- Latest News

Employees Are Out of Control, And It's Costing You Money

Mon, 05 Oct 2009 00:00:00 -0400

1 in 3 Canadian workers report they are in serious financial distress and are dissatisfied with their personal finances. A survey by the Canadian Payroll Association says nearly 60 per cent of Canadians are living paycheque to paycheque and they would be in trouble if one paycheque were to come one week later.

"We were shocked by that number. So many Canadians are now living so close to the line that, if they miss a single paycheque, a majority will find themselves in financial difficulty," said Janice MacLellan, chair of the Canadian Payroll Association.

This issue of personal debt and poor finance is present in all socioeconomic circles. It does not matter if your employees make $150,000 or $35,000 per year. Personal financial distress affects millions of Canadian workers and it is costing employers thousands of dollars each year. Researchers have found that financial distress spills over into the workplace, contributing to such work-related occurrences as personal finance-work conflict, lower commitment to the organization, less satisfaction with pay, work time wasted dealing with personal finances, more absenteeism, and poorer health. Employees with money problems are like sharks swimming around the work place taking bites out of the bottom line.

Financially unhealthy employees do not make the best decisions for themselves or their employers. They do not manage their personal finances very well. They do not save and invest enough for a financially successful retirement. These things contribute to lower productivity as well as higher health care costs. Work Place Research shows that your employees are worried about their money more than any other aspect of their life, more then their work, family, marriage, or even friendships.

Employers often recognize the issue but do nothing about it. The new trend at many companies is to provide Financial Literacy seminars at the work place. Financial Literacy is not another trendy catch phrase. It is a movement that is supported by all sectors of society and it is based on the belief that people can’t do better if they don’t know better. The definition of financial literacy is “The ability to understand financial choices, plan for the future, spend wisely, and manage the challenges that come with life events such as job loss, saving for retirement, or child education.” Large numbers of employees are not maximizing their retirement plans and do not have any kind of savings for emergency.

Providing employees with the tools to become financially literate about the basics—knowing how to manage personal savings, credit, and create a spending plan—helps improve factors that affect the organization’s bottom line, such as productivity.

The best way to help your employees financially is not to give them a raise. Instead provide them with workplace financial education.

Quality Financial programs rescue employees and employers. It is in the employer’s best interest to provide employees easy access to quality financial programs. It also is the right thing to do as stewards of the employee’s well-being. Employers do not realize they can improve profits –and prove it– by helping employees improve personal financial behaviors. Quality Workplace Financial Programs Reduce Employee Financial Illiteracy and can save employer’s $750 - $2,000 per employee. The Personal Finance Employee Education Foundation expects employers to receive a ROI of 3:1 (or more) annually for quality workplace financial programs. Example: Cost of Financial Literacy Program $500 per employee. The employer’s benefit will be $1,500 per employee.

Benchmark employee’s financial wellbeing by asking them to respond to the Personal Financial Wellness Analysis (PFWA). The PFWA consists of a 9-item pencil-and-paper questionnaire that in 3-4 minutes measures financial health. The PFWA is a valid, reliable, peer-reviewed, and published measure over 25 years in development. It’s not an issue of money spent on workplace financial education it’s an issue of it’s effectiveness!

Daniel Hanzelka
Special Report for HR-on-Demand

Employers to Reduce Pay Hikes Next Year

Thu, 03 Sep 2009 00:00:00 -0400

A survey of employers shows Canadians can expect an average pay hike of 2.3% next year, according to survey results released by Hay Group yesterday.

While that's well down from the 3.7% bosses were planning to give in anticipation of 2009, it matches the actual average raise of 2.3% this year, the Toronto-based business consultancy said.

"The 2010 forecast and the actual adjustments of 2009 obviously reflect the impact of the recent economic downturn," Hay Group said in a statement.

The data were based on responses from 500 private-and public-sector employers. Karl Aboud, director of Hay Group's compensation-consulting division, said although there were economic headwinds a year ago when the previous survey was taken, there was still a great deal of optimism in the energy sector.

The survey also showed 15% of employers are planning wage freezes for next year, up from 2% in last year's survey.

Financial Post September 3, 2009

More Canadian Employers to Boost Salaries Next Year: Survey

Tue, 01 Sep 2009 00:00:00 -0400

OTTAWA -- A report done by business research group Watson Wyatt Data Services shows that more Canadian employers plan to hand out raises next year than was the case this year or last.

The report said 92.2% of Canadian employers have budgeted to increase base salaries next year. That's up from 79.5% of companies that had planned to give raises this year and 91.4% who provided salary boosts in 2008. "Companies tend to feel . . . ‘If we held back salaries in 2009 and we laid off or we've done some restructuring . . . to reward our key players and to keep people on board and to keep them engaged, we have to budget something,'" said Cherie Langevin, director of survey operations for Watson Wyatt Data Services.

