Also in this issue:Wise Ys: What Millennials Can Teach Other Co-workers

HR Hat Doesn’t Fit? Don’t Wear It

Pay Equity: It’s the Right Thing to Do

Cracking the Gen Z Code Think You Know Them? Think Again.

Bottom LineSmart Thinking for Smarter Business | Volume 27

A more human resource.SM

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4 Up the Ante:Time to Play the Financial Benefits Card

19 22Find Your Sweet Spot:How Benchmarking Can Help You Hit It out of the Park

Wise Ys: What Millennials Can Teach Other Co-workers

As health care and insurance costs continue to rise, financial well-being is taking center stage. Freshen your benefits image among prospects and current employees by giving them both instant and long-term financial gratification.

When it comes to building a great team, the guessing game isn’t an effective strategy. Here's a surefire method for attracting the right talent and keeping valuable employees from being lured away.

Today’s employees are finding they can learn a lot from their millennial counterparts by having an open mind and keeping their running shoes on.

HR Hat Doesn’t Fit? Don’t Wear It8 “If you want something done right, you should do it yourself.” Well, that adage doesn’t always apply, especially when it comes to human resources.

Business-Owner-By-Day-and-HR-Manager-by-Night

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Federal and State Employment Law Updates 25

27

Stay on top of recent state and federal legislative changes.

Knowing Has Replaced Guessing26

Using data analytics to discover your organization’s strengths andweaknesses.

Not all PEOs are created equal. Here's how to choose wisely.

12 Pay Equity: It's the Right Thing to DoPay equity is also a way to attract a wider pool of talent, promote engagement, and build your brand.

Cracking the Gen Z Code: Think You Know Them? Think Again.16

At 80 million strong, millennials are the most studied generation in history and an economic force. Now, hiring managers must turn their attention to Gen Z if they hope to draw these young employees into the roles opening up as baby boomers retire.

Top 5 Differences When Working With a Certified PEO

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Up the Ante:Time to Play the Financial Benefits Card Elizabeth is your newest hire and she’s fresh out of college. When she filled out her new-hire paperwork, she checked the box to participate in the 401(k) plan you offer because in her words, her dad told her to. But he didn’t tell her how much to save, or to be sure and contribute enough to get the match, or what “pretax” means. When she received her first paycheck, she was shocked by all the deductions and said she was considering opting out of the 401(k) — even though she was only contributing 2%!

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Is her aversion to socking away money for retirement her fault? Or is it yours?

Long-term thinkingEveryone wants instant gratification, so compelling employees to think long-term can be challenging. Most employees have an employer-sponsored retirement account, such as a 401(k). Yet:1 2 3

• 60% of participants say they don’t have an actual plan for how they will manage money in retirement.

• 25% have no idea how much income they’ll need to replace.

• Only one in five project they’ll have adequate retirement savings.

If Elizabeth knew that participating in a 401(k) actually saves her money through pretax contributions — and although it looks like the money is being taken out of her paycheck, it still belongs to her — maybe her attitude about saving for retirement would change.

Employers are no longer expected to merely offer a 401(k) with an adjustable contribution rate and diverse investment options. More and more, workers want their employers to be educators. And what employees want is a more holistic service, such as one that offers lessons in debt management, investment strategies, and saving for college or a home, for example.4

Therefore, it's not surprising, that offering financial education benefits is becoming a draw for candidates of all generations. A financial wellness program could help distinguish your business as you compete for talent in today’s tight labor market. In addition to retirement savings, remind your employees that life insurance and long-term care benefits are important aspects of long-range planning.

But I’m not a financial expertServing as a financial authority isn’t necessarily a role employers want to play, but the advantages are clear. A company that offers

financial education could save $3 for every $1 they spend on their programs.4 Because money problems may cause stress that leads to poor health, financial wellness programs can reduce absenteeism and worker disability costs.

If you’re considering starting or ramping up your financial wellness support, you’re not alone. In a recent study, 35% of employers say they’ve altered their retirement savings and planning benefits in the prior 12 months in order to increase retention.5 Another 56% of employers say they are very likely to create or focus on financial well-being for employees beyond retirement decisions.

It starts with education. According to Aon Hewitt’s Hot Topics in Retirement and Financial Well Being report,6 employers are offering tools, services, and education campaigns on: • Basics of financial markets• Budgeting • Debt management • Financial planning • Health care planning • Saving for life stages • Prioritizing savings

A company that offers financial education could save $3 for every $1 they spend on their programs.4 Because money problems may cause stress that leads to poor health, financial wellness programs can reduce absenteeism and worker disability costs.

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And more companies are now partnering with financial planning service providers to give their employees access to personalized financial coaching, tools, and education that can even help them choose the medical plan that best fits their budget.

Instant gratificationIf Elizabeth thinks a 401(k) is the only financial benefit you offer, you can proudly point out how your many other benefits have helped her coworkers avoid financial disaster.

For example, Dan, your 40-year-old foreman, fell from a ladder during his annual gutter cleaning a couple years ago, landing him in traction and preventing him from working for the next six weeks. Because he was enrolled in short-term disability insurance, he had income coming in the whole time he was laid up.

