HR Compliance 101: Charlie the Tuna and the Fair Labor Standards Act (FLSA)

When the FLSA was enacted it’s intention was to provide minimum standards for employees in the U.S. and it’s territories.  One such territory is American Samoa. American Samoa is famous for two things it produces NFL football players and canned Tuna.  It is also an interesting micro-economy that was greatly effected by minimum wage laws.

As the story goes, in 2007 the U.S. passed changes to the FLSA requiring U.S. employers to pay their employees $5.85/hour, but there was an exception made for American Samoa tuna workers which kept their minimum wage at $3.55/hr.  The reason for this is that the island’s tuna canning industry paid a wage that was good when compared to the surrounding island economies, but obviously well below the U.S. standard $5.85.  An increase of this proportion would make the canning operations on American Samoa comparatively too expensive and could drive this industry out.  The non-voting congressional representative from American Samoa had a study performed by the U.S. DOL which stated that increasing the minimum wage to $5.85 in American Samoa would be the same effect as increasing the minimum wage in the main land to $16.50/hr.  The report went on to state that there is concern the increase would cause tuna canneries to close and production would likely be moved outside the U.S.  You can reference the study here.

Despite the study’s warning, in 2009, the U.S. Congress voted to remove the exemption with scheduled increases to take place every few years in $0.40 increments.  In 2009, the minimum wage was increased to $4.36 in American Samoa.  Two years later, Chicken of the Sea closed it’s cannery and moved it’s production.  Sunkist and others have tried to keep the industry going over the past 9 years, as the minimum wage was again increased in 2012 to $4.76 and again in 2015 to $5.16.  The next scheduled increase is in September of 2018.  Currently, there are less than a couple hundred cannery jobs in American Samoa and these are just skeleton crews to maintain the properties and to operate refrigeration units for tuna canneries in  These increases seem like small changes based on our mainland U.S. economy, but it has wreaked havoc in American Samoa’s economy with tuna job losses making up to 45.6% of the total jobs in American Samoa.  It has also had the effect of increasing the cost of living for all citizens of the island.  Ships who before carried tuna off the island are now nearly empty and as such the cost to ship to the island has went up significantly which has increased the cost of all imports.

Minimum Wage

As an employer one of our most important priorities is to properly pay our employees.  This is actually the reason our employee/employer relationship exists.  The employee agrees to work for a period of time for the employer’s interest and the employer agrees to pay the employee.  If either side fails this agreement the relationship will sour and end quickly after. The Fair Labor Labor Standards Act (FLSA) requires employers to meet certain minimum standards when paying employees.  Employers who ignore it will expect a visit from the Department of Labor (DOL) in a short time.

The FLSA is administered by the Wage and Hour Division (WHD) of the DOL.  It establishes a national Minimum Wage, rules for Overtime, defines Hours Worked, requires Recordkeeping and rules for Child Labor.  These rules apply in the private sector as well in Federal, State and local governments.  As with many government regulations there are exceptions and exemptions, so it is good to know when these may be applied as well.

The FLSA has been challenged as unconstitutional in United States v. Darby Lumber Co, 1941 stating the federal government does not have the right to regulate wages in businesses local to one State.  But, the FLSA was upheld by the Supreme Court as constitutional under the Commerce Clause, stating that the U.S. Congress has  the power to regulate employment conditions in both interstate and intrastate operations.

When the FLSA Applies

With that said, the FLSA still does not apply to all businesses.  Basically the FLSA applies to your business if you employee at least two people and you are an “Enterprise” with an annual dollar volume of $500,000 or if your business provides medical or nursing care for residents, schools/preschools or is a government agency.  The odd thing from the previous sentence is that although any school or preschool must pay a minimum wage, the teachers themselves are exempt from this law.  There is no minimum wage for teachers under the FLSA.  You can reference this exemption here.

Otherwise, the FLSA only applies to individual employees who engage regularly in Interstate Commerce.  Examples of employees who are involved in interstate commerce include those who: produce goods (such as a worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of state, regularly make telephone calls to persons located in other States, handle records of interstate transactions, travel to other States on their jobs, and do janitorial work in buildings where goods are produced for shipment outside the State.

If you do not, as a company, have a dollar volume of $500,000 and you do not have employees engaged in Interstate Commerce, then the FLSA does not apply to your employees.  But then, you still have to consider State and local laws as well.  For example in North Carolina, there is a State minimum wage as well as a Federal.  The correct amount is which ever is larger of the two.  Some states do not have a minimum, for example South Carolina does not.  In South Carolina the FLSA is the only minimum wage law referenced.  Some cities even have minimum wage laws, such as San Francisco where the minimum wage is currently $15/hr.

