Experts weigh in on how today’s labor market is driving HR trends.
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From the pages of In Business magazine.
Having trouble finding qualified employees? If not, consider your company among the fortunate, although it’s probably in the minority.
Since January 2010, the unemployment rate in Wisconsin plunged from 9.3 percent to a low of 2.8 percent, then rose slightly to 3.1 percent in August, according to the state Department of Workforce Development.
With employee turnover at high levels, qualified workers in short supply (or unable to pass drug tests), and state or federal policies that can make their heads spin, human resources managers often get sandwiched between the demands of their bosses to meet bottom lines and the pressure to hire and retain qualified employees.
It’s a two-aspirin problem, especially when the departments themselves are often understaffed.
Many companies never returned to their pre-Great Recession staffing levels or training programs, stretching HR departments even further, notes attorney Tom Godar, a partner in the labor and employment practice area of Husch Blackwell.
In addition to Godar, we asked Jill Hall, an attorney with von Briesen & Roper S.C. about avoiding common HR mistakes, while Angie Heim, owner/president of The Employer Group in Verona, offered an HR perspective. [Note: IB reached out to several HR directors but did get a response.]
Headache No. 1: Employee churn
Godar has spoken to HR personnel who have enormous pressure to fill jobs, and he says they are trying to hire people. They fully understand the value of orientation and helping new employees during their first six months, but many simply don’t have the time to get it done.
The danger is the cycle of trouble that job churn creates, especially in the service industries, Godar explains. “If a business doesn’t have enough people, those they do have could be overworked. They might become unhappy and leave, and then an employee who may not be ready to be a supervisor gets promoted. It’s a terrible cycle of retention, training problems, and brand loyalty,” he warns. And it seems to be happening more and more.
Even worse, it could lead to a lawsuit from a disgruntled former employee claiming discrimination when, in fact, they were unhappy because they weren’t trained properly. Perhaps the employer didn’t have the resources necessary to give the employee the best training, or an employer hired someone without fully vetting their qualifications.
“Often, that $15 dollar-an-hour supervisor hired to manage a $10/hour employee does not have all the training necessary,” Godar states.
If a poorly trained employee gets a tongue lashing by the boss through no fault of their own, they could feel wronged and mistreated by something they believe is protected under the National Labor Relations Act, “and suddenly it morphs into a wage-and-hour complaint under state or federal law,” he suggests. “That’s the kind of thing that can happen when the laws become just a trampoline for unhappiness, and it can cost both sides financially and detract from the core business.”
Knowledge reduces risk, and the more an employee knows and the more they feel connected, the better the chance they’ll stick around.
Godar advises employers to practice balance and consistency. “An organization with the proper balance will expose their employees to ombudsmen or an appeal process so they can work through their complaints,” he counsels.
He also advises them to provide employees with opportunities for internal training to develop better relationships. “Most of the time, people don’t leave their companies, they leave bosses.”
To gauge culpability, he suggests a stop-sign analogy. “If I run a stop sign, or a police officer tells me I have, I feel pretty bad if I realize I never saw the sign and blew right through it. On the other hand, if I knew the stop sign was there, was in a hurry, and ignored it, I’ll know why I’m being pulled over. It’s no surprise.”
In part, that’s why HR departments and employees need to work together — so people have a clear view of what to expect in the workplace — but consistency is key.
Godar says it all boils down to doing the right thing, and intent.
If an employee feels they’ve been wronged, the onus is on their legal team to prove, using a fairly rigorous test, that not only were they treated badly, they were treated differently than others, and that isn’t always easy. “In the meantime, the employer is distracted by unplanned litigation and costs,” he says.
It’s not uncommon to find HR managers feeling wedged between a rock and a hard place and working very hard under difficult circumstances.
That’s why it’s important that employers have a process that everyone agrees upon.
“A decent process simply feels fairer,” he adds. “Due process is not just a pain in the neck. Due process means — going back to the stop-sign theory — that someone feels their concerns have been heard.”
HR departments are often armed with anti-discrimination/anti-harassment tools, but do they have the necessary time, energy, resources, or incentives to develop and promote a culture of inclusion and diversity, and the training and resources that would go with that? Even if they do, it’s often difficult given the pressures they are under.
Headache No. 2: A change of form
Angie Heim, owner and president of The Employer Group, a professional employer organization, acknowledges the stressors.
“It’s hard on HR departments to get it right,” she says. “Mistakes are not tolerated, and compliance issues can get very complex, especially with just a one- or two- person department.”
Besides that, government is not typically known for simplifying things.
“Have you seen the new W-4?” Heim asks, her voice rising.
The W-4, or the new Employee’s Withholding Allowance Certificate, allows employees to direct how much federal income tax they want withheld from their paycheck.
The form changed as a result of the 2017 Tax Cuts and Jobs Act (TCJA) and was promoted as an easier way for employees to accurately determine how much income tax should be held from each paycheck.
It misses the mark, according to Heim.
“The new W-4 is so complicated,” she exclaims, “and it goes into effect Jan. 1!”
Although still in draft form, the new W-4 is now four pages long and requires tax withholding to be based on income. “Gone are the days of single-zero,” Heim adds, referring to a common withholding status.
An IRS calculator is available for assistance, but it can be confusing, she adds.
“I could barely figure it out and I’ve been in HR all my life!” Heim asserts. “I think it will be hard on small businesses, and maybe even manufacturers.”
In addition, the new form applies only to employees hired after Jan. 1, 2020, forcing employers to use two systems — one for existing employees, and one for new hires.
While this change should not come as a surprise to employers if the payroll firms are doing their jobs, Heim reports The Employer Group had to completely upgrade its systems just to accommodate the new form.
“I’m guessing many small HR departments could be overwhelmed.”