The same with Katherine, your 28-year-old receptionist, who was able to take 12 weeks of maternity leave following the birth of her baby because she had long-term disability insurance to replace a portion of

her salary. Today, she takes full advantage of her Dependent Care Flexible Spending Account, which lets her set aside pretax dollars to pay for child care services so she can continue working.

Then there was Marie, your 60-year-old bookkeeper, who was devastated after her husband was diagnosed with lung cancer. However, she was able to concentrate on him and not the medical bills because she had critical illness insurance through your group plan.

HIPAA regulations would, of course, prevent you from revealing the names of Elizabeth’s coworkers, but these real-life situations are important examples of the ways your benefits mix can protect your workers from financial loss and hardship.

69% offer online investment guidance.

53% offer phone access to financial advisors.

49% offer third-party investment advice.4

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1 Aon Hewitt Financial Mindset Study.2 Aon Hewitt: The Real Deal—Retirement Income Adequacy at Large Companies.3 Employee Benefit Research Institute’s Retirement Confidence Survey. 4 Time.com. 5 SHRM 2016 Strategic Benefits Survey.6 Aon Hewitt 2016 Hot Topics in Retirement and Financial Well-Being.

Benefit Why they need itLife insurance, accidental death and dismemberment, long- and short-term disability coverage

Helps protect your workers and their families from financial loss and hardship.

Accident and critical illness protection

Safeguards the family’s finances in case of unexpected medical expenses.

Long-term care insurance Provides the opportunity to use tax-free money to pay for nursing home or in-home care.

Flexible Spending Accounts Lets participants set aside pretax earnings for health care, dependent day care, and commuter expenses. Depending on the accountholder’s tax bracket, they can save between 15% and 30%.

Health Savings Accounts (a savings vehicle available with a qualifying high-deductible health plan)

Provides triple tax benefits: when the money goes in, while the savings grow, and when the money is spent on qualifying purchases.

Identity theft protection Can be a godsend if an employee’s private information is compromised.

Other voluntary benefits that can aid in financial wellness

Legal plan, tuition assistance, student loan repayment, home and auto insurance, etc.

If you failed to impress Elizabeth with all the money-saving benefits she can take advantage of by working for you, she might sit up and take notice of perks like flexible schedules, working from home, travel and shopping discounts, fitness club memberships, day care, and more.

ADP® has you covered ADP’s HR outsourcing solutions can help you take a holistic approach to your benefits program so it meets the needs of your individual workforce. From access to Fortune 500®-caliber benefits and a 401(k) plan to communication strategies that promote your offering, to current and prospective employees, ADP has you covered.

A young worker like Elizabeth may not be able to relate to benefits she can only use if she’s sick or on leave. If that’s the case, she may be interested to learn about money-saving programs that can benefit her immediately, such as:

But I’m not a communications expertYou don’t have to be a communications expert to promote your suite of benefits. Just send simple communications using posters, text messaging, or a basic email to remind your staff how valuable income-protection and tax-saving benefits can be. Use a chart like the one above to explain why those benefits are worth considering.

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HR Hat Doesn’t Fit? Don’t Wear ItRather than hiring a dedicated HR person or outsourcing the workload, 1.5 million U.S. businesses spend roughly $27 billion a year on ad hoc HR management — pulling employees, managers and even business owners away from their primary responsibilities.1 And that can be risky business.

Do you or anyone in your organization have the following job titles?

Just-Until-We-Hire-a-Dedicated-HR-

Manager- HR Manager

Business-Owner- By-Day-and- HR-Manager-

by-Night

Not-In-My-Job-Description-But-Sure-

I-Can-Do-That HR Manager

These titles belong to ad hoc HR managers — people who defaulted into the position but aren’t necessarily qualified, capable, or interested in doing it. In addition, they take on additional responsibilities above and beyond their primary role.

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Wearing one too many hatsWhen you ask someone to wear a hat that doesn’t fit right, they’ll grow more and more uncomfortable until they have no choice but to remove it. If it’s you as a business owner, then you already know how time-consuming it is to do work that’s not up your alley, especially when it eats up precious time you could be spending elsewhere.

What about the impact on your employees? Some workers say they definitely notice the absence of an HR person, especially when it comes to common HR responsibilities like mediating employee disputes and resolving pay problems.2 If one of your workers has an issue or concern, they may not be comfortable burdening the business owner, or worse yet, they consider you the problem. If that’s the case, they likely have three alternatives: gossip about it with coworkers, take their complaint to someone outside the business, or quit.

The survey saysOnly 10% of ad hoc HR managers say they enjoy their HR responsibilities, while 65% would drop them in a heartbeat if given the choice.1 Most stress about the risks involved with employee performance issues and terminations, disputes, and compliance with HR-related laws. That's because they know one wrong move could result in fines and potentially even legal action.

HR is a specialty that requires ongoing administration, knowledge of laws, and compliance with policies, just for starters. With the potential for health care reform and changes in family leave, pay equity, and other HR regulations, even seasoned professionals can find it hard to keep up. “Whenever you consider eliminating portions of HR, you have to think of the financial risk, the strategic risk,” said Steve Miranda, managing director of Cornell University’s Center for Advanced Human Resource Studies.2 Without an HR professional partnering with you on the basics, your ability to focus on your core

business and seize growth opportunities could be negatively impacted.