The average pay bump for the companies planning to boost pay is expected to be 3% in 2010 -- unchanged from this year. That's down from the average 3.7% raise in 2008, the report said. Liz Wright, Watson Wyatt's Toronto-based consulting head for compensation issues, said it's indicative of the apprehension employers still have over economic conditions that the raises planned for next year fall short of 2008. "There's certainly a lot of optimism, but we're just not out of (the economic difficulties) yet," she said. "Just because we had one month (June) showing positive GDP, it doesn't mean we've totally turned the corner yet."

The Watson Wyatt report shows working in the not-for-profit sector can be personally profitable, with the average salary hike there expected to be 3.8% compared to 2.9% in the for-profit sector. Ms. Wright said, as with most employers, the not-for-profit sector faces tight competition in attracting top talent. They tend not to provide the same level of performance bonuses seen in the for-profit sector, she added, and often have to put a greater deal of focus on base-salary increases for recruitment and retention purposes.

Only limited regional Canadian data was made available by Watson Wyatt on Tuesday, with more information expected to come out later in the week. Of the information available, Saskatchewan had the highest average planned salary hike next year at 3.1%, and Vancouver was the leader as far as cities go, also at 3.1%. The only other province for which results were released, Nova Scotia, was expected to see an average pay hike of 2.8% in 2010. For other cities, Montreal, Toronto and Winnipeg were all on track for 2.9% salary increases, while Calgary was slated for an average pay hike of 3%.

The data is based on surveys of 106 Canadian organizations between April and June. No margin of error was provided.

Financial Post September 1, 2009

Human Resource Outsourcing Outlook 2009

Wed, 12 Aug 2009 00:00:00 -0400

Human Resource Outsourcing Outlook 2009

In a recession, all arrows point to outsourcing. The Human Resources Outsourcing (HRO) industry projects growth at five percent in 2009 amid the most severe economic downturn since the Great Depression. Some of the industry changes driving this growth promise to translate into improved ROI for HRO clients. Find out which behind-the-scenes strategies will save you money in 2009.

To reach a projected $3.2 billion in sales, HRO intends to drive new business through several strategic initiatives.

A La Carte Service

Industry analysts are predicting more componentized deals, allowing companies to select specific services to outsource while retaining others in-house. HR outsourcing suppliers are building greater flexibility into service agreements, allowing clients on-demand service changes and pay-as-you-go pricing. With cost reduction a top priority, new clients will target transaction-intensive processes for outsourcing. Human resources outsourcing services include:
- Payroll and benefits
- Recruiting
- Performance management
- Compensation
- Learning

HRO clients can trim expenses by accessing available resources only as needed, scaling outsourced services to meet changing needs. In a volatile economy, this sort of flexibility is crucial to maintaining a lean business.

Human Resource Management System (HRMS) Technology

Human resource management system (HRMS) technology has hitherto served as something of a competitor to HRO. HRMS facilitates in-house human resources, providing a global view of human capital and automating tasks such as payroll, benefits, recruiting, training, and performance tracking. A technological solution can increase in-house efficiency, rendering outsourcing unnecessary.

In 2009, however, analysts predict an increased adoption of HR technology by outsourcing providers. By making this technology available to clients on a Software as a Service basis, HRO suppliers present an attractive proposition for companies looking to avoid a large capital outlay. Clients benefit from subscription-based access to both the state-of-the-art technology and the providers outsourced human resources team.

Consolidation in the HRO Industry

Consolidation among HRO suppliers will bring better value to clients outsourcing multiple processes or implementing a large-scope human resources solution. Industry analyst Everest Research Institute expects to see consolidation via mergers and acquisitions as well as via partnerships among independent suppliers. Providers will consolidate in order to broaden their expertise into new processes and technology; widen their geographical footprint; and expand their market share.

For HRO clients, consolidation promises greater efficiency and access to broader services, as well as a reduction in the cost of multi-process service contracts. Continuity between services alone produces greater value. For example, a global HRO supplier might partner with a specialized Recruitment Process Outsourcing (RPO) provider to deeper recruiting services in specific geographies. Their clients benefit from both the reach and economy of a global HRO and the local recruitment relationships of the partner.

The coming year offers a promising outlook for human resource outsourcing suppliers and clients alike. As the market for outsourcing human resources matures, the industry will drive growth by increasing the efficiency and breadth of its services. In a climate of pessimism and gloomy forecasts, companies finally have something to cheer about.

by VendorSeek.com

HR Outsourcing Trends and Insights 2009

Wed, 12 Aug 2009 00:00:00 -0400

HR Outsourcing Trends and Insights 2009

At a time when the majority of companies are under increasing pressure to reduce costs due to the weakened economy, HR departments expect to maintain their current strategies toward outsourcing HR services, according to Hewitt's HR Outsourcing Trends and Insights 2009 survey.

Hewitt recently surveyed 104 companies on how they are using outsourcing to improve the delivery of their benefit and HR programs and also how their strategies might be affected by the current economic environment.

