI on the time invested in reducing or eliminating hiring mistakes is immediate. However, as with any change in process, the success of your venture will be directly related to your manger’s actual participation. Working the process should be mandatory for all hiring managers. Like all cultural changes, this directive really needs to come from executive management (and they need to be held to it as well.)
There is no way to guarantee that every hire you make will be a good one - but using a well defined, objective selection and interview process coupled with careful pre-employment due diligence in the form of reference and background checks will put you well on your way to building your strongest team yet!
For more information or questions, contact Alden Reynoso, VP Recruitment and Client Services, Human Resources Professional Group. Alden may be reached at areynoso@hrpg.com, or (760) 730-9531.
California State Fund Board Lowers Work Comp Rates
By Eric Sheetz, Commercial Insurance Broker, The Michael Ehrenfeld Co.
The California State Compensation Insurance Fund Board passed a 7 percent decrease in workers’ compensation rates, which will take effect on January 1st, 2013.
The news is a step in the right direction for workers’ comp reform in California, and follows on the heels of Senate Bill 863 which aims to fix loopholes in our failed workers’ compensation system.
But despite its approval, the first quarter of next year will miss out on the initial rate savings. Unfortunate, I know.
“We anticipate they will be effective toward the end of the first quarter in 2013,” said Jennifer Vargen, a spokeswoman for State Fund.
The Board voted on the measure after deliberating in a “two-day strategic retreat session in Napa,” the Insurance Journal reports.
Now that California can look forward to lower rates, here is what you can expect to see:
A $543 million dollar immediate savings for the state of California.
Estimated savings of up to $1 billion dollars over several years.
A 100 million dollar dividend for the 2012 policy year.
A change in the State Fund broker distribution model which requires representatives to go through one of two wholesalers in order to establish “premium thresholds to qualify for a direct contract.”
We, at the Michael Ehrenfeld Company, applaud the state of California and its activists for working to reduce workers’ comp rates.
“State Fund has made significant progress in its restructuring plan that is on track to reduce annual expenses by $300 million over a three-year period,” Tom Rowe, State Fund and CEO, said in a statement. “We’ve made difficult but necessary decisions over the past couple of years and our improved efficiency, disciplined pricing combined with solid investment returns enables us to return money to California employers who are still struggling with a slow economic recovery. State Fund is committed to serving California’s businesses and employees and helping to grow California’s future.”
For more information or questions regarding your companies risk exposure, please contact Eric Sheetz, Property and Casualty Insurance Broker for The Michael Ehrenfeld Co. at ESheetz@ehrenfeldinsurance.com, (760) 809-8510.
New CA Sales Commissions Law Takes Effect January 1, 2013
Employers in California with employees paid on a commission basis, such as commissioned sales representatives, are advised that a new California law that takes effect on January 1, 2013 requires that you:
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Prepare your commission agreement in writing, specifically stating the method by which you will compute and pay the commissions
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Provide a signed copy of the written agreement to the employee; and
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3. Obtain a signed receipt for the written agreement from the employee.
There is no clear-cut guidance on how the law applies to existing arrangements, so it is recommended that employers review existing arrangements to be sure they are in compliance by January 1, 2013. Most employers will need to take some action during the remainder of 2012 to comply.
The new law also provides that if you do not take formal action to amend or cancel a commission agreement, and your employee continues to work for you, in substantially the same position, your employee may have a continued right to be paid the same commissions. Thus, it is extremely important for you to either amend or cancel a commission contract, in writing, prior to its expiration if you wish to change any of the terms or to end the arrangement with an existing employee. Limited exceptions exist for certain short-term productivity bonuses and for more global bonus and profit-sharing plans, but you will need to assess your various arrangements on a case-by-case basis to see if each qualifies.
HRPG is prepared to assist you with finalizing your 2013 commission agreements in time to comply with the new regulations. Please contact us at rdavies@hrpg.com or by phone at 619-421-0074.
Planning a Safe and Successful Company Holiday Party
December is upon us and so is the season for holiday parties. With that in mind, many employers choose this time of year to thank employees for their hard work and a job well done. A holiday party is a great morale booster and serves as a nice way to say thank you. At the same time, it is important to be mindful of your liability and legal responsibilities.
When planning your holiday party, be aware that you are undertaking several liability risks and there is the possibility of criminal or civil penalties. Alcohol is known to be the most common culprit of such actions. Refraining from serving alcohol altogether would be an easy solution; however this is not always feasible.
If you choose to provide alcohol at your holiday party, it is good policy to familiarize yourself with “social host” laws in your state. For instance, in California, employers generally do not face criminal liability if an employee overindulges, and is then involved in an accident causing injury to him or others. Important to note though - municipal social host ordinances do exist locally in California. If alcohol is served, take steps to curb consumption by providing a limited number of drink tickets, or by keeping the bar open for only a short period of time. Also important to note that while you may not be held legally liable for a drunken employee's actions, you may end up spending thousands of dollars proving this.
Sexual harassment and lewd behavior is yet another pitfall to be aware of when hosting employees at a company party. As the party approaches, companies should make it a point to hand out their sexual harassment policy again and be sure all employees understand that these guidelines will be in effect at the party, even if it takes place off-site. Supervisors should also be urged to monitor employee behavior and set a professional example.
One last thing to note: emphasize to employees that their attendance at holiday parties is voluntary, not mandatory. This will minimize liability should an employee injure themselves at your party. There have been instances in California of employees attempting to sue their employer for slip and fall injuries at parties.
With some advanced planning and awareness of liability issues, your holiday party can spread good cheer and be enjoyed by all. Below is a holiday party checklist that will help you have a successful event.
Holiday Party Checklist
Choose an off-site location or local restaurant.
By reserving space at an establishment with a liquor license, there is a good chance that a professional bartender will be serving drinks. Bartenders can better gauge a guest's alcohol consumption and when it becomes excessive.
Consider hiring a caterer for events held on-site.
If you plan on serving alcohol at an event on your premises, a professional bartender should be hired to serve any and all alcoholic beverages. Employees should not serve drinks to other employees. Be sure to confirm that the caterer has updated and current liability insurance.
Set limits as to how much alcohol will be served.
Employers should attempt to control how much alcohol is consumed by implementing one or more of the following suggestions: a) provide a minimal amount of drink tickets or serve alcohol for a short period of time only. b) parties that take place earlier in the day can curb alcohol consumption as employees may be less inclined to drink to excess in the daytime. c) offer abundant choices of non-alcoholic beverages and food, which can serve as an alternative to alcohol.
Offer Transportation.
If you choose to serve alcohol at your event, consider providing transportation home for employees in attendance.
Have employees alert you to any intoxicated employees.
Encourage employees to be on the lookout for co-workers who may have over-indulged. However, be sure not to assign employees who could be non-exempt from the Fair Labor Standards Act (http://us.practicallaw.com/5-501-9884) (FLSA) in order to avoid claims that they are entitled to compensation, having been required to work off the clock. (See Prevent Wage and Hour Claims by Non-exempt Employees)
Is the company insured?
Companies should determine if they need to purchase insurance that covers Dram Shop or liquor law liability. However, before investing in any new coverage, they should review their existing policies as a comprehensive general liability policy can provide such coverage.
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