There are strict federal laws to consider based on the number of workers you employ. For example, the OSHA law (the Occupational Safety and Health Administration) kicks in when a business employs between one and 14 workers, as does HIPAA, (the Health Insurance Portability and Accountability Act). A certified HR professional is trained and required to keep up with employment laws like these.3

What’s the solution?If you’re an ad hoc HR manager who’s ready to shed that extra hat and minimize your risk exposure, you have a number of alternatives to consider:

Look at technologyUsing technology to simplify and automate payroll and HR processes can save you time, improve accuracy, and minimize risk.4 Specialized HR software and services can include payroll processing, time and attendance systems, and templates for creating and updating items such as your employee handbook.

Sleep snatchers

Only 46% say they’re confident their organization is compliant with payroll tax laws and regulations, down from 57% just four years ago.5

48% of midsized business owners say they’re very concerned or extremely concerned by the level and volume of government regulations.

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Hire an HR specialistThose placed in the position of handling the extra burden of HR see the value in turning to the professionals for help. In fact, access to HR experts is at the top of their wish list.1

While startups often launch without an HR staffer, SHRM (the Society for Human Resource Management) advises that companies bring on an HR professional once they reach 15 employees, the point at which workforce issues become complex enough to require specialized skills.6

P Number of years of HR experience and the level of responsibility in those years of experience

P Experience working with startups or organizations of similar industry or size

P Education level and focus. Does the candidate have a bachelor’s or master’s degree in human resources, or a degree in a related field with SHRM- or HR-related certifications?

P Knowledge of employment laws and other compliance issues

P Demonstrated ability to keep up with changing employment requirements and its impact on businesses like yours

P Expected compensation that fits into your budget

P Ability to prioritize and juggle multiple projects, adjust to the fast-changing needs of your business, and communicate directly with upper management

An HR professional may serve many roles: benefits administrator, recruiter, compliance advisor, employee relations counselor, and safety coordinator, to name a few. If you go the route of hiring an HR professional, whether full time or part time, here’s a checklist you can use to aid your search:

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Pass the hatIt’s all too common to feel like the only way to get things done is to do it all yourself. Using ADP® HR Outsourcing Solutions you can free you to run your business the way you were meant to. Turn to ADP to learn how we can help you shed that ill-fitting hat.

1 ADP Ad-hoc Human Resource Management Study, December 2016. 2 The Wall Street Journal, Companies Say No to Having an HR Department.3 Federal Labor Laws By Number of Employees.4 HR Next, Improving HR Through Technology.5 ADP: 2016 Midsized Business Owner Study. 6 Society for Human Resource Management, Starting an HR Department From the Ground Up.

Outsource your HR business processesOutsourcing is like having a fully staffed HR department. When you outsource your human resources functions, you gain support to help your most challenging HR processes, such as:• Benefits administration• Payroll, time and attendance, and

HR technology• Talent management and acquisition• HR risk management• Business insights and HR guidance

When you outsource HR, the services aren’t bundled, so you can choose which HR responsibilities you want. Some of the larger providers can implement technology solutions to automate your workforce data and provide

a platform where you and your employees can record, access, and manage information, including employee benefits.

Join a Professional Employer Organization (PEO) A PEO is a relationship where you select a provider to become your dedicated HR management and benefits administration partner and deliver a range of HR services through a “co-employment” model. That means the PEO becomes the employer of record for tax and insurance purposes. Typically, you’d retain the day-to-day control over how you manage your employees, while your PEO provider would help with HR management and benefits administration, including:• Fortune 500®-caliber benefits and benefit

administration• Payroll, time and attendance, and HR

technology • Talent management and acquisition• HR risk management • Workers’ compensation • Employment practices liability insurance• Business insights and HR guidance• Assistance with HR business strategy and

employer compliance

Businesses that use a PEO can gain access to expertise and technology that sets them apart in a competitive marketplace.

Whichever path you decide to take, it’s worth your time to at least weigh the risks of ad hoc HR management against the benefits of turning to human resources professionals. In the long run, you may find that the costs of making the transition are far lower than maintaining the status quo.

Companies should bring on an HR professional once they reach 15 employees, the point at which workforce issues become complex enough to require specialized skills.5

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Pay Equity: It's the Right Thing to DoAbout a year ago, five prominent members of the U.S. Women’s Soccer team claimed they were unfairly paid as compared to their male counterparts on the U.S. Men’s Soccer team. The U.S. Women’s National Hockey team recently upped the fair pay ante, saying they would not play in this year’s world championships unless meaningful progress is made on fair pay issues.

What do these two teams have in common? They win. On the world’s stage, they are more successful than the men in both sports, yet they are paid less.

That same stubborn problem is seen throughout the workplace. The facts speak for themselves. For every $1.00 a woman earns, a man earns $1.28 on average. And, on average, men earn 28% more than women across all industries.

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But pay equity goes beyond “the right thing to do.” Attracting a wider pool of applicants and keeping them engaged is critical to your business, and your brand. You also need to stay in compliance with increasingly rigorous federal and state regulations. And, as discussed below, federal, state and local governments have been very busy battling pay inequity.

