work life integration - human capital insights - vol. 6

Maximizing Performance, Productivity, and Profitability

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ADP Human Capital Volume 6

Vacation Policies Around the World: How Adaptable Is Your Organization?

Predictive Analytics: Reaping Rewards While Avoiding Risk

What Small and Large Organizations Alike Can Learn From the First Year of Annual ACA

Sharing Institutional Knowledge Across Generations Before it Disappears

Passing it Forward:

A more human resource.SM

2 ADP Human Capital Insights®

PeopleWork-Life Integration: Is There an Employee-Employer Expectation Gap? Managing work and life means different things to different generations. Here’s how to keep up with changing employee expectations.

Passing it Forward: Sharing Institutional Knowledge Across Generations Before it Disappears What happens when your most tenured and skilled employees are ready to retire or move on, taking their experience and knowledge with them? Knowledge transfer is becoming an urgent issue that can’t be ignored.

TrendsVacation Policies Around the World: How Adaptable Is Your Organization? To meet the needs of a global workforce, understanding the variance in laws and cultural norms is critical.

ChangeThree Ways to Get Leaders to Buy-In to a Unified Global HCM Solution The ability to enjoy high employee efficiency, regardless of location, is just one benefit of a unified HCM system.

What’s Your Agility Quotient (AQ)? Outpacing the competition means being an agile organization — and that starts with agile leadership.

Beyond the Bottom Line: How An HCM Strategy Can Help Corporate Success How to build an HCM strategy that aligns with broader measures of success, driving a greater impact on society while still supporting profitability.

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Contents

Risk What Small and Large Organizations Alike Can Learn from the First Yearof Annual ACA There’s nothing like getting a little experience under your belt. Read five tips for dealing with the task of ACA compliance moving forward.

Predictive Analytics for HCM: Reaping the Rewards While Avoiding Risk By analyzing a wide array of workforce data, leaders can enhance their ability to identify patterns and take proactive actions. But where to start?

Guidebook to New DOL Overtime Rules Recent changes to overtime rules will make 4.2 million currently exempt workers eligible for overtime pay. Here’s help for developing a strategy to stay compliant and control costs.

Real Stories, Real ImpactLearn how two organizations are driving business impact with a strategic approach to HCM.

For more articles and insights that can help you ignite the power of your workforce, visit our blog for large business leaders at adp.com/spark

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ADP® publishes ADP Human Capital Insights magazine 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 services. While every effort is made to provide current information, the laws change 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 Human Capital Insights, and ADP Research Institute 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 © 2016 ADP, LLC. ALL RIGHTS RESERVED. Questions: Please call ADP at 1-800-225-5237.

When it comes to managing a global workforce, sometimes the only constant is change — from new technologies and compliance hurdles to shifting employee expectations regarding how, where and, most importantly, why work gets done.

A study from the ADP Research Institute®, The Evolution of Work: The Changing Nature of the Global Workforce, finds that today’s workforce is increasingly guided by a search for meaning or doing important work, rather than simply earning a paycheck.

And it’s not just employees who feel this way. According to PwC, 76 percent of CEOs believe measuring corporate success is about more than just profit, too. For HCM leaders, this raises an interesting challenge — how to build an HCM strategy that aligns with changing measures of success.

The latest issue of ADP Human Capital Insights® magazine offers some insights into achieving this alignment. Our editors also take a look at hot issues on the minds of global HCM professionals, including:

• Agility — Transformational workplace change is not only happening, it’s accelerating. Success means being an agile leader. We designed an assessment so you can see how you rank compared to your peers.

• Health Care Reform — With year one of the Affordable Care Act now in the rear-view mirror, the real challenge begins.

• Data-savvy HR — Predictive analytics has the potential to enhance a multitude of HR strategies significantly, including workforce planning, leadership development, diversity, and employee education.

• Knowledge transfer — As Baby Boomers continue to exit the workforce, how can you ensure your organization retains valuable institutional knowledge?

We’ve designed this issue to offer some insights into the workforce of today and tomorrow, and to spark dialogue within your organization. As always, we welcome your feedback at [email protected].

We want to hear from you

Send us an email at [email protected]

For more information, visit adp.com/large-enterprise

Mark BenjaminPresident, Global Enterprise Solutions

How are you transforming your business?


People

Work-Life Integration: Is There an Employee-Employer Expectation Gap?According to Ernst & Young,1 24 percent of U.S. employees said work-life integration is becoming more difficult to manage. Even in an era in which flextime — designed to improve work-life balance — has increased, recent data from the U.S. Bureau of Labor Statistics2 (BLS) indicates that the average full-time employee is working more hours per week and working more on Saturdays and Sundays.