There are also employees who are exempt from the FLSA minimum wage requirement.

The following are examples of employees exempt from both the minimum wage and overtime pay requirements:

  • Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and certain skilled computer professionals (as defined in the Department of Labor’s regulations)
  • Employees of certain seasonal amusement or recreational establishments
  • Employees of certain small newspapers and switchboard operators of small telephone companies
  • Seamen employed on foreign vessels
  • Employees engaged in fishing operations
  • Employees engaged in newspaper delivery
  • Farm workers employed on small farms (i.e., those that used less than 500 “man days” of farm labor in any calendar quarter of the preceding calendar year)
  • Casual babysitters
  • Persons employed solely by the individual receiving services (not an agency, non-profit, or other third party employer) primarily providing fellowship and protection (companionship services) to seniors and/or individuals with injuries, illnesses, or disabilities

The current minimum wage is $7.25/hour (except in American Samoa) and has been the same since July 24th, 2009.  This is the national minimum, but your local state, county or city may increase this through local laws, so it is important to know what the minimum is in your location.  Some jurisdictions in California have more than doubled this to $15/hour in a few locations.  If there are no local or State regulations, the FLSA applies at the Federal level.  This is actually the case in most of the U.S.

An interesting concept when considering minimum wage, is one of Cash Wages.  In some scenarios, an employee may make some portion of their wages from the employer and some other portion of their wages from other sources such as, in the case of a waiter or waitress, tips.  Minimum cash wages refer to the employer’s portion of the wages  the employee must receive.  The minimum wage is still $7.25, but the employer is only required to pay $2.13/hour with the other wages ($5.12/hr) expected to come from tips.  The employee is still required to be compensated at $7.25, so if the tips fall short the employer must pay more than $2.13 to make up the difference so the employee realizes the full $7.25/hr in earnings.

Another “piece” to consider is when when employee’s are compensated in ways other than by the hour.  Employees may be paid by the piece or by the mile as long as the rate being paid is compliant to the minimum wage they would make in the same amount of time using hourly  compensation.  For example, an employee paid $1 per piece would need to work at a rate of at least 7.25 pieces per hour or the the employer would have to make up the difference for slow production work.


‘I wish you could do something to help us girls… We have been working in a sewing factory… and up to a few months ago we were getting our minimum pay of $11 a week…. Today the 200 of us girls have been cut down to $4 and $5 and $6 a week.’   This note was passed to President Roosevelt while he was campaigning and he later commented to a reporter, ‘something has to be done about the elimination of child labor and long hours in starvation wages.’  Seventy years later it is still the law of the land and it firmly established a ‘living wage’ which has been changed nearly 30 times since it was enacted in 1938.



HR Compliance 101: Know the Rules

The IRS Office suspected a fishing boat owner wasn’t paying proper wages to his deckhand and sent an agent to investigate.
IRS Auditor: “I need a list of your employees and how much you pay them.”
Boat Owner: ” Well, there’s Sam, my deckhand, he’s been with me for several years. I pay him $1,000 a week plus free room and board.
Then there’s the crazy one… He works about 18 hours every day and does about 90% of the work around here.
He makes about $10 per week, pays his own room and board, and I buy him a case of beer every Saturday night so he can cope with life… He also gets to sleep with my wife occasionally.”
IRS Auditor: “That’s the guy I want to talk to – the crazy one.”
Boat Owner: “That would be me. What would you like to know”?

Ask many business owners about HR compliance and most will refer you to their outsourced HR service or their internal HR director/manager down the hall.  Although this is a common practice, owners and corporate chiefs should also know that ultimately this is actually their responsibility and pointing down the hall or hiring a third party wont serve as an excuse when violations happen or pay judgments, penalties or fees when assessed.  As business owners and leaders, we need to know and have a basic understanding of the rules.

Compliance regulations which employers should have a general understanding include the following laws and associated regulations.

  • FLSA The Fair Labor Standard Act of 1938 established a minimum wage, overtime rules, record keeping requirements and youth employment standards.
  • Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion. It generally applies to employers with 15 or more employees, including federal, state, and local governments.
  • PPACA Patient Protection and Affordable Care Act ‘s employer shared responsibility provision of the Affordable Care Act penalizes employers who either do not offer coverage or do not offer coverage that meets minimum value and affordability standards. These penalties apply to firms with 50 or more full-time equivalent employees.
  • ERISA The Employee Retirement Income Security Act’s purpose is to protect the interests of employees (and their beneficiaries) who are enrolled in employee benefit plans, and to ensure that employees receive the pensions and group-sponsored welfare benefits that have been promised by their employers.
  • FMLA The Family Medical Leave Act of 1993 is a federal law that guarantees certain employees up to 12 workweeks of unpaid leave each year with no threat of job loss. It also requires that employers covered by the law maintain the health benefits for eligible workers just as if they were working.
  • COBRA The Consolidated Omnibus Budget Reconciliation Act generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.