Federal government takes the leadIn 2016, the U.S. Equal Employment Opportunity Commission (EEOC) released an updated EEO-1 reporting form that will require covered employers to provide pay data starting in March 2018. Currently, the EEO-1 report, which is a compliance survey mandated by federal statute and regulations, only requires employment data to be categorized and filed by race/ethnicity, gender, and job category. The EEOC’s updated form is a significant change, because it will be the first time pay information will be required on the report. This information can be used by the government to address pay inequality.

Also in 2016, the EEOC published a fact sheet which highlights the agency’s interpretation of the Equal Pay Act (EPA). The EPA prohibits employers from paying unequal wages to men and women who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions in the same establishment. The EEOC’s fact sheet summarizes its interpretation of each of these factors:

u Skill Skill is measured by factors such as an employee’s experience, education, ability, and training to perform a job. It is important to distinguish between the skills required for the specific job and the skills of the employee in general. An employee may have skills in a certain area, but if those skills are not relevant to the job (e.g., a graduate degree in an unrelated field), they should not be considered in the employer’s analysis.

u EffortThe amount of physical or mental exertion needed to perform a job.

u Responsibility The degree of accountability required in performing a job. Note, however, that minor differences in responsibility will not justify a pay differential (e.g., turning off the lights at the end of the work day).

u Working conditions Working conditions refer to both (1) physical surroundings (e.g., temperature, fumes, and ventilation) and (2) hazards.

u Establishment An establishment is a distinct physical place of business rather than an entire business consisting of several places of business. However, in some circumstances, physically separate places of business may be treated as one establishment (e.g., if a central administrative unit hires employees, determines their compensation, and assigns them to separate work locations, the separate work sites can be considered part of one establishment).

Lastly, Executive Order 13665, which applies to federal contractors, prohibits policies and practices that prevent applicants and employees from freely discussing their pay. Federal contractors must also incorporate a prescribed pay transparency nondiscrimination provision in employee handbooks (or implement a stand-alone policy) and post it for applicants and employees. Specifically, this provision must provide applicants and employees with notice that the federal contractor will not discriminate against them for inquiring about, discussing or disclosing their pay or, in certain circumstances, the pay of their co-workers.

The federal government is not acting alone. Rather, its rules and regulations are part of a climate of increasing regulatory measures aimed at closing the pay gap, with a particular focus on restrictions on the use of salary history to set pay.

CaliforniaOn September 30, 2016, California Governor Jerry Brown signed into law two bills designed to address ongoing concerns of pay inequity.

• Effective date: January 1, 2017.• Prohibits employers from relying on

an employee’s prior salary to justify a disparity between the salaries of similarly situated employees.

• Prohibits employers from paying employees of one race or ethnicity less than employees of different races or ethnicities who perform substantially similar work, subject to some exceptions. For example, exceptions include seniority, merit, a system that measures production, and/or another bona fide factor.

MassachusettsGovernor Charlie Baker signed a bill amending Massachusetts’ Equal Pay Act on August 1, 2016.

• Effective date: July 1, 2018.• Prohibits employers from screening

job applicants based on wage or salary history.

• Prohibits employers from seeking the salary history of an applicant from a current or former employer, unless the prospective employer made an offer of employment to the applicant, and the applicant provided written authorization to the employer to confirm wage or salary history.

• Employers cannot prohibit employees from discussing their compensation with coworkers or colleagues.

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New YorkOn January 9, 2017, New York Governor Andrew Cuomo signed two executive orders.

• Requires state contractors to regularly disclose employee job title and salary data. Contractors must disclose this data for all state contracts, agreements, and procurements issued and executed on or after June 1, 2017.

• Prohibits state agencies from making pre-job offer inquiries about candidates’ prior or current salary. This requirement is now in effect.

On May 4, 2017, New York City Mayor Bill de Blasio signed into law legislation regarding pay equity.• Effective date: October 31, 2017.• Prohibits employers in New York City from

inquiring about, relying upon, and verifying a job applicant’s salary history, subject to some exceptions. For example, if an applicant makes an unprompted and willing disclosure of his or her salary history to the prospective employer, the employer may consider salary history in determining the prospective employee’s salary, benefits, and other compensation, as well as verify the applicant’s salary history.

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Not sure where to begin?Start with ADP®. Our HR solutions can help you see if a pay gap exists at your company. From compensation analysis, to helping you with a pay equity evaluation, we have the expertise that you need to stay in compliance and ahead of changing federal and state regulations.

What should employers consider doing now?Employers cannot afford to operate in this regulatory climate without knowing whether there is pay inequality among their own employees and where risks may lie. Consequently, employers are advised to conduct a review of their pay practices to identify and correct any pay equity problems.

Similarly, for employers that operate in locations that prohibit the use of salary history, all applications, interview forms, and related HR documents should be modified to avoid the use of unlawful questions.

New JerseyIn March 2016, the New Jersey Legislature gained bipartisan support to pass a new bill on pay equity.

• The bill would have required equal pay for “substantially similar work,” allowed damages for the entire period of discrimination, and required certain public contractors to report employment information.

• Effective date: None. Governor Chris Christie vetoed the bill.