1 Study: Work-Life Challenges Across Generations, Ernst & Young, 2015.2 American Time Use Survey Summary, U.S. Bureau of Labor Statistics, 2016.

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This problem is not exclusive to the United States, either. According to the ADP Research Institute® study, The Evolution of Work: The Changing Nature of the Global Workforce,3 more than a quarter of working people in the United Kingdom report unhappiness with their work-life integration.

These statistics come at a time when managing work and life means different things to different generations all over the world. For the “Sandwich Generation” — people in their 40s and 50s who are caring for both their parents and their children — it means trying to balance work and family, while making enough money to support a growing household.

In 2013, nearly one in seven American adults in the Sandwich Generation were financially supporting both an aging parent and either a small or adult child, according to a Pew Research Center4 report. Across the globe, the burden on Asian families to care for both parents and children is increasing, as well, according to Economist Insights.

The Harvard Business Review5 reports studies from the National Institutes of Health and the Centers for Disease Control and Prevention show that the work-life integration issue has real consequences for both worker productivity and personal health. Basically, longer hours and increased stress are at odds with what workers value in their lives.

The Changing WorkforceExpectations in the global workforce are changing, and workers’ expectations of freedom to do their work when, where, and how they want are higher than ever before. For example, according to The Evolution of Work study, 44 percent of workers in the Netherlands believe they should “define” their own work schedule and 95 percent of Chinese employees believe they will soon be able to do the majority of their work using a mobile device — beliefs that reflect a need to work in a different way in order to accommodate personal obligations. Leaders should be cognizant of the changing workforce and how work-life integration affects employee well-being, productivity, and organizational performance.

Flexibility for Different ReasonsAccording to The Evolution of Work study, 81 percent of employees view their ability to work from anywhere in the world positively, but the rationale for that positivity varies for different generations. The Sandwich Generation, in particular, is a group of employees seeking better work-life integration. Gail Hunt, president of the National Alliance for Caregiving, told Monster.com that the number one thing members of this generation want from employers is flexible time.

That presents both a retention and recruitment opportunity for leadership. By catering to varying needs, you can show your existing employees you understand that work-life balance comes in all shapes and sizes and highlights

Longer hours and increased stress are at odds with what workers value in their lives.

3 The Evolution of Work: The Changing Nature of the Global Workforce, ADP®, 2016.4 The Sandwich Generation: Rising Financial Burdens for Middle-Aged Americans, Pew Research Center, 2013.5 Your Work-Life Balance Should be Your Company’s Problem, Harvard Business Review, 2014.


to potential, talented, employees just how much you value your employees’ happiness outside of work.

What to Do?If Hunt is correct, that the number one thing members of the Sandwich Generation want from employers is flexible time, then organizations that offer this have the potential to attract highly skilled employees at the expense of employers that do not. HCM leaders should prioritize the implementation of technology and policies that both enable flexible work time and show employees that their voices are being heard.

An example of a technology that can enable flextime and keep employees productive includes a mobile-friendly collaborative enterprise social network, such as Yammer and Oracle, that employees can use to communicate and collaborate on projects. As The Evolution of Work report suggests, the vast majority of global employees believe they can work from anywhere in the world, and many are already using social technologies to communicate and

connect with people. Employers should find it easy to gain adoption of those technologies and keep up with the trend.

When it comes to creating policy around flextime, there is one simple solution to include: encourage employees to take all of their vacation. MarketWatch6 reports that employees in the United States take only half of their paid vacation time. Employees in China take even less,

according to the same article.As technology and employee

preferences continue to blur the lines between where work actually gets done — at the workplace or remotely, during or outside of standard business hours — organizations must provide new ways to support productivity, while helping employees achieve balance in this new norm.

HCM leaders should prioritize technology and policies that enable flexible work time and show employees that their voices are being heard.

6 Americans take half of their paid vacation, but Chinese take less, MarketWatch, 2015.

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Passing it Forward: Sharing Institutional Knowledge Across Generations Before it Disappears

When one generation retires, you’re left with a new generation of less experienced workers. Taking steps to forge deeper connections across the generational lines can facilitate the transfer of information and keep your organization running at its best.


What happens to organizations when their most-tenured and skilled employees are ready to retire or move on, taking their experience and knowledge with them? As the Baby Boomer generation increasingly leaves the workforce, the loss of institutional knowledge — their accumulated knowledge about your organization — increases, as well. Knowledge transfer and skilled workers is becoming an urgent issue that organizations won’t be able to ignore.

According to the Pew Research Center1, Millennials (born 1981 to 2000) made up the majority of the U.S. workforce in 2015 with 53.5 million workers. Gen Xers (born 1965 to 1980) were close behind at 52.7 million workers, while Baby Boomers (born 1946 to 1964) continued to exit the workforce, declining to 44.6 million workers.