In addition to Federal compliance concerns, many states, counties and cities are test beds for new employer regulations where smaller governmental legislatures pass increased employee protections and minimums.  For example minimum wages in some California cities are currently set as high as $15/hour which is more than double the federal minimum wage of $7.25.  Some local governments even require additional wages over 8 hours in a given day or increased wages on Saturday and Sunday.  More than 40 cities and counties now have minimum wage rules that exceed the federal minimum requirement.

State and local jurisdictions have also started to pay attention to rules and regulations as a form of union substitution.  For example, there are new local  laws in some cities protecting an employees right to discuss their wages with their peers.  This is noteworthy as this same law is having the effect of preventing employers from asking job applicants about their wage history during the application or job interview process.   Some jurisdictions have even become involved in paid sick leave regulations and other benefits and now require employers to provide benefits beyond the paycheck.  These regulations often increase the burden to track and record employee data which was not required in years past.

And in addition to federal, state, county and city regulations, some employers impose a form of regulatory responsibility on themselves through internal policies.  If a company’s internal  policy is not applied fairly and equally applied across all employees, the employer opens themselves up to civil judgments from employees who were not treated the same as others in the same situation and as a result were financially effected.

Compliance is not a one and done project, it is an ongoing effort.  An employer’s ability to answer compliance questions today does not guarantee that the organization will be in compliance next month.  New and changing regulations can cause mistakes, but so can changes in HR management staff with tribal knowledge and who have been administering compliance from spreadsheets, manual processes and/or  unconnected data systems.   Data must be kept in a reliable system capable of providing forensic data for audits purposes and defending compliance issues when needed.

In this series of articles, HR Compliance 101, we will look at some of these laws in a little more detail.  We will discuss, what questions to ask and where to look for state and local regulation concerns.  We will also look at information systems and best practices that will help you establish a clear compliance audit trail, which should be the basis on which any HR system is built.  And finally, we will look at workflows and procedures to ensure that your company’s policies and procedures are applied consistently and fairly across your organization.


How to get engaged in Employee Engagement: Maintaining Employee Engagement

Over time man has created many great works.  The Colosseum of Rome, Solomon’s Temple and The Mayan Pyramids to name a few.  Great achievements that have been celebrated over the years as some of man’s finest work.  But, none of these are functional today.  When man is unable, unwilling or simply negligent, even our greatest works will slowly go back to the chaos of nature through entropy.

Employee engagement is the emotional commitment an employee has to the organization and it’s goals.  It is highly recognized in modern management as important to the success of an organization.   If you have followed this series of articles and have made changes which have shown improvements to your organization’s employee engagement as a whole, then you will need to be sure to put controls in place to ensure your great work is not forgotten or properly maintained in the months and years to come.

Over this series of articles, How to get Engaged in Employee Engagement, we have defined and discussed how to measure , analyze and improve employee engagement, but unless we are able to maintain our new found emotional commitment, we will lose it.

The control phase of any process improvement initiative is when the project team hands off the new procedure to the process owner.  The team recommends audits, procedures and controls to keep the new process in check and well maintained.  It is the responsibility of the process owner to carry this forward and maintain the new status quo.  With many companies, the ownership of employee engagement is firmly held in HR.  But as we have seen throughout these articles, the responsibility really remains with the entire management team.  So all managers need to take measures to ensure employee engagement stays at the forefront of the organization’s strategies.

One of the key metrics or measure-able for employee engagement is the independent survey.  It is recommended that these be performed no less than annually and probably no more frequently than quarterly.   The Q12 survey by Gallup is a good tool and would produce the scores required to maintain and keep checks on the process.  Keeping a routine measurement of any process helps to ensure the personnel involved are continuing to maintain a high standard and also to keep an eye out for factors that may spark future improvements.

The leadership of the company must continue to communicate and set the vision for the organization.  They must hire and empower managers who share the same vision and are themselves emotionally committed to the organization’s goals.  If leadership is less vocal or communicates less, this may lead to entropy and less employee engagement.