Philadelphia, PAOn January 23, 2017, Philadelphia became the first major U.S. city to make it illegal for employers to inquire about a potential employee’s salary history.

• The Wage History Ordinance makes it unlawful “for an employer, employment agency, or employee or agent thereof” to “inquire about a prospective employee’s wage history, require disclosure of wage history, or condition employment or consideration for an interview or employment on disclosure of wage history.”

• Originally effective May 23, 2017, the ordinance was temporarily halted by a now-dismissed lawsuit. It remains in effect pending further legal challenges.

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Cracking the Gen Z Code:Think You Know Them? Think Again.

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It’s been a given that when one generation of workers retires, there’d be a new generation to take their place in the workforce. That “given” might be changing, as the current crop of 18 to 22-year-olds (known as Generation Z or Gen Z) is finding different ways to earn a living. With job openings on the rise and 10,000 baby boomers retiring daily, what can you do to attract workers who have a more independent mindset than previous generations?

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Born in 1995 and after, Gen Z came of age during difficult economic times that culminated in 2009. A New York Times article compared Gen Z to the Traditionalist Generation (born before 1946). By growing up in a time of recession, they’re more pragmatic and skeptical than their slightly older peers.1 Both professionally and financially, stability will likely be very important to Gen Z.

For one thing, they want to be in charge of their own destiny, even more so than earlier generations. Instant access, social media, and digital technology have always been part of their world, and virtual connections are the norm. Because they have nearly unlimited access to information, media, and data, they tend to be aware of the world around them, making them arguably the savviest generation in history.

Who’s the boss?So, how does this generation envision their careers? Here are some important findings uncovered in an extensive survey of Gen Zers by Northeastern University:3

• In general, Gen Z is composed of self-starters who have a strong desire to be autonomous. 63% of them report that they want colleges to teach them about being an entrepreneur.

• 42% expect to be self-employed later in life, and this percentage is higher among minorities.

• Despite the rising cost of higher education, 81% of Gen Z members surveyed believe going to college is extremely important.

• Gen Z has a lot of anxiety around debt, and not only student loan debt. They’re very interested in being well educated about finances.

Shifting gears in the workplaceAgainst this backdrop, attracting the next generation to traditional jobs will be challenging. While you may not be able to change the inherent job duties, you can adjust the job experience.

Flexible work schedules, including part-time and freelance opportunities, are expected to be a big part of the Gen Z world. Supporting this fact: there are now 53.7

million freelance workers in the U.S. — a third of the nation’s workforce.4 For those who do choose to work for a company, these young employees do not expect to remain with the same business for more than a few years.

Gen Z snapshot Like their millennial counterparts, Gen Z is composed of digital natives who are constantly connected.

According to Digitalist Magazine, Gen Z (which some call the iGeneration or heads-down generation) was born with a digital device in their hand. They will try to swipe any graphic they see, will not memorize anything they can Google, and really don’t need to know how to use a pencil.1

They’re accustomed to accessing information and entertainment instantaneously, and prefer to solve problems by turning to YouTube or other video platforms for tutorials and ways to troubleshoot before asking for help.2

The age of one-size-fits-all HR is overNeed HR solutions as personal as the business you run? With ADP® as your strategic HR partner, we can design a strategy that responds to changing economic conditions, the digital revolution, the freelance economy, and changing talent demands.

1 “8 Important Things You Must Learn From Millennials,” June 2015.2 “What Gen Z’s Arrival In The Workforce Means For Recruiters,” October 2015. 3 “Generation Z Is Entrepreneurial, Wants to Chart Its Own Future. 4 “ADP, Reinventing HR for the Digital Economy.” 5 “Recruiting’s New Reality: A People-Centric Paradox,” July 2015.

For recruiters and company leaders, hiring and retaining employees from Gen Z with its evolving preferences about work means modernizing decades-old policies on acceptable work hours and other business norms.

Be ready to communicate continually, using a variety of platforms.

Know where to find Gen Z by connecting to the same professional networks (which will frequently change).

Be transparent, since this generation is skeptical and demands authenticity.

Offer flexibility, which will be increasingly important as we move away from the traditional 9-to-5 structure and work becomes more about life and less about work.

Planning to call their own shotsInterest in entrepreneurship runs high in Gen Z. Even though only 6.6% of the American workforce is currently self-employed,2 the growth of online retailing and devices from Squareup.com, which allows small businesses to process credit cards from their smartphones, is making self-employment more achievable.

Prepare to allot more money to retrain existing staff to cover positions that are difficult to fill as more employees turn to less traditional income opportunities.

Adapt to the new reality of the “liquid workforce,” which is focused around projects rather than roles.

Use internships to teach Gen Z various aspects of your business.

In light of the dramatic workplace changes that Gen Z and millennials are demanding, it is critical for business owners to find new ways to attract and engage employees. In short, recruiting in this environment will require employers to be “part wizard, part astronaut, part diplomat, and part guidance counselor.”5

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Find Your Sweet Spot:How Benchmarking Can Help You Hit it Out of the ParkDid you ever throw spaghetti at the wall and if it sticks, it’s done? That’s the approach many managers take when it comes to hiring, even though they know there are better ways.

