Financial Safety Nets for Employees
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Money is a top stressor for employees, and a looming recession has reinforced that fact. Employers are uniquely poised to help support employees with much-desired financial guidance and resources. When employees experience less financial stress, employers may see greater employee productivity and morale and lower absenteeism. Those positive feelings can also translate into a strong employee retention rate and help employers attract top talent. Economic recovery will take some time, but voluntary benefits could help decrease employees’ financial stress.
More employers are looking for ways to help employees save for unexpected financial emergencies. This article explores ways that employers can offer financial safety nets for employees.
Employer Considerations
The reality is that many Americans worry about covering living expenses and unexpected expenses. In fact, 57% of U.S. adults are unable to afford a $1,000 emergency expense, according to Bankrate’s Annual Emergency Fund Report. Lacking sufficient funds to pay for a major medical emergency or other urgent needs can jeopardize an employee’s food and housing security for several years.
A financial safety net will mean different things to employees, depending on their age and personal financial goals. The following common employee benefits can offer valuable financial protection:
- Life insurance—Employer-sponsored coverage can be offered in a variety of ways. Employers may offer a term policy, permanent coverage or both. Though life insurance is an important asset for future financial security, many employees don’t realize its importance. Teaching employees about the value of life insurance may increase loyalty to the organization as they better appreciate this benefit.
- Disability insurance—Disability insurance has become an increasingly valuable part of a comprehensive employee benefits package and can fill gaps in financial protection offered by other programs, such as Social Security. While employees appreciate the peace of mind they receive as their income replacement benefits are being paid, employers can use the resources offered by insurers to manage time and productivity losses and find the most effective ways to return employees to work.
- Retirement accounts—Whether employees are close to retirement or have decades left in the workforce, saving for retirement is a key component of their financial security. Offering a 401(k) account or other retirement benefits as part of employee benefits packages can increase employee loyalty, especially if employers offer a contribution match. Good retirement benefits are also a great recruitment and retention tool. However, benefits are only helpful if employees are aware of and understand them.
- Financial planning or coaching—Employee assistance programs support workers facing various challenges, including financial ones, by offering resources and counseling. Employees with access to financial education and tools are more likely to increase their savings and make progress toward their financial goals. Furthermore, employees with a plan or access to help are less likely to feel stressed or overwhelmed by their financial situations.
- Emergency savings fund—An emergency savings fund helps offer peace of mind and resources employees may use instead of their retirement savings or other accounts. Employers can offer guidance for starting an emergency savings fund regardless of how much employees may have for an initial investment. Many employees may believe they don’t have enough money to build one, but employer-provided education and guidance can help them understand that even a small amount of cash can help start an emergency savings fund. An alternative approach for employers may be to offer an employer-sponsored emergency savings account alongside traditional benefits. Although an emergency savings account is a top benefit wish of many employees, very few employers offer them. Still, by helping employees build emergency savings funds, employers can boost their workers’ confidence in navigating finances and increase happiness in the workplace.
- Student loan debt assistance—Student loan debt weighs heavy on many employees in the United States, but some employers are trying to help by offering student loan debt assistance. Employers can offer various forms of support beyond loan repayments, such as student loan payment counseling, third-party low-interest or interest-free educational loans, debt consolidation, and refinancing services.
Summary
Ultimately, having a financial safety net can translate into peace of mind for employees. As more employers consider ways to help employees save for unexpected financial emergencies, they can offer employee benefits that help workers achieve their financial goals and save more of their hard-earned money for both expected and unexpected expenses.
Contact RISQ Consulting for additional resources.
- Published in Blog
Getting Buy-in on HR Initiatives
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
While today’s HR professionals are tasked with many organizational goals ranging from improving employee engagement to attracting and retaining talent, such initiatives take time, resources and continuous effort. As such, building and maintaining successful HR initiatives can be challenging without support from the overall organization and leadership. HR professionals need stakeholders to listen, understand, and support their views before any initiative can get off the ground.
This article explores strategies for HR professionals to obtain organizational buy-in on their initiatives.