From the survey results, it's clear that outsourcing does play an integral role in HR's ability to deliver programs to employees. Overall, 82 percent of companies that have measured their outsourcing programs said they realized the benefits they had hoped to gain by outsourcing.

There are a number of reasons why companies choose to outsource HR services, including:

Reducing costs: Sixty-five percent of organizations that indicate cost savings is a primary outsourcing objective reported they achieved their expected cost-reduction targets through their outsourcing programs.

Gaining access to outside expertise: In addition to needing specific domain expertise, companies also want to be relieved of the burden of making large investments in technology to maintain in-house systems and dedicating resources to meet challenging regulatory guidelines.

Improving service quality: Considered the most common measure of success for outsourcing, 81 percent of respondents indicated that they met or exceeded their service quality targets.

Realigning/focusing on strategic HR priorities: Outsourcing helps remove the day-to-day administrivia of managing HR programs so HR can focus on supporting on their most important business challenges.

by Hewitt Associates

Preparing for Shortage of Key People

Sat, 30 May 2009 00:00:00 -0400

Preparing for Your Upcoming Shortage of Key People

Did you know that the cost of replacing retiring or departing employees in your business could be in the millions of dollars over the coming decade? And while hiring retirees as contractors can fill the skills gap, it will also slow your corporate adaptation efforts.

With the looming retirement of Baby Boomers, many companies are ill prepared for the accelerating talent shortage to follow. They haven't done enough to improve their hiring and employee retention practices, or establish succession programs. Consequently, they will struggle in attracting needed talent and sector skills in the competitive future. They will not stand out in comparison amongst employers and will find themselves unable to afford the replacement cost for comparable skills.

The time to act is now, since your hiring competitors may have already taken significant steps to position themselves as an attractive employer - an "Employer of Choice."

It's critical to recognize both the attraction and retention issues faced. Changing your internal practices to become a competitive employer will be a significant undertaking. Board members and shareholders must be alerted to the issues and make the choice to enable you to successfully compete for talent and retain proprietary information.

The first step is generally to craft the business case which highlights the risk to the company and proposes an action plan to make your business a desirable employer - which boards and shareholders

must consider seriously. Backed up by research and best practices, identify what your company needs competitively to be a more attractive employer, together with an appropriate budget for this effort.

Here are some of the areas such a presentation might address (customized to your business, its location and priorities):

• The cost profile of replacing retirements/departures
• The upcoming labor force demographics in Canada and specifically your region
• The folly of relying on contracted retirees as a stop gap
• What today's employees are looking for
• What other similar or competitive businesses are doing to attract and retain employees
• Human resource costs - direct and indirect
• The training costs of training up internal and external candidates based on the difficulty in replacing critical skills in a more competitive marketplace
• Financial and other implications arising from inability to service your customers until internal knowledge base is replace
• A plan for transitioning your business to becoming a more competitive employer
• Proposed budget and how to pay for the transition
• Measurable success criteria

Everyone knows that a few key people can make a huge difference to your business. If you have those people now - it's important to ensure that you don't lose them. If you need to add those people, you need to be their most attractive option.

About the Author:
David Boyle, president of HR-on-Demand, has over 30 years experience in designing and implementing strategies and tactics for outsourced human resources expertise.

Ottawa Paves Way for Phased Retirement

Sat, 30 May 2009 00:00:00 -0400

Ottawa Paves Way for Phased Retirement

In March of this year, the Federal Government enacted legislative changes to the Pension Benefits Standards Act, enabling pension plan sponsors to offer phased retirement as a means to retain mature workers. Phased retirement programs allow employees to receive a portion of their accrued pension while continuing to work reduced hours.

This allows companies to keep key personnel active in their business, while still allowing them the benefits of retirement. A phased approach to retirement can allow significant breathing room in transitioning roles and experiential knowledge critical to company success.

In Canada, the most recent census indicates that what has previously been viewed as the "core" working age population between 20 and 55 years of age, is decreasing while the population above 55 is increasing. Phased retirement offers employers an option to manage the retirement patterns of employees, to manage these demographic changes.

- Latest News

Employees Are Out of Control, And It's Costing You Money

Employers to Reduce Pay Hikes Next Year

More Canadian Employers to Boost Salaries Next Year: Survey

Human Resource Outsourcing Outlook 2009

Human Resource Outsourcing Outlook 2009

HR Outsourcing Trends and Insights 2009

HR Outsourcing Trends and Insights 2009

Preparing for Shortage of Key People

Preparing for Your Upcoming Shortage of Key People

About the Author: David Boyle, president of HR-on-Demand, has over 30 years experience in designing and implementing strategies and tactics for outsourced human resources expertise.

Ottawa Paves Way for Phased Retirement

Ottawa Paves Way for Phased Retirement

About the Author:
David Boyle, president of HR-on-Demand, has over 30 years experience in designing and implementing strategies and tactics for outsourced human resources expertise.