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Before blaming your hiring woes on the marketplace, the economy and other factors beyond your control, take a look at the things you can control.

If you’re continually struggling with turnover or finding the right candidates for your business, you’re dealing with issues that are common to all companies, large and small. According to Xerox HR Services (now Conduent), 53% of employers say retaining talent is a top priority.1

If you’re tired of merely guessing and are ready to uncover actionable facts, take these three steps to enhance the future of your business.

For starters, ask yourself questions: • What’s the average age and tenure of

our workforce? • What is our turnover rate? • What’s our average pay increase

schedule and how often do we evaluate performance?

• What benefits do we offer? • Do employees have a career path and

opportunities for advancement? • Do we communicate regularly with

our workers?

Answering these kinds of questions will give you a good snapshot of your business based on your workforce data and your perceptions.2

Poll your employees to learn whether their opinions sync up with your perspective. You may think you communicate plenty, but maybe your workers don’t agree. Determine what’s unique and compelling about the environment you provide and use it to your advantage. Here are some sample questions to include in a survey of your employees:• Do your managers communicate too much,

enough, or not enough?• Does the information you receive have

value?

ASSESS

• What is your preferred means of communication (e.g., email, text, phone, face-to-face)?

• What do you like best about working here?• What do you like least about working here?• On a scale from 1 to 10, how satisfied are

you with your job?• Is there anything missing from your

employee experience?

One caution: Surveying your workers sets up an expectation that their employment experience will improve. If you take no action as a result of the survey, your credibility could take a hit.

Perhaps the most important discovery you can make is whether those things you believe are valuable to your workers actually are. According to Aon Hewitt’s 2016 Workforce Mindset™ study, the top characteristics employees seek in an employer are:3

• Rewards• Fun• Flexibility• Fit with their values• Stimulating work• Innovation

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ADP® eliminates the guesswork There’s a new benchmarking tool in town and it’s helping businesses like yours become more competitive across the HR spectrum. From talent to compensation and benefits to risk mitigation, ADP’s benchmarking capabilities allow you to develop the strategies that can lead your business to greater success.

So you’ve assessed your business and performed your benchmarking. Now it’s time to analyze the data. Use the information you’ve gathered to find the gaps. Where are you low when you should be

high? Where possible, bring your numbers in line with companies that are having greater success with hiring and retention. See what benefits are valued most, how compensation compares, and which voluntary benefits are trending.

1 Xerox Services Survey Finds Retention Tops Cost Management for Employers’ 2017 Priorities, Business Wire, October 18, 2016.2 The Competitive Advantage of Benchmarking: How Do You Measure Up?, ADP Spark blog, February 21, 2017.3 2016 Workforce Mindset™ Study, Aon Hewitt, November 2015.4 How to Benchmark Your Business, Bert Markgraf, Retrieved from http://smallbusiness.chron.com/benchmark-business-23855.html on

6/13/17.5 10 ways to...benchmark your business, Institute of Chartered Accountants in England and Wales, February 2008.6 Midsized Businesses: Poised to Lose Balance in Time of Uncertainty, ADP Research Institute, 2017.

Do you know how you stack up against other employers in your industry or area? Is the salary you’re offering competitive enough to entice new employees to join and current workers to stay? Are your benefits in line with those offered by other employers? Could you provide perks such as flexible hours, virtual work options, paid volunteer hours, or employee discount programs?

To find out what other employers are doing, benchmarking is your best bet. Benchmarking compares the operation of your business with similar businesses and establishes a performance level to shoot for. It starts with identifying measurable business processes that exist in other businesses.4

First, decide who you want to benchmark against. Pick firms of a similar size and with similar objectives. Consider benchmarking against firms outside your sector if there are areas they excel in.

You can work with an HR solutions provider

COMPARE

PLAN

If you can’t offer the same salary range as peer companies, that’s okay. According to recent ADP research, 47% of employees would consider taking another job that pays the same

or less, proving money isn’t everything.6 Adding low-cost perks and rewards such as flexible schedules, a fun work environment, family-

inclusive activities, and lunch and learn programs may capture the imagination of top talent and enhance the package.

In completing these three steps, you'll realize that becoming more competitive is easier than you thought. Businesses of your size have distinct advantages over large corporations: you typically don’t have a lot of bureaucracy, so you can react more quickly to trends, implement changes faster, and have the power to make the big decisions.

that offers benchmarking services. If you do it on your own, your local trade association should be able to suggest benchmarking partners. Another approach is to contact businesses and offer to swap data so you can gain insights into their strategies. Continue to collect data until you have a large enough pool from which to confidently draw conclusions.5 2

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Wise Ys: What Millennials Can Teach Other Co-workers

Millennials, also called Gen Y, represent a third of the American workforce and are expected to grow to 75% of the global workforce by 2020.1 While baby boomers and Gen Xers lived through the advent of high tech, millennials were raised on it, making them the perfect go-to people for adapting quickly and teaching other workers new tricks.

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Worth emulatingIt may be true that many people tend to resist change, but millennials expect and even embrace it. Business owners would be wise to tap into the can-do spirit that millennials embody and cascade it throughout the organization for a fresh approach to success.

