Are you pushing the limits on your labor?

Pushing

One of the first things I learned in Industrial Psychology was the breakdown and distribution of labor. I learned what it meant to have a full-time equivalent (FTE), part-time, temporary and per-diem/on-call staff. Each of these components serves a different and essential purpose to your workforce planning.  In fact, you cannot actually get any work done without first deciding what work needs to be done, how much time it takes to get the work done and how many people you will need to do it.

There has been a shift                     

Over ten years since my first Industrial Psychology class, I see labor distribution and allocation looking very different and even nonsensical.

Let’s take per diem staff for an example. Traditionally, per diems were used as workforce fillers. They were a subset of the workforce that you kept handy to cover peak times, special projects, surplus or leaves. Per-Diem staff did not have regular schedules and were often paid a higher hourly rate for their ability to be flexible and/or be called in at the last minute. They were just-in-time labor and we never treated them as anything but.

Fast forward to now, there is something very different going on with per-diems.  Not only are they expected to be flexible as they have always been – they are also working the equivalent of full-time hours on a consistent basis.

I worked in Healthcare for 8 years. Many of my friends and colleagues are still in that field. One friend in particular has repeatedly worked as a per-diem nurse for various facilities. As a per-diem nurse, she has been expected to be flexible with her scheduling. She has also worked upwards of 40-50 hours per week in these roles.

Here’s the breakdown of labor:

  • 32 hours of actual on-the-job labor
  • An additional 8-10 hours off the clock answering phone calls, emails, and charting because of the insurmountable workload.

This schedule is consistent and is also considered what they call fee-for-service which means she gets paid for individual services provided to a patient. The issue is she has worked all of the hours above and is paid infrequently due to minor errors like an incorrect year being listed on the final chart. She uses her own car for this mobile position and although she was offered cases in close proximity to her home they consistently assign her an hour or more from her designated area. Even the expenses like her gas and the like have not been paid.

Why do I share this?

This company is pushing the limits on her labor. It is not reasonable for anyone to be classified as per-diem and be working as much or more than a full-time equivalent on a consistent basis. You can cite any rule you can find to support this from DOL – it makes no sense.

Secondly, if you are going to implement a point-of-service model for paying a subset of your workforce, you need to pay when the service is rendered – not when you choose or even when you get paid. There is absolutely no ROI on her working, because every time she thinks she is getting paid there is an issue pushing her payment further and further into the realm of unreasonableness. To date she is still waiting to be paid for three weeks worth of work. She’s basically working for free. The bills wait for no one.

Last but not least (and this applies to FTE’s, part-time, temp and per diem), there are reasonable and unreasonable limits for off-the-clock labor.  One call for clarification on something is reasonable. An expectation of your employees being on email at all times and/or requiring after-hours calls is unreasonable. She receives calls and emails all times of the day and night and when she returns the phone calls there is no one there to receive it. This turns into hours of calls and returned calls and emails on a day when she isn’t officially on-the-clock.

I have witnessed the abuse of labor both as a practitioner and now as a consultant. Businesses have gotten really good at utilizing the loopholes in what DOL provides and they are using it against the workers. If you are a new business owner, established business owner or work in HR, here are some suggestions:

1) Work needs to start and end. Just because you have penchant for working excessive hours and wear that as a badge of honor- doesn’t mean others should do the same. Establish reasonable start times for work and encourage your employees to end at a designated time. The only purpose for extra hours of work is when there are tight deadlines and surplus. You should be training your people to be efficient. not over-worked zombies.

2) Respect your employees time off-the-clock. You many think your question or issue is pressing, but did you really take a moment to decide if it is more important than what your employee may be doing on their day off. No one wants to be disturbed at dinner, in the middle of family time or while out running errands. Be sure that your concerns are worth the interruption of their life.

3) Be careful how you are classifying your people. As I illustrated above, there are many abuses of per-diem staff going on. If you have that much of a need for additional assistance with getting work done, these workers need to be re-classified and offered all of the benefits, compensation and perks that come with part-time and full-time status. You will decrease your risk as the employer and appease the employee who will understand that you value their time and efforts.

Our job in HR is to be the moral compass for the organization among other things. Over-extending your workforce not only leads to turnover, but to absenteeism and wellness issues. It’s time we stop trying to cut corners and be good to the people that keep the business humming.

 

#EqualPayDay What Are You Doing Differently Today?

Image courtesy of Flickr.com

Image courtesy of Flickr.com

As I turned on my computer yesterday and started to navigate my various social accounts, I found out that it was #EqualPayDay. It was a day for all of us to discuss the obvious issue with pay equity in this country. It also marks how far into the year women must work in order as much as their male counterparts earned in 2014.  I’m always down for a good social campaign, but something about #EqualPayDay feels banal.

It is well documented that women are paid less than men in the workplace. We also know that black and latino women fare the worse with regard to pay equity. The bigger question is: what are employers going to do about it? It’s cute to hop on social media and tweet your support for the day, but again what is anyone going to do about it?