Winning Over Stakeholders
To start, buy-in is the encouragement or support of one’s ideas. Getting buy-in does not mean 100% agreement with a plan or initiative, but it’s receiving the support of key team members or stakeholders—even if they don’t wholly agree. HR professionals will spearhead a myriad of initiatives for an organization. Common initiatives are related to talent and learning and development efforts, or it could be more specific, such as integrating new technology or artificial intelligence. Before an initiative kicks off, others in the organization must approve it or give their blessing. Support may also require a financial investment (e.g., expenses and labor costs) depending on the initiative.
Regardless of the nature of the initiative, there are general strategies HR professionals should consider when trying to pursue a new idea but may be facing roadblocks within the organization. Take into account the following tips:
- Lead with a clear vision. A well-defined vision demonstrates confidence in the proposed idea. Developing a clear vision involves:
- Identifying the problem
- Providing examples of the proposed solution
- Leaning on data and metrics to substantiate the solution
- Considering potential risks associated with the plan
- Align with business goals. An initiative is more likely to gain support if aligned with business goals, core values and other companywide efforts.
- Establish credibility. With a proven track record, leaders and key stakeholders are more likely to support HR professionals and their new initiatives.
- Know the audience. Everyone has different perspectives and opinions, so knowing the stakeholders is essential. A successful pitch will address an important issue to that person or deliver on success for the organization. Strong interpersonal skills help HR professionals build relationships before the next big idea. Still, they can also help them navigate these conversations better by knowing what piques the interest of certain individuals.
- Leverage metrics and data. Harness the power of HR data to help prove the need for an initiative and perhaps ways that others have experienced success. Facts and figures don’t lie, so HR professionals can use data to prove their points.
- Calculate the return on investment (ROI). ROI is often the ultimate measurement tool and the key piece of information stakeholders are interested in. Many organizational leaders understand and relate to ROI, and including this information can help validate the proposed initiative.
- Practice the pitch. Before meeting with stakeholders, practicing the pitch to become more comfortable presenting the idea and supporting information is essential.
- Expect common questions. While it’s important to be prepared for the actual pitch, it’s just as critical to be ready for stakeholder questions. Make a list of expected questions and answers to be properly practiced beforehand. It’ll help show confidence in the plan by not faltering on a question.
Being open to feedback or inviting others to expand on the idea is critical. This collaboration could strengthen the idea, demonstrate a willingness to compromise and build stronger interpersonal skills.
Summary
HR professionals are critical in driving significant impact and transformation within organizations. There are countless options for implementing HR initiatives, but securing stakeholder support is vital for them to either go anywhere or, hopefully, be successful. By selecting the appropriate workplace initiatives and striving to get buy-in from leadership, HR professionals can help bolster their influence and achieve notable results for the organization.
Contact RISQ Consulting for more HR resources.
- Published in Blog
HR-to-Employee Metrics
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Deciding how many HR professionals an organization needs to operate effectively is a hotly debated topic. Some organizations rely on metrics to guide them in making this decision. One of the most common metrics organizations use when deciding whether to hire HR professionals is the HR-to-employee ratio. When properly analyzed, this ratio can aid employers in meeting their HR needs and benchmarking their organizations against others. It can help employers determine not only how to fill their HR staffing needs, but also analyze how well their HR professionals are delivering on organizational goals.
This article explains the HR-to-employee ratio, how organizations can use it and what employers should consider when deciding whether to hire HR professionals.
What Is the HR-to-Employee Ratio?
The HR-to-employee ratio measures how many HR professionals there are for each employee in an organization. It’s calculated by dividing the total number of full-time HR professionals by the total number of full-time employees in an organization and then multiplying that number by 100. For example, the HR-to-employee ratio for an organization with one full-time HR professional and 73 total full-time employees would be 1.37. As the total number of employees increases, the HR-to-employee ratio usually decreases, though this varies by organization.
The HR-to-employee ratio is a useful measurement for evaluating HR departments. It can guide an organization’s decisions regarding HR staffing, including whether its HR department needs additional support, is overstaffed or can delegate or outsource certain functions. It can also help determine an organization’s HR efficiency, as a higher ratio could indicate a lower efficiency in delivering HR services.