1. Embrace change Technology is constantly evolving and changing the way we do business. Millennials adapt by quickly learning new and different skills. They’re used to the speed at which technology moves, and they eagerly await the next release of their mobile devices, fitness trackers, and electronic gaming.

2. Ask questions There’s a reason Gen Y is called “Generation Why.” Millennials ask questions if they don’t understand the reason behind a process, procedure, or practice — opening the door for newer, fresher ways of getting things done. For this article, Bottom Line asked a few millennials how they help shape the workplace.

3. Get flexible A 9 to 5, Monday through Friday workweek in the confines of a cubicle can be a soul killer for millennials. For a generation that grew up on the internet and stayed connected at all hours, face-to-face meetings and a set schedule hold little value. Having the freedom to work on their own terms is key.

For Rachel, “Questioning the norms, seeing situations from a different perspective, and understanding that things aren’t usually black and white” are among this generation’s most important lessons.2

4. Seek feedback Few employees believe no feedback is good feedback, but millennials go a step further by not only asking for feedback, but requesting it on a regular basis (preferably monthly).3 While some have criticized this as a need for constant praise and attention, Gen Y considers continuous feedback — not to be confused with micromanagement — the best way to grow.

5. Follow your passion According to one millennial, “Baby boomers got caught climbing the corporate ladder and hated every rung.”4 Gen Y believes that doing something just because it pays well won’t make you happy. The greater reward is in figuring out what you want to do what fulfills you and then doing it. By pursuing your passion, work-life balance occurs automatically since this mindset lets you fit both work and play into every day.

Millennial Janna, who works virtually, is a good example. “I prefer fewer meetings, especially for things that can be accomplished over email. I can’t stand having a [conference] call for a call’s sake.”2

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Be part of the new generation of employerHighly functioning multigenerational workplaces thrive by leveraging the strengths, similarities, and differences within each generation. When your employees relate and communicate as one, your business wins. Want to make this a reality at your company? Contact ADP® HR Solutions.

1 Thomson’s 2015 Global Employee Benefits Watch. 2 Informal in-house Millennial Survey, conducted May 2017.3 Millennials Want to Be Coached at Work, February 2015.4 What Old People Can Learn From Millennials, September 2014. 5 Management for All Ages: How to Better Lead Your Multigenerational Team, February 2017.

6. Give back What you do in life shouldn’t just make you money; it should make the world better. Sure, millennials want a fair wage and to live comfortably like the generations that came before, but they also want to do good, support and promote causes they care about, and feel a broader connection with the world. Regardless of the generation, most people want to do good for society and give back. But before millennials became a force in business, work wasn’t traditionally the place to achieve both personal and professional goals at the same time.

7. Be authentic Millennials have a corporate-speak threshold that’s set very low. They don’t have patience for jargon and spin. Their own lives are pretty much an open book and they’re comfortable with the honest viewpoints exchanged through their social networks.5

8. Take risks While not all millennials like taking risks, many consider it a necessary means for achieving their goals. Occasional failure is merely a trade-off for infinite possibilities.

In the final analysis, every generation — every individual — wants the same basic considerations at work: respect, trustworthiness, stability, feedback, and loyalty.

When we interviewed millennial Madeleine, she echoed the sentiment: “Younger or older, regardless of age, I treat my co-workers with the same level of respect and care.”2

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Federal and State Employment Law Updates

Federal Employment Law Update:President Trump Issues “Buy American and Hire American” Executive Order On April 18, 2017, President Trump signed the “Buy American and Hire American” Executive Order (EO), which addresses H-1B visas. The EO calls for the application of existing U.S. laws to visa recipients and the re-evaluation of the H-1B program. Employers of current H-1B visa holders and employers that seek to secure H-1B visas on behalf of workers in the future should remain alert for federal agency regulations and guidance that may affect this visa program.Effective Date: Currently in effect.

State Updates:Arkansas, Iowa, and South Carolina Ban Local Minimum Wage and Employee Benefits LawsArkansas, Iowa, and South Carolina are three of the latest states to pass laws prohibiting local jurisdictions from passing their own minimum wage and employee benefits laws. This includes laws providing for paid sick leave.Effective Date: Currently in effect.

Georgia Updates Ban on Local Minimum Wage and Employee Benefits Law, and Enacts Law Setting Paid Sick Time Standards On May 8, 2017, Georgia amended its existing law precluding local minimum wage and sick leave laws, and enacted a law setting standards for employers who choose to offer paid sick time. Georgia law has prohibited local government from implementing any law in relation to minimum wage or employment benefits in excess of what state or federal law requires since 2005. On May 8, 2017, Georgia Governor Nathan Deal signed HB 243 which amended that existing law to expand the definition of “employment benefits” to include “additional pay based on schedule changes.” Effective Date: Currently in effect.

Illinois, Indiana, and Wisconsin: 7th Circuit Finds Sexual Orientation Discrimination Prohibited by Title VIIObserving that it would require “considerable calisthenics” to remove “sex” from “sexual orientation,” the U.S. Court of Appeals for the Seventh Circuit ruled that “discrimination on the basis of sexual orientation is a form of sex discrimination” and unlawful under Title VII of the Civil Rights Act of 1964. Employers should ensure that Equal Employment Opportunity and Harassment policies and training cover sexual orientation discrimination. Effective Date: Currently in effect.