That shift is sure to continue, causing concern that institutional knowledge from older generations will not be transferred effectively. The failure to retain and transfer institutional knowledge could result in a steady increase of employee turnover, further knowledge loss, and less-skilled laborers, which means higher costs and lower efficiencies. Some estimates suggest it costs 150 percent of an

annual salary to replace an employee, when factoring in recruiting, lowered productivity, lost knowledge, training, and even time for interviewing.2

The Time to Retain and Share Knowledge Is NowKnowing there is a need to capture and transfer knowledge and skills from older generations and figuring out how to go about it are two very different things. According to the ADP Research Institute’s study, The Evolution of Work: The Changing Nature of the Global Workplace3, those surveyed “feel an element of pressure and stress” related to a workplace that demands rapid learning of new skills. This was evident in each major region of the world.

As the proportion of the experienced workforce continues to shrink, organizations must balance the need to put processes in place to capture their knowledge and transfer it to the younger generation, while still remaining productive as an organization. Members of the younger generation are already adjusting to the demands of their own workload, so adding the responsibilities of retiring coworkers or colleagues who are moving into new roles, requires a delicate blend of technology, trust, and education.

Passing it ForwardAccording to The Evolution of Work study4, over half of employees believe technology allows them to have deeper personal connections with their peers. Additionally, 88 percent of those surveyed believe that social media is already or will soon become the preferred collaborative platform for work. The study also finds that the way employees accrue knowledge is changing, because of the increased use of collaborative tools at work.

The Millennial generation is adept at sharing information on social media, and organizations are establishing similar “internal” social and collaborative tools that take advantage of their skills. This can pose a challenge in the knowledge-transfer process, as Gen Xers and Baby Boomers prefer email, according to Marketing Sherpa.5

Knowing there is a need to capture and transfer knowledge and skills from older generations and figuring out how to go about it are two very different things.

1 Millennials surpass Gen Xers as the largest generation in U.S. labor force, Pew Research Center, May 11, 2015.2 How Much Employee Turnover Really Costs You, Inc. August 30, 2013.3,4 The Evolution of Work: The Changing Nature of the Global Workforce, ADP®, 2016.5 Marketing Research Chart: Do different age groups prefer different channels? Marketing Sherpa, March 10, 2015.

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1. Study your best. Once you understand what it is that made longtime members of your organization successful, you can begin to organize and funnel others in your organization who share those traits into the right areas to continue that success. Successful organizations offer specialized training and job sharing to help combat this loss.

2. Conduct experience reviews. Whether it was an organizational restructuring done well or changes that were communicated poorly, future strategy will be greatly informed by the insights of employees who have been around long enough to see both the highs and lows of your enterprise.

3. Create inter-generational partnerships. Encourage Baby Boomers to take on mentoring roles — coaching employees who will take over the tasks of retirees. Create inter-generational project teams to provide continuous skill transfer and continued production, and establish a process for Millennials to document and share what they learn.

Loss of employees to retirement is inevitable, but organizational knowledge and skills can remain, if you take steps now to ensure transferability. By far, most employees throughout the world are ready to use social and collaborative tools as a means for making deeper connections across generations and work more collaboratively. Organizations that embrace these trends will gain a competitive edge in the rapidly evolving workplace and marketplace.

With those trends in mind, it should be a priority to establish a social, collaborative knowledge management system that facilitates the free flow of knowledge and skills between the generations that are working side-by-side in your organization. These tools allow your employees throughout the organization to connect with each other, no matter where in the world they work. In addition, interactions will be captured and stored in the social collaborative knowledge management system, making them available to anyone within the organization.

Your People Are Still Your Biggest AssetDespite the increasing propensity to embrace digital collaboration, it will still be up to the people who use these systems to do the bulk of the heavy lifting.

Here are three essential steps you can take to reduce the level of institutional knowledge you lose with the loss of skilled employees:

of those surveyed believe that social media is already or will soon become the preferred collaborative platform for work.

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Vacation Policies Around the World: How Adaptable Is Your Organization?

Employee expectations concerning vacation policies can vary drastically across different regions of the world. According to Forbes, while the average American worker receives 16 days of paid leave each year, this number may be more than double in Scandinavia, parts of South America, and other nations.1

Trends

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A study by employer branding consultant Universum found that Scandinavian, European, and South American employers populated most of the top global spots for job satisfaction factors and employer loyalty.2 As HCM leaders look to continuously improve employee retention and happiness, vacation and flextime policies could be an important element of the overall employee experience. To meet the needs of a global workforce, understanding the variance in laws and cultural norms is critical.

