Prior to our workplace upheaval in 2020, work life had been a pretty predictable formula for many businesses. We did things the way we always had—the way society had taught us to look at work because there was simply no outside pressure to force us to change our perspective. As much negativity as is associated with the pandemic, I would suggest that it has had a positive, clarifying effect on the business mindset by challenging false assumptions about work productivity. My favorite business book, “businessThink” by Dave Marcum and Steve Smith, says “A solution is worthless unless and until it creates business value,” and I think we had allowed our focus to be locked in on business norms instead of business value.
There have been many lessons learned over the last two years as we faced the pandemic and the new world of work. When the shutdowns were announced in March of 2020, ESC immediately put an action plan together that included how we could best assist our clients and what would be most helpful for them during that challenging time. Some clients were nimble and employees began working from home with little interruption, while others did not know where to start. We assisted them through the transition to work from home, and then many of them came back to the office. Currently, the majority of our clients are either working on-site or in a hybrid model, while a few made the decision to be fully remote. We wanted to share best practices and lessons learned as our team of HR business partners and clients worked together to navigate this new world of work.
It’s an “employee’s market.” That’s a phrase business leaders have heard over and over again during the past year. Many HR professionals and business owners alike were hoping to see a change after stimulus programs ended. Since then, employers haven’t seen a rush of candidates back to the workforce as anticipated, nor have companies experienced a widespread rebalancing of workforce supply and demand. A change in worker attitudes and a return to normal also have been slow to materialize. That has left employers questioning whether these trends are here to stay. Regardless, these employment challenges can’t be ignored. To remain competitive and to continue business operations, organizations need to bridge the gap between employee expectations and workplace realities.
An overview of how PEOs & their clients are working: fully remote, hybrid, or fully in-office.
The Great Resignation or the Turnover Tsunami—however you refer to this period of change in the workplace—is a historic moment for the workforce. As the quitting rate continues to increase along with the number of open positions, employers are being forced to take action to counteract the labor shortage.
Many issues stem from the current labor shortage crisis. Many long-term employees who are great at their specific skill sets have their eyes set on retirement. These employees are consistent, yet some are stagnant and slow to embrace change. This may pose a challenge for contribution to forward-thinking strategies. Leaders need to push long-term employees from becoming stagnant, which is especially important when these workers are in charge of hiring and training.
In a word: Sobering. That’s how I’d describe the feelings I had following the Birmingham Civil Rights Tour your NAPEO Board of Directors participated in on the last day of the winter board meeting in Birmingham, Alabama.
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Few now dispute that the American workforce underwent systemic changes due to the COVID pandemic. Remote work is more prominent than ever, employees feel more empowered in their roles, and businesses face new hurdles in supply chain disruptions and public health mandates. The pandemic has ushered in a new era in the workforce that employers who hope to remain successful must adjust to. As the president and CEO of one of the industry’s largest PEOs, TriNet’s Burton M. Goldfield has seen small and medium-size businesses (SMBs) across the country grapple with these changes, and he’s also confronting this new reality himself as he leads TriNet’s more than 3,000-person internal workforce.
At the NAPEO Annual Conference & Marketplace in late September 2021, there was a buzz in the air about national retirement policy. Only a few weeks earlier, on September 9, the House Ways and Means Committee had just approved, on a straight party-line vote, an ambitious plan to remake the national private retirement system as part of the Democrat’s broader Build Back Better Act agenda. This proposal would have required all employers, except the very newest and very smallest, to offer retirement savings vehicles to virtually all employees. NAPEO staff and I were fielding questions non-stop about the opportunities and challenges this bill would create for PEOs. It really felt as if a new retirement plan mandate on employers was on the verge of becoming law.
Employees are vital to your organization and a significant investment for most businesses, typically averaging 70 percent of operating expenses. This essential business asset deserves a well-crafted strategy.
While compensation is only one factor to consider for recruiting and retaining talent, it is critical to your overall HR strategy. Whether initiating or updating your compensation strategy and philosophy, the following best practices may help guide your process and decisions.
As the needs of clients evolve and change over time, it is important for PEOs to offer solutions that meet those needs. Sounds simple, right? We have all seen clients that initially onboarded with 10 employees that now have 200 employees and just hired a new CFO and HR director. Their needs have obviously changed.
What is a PEO’s value proposition to its clients? One may be tempted to answer this question by listing a PEO’s service and product offering. However, the service and product offering are not the value proposition of a PEO.
The value proposition of a PEO is the material impact the PEO has on its clients. The PEO’s product and service suite serve as the framework to drive the value proposition. The execution of the product and service suite through the PEO’s staff is the delivery method of said value.
The PEO Index in general very much aligns with the rapid gross domestic product (GDP) growth of 2021. See Figure 1. As the economy began to accelerate as the various state-mandated shutdowns were lifted, businesses of essentially every type began to recover. The slight flattening of the PEO Index in the last few months perhaps indicates that the persistence of the Delta and Omicron variants may begin to take a toll on businesses that were buoyed by the various relief packages from the federal government, but may struggle now that the money has run out. This combined with the more recent hawkish view of the Federal Reserve may prompt a more challenging environment in the months to come.
Welcome to the February issue and the new world of work!
Over the past decade, to me the “new world of work” meant technology and the way we used it at work, moving from fax machines to laptops, from phones to texting and emailing. Of course PEOs were in the middle of that transition, deploying new technology to help clients track hours, pay, attendance, taxes, you name it.