New York Paid Family Leave Benefits Law The New York Paid Family Leave Benefits Law (“PFL”) will provide eligible employees up to 12 weeks of paid family leave to (1) care for a family member with a serious health condition, (2) bond with a child during the first 12 months after the child’s birth, adoption, or placement in foster care, or (3) attend to a “qualifying exigency.” Leave will be funded through deductions taken from the pay of full-time and part-time employees. Effective Date: January 1, 2018.

Ohio Gun Law Expands the Rights of Concealed Carry Permit Holders Employees with valid concealed weapons permits now have the right to bring their licensed firearms into company parking lots. Ohio employers can no longer ban these employees from transporting or storing their firearms or ammunition inside their privately-owned vehicles as long as (1) the firearm is locked in the trunk, glove box, or an enclosed compartment within the vehicle, (2) the firearm and ammunition remain in the vehicle when the employees are in their vehicles, and (3) the vehicles are parked in a permitted location. Employers can still prohibit employees from carrying weapons into company-owned buildings and in company-owned vehiclesEffective Date: Currently in effect.

This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP® is not rendering legal advice.

ADP® assists clients in meeting their compliance challenges. Timely communication, clear action plans, and helpful resources allow ADP clients to focus on their business objectives, while helping them mitigate risk associated with employment law compliance. The following is a summary of recent significant federal and state HR compliance developments:

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What if you could discover your organization’s strengths and weaknesses from data analytics?

ADP® knows. We’ll help you uncover insights from the start – even before you become a client – so you can see how you stack up against your peers. After an initial consultation with ADP you’ll know how your company compares to others in your industry and location in a wide variety of areas:

Comp & Benefits• Average wage• Benefit participation rate• Employer contribution

to benefits• Deductible/co-insurance/

out-of-pocket max• Retirement plan match• Wage growth

Risk• Turnover• SUI rate• Workers’ comp

mod factor• Turnover by generation

See how you stack up against the competition on a number of key metrics.

If you’re ready to stop guessing and start knowing, contact us today at 800-HIRE-ADP.

1Source: CHRO Quarterly First Quarter 2015; Deloitte 2014 Human Capital Trends Survey.

Knowing where you stand is only the beginning. Become an ADP client and your dedicated HR partner will create a smart, dynamic action plan that turns these insights into a customized strategy to maximize your competitive advantages and turn your weaknesses into strengths.

!

Knowing beats guessing. But knowing is only half the battle. How do you interpret the analytics? How do you take meaningful action with it? How can the information propel your business forward?

86% of companies do not have any analytic capabilities in HR1

Talent• Workforce

demographics• Revenue per employee• Expected job growth• Time to hire• Employee engagement• # of job openings• Compatible

occupations

Knowing Has Replaced Guessing

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Top 5 Differences When Working with a Certified PEOProfessional Employer Organizations (PEOs) that are certified by the Internal Revenue Service (IRS) under the Small Business Efficiency Act (SBEA) are recognized as the employer for federal employment tax purposes.

1Source: CHRO Quarterly First Quarter 2015; Deloitte 2014 Human Capital Trends Survey.The IRS does not endorse any particular certified professional employer organization. For more information on certified professional employer organizations go to www.IRS.gov.

Working with a Certified PEO (CPEO) ensures:

Fiscal Ownership CPEOs are solely responsible for the payment of federal employment taxes.

If a company utilizes a non-certified PEO that doesn’t pay their taxes, they could be liable for the unpaid federal employment taxes, late penalties, and interest related to their employees.

Not all PEOs are created equal. Choosing the right CPEO is a major decision for your business. The right CPEO will serve as a trusted partner – helping your business to stay in compliance with evolving regulations, take on certain fiduciary responsibilities, enable scalability via great technology, and facilitate access to Fortune 500®-level benefits.

ADP TotalSource® is now a Certified PEO and the largest PEO in the country. We are committed to the highest standards. To learn more visit www.adptotalsource.com or call 800-447-3237.

Financial Guarantee The certification program also requires a PEO to post a bond each year of up to $1 million guaranteeing payment of its federal employment tax liabilities.

Tax Restart EliminationCertification eliminates the wage-base “restart” for certain payroll tax purposes for PEO customers that join or leave a PEO relationship mid-year.

Customer Eligibility for Tax CreditsCPEO clients have express authority to continue to claim specified tax credits for which they would qualify absent a PEO relationship.

Required Federal Standards Because CPEOs are solely responsible for the payment of federal employment taxes they must meet specific requirements regarding tax status, background, experience, business location, financial reporting, and more.

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ADP HR/BPO publishes the Bottom Line free of charge. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP® is not rendering legal advice or other professional services. ADP does not give legal advice as part of its ADP TotalSource or ADP Resource Services. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable law in your jurisdiction and consult experienced counsel for legal advice.

The ADP logo, ADP, ADP TotalSource, ADP Resource and ADP Workforce Now are registered trademarks of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. All other trademarks and service marks are the property of their respective owners. Copyright ©2017 ADP, LLC. All rights reserved. Questions: Please call ADP at (800) 447.3237. MKT294

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