1. ScandinaviaFour to five weeks of annual vacation in Sweden and Norway each year is the norm for Scandinavian workers. And it’s clear that there’s strong cultural support behind workers using their full allotment of vacation days, with 88 percent of Norwegians and 80 percent of Swedes feeling “encouraged to take vacations” by senior management, according to the Daily Good.3

U.S.-based SAS, for example, is rated among Norway’s top employers. In addition to generous vacation, Norwegian employees enjoy flexible hours, work-from-home freedom, a bring-your-children to work policy, and leave to care for aging parents.4

2. The European UnionAccording to FindLaw, European Union law dictates that workers are given at least 20 to 30 days of paid vacation time each year, which is often in addition to paid holidays.5 Despite those trends, the Daily Good notes that 90 percent of French workers feel “vacation-deprived,” and only 49 percent of Germans feel actively encouraged to use their allotted days off.6 However, time away from work isn’t Europe’s only investment in worker happiness. The Huffington Post also notes that legislation and employee federations are increasingly encouraging workers to avoid working during evenings and weekends.7

3. Australia and New ZealandIn Australia, a combined total of over 30 days of paid leave each year is average, according to Working in Australia, and 76 percent of workers feel encouraged to use their vacation days.8 Business Insider writes that worker happiness index studies of Australia and New Zealand put those countries in the 11th and 8th spots, respectively, in global happiness.

The same study discovered that national wealth had minimal impact on worker happiness and engagement. Instead, a comprehensive culture of encouraging work-life balance — including generous vacation policies — pushed the region near the top.9

In fact, some of the best-regarded employers in Oceania choose to exceed requirements for vacation leave, significantly. Warehouse Stationary, for example, is a New Zealand-based enterprise that offers five additional forms of leave, including time for birthdays, sports and “long service,” which is additional time off that is redeemable after a long tenure with an employer.


5. South AmericaSouth American vacation laws can vary, but include some of the most generous options worldwide. According to Mondaq, Brazilian employees are guaranteed 30 days of vacation, every 12 months, as well as an additional salary bonus for their vacation period.12 Time off is also perceived as a matter of “workers’ health, safety, and well being.” Peru is also similarly generous, with 30 days of vacation accrued per year of service, though this may be reduced in agreement with the employer according to Baker & McKenzie.13

There’s a wealth of different approaches to vacation policies worldwide, and employee expectations vary accordingly. Global organizations should account for these differences when designing worldwide policies for vacation, since cultural norms appear to have a strong influence on employee expectations. By concentrating on shaping policies that address regional expectations, leaders can improve engagement and happiness across their global workforce.

4. AsiaWhile Asian countries tend to surpass the United States in terms of paid vacation, they’re still ranked toward the bottom of the global list. On average, APAC workers receive 19 days of vacation and only take 14 days. In some countries, such as South Korea, just 7 out of 14 earned days were taken.10 According to Reuters, in Singapore, one of the wealthiest countries in the world, 55 percent of employers reported they were not doing a good job developing fair flextime policies.11

1 U.S. The Only Advanced Economy That Does Not Require Employers to Provide Paid Vacation Time, Report Says, Forbes Magazine, 2013.2 The Countries with the Happiest Employees, Universum, 2016.3 Vacation Time Around the World, Good, 2015.4 Vacation Time Around the World, Good, 2015.5 Summer Vacation Time: U.S. vs. Europe, FindLaw, 2015.6 Vacation Time Around the World, Good, 2015.7 These Countries are so Much Better Than America When it Comes to Work-Life Balance, The Huffington Post, 2014.8 Annual Leave in Australia, Working in Australia, 2016.9 The Secret to Australian Workers’ Happiness, Business Insider Australia, 2016.10 U.S., Asian workers are not using their vacation, CNN, 2015. 11 Sullen in Singapore: Its Workers are the Unhappiest in Asia, Reuters, 2014.12 Brazil’s Restrictive Legislation on Vacation, Mondaq, 2015.13 General Summary of Labor Rights in Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela, Baker & McKenzie, 2014.

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Three Ways to Get Leaders to Buy-In to a Unified Global HCM Solution

Globalization offers the opportunity for organizations to span multiple continents and derive value from diametrically different cultures and locales. With that opportunity, however, comes challenging employee management issues. Human Capital Management (HCM) systems work to provide the standardization that multinational corporations need, while offering the flexibility to satisfy very unique local employee demands. The ability to enjoy high employee efficiency, regardless of location, is just one benefit of a unified HCM system.