Managers in the organization need to hire great people and make sure they have the tools they need to succeed.  They should work each day to eliminate and automate manual processes to allow their employees the time to focus and the freedom to align themselves to the company’s  goals emotionally.

Managers must continue to communicate the vision from leadership, but it is also just as important to make time to regularly listen to the employee’s feedback and not only listen but hear what is being said by the employee.  If employee’s feel they have a voice they will continue to remain engaged.  If they feel they are not being heard they may lose faith in their own emotional engagement or worse become disengaged.

In simplest terms, stay engaged with your employees and they will stay engaged with you (and the company).  Long ago, before talk of employee engagement, one of my favorite mentors said to me, “You are either with me or against me.”  Not in the sense of an ultimatum, but he truly felt that there should be an unwritten understanding that if he was engaged in my interests then likewise I would be engaged in his and the company’s interests.  He knew, even 25 years ago, how important it was to have my emotional engagement and alignment in the goals of the company.   I have kept that philosophy in my mind ever since it was told to me.  And now that I have shared it with you, you have one more tool in building truly great employee engagement in your organization.


How to get engaged in Employee Engagement: Improving Employee Engagement

There is no doubt that the members of the French World Cup team were 100% emotionally committed to the goals of their organization; the very definition of employee engagement.  Organizations with engaged employees out perform those without by over 200% according to Gallup .  A recent study by Deloitte’s Bersin group finds that Employee Engagement is believed by 87% of it’s global respondents as an important issue.  With over 50% stating that it is very important.  This finding is repeated in many other studies, where businesses leaders, overwhelmingly, find employee engagement is important to their success.

In our series of articles, How to get engaged in Employee Engagement, we have followed the process improvement approach of Define, Measure, Analyze, Improve and Control (DMAIC) commonly used in Six Sigma.  In our first three articles we Defined Employee Engagement, Quantified it with 3rd party surveys, discussed points to Analyzing this issue and now we will discuss ideas on how to Improve Employee Engagement.

SHRM has identified the first factor to consider when improving employee engagement is to make sure your employees have the tools to do their jobs.  This would be obvious in making sure plumbers have pipe wrenches given you are operating a plumbing company, but just as important in sales organizations is to have an effective Customer Relationship System or for HR professionals to have an effective Human Capital Management system.  It is defeating for employees to struggle through manual spreadsheet reports for much of their day vs. having that same time to engage in projects to move the company forward.  This also goes hand in hand with training and coaching, both factors (tools) that are needed for employees to excel in their jobs and to become more engaged in what is important to employers.

Edward Deming was a great process improvement guru who famously stated that 94% (later increased to 97%) of problems are caused by the system.  He was also quoted as stating, “All anyone asks for is a chance to work with pride.”  These are two great points to consider when looking to improve employee engagement.  First look at the system in which we all work.  Is the system favorable to engaging employees.  Is the performance measurement systems at your company still working with the traditional once or twice a year review or does your company employee a more modern approach of frequent review and reward.  Deming stated in his book, Out of Crisis, “Give the work force a chance to work with pride, and the 3 per cent that apparently don’t care will erode itself by peer pressure.”  Deming may have been on to something when he published these comments 35 years ago.  To learn more about how a modern HCM can help  click here.

My last point for this article:  make time to listen.  Take time to individually listen to your employees and to tailor your management style to each employee.  Individual personality assessments are one approach to learn what tasks employees may become more involved in, but a more simple approach is simply to ask what they want.  Also keep in mind that what may be considered a positive approach to one employee’s engagement strategy may be terrifying to others.  An example would be public speaking and presenting in front of others.  Great for some, not for all.

And there is no greater way to engage an employee than to listen to an idea they have and then ask them to participate in the idea’s implementation and success.   It is a well known fact in our company that if you bring me a good idea and you are willing to make it happen, you may just have a new line on your job description next week.  By allowing the employee to develop a sense of ownership in the success of the idea and making sure to acknowledge the employee’s contribution you will no doubt see employee engagement on the rise.

In our next article, we will discuss how to keep our new employee engagement  strategies moving forward over the long term and to avoid losing what we have just gained.





How to get engaged in Employee Engagement: Analyzing Survey Results

Photo by Lukas from Pexels

In the past two articles, we first defined employee engagement and then measured it.  Now that we have received the results of our survey it is important to analyze the results to identify areas for improvement.

Employee engagement is defined as the emotional commitment the employee has to the organization and its goals.  We measured this using a survey executed by a third party, where our company’s employees answered a series of questions designed by the polling company to measure key areas of employee engagement.  Analyzing the results is the next step in the process improvement process.

