Small Business Planning for 2018: Top HR Compliance and Strategy Trends

Small Business Planning for 2018: Top HR Compliance and Strategy Trends

2017 was an interesting year from an HR compliance perspective. As it often does, a change in the White House brought uncertainty around potential policy changes, and the massive undertaking of implementing new overtime rules posed a challenge to HR departments around the country.

The rise of the Me Too and Time’s Up movements toward the end of the year stirred up conversations around workplace harassment. Many employers were unsure of what they were supposed to be doing, and how they could best share their voices. At Xenium HR, we suggested educating employees on what harassment is. It remains important to open these conversations so expectations are clear and so there is no room for misinterpretation. It’s also crucial to train managers to take complaints seriously.

When we look ahead to 2018, we expect those conversations to continue. But in terms of policy, there aren’t many changes at the federal level this year. At the state level, though, we’re seeing changes to sick leave policy. In Oregon and Washington, for example, employers are now mandated to provide paid sick leave to their employees. Only a handful of other states have similar sick pay policies to date, and early adopters to new policies always experience some growing pains. Many payroll platforms currently in place aren’t built to adapt to new policies related to timekeeping, which makes tracking that sick pay complicated.

In Oregon, where Xenium is located, the Oregon Equal Pay Act of 2017 places more obligation on employers to ensure they’re paying their employees fairly. Laws around fair pay have been on the books since 1963, but the new law requires more intentional, proactive oversight from employers. That’s because under the new law, employees can file complaints to the Bureau of Labor if they feel they’re not being paid fairly.

Beyond compliance, I’m expecting five strategy-based HR issues to become more pressing in 2018: the skill gap, employee experience, flex time and remote work, leveraging technology, and data.

Listen to the full discussion on the HR for Small Business podcast


1. The skill gap.

The skill gap is not a new problem for 2018, but it will be at the forefront of business owners’ minds this year. The first stage of addressing the skill gap at your workplace is the same no matter your goal, whether you’re simply hiring for new positions, or you’re expanding into a new market. No matter what, you must first address your current landscape. Find your current “pain points” and identify the skills you need at your company.

On the employee development side, you can solve this by creating succession plans to prepare for departures of highly skilled employees. Identify the gaps between your senior-level leaders and your employees at the next level down and find ways to close those gaps. This can be very difficult for small businesses to manage. It gets expensive to develop numerous employees, and ultimately, there still could be no role for those newly trained employees to move up into. You have to plan strategically.

The other part of the skill gap is the talent shortage. There are just not enough people with the right skills for the fields that desperately need employees, like manufacturing and distribution, for example. To solve this issue, we’re seeing more companies team up with universities and trade schools to train students on the specific skills they’ll need on the job.

Naturally, employee retention is a big part of this. When there is a skill gap and talent shortage, you want to keep your folks happy and engaged in their work so they’re encouraged to stay. Interviewing current employees is a tactical way to approach this, as you can gain understanding on what’s keeping people in their roles. You can then use those insights to make decisions around company culture.

2. Employee experience.

Talking about “employee experience” is actually not too different from talking about customer experience in marketing. Employee experience refers to a combination of culture, engagement, and performance management. Big companies like Airbnb have the resources to create truly exceptional employee experiences. But at the small business level, it can be tricky to find ways to keep employees happy while still meeting your company’s needs.

The first thing small business owners can do to address employee experience is look around the workplace. What does the work environment look and feel like? You don’t have to undertake a billion-dollar building renovation to please your employees. Find little things, like rearranging desk space, creating open work areas, or even just bringing in comfortable furniture where people can work together, that improve the time your employees spend in the office. Remember, your employees probably spend more time with you and their other coworkers than with anyone else in their lives!

Some of this focus on employee experience does have to do with the generational shift in the workplace. Millennials have now surpassed Gen Xers in the workforce, and in the not-too-distant future, they’ll be taking over leadership roles. When you talk about recruiting and retention strategies, and when you talk about employee experience, you have to address the needs of this significant portion of the workforce. It only hurts you to keep delaying it.

3. Flex time, remote work, and productivity versus office time.

Flexibility has become a key factor in the employee experience in recent years. When an employee comes to you and requests more flexibility, whether it’s in the form of flex time or out-of-office work time, you need to keep fairness in mind. How can you implement these protocols while being fair to all employees? You also need to make sure the work is still getting done. The company shouldn’t suffer because of it.

Ultimately, being flexible, permitting creative scheduling that lets an employee take care of their family and work more effectively, only improves that employee’s experience. In turn, that employee will be more loyal to you. Companies lose out nowadays if they’re not considering these issues and pulling out all the stops to figure out the win-win situation. Because I can guarantee the employer down the street is already doing so.

What’s important to one employee may not necessarily be important to every employee, so this is an ongoing conversation that must be adapted to fit various needs. Keep in mind that you and your employees have a common goal: for them to be successful and get their jobs done in the most efficient, effective way possible.

4. Leveraging technology.

Small businesses may not have the capacity to implement the large-scale technologies—like artificial intelligence and robots—big companies can access. However, properly leveraging technology can still make a significant difference for small business owners.

Technology is pertinent to the year ahead from many angles, from software for performance management, to communication platforms for increased team growth, to job obsolescence due to growth in AI. One important use of technology that’s growing in popularity is closing a skill gap by leveraging technological solutions—specifically by accessing the remote workforce. By looking outside your immediate geographical market, you have more opportunities for finding people who are qualified for the jobs you need. Talent is everywhere, and we now live in a world where that talent is accessible everywhere.

5. Data.

By looking at data and finding the narrative within it, you can uncover huge opportunities for growth. You should be looking at measurable results, not just subjective employee performance—these analyses should not be kept to end-of-year reviews. All year long, you can track turnover and hiring data, demographic data of your staff and clients, PTO data and how it’s used. By looking at this information, you get a bigger, clearer picture of your company and how it operates.

For example, if a manager in one of your departments requests a new hire because they’re busy, you can see if the data backs that up, and see if productivity is matching company goals. By turning a feeling (“I’m too busy”) into hard data, you can make better decisions.

It’s much easier now, thanks to improved data management technologies, to track and view these kinds of metrics, and you should use these improvements to your advantage. To make this work, it’s easiest to first identify which metrics mean a lot to your business. What items will give you the most growth by tracking them and reporting on them? Then, you can identify the tools you need to collect that data.

There are two easy places to start tracking data: employee turnover and time to hire. Most HR departments have a general sense for turnover across an organization, but you can be more specific and pin these numbers down to the department and position. You can see which specific positions have higher turnover, and from there you can find out what you need to do to change that. And by knowing your time to hire, you can plan workflow more efficiently when an employee departs and their successor hasn’t yet been hired.

Angela Perkins

As VP of Sales & Marketing at Xenium HR, Angela leads the sales and marketing teams and is responsible for the revenue growth of Xenium. She has spent her entire career working with small business leaders designing HR programs that fit their needs.