Deploying a Human Capital Management (HCM) system globally, throughout an organization of both corporate and subsidiary locations, can be a far easier process technologically than managerially. Achieving global HCM solution buy-in can be a task that succeeds only through a delicate blend of people-centric education and intricate logistical planning.

Subsidiary or field locations can often be resistant to such systems, despite the clear benefits they offer. In order to truly achieve understanding and acceptance throughout all levels of the organization, a full HCM strategy and corresponding network of support must be developed.

Encouraging Local Subsidiary Buy-InWorried about facing criticism and push back as you roll out your HCM solution? You’re not alone. Front-line employees, or employees who identify more clearly with your subsidiary than your corporate entity, may feel like an HCM solution is simply another piece of software that will scream

for attention, while not delivering on its promises. That’s why the first important step toward a successful HCM deployment is creating the human capital strategy and providing your teams with the tools to support it.

Strategizing isn’t enough, however, especially when that strategy is kept solely at the corporate level instead of combining

The first important step toward a successful HCM deployment is creating the human capital strategy and providing your teams with the tools to support it.

it with tactical considerations at the local and subsidiary level. A lack of organizational awareness could ultimately undermine HCM success.

The next step after creating the overarching strategy — which should at the very least include consideration of locally based issues — is developing the education to support it. And lest the cart be put before the horse, education related to both the strategy and the solution must precede implementation to loop in all affected parties.

HCM Wins = Better Management and Better FinancialsIt’s likely that subsidiary leaders will be surprised by how high the cost of an HCM solution can be, especially if they aren’t seeing the bigger global picture. By including key human capital metrics within the strategy and education, you can begin to relay the appropriate story for you. Whether through dollars saved, greater productivity achieved or a lessened strain on management resources, those metrics should become a bedrock upon which to build a solid and relatable HCM strategy.

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Painting the Human Capital PictureLack of understanding, fear of or irritation with change, or previous failed integration attempts can easily turn off a local manager to the whole concept of an HCM solution — something that makes acquiring buy-in that much more difficult. To get around those impediments, the fullest possible picture of human capital successes must be painted. Showing its two-pronged benefit — both how it benefits corporate locations and subsidiaries alike — can lead to a shared sense of both pain (cost) and gain. Those benefits are best shown through the comprehensive educational plan that accompanies an HCM rollout, as well as examples of successful HCM implementations.

International Automotive Components (IAC) is just one example of an organization that successfully moved to a unified global solution. They have a presence in 22 countries with over 100 locations and 32,000 employees. As is common in large multinational corporations, differing locations implemented various employee-management systems — using 30 types of payroll processing software alone. Because of this diversity, Bonnie Tibitowski, IAC’s Senior Director of Financial Shared Services, highlighted her organization’s

To truly achieve understanding and acceptance at all levels of the organization, a full HCM strategy and corresponding network of support must be developed.

need to change to “one global system across all of IAC to be able to standardize processes and procedures, achieving local and global compliance, and ensuring accurate and timely pay for their employees across the globe to support their organization’s growth.” For the full story, visit: adp.com/IAC.

By employing a strategy and educational plan that shows manpower and monetary savings at each level while supporting your organization’s overall mission, you can silence the critics and facilitate a comprehensive global HCM solution buy-in to support growth for both your local and global subsidiaries.


What’s Your Agility Quotient (AQ)?

Workplaces are transforming, and change is the new normal. But keeping up with your competitors isn’t enough — you need to outpace them. We asked what it takes to be an agile leader. You might be surprised at the results.

72% said <25%

15% said 26-50%

8% said 51-75%

5% said >75%

What percentage of your workforce is remote today?

Since technology is the most critical enabler of your workforce, is HR driving your technology?

<25% said Yes

26-50% said Sometimes

51-75% said No

82% said <25%

12% said 26-50%

4% said 51-75%

2% said >75%

How many of your strategic roles have been filled with a truly globally minded hiring process, where you extended the search beyond your backyard to find the best talent?

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Change is all in a day’s work. It’s your ability to adapt that makes all the difference. See how your AQ stacks up.

Yes, already underway

Yes

Yes, in initial stages

No

Under consideration

Not an option

19%

14%

Are you replacing parts of your workforce with automation, machine learning, and/or artificial intelligence?

Is personal meaning and societal impact a differentiator for your organization? Change is the

new normal.Transformational workplace change is not only happening, it’s accelerating. How will you keep pace ... thrive ... innovate ... and outrun your competitors?Agility is key. Are you an agile leader?Take the What’s Your AQ? assessment to find out.

Visit adp.com/aq to see how your AQ ranks compared to your peers.