Many times the analysis phase is not given proper consideration.  Without analyzing the results, we may jump to solutions without knowing the true root cause.  This premature action may waste time, wrongly consume resources and may even cause more issues, unknowingly.

The ideal way to perform analysis is to review the measurements and then brainstorm as a team to develop hypotheses about the root cause of the issues identified.     Then if possible design tests to prove or disprove each hypothesis.  It is very important to take the time to determine and verify each hypothesis before deciding on any solutions.

An important technique in the analysis phase may include graphically displaying the data.  Tools such as Pareto Charts, Histograms and Line Graphs may lead to new hypothesis, so it is important to organize and display the data in a meaningful way.

With properly displayed data, the team can then look for possible causes.  Most process improvement teams will be familiar with tools such as fish-bone diagrams and techniques such as the 5 Why’s. All useful tools to help in determining the root cause of an issue.

There are also third party organizations who specialize in analyzing these results and can help in offering insight and also help in suggesting possible solutions.

It is important to note that just because you score low in a given area in the survey, this is not always an area that needs your attention.  The survey results should also include bench marking data to help you compare your company’s results with those of  other companies in your geographical area and/or industry.  This is important as it can help in determining which areas you should pay attention to in your analysis.  If you find you have a low score in a specific area of interest, you may find that you also score higher than your competition.  If this is the case this may not be an area you would spend time and resources trying to improve.

Given we have defined, measured and analyzed our company’s results our next step would be to implement solutions targeted to improve employee engagement.  This will be discussed in my article to be published next week.


How to get engaged in Employee Engagement: Quantifying Employee Engagement?

Read any selection of articles about employee engagement and you will read statements like…

  • Great employers understand that truly innovative ideas come from an engaged and inspired workforce.
  • Successful companies emphasize employee engagement as a significant factor in their success.
  • The importance of employee engagement can’t be overstated…

From the headlines one can quickly determine that employee engagement is important and companies who want to be successful should take steps to improve it.  And any good process improvement guru will tell you, “Anything worth doing is worth measuring.”

How do you quantify employee engagement?   The Gallup organization has established a survey of 12 questions which they and many others feel will provide a measure of employee engagement.  They refer to these questions as the Q12 and they have been performing surveys since 2000 with thousands of employers and 100’s of thousands of employees.  Every five years they publish a State of the American Workplace with the most recent published in February 2017.  You can receive a copy of this report here.  It is free of charge and is referenced by journalists and bloggers heavily.

Employee engagement affects eleven performance outcomes. Compared with bottom-quartile units, top-quartile units have:

  • – 41% lower absenteeism
  • – 24% lower turnover (in high-turnover organizations)
  • – 59% lower turnover (in low-turnover organizations)
  • – 28% less shrinkage
  • – 70% fewer safety incidents
  • – 58% fewer patient safety incidents
  • – 40% fewer quality incidents (defects)
  • +10% higher customer metrics
  • +17% higher productivity
  • +20% higher sales
  • +21% higher profitability

While the report is done every five years the survey is completed by employers continuously every year.  The 12 questions asked in the survey are broken down into four categories.  The twelve questions and 4 categories are listed below.

These surveys establish baselines which can be used by your company to compare your employee’s overall engagement compared to the hundreds of thousands of employees surveyed each year.  You can purchase this analysis for your company at a cost of $15/employee from Gallup.  Your employees will be given a link and credentials to complete the study and your company will receive back a nice report which will show how you compare to the baselines established each year.   If your company has multiple departments or groups these reports may also be used to compare results between groups

There are other measures and other methods that may be used to perform this analysis, but Gallup is well established in this field and no doubt you will be able to use this information to establish your own baseline for process improvement and a broader baseline to compare your employee’s engagement to other workers in the United States workforce.

Once your baseline is established you would want to repeat it, periodically to see if you are improving or declining, using the report to identify target areas for improvement.

There is little doubt that employee engagement is highly important to a successful company and that adding it as a significant part of your overall strategy for improvement is a very wise decision for any business leader.

In my next article we will look at analyzing the survey results.



How to get Engaged in Employee Engagement: Defining Employee Engagement

Today’s business world is changing rapidly.  Companies who want to be successful are being challenged by new measures of success.  As new generations of workers become a more significant part of the workforce, employers are challenged to adapt to what factors motivate employees.

Unemployment numbers have dropped to record lows and employee confidence in the workforce is on the rise.  Employees are much more confident in seeking new employment.  As such, employee retention and recruiting are at the top of the list of business leaders’ concerns.  One of the key factors to consider in this changing environment is employee engagement.

