Employers have always faced a lot of business challenges. But if it seems like it”;s harder to run an organization now than in the past, your perceptions are correct.
Factors that contribute to the complexity employers face:
Increasing business regulations at all levels of government, A patchwork of rules for operating in different states and regionsNew expectations from employees and customers
Here”;s an overview of those key issues -; compliance, risk mitigation, retention, workplace culture and customer relationships -; plus a few tips on how employers can successfully navigate them.
Compliance and risk management
Among the top business challenges for employers are those related to managing compliance and employment risk. The requirements are complex, and there can be strict penalties for failing to comply.
All too often, while employers are focused on growing their
businesses, the laws and regulations that apply to their companies get set
aside, remaining overlooked until a problem arises.
More people, more rules
Compliance requirements change as a company grows. For example, once a company hits 50 full-time (or full-time equivalent) employees, it becomes subject to the employer shared responsibility provisions of the Affordable Care Act (ACA).
That adds another layer of information to monitor and actions to take, including tracking hours worked by part-time employees to determine benefits eligibility.
Faced with many layers of rules, employers can get mired
down trying to keep track of it all, especially if they don”;t have internal or
outside HR expertise.
That”;s why growth typically means a business will need to scale HR functions internally.
Must-haves for managing risk
Risk mitigation also often gets overlooked while leaders
are focused on growing their businesses. Alas, this common oversight can put a
company in a vulnerable position, perhaps one that can result in a costly
lawsuit or legal fees.
Meanwhile, many employers raise their risk further by not
having a company handbook or written best practices and procedures. That can
work against the employer when (not if) an employee someday files a grievance
The basic steps to mitigating employee risk are simple:
an employee handbook. It should include best practices, processes,
procedures and company policies.Create
a system to deliver anti-harassment
and anti-discrimination training to all your employees as part
of your company”;s code of conduct.
Yet, even with a hardworking HR staff member or two,
creating a handbook, delivering training and keeping risk-mitigation documents
up to date can be challenging, especially as the number of employees grows.
Employment regulations have increased in recent years, and compliance
now involves more than federal rules.
Every state has its own employment laws that businesses
need to follow. In fact, California has its own separate certifications for HR
professionals because of the complexity of operating in the state.
Cities, such as San Francisco and New York, are passing their own regulations with which employers must comply.
Thus, as businesses expand into other cities and states, they often discover they need HR expertise for every region in which they operate — and someone to continuously monitor the existing rules for updates and make process changes accordingly.
Hiring and retention
Employers continuously encounter challenges to finding and keeping talent that”;s a good fit for their company culture.
Long gone are the days when someone made a whole career with one employer. In fact, younger employees now tend to join new organizations eager to build skills quickly and then seek out new opportunities.
This creates a problem for employers, because it costs a
lot of money and time to find talented people.
hire and retain the talent you want, your company must build a great
employee value proposition. To craft a persuasive one, begin by clearly identifying
the things in your business that will encourage top talent to sign on and stay,
Good health benefitsCompetitive compensationCompetitive leave options, including paid time off (PTO)Workplace perks (flexible schedules, free lunches, snacks, etc.)
Once you”;ve identified what makes your company a great
place to work, write and share your employee value proposition with potential hires
by integrating it into job listings and other recruiting materials.
The overarching theme of your employee value proposition should be that your company has a good culture. A healthy culture -; one that makes talent want to join and stay -; takes planning and work.
Organizations that let their culture develop on its own run
the risk of losing control of it. Your employees may establish a great culture,
or they may not.
The more effective approach is for leadership to manage the
culture from the top down. That means clearly, consistently communicating your
vision and values to your people.
This may sound straightforward, but it can be difficult
sometimes, especially when:
have remote employeesYour
company is rapidly hiring new peopleYour
company is going through a merger or acquisition
In these situations, you want all your employees to
experience the same culture. To accomplish that, consider:
How do you communicate your culture to workers in distant locations? Are you ensuring that new hires are a good fit for your culture?In a merger, how will your mission, vision and values evolve to reflect the two identities of the individual companies?
Navigating these business challenges requires work and a long-term commitment. The effort is worth it, because it creates a culture that keeps employees engaged.
engagement leads to good morale, which is a hallmark of a great
culture. That can make your people more likely to stay. Yet engagement isn”;t
the only cultural element that can increase retention.
Sometimes those elements are unique to a specific business.
But how do you assess cultural strengths and weaknesses?
A good starting place is to have meaningful conversations
with key employees. Many companies do exit interviews but not enough conduct stay
interviews. In these discussions, employers sit down with their most
engaged employees to find out:
they stay with the company?What
is your company doing right from the employee”;s perspective?Are
there gaps you can close to make the employee experience better?
A strong culture helps companies master another important business challenge: customer relationships.
Customer relationship management has evolved from “;the
customer is always right”; to “;the customer is always right and online.”;
Any touchpoint can become the subject of a social media
post, for better or worse. And customers are more willing than ever to take
their business elsewhere after a single negative experience with an
Good customer relationships stem from the company culture, because
engaged employees represent the company well. When employees are passionate
about their work and feel that it makes a difference, every touchpoint they have
with customers reflects the company”;s values.
In the long run, a positive, upbeat culture not only makes
employees happy but also customers.
And happier customers positively impact the bottom line.
The ultimate business challenge: finding time to handle it all
Compliance, risk mitigation, retention, workplace culture
and customer relationships are critical to business success. The complexities
and ongoing work involved can pull a leader”;s focus away from other business
If you want your business to succeed in the long run, however, ignoring these business challenges is not an option. That”;s why many organizations turn to a professional employer organization (PEO) to handle some or all these burdensome tasks.
With professional HR help, organizations can focus on their
business goals and handle the many challenges that face today”;s employers.
Want to learn more about how PEOs can help businesses? Download
our free e-book: HR outsourcing: A step-by-step guide to professional employer
Read more: insperity.com