21% 27% 29% 23%

Uncertain

67%

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Beyond the Bottom Line: How An HCM Strategy Can Help Corporate Success

According to PwC, 76 percent of CEOs believe measuring corporate success is about more than just profit, citing several measures of success not related to the financial side of the organization.1 They include innovation, organizational purpose, and the impact on the broader communities in which the organization operates. For HCM leaders, this raises questions about how to build an HCM strategy that aligns with these broader measures of success, to drive a greater impact on society while still supporting the profitability of their organization.

Innovation

Organizational purpose

Positive community impact

1 19th Annual Global CEO Survey, PwC, 2016.

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Positive Community Impact A third factor that CEOs view as a measure of organizational success is the impact the organization

has on the broader community; however, impact can mean many things. It could mean helping people in the community develop job skills (those not working for the company), providing volunteer services in the community, or supporting local educational initiatives with grants or internships for students.

It will ultimately be your people who drive home a connection between your organization and the community. With that purpose in mind, you could begin hiring more people with a history of public service or create employee benefits packages that include paid time off for community service.

Here are three measures that can align your HCM strategy with corporate success.

Innovation as a Measurement of Success

The PwC report shows that organizational success could be measured by the innovation produced by the organization, so it’s no surprise that more than half of CEOs surveyed called out the need to fuel innovation. For organizations in which innovation is a top priority, your talent acquisition strategy should revolve around exclusively selecting and onboarding people who are proven innovators and who will move swiftly to affect change, helping your organization to grow.

Innovation helps a company break out of routine, to find success through avenues that, perhaps, their competitors have not explored. But, innovation requires process, new ways of thinking, and risk taking. So, leaders should ask themselves, “Are we seeking people who are risk takers and forward thinkers? Is HR encouraging hiring managers to select for innovation? Are we truly measuring performance for innovation?”

To truly innovate, you need the right people, and your HCM strategy should be aligned with that goal.

Organizational Purpose and Value

Whether organizations achieve a broader purpose and add value to customers is another crucial nonfinancial measure of success. Not only do one third of CEOs believe they could improve how they measure organizational purpose and value, but nearly 60 percent believe they could communicate the organizational mission more effectively. That idea is important for leaders to understand because, according to ADP’s study, The Evolution of Work: The Changing Nature of the Global Workforce, “today’s workforce is more and more guided by a search for meaning or doing important work, rather than by simply earning a paycheck.”2

To attract new talent, you may need to shift how the organization communicates its purpose and values to potential candidates by altering job descriptions and recruitment marketing tactics to reflect that message more accurately. Recruiters can also address the organization’s higher purpose and the premium the organization places on those who are willing to fulfill those overarching goals in their discussions with candidates.

CEOs want to get beyond the bottom line and measure success by how well the entire organization lives up to its stated vision, mission, and values. HCM leaders can help make that happen by developing strategies that encourage and promote these ideals to both the organization and the world at large.

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2 The Evolution of Work: The Changing Nature of the Global Workforce, ADP®, 2016.


What Small and Large Organizations Alike Can Learn from the First Year of Annual ACA*There’s nothing like getting a little experience under your belt, especially when it comes to complying with the Affordable Care Act (ACA). But experience in this area is hard to come by. Although businesses with 50 to 100 employees had to file 1094-C and 1095-C forms in 2015, this year represents the first time they must meet ACA compliance deadlines for offering benefits or face a potential employer shared responsibility penalty. Larger organizations, meanwhile, have by now amassed only a single year’s experience with compliance. There’s a lot to learn all around.

Luckily, organizations that have worked with a number of companies during the past couple of years have learned some key tips — for both larger and smaller organizations — that can help with the task of compliance moving forward.

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*Originally published by Forbes Media LLC as ForbesBrandVoice content.

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It’s All About The DataWhen it comes to the ACA, there’s no getting around doing your homework.

“The whole thing is extremely data-driven,” said John Haslinger, vice president of strategic advisory services for ADP®. Haslinger has worked with many companies on ACA compliance. “After this first year, many organizations are finding that they don’t have the best data,” he said.

ACA compliance requires data from the payroll, benefits, HR and absence management systems. The biggest data gap Haslinger sees so far comes from the absence of a time management system. That’s because employers have to factor things like jury duty and family and medical leave into hours of service to determine who must be considered a full-time employee under the law.

Haslinger anticipates there may be just minor penalties for honest mistakes in these areas for 2015, but there won’t be much leeway in the future.

“So they really have to make sure they get good data for 2016,” he said.

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Recount (And Reconsider) Contingent Workers

It’s never been more important for employers to have clearly defined worker classifications. Incorrectly defining employees, contract workers and temporary workers has big consequences under ACA — especially this year.