What is employee engagement?  Forbes author, Kevin Kruse, defines employee engagement as follows:  Employee engagement is the emotional commitment the employee has to the organization and its goals.  He goes on to state that employee engagement is not specifically employee happiness,  or satisfaction.  The emotional commitment mentioned in his definition refers to the employee’s and the company’s goals being more closely aligned and the employee is engaged in the company’s success rather than simply working for a paycheck.

While millennials are now the largest segment of the workforce, employers must continue to realize it is still made up of 5 or more generations of employees:  The Silent Generation, Boomers, Gen X, Gen Y (Millenials) and Gen Z (Nexters).  In 2016, according to a Pew poll, Millennials composed 35% of the workforce making it the largest generation in the workforce.  33% are Gen X, 25% are Boomers, while Gen Z and the Silent Generation round out at 6% and 2% respectively.

Each generation has their own expectations of how the workplace should operate and if employers are not prepared to adapt, they will find they are at a disadvantage in regards to employee engagement as the workforce shifts to the newer generations.

The Silent Generation has traditionally been about loyalty and duty.  Many of this generation would spend their entire career at one company.  The Boomers are more about career and self-worth.  They may be more materialistic than the other generations and are more driven by titles and personal success.  They prefer person to person communication, and like the Silent Generation are team oriented.  Gen X is more independent and prefer to solve problems on their own.  They were the first generation to actively use the internet, but likely learned it as young adults.  They focus on results and tend to ask for feedback only when they need it.  Gen Y (millennials) are the first generation to use the Internet from a young age.  They may be seen as over-confident due to overly affirming parents.  They are good at multitasking and typically expect much more feedback and rewards in the workplace than the previous generations.  Work/life balance is more about life than work, and they put an emphasis on corporate social responsibility more than previous generations.  The newest generation, Gen Y, is expected to be more focused on life style than money and career success.  Gen Y is also considered to be more team oriented and prefer face to face communication.  Everything old is new again.

Understanding each generation and their work place goals and motivators are extremely important in developing a focus on employee engagement.  The leading motivators such as title and money are being replaced with lifestyle and continuous feedback.  Employees are becoming less materialistic and more concerned with social responsibility.

With this in mind, the annual review with a pay adjustment may be considered less effective than in years past.  The ability for an employee to receive instant feedback and recognition may ultimately lead to more engagement than previous motivator to improve on an annual review.  Recognition for a job well done is changing.  It is also important to note that an approach heavy on command and control may be less effective than team activities and celebrating smaller goals more frequently.

As part of the overall employee engagement strategy employers should also consider investments in technologies better suited to the changing needs.  Today’s workforce is much more technology oriented and they expect better, more mobile communications with the company.  They expect to receive information and feedback more frequently and wish to be more involved and up to date with the social culture of the company.  Modern HCM systems from Cimplx address these challenges and more.

It is my intent to continue this as a series of articles with the next being How to get Engaged in Employee Engagement: Quantifying Employee Engagement (next week).

Baptizing Cats

This past weekend Mrs. Stein and I tried something new to us, Glamping.  Glamping is a mix of glamour and camping and describes a style of camping with amenities not usually a part of traditional camping.  Mrs. Stein had recently made the decision to stop smoking and asked that we find a quiet stress free location to begin this transition.   She needed to change her environment and reduce as many triggers as possible.  We chose glamping for the seclusion it offered.  Just the right amount of separation from  normal society without too much roughing involved.

While reducing her stress was the goal, I quickly learned that offering sound, logical, reasonable cessation advice to a person who has just stopped smoking is much like attempting to baptize a cat and she was not nearly as appreciative as the cat in the metaphor.

While Mrs. Stein was doing this for personal reasons, it still made me think about the cost of smoking in the workplace.  So like any HR blogger would do, I did a little research so I can share it with you here.   I found many articles on the subject which mostly referenced an Ohio State University study (found here)  which claims that companies pay almost $6,000 extra per year for each employee who smokes.

Before going much further, I feel it important to note that this information is being provided for informational purposes and not a condemnation of smokers in the workplace.  Some of our most valuable employees are smokers and I would not trade them for the world.  In no way am I suggesting this be addressed on an employee by employee basis, I am sure the cat metaphor above would still apply if this was attempted in the workplace.  This information is being provided to help employers understand there is a real employer cost involved with smoking and that offering cessation assistance (even at a cost to the company) can be a good investment.

The costs listed in the study are broken down as an average of $517 per year for absenteeism, $462 for what they call presenteeism (present but less productive), $3,077 in smoke breaks and $2,056 in extra medical costs if the company is self insured.  And it costs the smoker as well; the study states that smokers tend to have lower salaries than non-smokers by as much as 15.6% and some employers have actual policies of not hiring smokers.