I am a solopreneur with a little over two years under my belt as a business owner. I can assure you when my time comes to hire a few good women to assist me with building my legacy they will be compensated adequately for their efforts regardless of gender, color or any other identifiable criteria beyond their control. That’s my vision for my company.  I have powerhouse women friends who also own their own businesses and have dedicated themselves to filling in all the pay equity gaps women have had to deal with for eternity by offering: fair salaries, childcare and eldercare options, real maternity leave that isn’t confined to a 12 week FMLA allotment etc. You see, the end to the gender pay gap in this country has to start with good intentions. If you have little or no regard for a certain subsection of citizens or better yet the people you employ (who happen to be human beings like you) none of this will change.

Food for thought…

Women don’t just get screwed on salary alone, it is the entire package and delivery that creates economic disparity. Every unpaid medical or maternity leave, the inordinate costs of childcare and eldercare; and wages that have stopped increasing or do so marginally prevents us from being able to sustain ourselves and our families. According to a recent study by the Center For American Progress, over 50% of women work outside of the household and contribute to their families economic security.

I have been pretty transparent about my salary negotiation missteps over the course of my career. However, what’s really disturbing is that the “sisterhood” isn’t collectively on the same page when it comes to closing this gap. Out of the seven positions I have held over the course of my career, I have had one male boss. The rest have been women. In all circumstances, not one of them ever advocated or demanded I be paid my worth. They used to lie and tell me that they were pulling for me to get the raises I was fighting for, but it was hot air. It was never their intention to ensure that I was paid a fair wage for my efforts.

Here’s the bottom-line, if I work hard and provide quality outcomes I expect to be paid commensurate with the result. I don’t want to hear: “hang in there” “I’m rooting for you” “Budgets are tight” or “maybe next year”. Women want this to change now- not in 2049 or 2178.

I say all of this to say leaning-in never increased my salary, asking for more never increased my salary and it had little to do with my ability or lack thereof to negotiate. The system in many companies is not geared to serve the interests of women or minorities for that matter. The companies that care and want to see everyone succeed do so because they start with good intentions, consistent action and passion for establishing fair workplace standards.

I know many of you felt empowered yesterday, but what are you doing about it today in your own businesses? I’ll wait. 

 

Why Focusing on Internal Equity Isn’t a Compensation Strategy?

 

 

is_not_3Outside of my love for both Recruitment and Talent Management lies a fascination with Compensation Strategy. It is the window of opportunity that every company has to compete for talent. Not every company can deal the same cards. Some will lag the market, some will lead and others will mirror the market. Even more fascinating is this sentiment that a person’s worth in an organization should be marginalized by the salaries of others- a.k.a. internal equity.

If you are unaware of internal equity, here is the breakdown in a story: you are courting a new Accountant from the outside. You already have six other accountants company-wide with varying levels of knowledge, skills, abilities and tenure. You ask the new Accountant for their salary requirements; but before you oblige their wish list- you check the salary spread across the six individuals you currently employ. In doing so, you find that the lowest paid Accountant gets $65,000 per year and the highest paid Accountant gets $85,000. Your rockstar Accountant candidate is making $85,000 plus a $10,000 per year bonus. To make him whole he is looking for $93,000- 96,000 per year. Despite your salary range of $63,800- $94,000, you decide to offer $87,000 because you would hate to disturb your internal equity among Accountants.

Here’s the issue with this strategy:

1) You are likely to either have your candidate decline your offer to move onto greener pastures or  he will counteroffer and you get to play that game.

2) This person has an MBA, CPA and has worked at KPMG for over 15 years. You only have one other CPA on staff and they don’t possess the 15 years of experience at a big firm or an MBA. How can you offer him less when he is more qualified?

3) Depending on whether your ranges lag, lead or mimic the market, you may spend a long time trying to make this candidate whole- which may become old and eventually push the candidate to seek new opportunities.

Don’t get me wrong, I like to look at internal equity to give me a barometer for how people are situated salary-wise in the organization. Additionally, it helps you to make equitable decisions regarding both internal and external candidates. However, I have seen companies use it to drive their compensation strategy. It isn’t a strategy at all. If someone meets and/or exceeds the functional and strategic needs of your organization, you may have to bust the internal bubble once in a while.

It is foolhardy to believe that every hire will conform to the confines of your salary structures. The key is to make the right compensation decisions and burst that internal equity bubble only when it makes the most sense. However, inconsistent compensation practices whereby certain employees are paid more and unqualified or under-performing- will undoubtedly undermine any aspirations or hopes you have for a fairly compensated workforce. More often than not, I see under-performers that are better compensated than those who perform at or above their pay grade.

What does that say for internal equity?

If you truly care about a transparent and fair payment system, you have to start with the premise that every  person regardless of race, gender, ethnicity etc. is worth the value they provide to the organization. Salary is just one piece of the puzzle, how else can you leverage rewards, benefits etc. to improve your overall offering. I understand the reasons why internal equity is needed, but as a strategy it is stifling and only as good as your overall compensation practices.

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