That’s because last year, qualifying employers had to make sure 70 percent of their full-time employees were offered minimum essential healthcare coverage to avoid penalties. If a few workers were found to be full-time employees when the employer considered them contractors, the company still had a good chance of being below that 70 percent threshold. This year, that threshold goes up to 95 percent. So a few misclassified workers could trigger a major penalty.

How major? The penalty for failing to offer minimum essential coverage to substantially all of your full-time employees, meaning 95 percent of them, in 2016 is a $2,160 fine for every full-time worker the company employs — including those who are correctly covered. Keep in mind this penalty is triggered if the employer does not make an offer of health coverage and at least one full-time employee enrolls in exchange-subsidized coverage.

Haslinger thus recommends that companies proceed with caution when making hiring decisions. If there’s any possibility that the government could consider a potential contractor or temp an employee, Haslinger recommends hiring the person as an employee.

Double-Check Everything Before The Penalty Estimate Arrives“I think there is a high probability that many employers are going to get penalty assessments,”

Haslinger said. “And why wouldn’t they? ACA is complicated, and everyone was giving it their first try just last year.”

But just because you didn’t receive a penalty assessment right away — even by the time you’re doing your filing next year — it doesn’t mean you did everything right. It could take 18 months or more after the filing deadline for these assessments to reach employers.

Simply put, don’t trust that your methods were perfect the first time around. The fact that you haven’t heard anything to the contrary yet doesn’t mean anything. Haslinger recommends double-checking all processes, procedures and, of course, data — filed and otherwise — again and again, and immediately fixing any mistakes you find.

“That shows good-faith effort to be compliant,” he said. Otherwise, “you’ll probably do the same thing wrong for 2016, 2017 and into 2018. You could be looking at a multi-year penalty.”

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Simply put: The ACA is a work in progress, and it’s going to keep changing.

ACA

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Marketplace Notices Are Forthcoming

When someone applies for a subsidy on the marketplace and indicates he or she is an employee, the exchange/marketplace will send a marketplace notice to the employer to alert it that based on information that the employee provided on his or her application, the marketplace determined that the employee was eligible for a premium tax credit. The employer then has 90 days to agree with or contest that claim.

With the exception of employers in a couple of states, no one has gotten these notices yet, but the notices should be coming soon. Employers need to be on the lookout for these forms. Rather than arriving in the mail at corporate headquarters, they’ll most likely be delivered to each employee’s worksite. Executives should alert and train on-site supervisors, said Haslinger, to look for the notices and be sure that they don’t get pitched with the junk mail. In addition to providing training, he recommends that employers do a sweep through every worksite to be sure none of the notices have been missed.

Be On The Lookout For Changes

Last year, the IRS issued new guidance affecting affordability safe harbors — the guidelines employers use to calculate whether their plans are affordable for employees. That guidance changed some employers’ understanding of the safe harbors. At the same time, the IRS clarified some of the confusion employers were experiencing around how their contributions to employees’ health reimbursement accounts affected affordability — again changing the way some employees would file.

And those changes are just two of many. “The ACA legislation is hundreds of pages long, it’s really complex, and we are going to get thousands and thousands of updates,” said Haslinger.

Simply put: The ACA is a work in progress, and it’s going to keep changing. To stay compliant, employers should be as vigilant about watching for forthcoming changes as they are about tracking their important employee data.

4. 5.


Predictive analytics for HR has the potential to enhance a multitude of HR strategies significantly, including workforce planning, leadership development, diversity, and employee education. The Society for Human Resources Management (SHRM) predicts the “data-savvy HR leader” will become an increasingly important part of organizational leadership in the year to come.1 By analyzing a wide array of workforce data, including industry and regional benchmarks, internal records and user-generated information, leadership can enhance their ability to identify patterns and take proactive actions.

Predictive Analytics for HCM: Reaping the Rewards While Avoiding Risk

According to research from Deloitte, 75 percent of HR professionals believe the use of analytics is important.2 The study highlights that “companies that build capabilities in people analytics outperform their peers in quality of hire, retention, and leadership capabilities, and are generally higher ranked in their employment brand.”

1 Get Started Using Data for HR Decisions, Society for Human Resource Management (SHRM), 2016.2 HR and People Analytics: Stuck in Neutral, Deloitte, 2015.

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But despite the remarkable potential of predictive analytics, HR leaders should still be conscious of potential risks associated with developing comprehensive data strategies. Employee privacy and civil liberties should remain top-of-mind as HR leaders progressively increase their use of sophisticated tools and strategies for predictive analysis.