Quitting smoking is very difficult.  An article from the National Center for Biotechnology states that smokers try to quit only once every two to three years and only about 4-6% are successful.  Successfully quitting usually involves multiple attempts, but eventually about half are able to quit permanently.   About 1/3 of the people attempting to quit will seek treatment, which is actually a higher rate of treatment use than that for alcoholism or obesity.

Many times, employees who want to quit will seek, and in some cases require, treatment to quit.   Employers who provide support will increase the chance of success.  The website, , states that within 12 months of quitting the risk of cancer, heart disease and other chronic conditions is significantly reduced, lowering the extra medical costs stated above.  Workers who stop smoking will become as productive as co-workers who never smoked at all.

The site goes on to state that a successful, employer-supported cessation program should include three elements:

  • Easy access to nicotine replacement therapy
  • Active social support
  • Coaching

This is obviously best served from a third party.  Employers who want to help should research programs that offer assistance rather than develop or manage their own.  This should be easily justified given the figures in the OSU study are in line with actual costs the employer may be experiencing.

It would also be wise to offer this help passively.  The employer should let all employees know the program is available, but should allow the employee to make the initial approach.  The sources used above all state that this data is for employees who want to quit.

Mrs. Stein is off to a good start.  At times, she has vocalized some serious second thoughts throughout the weekend.  And we both know this is very difficult.  But overall, I am very proud of the effort she is making.

I also must say that our hosts, Christy and Bryan did a great job making sure we were comfortable and that we had everything we needed.  I would highly recommend the experience if you are considering something like this.  Learn more about them and the glamping experience at .



Does your vendor know where to tap?

Scanning my Facebook news feed today, I came across a story about two business men who had a problem with a large ocean ship they owned.  The ship needed engine repairs and the men had already went through several vendors to repair the engine with no success.  Eventually,  they came across an older gentleman who advertised more than 30 years experience in large engine repair and specifically on the engine they had.

Having no luck otherwise, they decided to  hire the man.  Soon later, he arrived to work on the engine carrying a large bag of tools and proceeded to inspect the engine.  The two owners watched intently hoping he would know what to do and that they would have their engine running again.

After a little time, the man reached into his bag and pulled out a small hammer.  He selected the right place on the motor and gave the engine a tap.  The engine came to life and ran perfectly.  The owners were very happy and the old man returned the hammer to his bag and left with a job well done.

Later the owners received the invoice for his work.  It priced the repairs at  $10,000.  Upset by the amount, they wrote to the old man and asked for an itemized bill so that they could justify such a large payment for such little work.  When they received the invoice it listed two lines for the repair:

  • Tap engine with small hammer          $           2.00
  • Knowing where to tap                            $ 9,998.00

The most valuable thing is knowing where to tap.

When working with a vendor to resolve an issue you want to work with one who knows where to tap.  Many times when working with large corporate software providers, you may find yourself passing through the phone tree to arrive at an individual who is reading from a script and who may never have actually worked a day in an HR environment.  You can anticipate the frustration you are about to experience almost immediately after the phone is answered.

One of the most frustrating things for myself is when they say, “I am sorry you are experiencing this problem.”, for the third, fourth, fifth time  (I got the message that you are sorry I am experiencing this problem the first three times you said it, let’s get the issue resolved already.)  Over and over the same phrase, apologizing, instead of a strong sense of confidence letting you know you have reached the right person and they will solve your problem.

One way to ensure you can expect the right type of response in this situation is to work with a solutions partner who knows the ins and outs of the software.  A firm authorized by the software company to provide service and sales so you know they are qualified.  Instead of a phone tree and scripted responses, you want a direct line to a familiar voice that you know is knowledgeable and most importantly is in this problem with you.   You should feel like your problem is now their problem.

It’s easier not to stress, when you have familiarity with the other person and you have developed a solid partnership, over time.  A knowledgeable expert in many aspects of what you are experiencing and in every case, a go to person who can quickly find answers and most importantly follow up throughout the process and make you feel you are receiving the service you deserve as a valuable customer.

Most importantly, one who apologizes once, and then solves your problem.

Ten Reasons Why Your Office Should Consider Fun in the Workplace as a Great Business Strategy

Companies are discovering the vital benefits to letting employees blow off steam in the workplace. Whether this is a basket ball hoop in the parking lot, a ping pong table in the break room or even a more simple gesture as offering outdoor time to take a walk and get some fresh air, the decision to allow employees to have fun activities away from the desk can show real benefits to the workplace. Regardless of the activity, employers are noticing the benefits to the company as well as the employee. Win-win!