According to Bloomberg’s HR Department Benchmarks and Analysis report, annual survey results revealed the median HR-to-employee ratio is 1.4 full-time HR professionals per 100 employees. This ratio is currently at an all-time high, as it previously peaked in 2013 at 1.3 HR professionals per 100 employees. The recent increase in the HR-to-employee ratio is primarily the result of unprecedented workforce growth and employers’ need to address the increased HR burden on their organizations.
Smaller employers (organizations with fewer than 250 employees) generally have a significantly higher HR-to-employee ratio—averaging between 1.7 and 3.4—because of the minimum number of HR professionals required to perform core HR functions, such as recruiting and benefits administration. It’s not uncommon for smaller organizations in the early stages of growth needing to focus more on people management than more established organizations, resulting in a higher ratio. As organizations grow, the HR-to-employee ratio tends to decrease because of the cost advantages employers gain by increasing the size of their organizations.
Factors Impacting the HR-to-Employee Ratio
Determining how many HR professionals an organization requires is difficult and depends on the organization’s needs and growth strategy. While the HR-to-employee ratio can guide employers as they make HR staffing decisions, there are several factors that may influence this ratio. These factors include the following:
- Technology—Automating HR operations will reduce an organization’s need for HR professionals, lowering the HR-to-employee ratio. Organizations that invest in digital and self-service HR tools can improve overall accuracy and empower managers and employees to self-manage many HR functions, which can allow HR professionals to focus on higher-value work.
- HR involvement—The role of HR can influence the HR-to-employee ratio. For example, a highly operational HR department may require more HR professionals to perform a variety of functions, such as employee training and development, recruiting, onboarding, benefits and compliance.
- Budget—A larger budget allows an organization to staff more HR personnel, while a smaller budget can restrict the total number of employees the organization is able to hire, thus impacting the HR-to-employee ratio. Increasing the size of an HR department will often result in a higher HR-to-employee ratio; however, a high-functioning HR department can ideally help reduce costs elsewhere in an organization.
- Industry—The HR-to-employee ratio generally varies by industry, as some sectors require more HR involvement than others—resulting in a higher ratio. Industries such as consulting, insurance and finance typically have higher ratios than manufacturing, construction, retail and health care because sectors with highly skilled professionals tend to require more training and personal development to engage and retain staff compared to their lower-skilled counterparts.
Other factors that may impact an organization’s HR-to-employee ratio include whether the organization is centralized or decentralized, where employees are located (e.g., a single location versus multiple locations) and the level of employee sophistication. The HR-to-employee ratio only accounts for full-time HR professionals, so there may be a gap between the metric and actual organizational needs.
Does a Smaller Organization Need HR Professionals?
Regardless of an organization’s size, HR practices and processes play a role—whether completed by an owner or a formal HR professional—in the organization’s success. Small and midsized employers tend to implement more formal HR processes as they grow. This is because their compliance needs, cultural challenges and talent struggles become increasingly complex with more employees.
Small and midsized organizations generally have the following HR needs:
- Recruiting job candidates
- Onboarding new hires
- Providing training and development opportunities
- Handling compensation
- Managing benefits
- Setting up and overseeing payroll
- Reviewing timekeeping records
- Ensuring compliance
- Fostering employee relations
- Promoting health and safety
- Boosting organizational morale
Owners and executives of smaller organizations often take on HR responsibilities themselves rather than hiring new employees. According to industry research, owners and executives of smaller organizations can spend as much as 12 hours each week on HR administration. However, as organizations grow, small and midsized employers often need HR support because executives and owners often do not feel confident managing HR functions and processes or may have other areas that require their limited time and resources. Utilizing the HR-to-employee ratio can help theses employers decide when to hire HR staff.
Before deciding to hire an HR professional or adding additional HR staff, employers need to decide where their staffing needs are the greatest and how much value HR professionals could add to their organization versus an investment in other departments. They also need to consider the skills an HR professional brings to ensure organizational needs are met.
Summary
Understanding the HR-to-employee ratio and factors that affect it can help employers evaluate the role of HR in their organizations. When making HR staffing decisions, employers should consider their organizations’ specific needs and long-term goals. Using the HR-to-employee ratio can provide employers with insights regarding HR hiring practices and improving organizational efficiencies.
For more HR-related resources, contact RISQ Consulting today.
- Published in Blog