Preparing for Employee Privacy ConcernsAdvocates of workforce analytics argue that employer monitoring of productivity, engagement, and other factors is not a new concept. While legislation could evolve in the near future, HR’s ability to collect and analyze employee data currently has few legal limitations. Despite this, Inside Council recommends a culture of transparency for organizations adopting predictive analytics, including clear policies that establish the organization’s role as data owner.3

In addition, organizations should consider transparency regarding the types of monitoring and predictive analysis being performed and its “business purpose.” Although the employee data that is used to perform analyses may not technically fall within the legal definitions of personally identifiable information (PII) or protected health information (PHI), organizations must work to treat the results of monitoring as sensitive. Appropriate information governance procedures can facilitate adequately restricted access within HR teams.

Managing Biometric Technology RisksThe rise of the Internet of things (IoT), or personal sensors and other connected devices, has introduced new forms of big data collection for HR departments. Sensor-based biometric technologies can allow for increased accuracy for factors such as time-tracking, information security

and employee health assessments. However, as SHRM highlights, those technologies can also introduce employee privacy risks and evoke “big brother” concerns among your employees.4 Legislative compliance and the guidance of subject matter experts, such as technology manufacturers and internal legal counsel, can be vital resources while implementing biometric technologies to verify the civil liberties of your workforce are not compromised inadvertently.

Sensor-based biometric technologies can allow for increased accuracy for factors such as time-tracking, information security and employee health assessments.

3 Employee and Customer Privacy in An Era Of ‘Big Data’ Monitoring, Inside Counsel, 2015.4 Workplace Biometric Technology Outpacing the Law, Society for Human Resource Management (SHRM), 2015.


Mitigating the Risk of Inaccurate AnalysisPredictive analytics points to future possibilities, based on past behavior. According to Analytics Magazine, Hewlett-Packard’s “Flight Risk” score, a predictive measure of employee retention risks, has undeniable benefits to the organization.5 But the article also points out that Hewlett-Packard has a “great responsibility” to filter the results of predictive analysis through knowledge and experience, ensuring that potentially inaccurate results don’t have a negative impact on an employee’s career trajectory.

Human behavior is ultimately complex. At best, even the most sophisticated talent and retention algorithms will only capture a fraction of the organizational, personal, and cultural factors that

On May 18, 2016, the United States Department of Labor (DOL) published its highly anticipated change to the Fair Labor Standards Act (FLSA) overtime rules, in effect doubling the minimum salary for exemption threshold to $47,476 for salaried workers. Estimates from the DOL and President Barack Obama predict that the new overtime rules will make 4.2 million currently exempt workers eligible for overtime pay.

So what can you do to be compliant? How should you manage the change and communicate the impact to your employees? And how do you go about controlling future costs on an ongoing basis,

as a result of these changes? To help sort it out, three of ADP’s top experts addressed these important questions with the goal of helping you plan the best possible strategy as you move toward complying with the new FLSA overtime rules. Visit adp.com/overtimechanges to read more details about the new rules in the FLSA Through the Eyes of the Experts Guidebook.

affect employee behavior within an enterprise. While predictive analytics can be a powerful means of identifying rising talent and pointing to risks, CHROs must establish clear guidelines to make sure that results are carefully considered and fairly applied.

Predictive analytics has the potential to ease talent management pressures and drive cost savings, but it may also introduce risks concerning fair treatment of employees and their right to privacy. HR leaders should work with legal counsel, technology experts, and information governance specialists to mitigate these risks, while still pushing forward to take advantage of the incredible benefits these emergent technologies provide.

Guidebook to New DOL Overtime Rules

5 Predictive Analytics: The Privacy Pickle, Analytics Magazine, November/December 2013.

Apria Healthcare, a leading provider of home respiratory services and medical equipment, serves more than a million patients every year. To do that effectively, they needed help updating and automating their HR systems to stay compliant and make better use of employee data. ADP® helped them improve their HR workflow processes and give employees and managers easy-to-use self-service tools, so everyone could get back to what’s important — improving their patients’ quality of life.

Watch Apria’s story at adp.com/Apria and hear from JoDee Mountain, VP Human Resources Operations, and Celina Scally, SVP of Human Resources.

Challenges:· Ineffective manual processes· Outdated and unsupported HR system· Piles of paperwork

For over 140 years, Follett has provided content and school solutions to over 80,000 K-12 U.S. schools and school districts. Working with ADP® gave the company a unified HCM solution with advanced analytics that let them shift from a transactional model to a more strategic approach. ADP’s HR analytics give Follett’s HR partners 24/7 access to data, metrics, reporting, and dashboards for insights they need to make better business decisions.

Watch Follett’s story at adp.com/Follett and hear from Cheryl Brand, VP Compensation & HR Systems, and Irma Long, VP Talent Acquisition.

Challenges:· Fragmented HR services· Decentralized workforce· No analytics to drive decision-making

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