Below are 10 reasons you may want to consider these type of activities in your own workplace.

10. BALANCE – In life, and really in everything we do, we need balance. This also applies to work in the forms of stress and relief. At times, it seems that work is everything and deadlines are coming faster than we can handle. As employers, we can sometimes push employees to the point that they begin thinking more about the end of the day, rather than the day at hand. In some cases, it can help employee’s over all job satisfaction to have relief come more frequently in small doses in the form of a quick and fun activity, rather than simply concentrating on the clock and going home when stress becomes too much.

9. PRODUCTIVITY – Thinking back to your school days, in which classes did you participate and learn the most? Was it the class with the lengthy lecture and the monotone teacher? Bueller…. Bueller… Or was it in the classes where the teacher added a little fun to each day and you actually looked forward to going? Chances are it was the latter. This principle also applies to the workplace. When employees look forward to their work day they are more productive. Whether it is a student taking a break from reading a book or an employee taking a break from staring at a computer screen, we are beginning to learn that productivity doesn’t always stem from staying 100% focused for eight hours. Recent studies show that adding in small, frequent breaks to a task filled day leads to highly increased productivity.

8. ENGAGEMENT – Employee engagement is quite the buzz word in today’s workplace and rightly so. When you realize that employee engagement is a mindset, you will find opportunities for greater employee commitment, including greater effort from the team, higher sales, fewer mistakes… I am sure there are many more. Author, Kevin Kruse, in his book Employee Engagement 2.0 states, “Employee engagement is the emotional commitment an employee has to the organization and its goals, resulting in the use of discretionary effort.”

7. RETENTION – Looking above at reasons 10, 9 & 8, you can see that this is a place you may enjoy working. And if so, other employers are going to have to work a little harder to convince this employee to leave and come work for them. Turn over is a very real cost for employers and it is very important to retain good employees rather than worry about recruiting and training costs.

6. MORALE – People who enjoy coming to work are more prone to stay at work and have a positive attitude throughout the day. This is better for relationships with co-workers as well as customers. Positive attitudes are also infectious and can spread throughout the organization, making life easier on everyone.

5. COLLABORATION – Most business leaders see the benefit of conversing on the golf course in a more relaxed and less business like environment rather than in a corporate conference room. (Given the time some spend on the course this must be of real benefit to the company, right?) The same benefits may be found when employees engage in fun activities at the office. Just because fun time may be spent away from the desk, it doesn’t have to exclude work related conversations. I can say, that even with myself, I have found time spent with co-workers in a more relaxed environment, such as shooting darts or playing pool, has produced some very good work-related conversations. Work is the one thing employees definitely have in common, so it will be a natural topic when two or more coworkers get together regardless of the activity. Talking through problems and work related issues in a creative manner will help in finding new solutions to existing problems.

4. HEALTH – People are more healthy when they are happy. Stress is a leading contributor to many health issues, so reducing stress can have a positive effect on ones overall health. Harvard’s School of Public Health agrees and specifically lists heart disease as having a causal relationship with stress. Healthy employees have better general attendance at work and experience less chronic issues requiring leave from work.

3. CREATIVITY – Whether your shop employs software developers, maintenance mechanics or blog editors, play improves the imagination which in turn leads to improved creativity. Creativity helps every process and leads to innovation and problem solving. These are all benefits that will give your company an edge over the competition.

2. CULTURE– When customers, competitors, other business owners or city leaders visit your facility and see the investment you have made in your employees’ well being, it makes an impression. They can see that you value people and that your company genuinely cares about people. This helps in establishing trust and will inspire other companies to do business with you and refer new business. Employees will tell people they know that they enjoy their work. Visitors will share what they have seen. This leads to recommendations and will generate business opportunities down the road.

1. PEOPLE ARE THE MOST IMPORTANT THING – Doing the right thing in every aspect of business leads to success. In any industry, leaders who have the philosophy of doing the right thing are more successful than those who do not. Authors Rajendra Sisodia, Jagdish Sheth and David Wolf have completed research and have published a book, ” Firms of Endearment: How World-Class Companies Profit from Passion and Purpose.”Coining the term Firms of Endearment or FoE, they promote the corporate culture where creativity, empathy and responsibility to all stake holders is core to the corporate philosophy. For FoE companies, this includes making their employees jobs more more fun and creative as one of the primary strategies. First and foremost making long term investments in their employees as one of the best investments they can make.