Monday, Jan 19 2015

What to Do About Severance Pay

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What to Do About Severance Pay

As an employer, one of the things you may consider doing for your employees is providing severance pay. But what is it exactly, how does it benefit you, and how should you implement a severance pay program that achieves the right goals for your company?

What is severance pay?

Severance pay is money that’s provided to an employee who is leaving the company for reasons other than retirement. Typically, the circumstances surrounding severance pay are layoffs, elimination of a position, and a mutual agreement to part ways — for a variety of reasons. The purpose of offering severance pay is to help the employee stay afloat and maintain a decent standard of living while they’re looking for a new job.

How much is severance pay?

A typical severance pay package offers one or two weeks of salary for every year the employee worked at the company. In some cases, the package is higher — executives, for instance, may receive up to one month’s salary for each year worked.

Some senior positions may have an employment contract that dictates the amount of severance pay. And for some companies or certain positions within them, severance packages can include an extension of benefits and/or outplacement assistance for finding new employment.

Most severance pay packages are given as a lump sum following termination of employment, rather than as weekly payments. This is because receiving weekly payments can make an employee ineligible for state unemployment benefits, or severely reduce the amount of unemployment assistance they receive.

How much are you required to pay?

Currently, there is no law in the United States that requires employers to offer severance pay. The only requirement for paying departing employees is under the Fair Labor Standards Act (FLSA), which requires that employers pay terminated employees any regular wages that are due, as well as any accrued, paid time off. This includes vacation time, but not sick days.

The only instance where severance pay is required is when an employment contract or official severance policy is in place. In general, offering severance pay is a goodwill gesture on the part of an employer — and in some cases the offer may be rescinded.

What if your employees try to negotiate severance pay?

Sometimes, most often with employees who have been laid off, an employee may try to negotiate a higher salary or additional benefits than what was offered in the severance package. In these cases, as an employer you would be legally allowed to rescind the offer and refuse to pay severance, since technically the employee has turned down your offer.

However, you may not want to rescind a severance package if the receipt of severance pay is contingent on the employee signing a release of claims — which protects you from any legal obligation or responsibility arising from the employee’s termination. If this is the case, you can either tell the employee that the offer is non-negotiable (usually the best choice if multiple employees are being laid off), or you can consider negotiating, provided the severance package is not guaranteed in writing.

What is a release of claims?

Commonly, departing employees sign a document that releases the employer from all claims as a condition of receiving a settlement package. This release states that you are not liable for the employee’s lack of employment, and frees you from potential future lawsuits. An important note to keep in mind here is that employees over 40 who are leaving the company must sign a separate release for age discrimination lawsuits, which aren’t covered under a standard release of claims.

Providing employee severance pay is a generous act on the part of the employer, and it’s also a means to protect yourself and your company from potentially damaging employee lawsuits. Offering a severance package is a positive and supportive gesture that can build goodwill for your company among both departing and current employees.

Are You Contributing to the IT Skills Gap

With the demand for IT talent rising faster than the supply, most IT managers are aware that there’s a serious disconnect between the skills your company needs for your tech department, and the availability of those required skills among available talent. In fact, according to a recent survey from staffing firm Manpower, 36 percent of employers report struggling to fill their available IT positions. The reasons given are that candidates lack:

  • Technical competencies / hard skills (35 percent)
  • Experience (25 percent)
  • Soft skills (19 percent)

But is there truly a shortage of talent? While it can’t be disputed that the “talent pool” is narrowing as unemployment among IT professionals continues to drop toward an all-time low, the real problem may be a skills mismatch — and as an employer, your recruiting, hiring, and retention strategies may be contributing to the issue.

Here are three common ways employers are making the IT skills gap problem worse, and what you can do to bridge the gap and find the talent you need.

Looking for the perfect match

Just as IT candidates have their dream companies, IT managers have their dream employees — the perfect talent to slot into their open positions. They know exactly the skills, experience, and personal qualities they’re looking for, and they won’t settle for anything less.

The problem is that “perfect” candidates are rare, or even impossible to find. And in your pursuit of perfection, you’re very likely to overlook excellent candidates with skills and qualities that can be molded to fit the position.

When it comes to recruitment and hiring, consider broadening your search parameters. Most often, the major stumbling block for perfect candidates is level of experience. With this factor the issue becomes a talent shortage because other companies are looking for the same qualifications, and the end result is often a bidding war where only one organization wins. Instead, consider hiring younger and less experienced candidates who can be trained to fulfill your expectations.

Not investing in training and education

In the rush to hire new talent, many employers make the mistake of overlooking their existing talent. Employer-provided training is a valuable and viable way to bridge the talent gap — but the majority of employers simply aren’t investing in training programs or opportunities for their employees.

The most recent data available, from Accenture, found that in 2011 only 21 percent of employees reported receiving training from their employers in the past five years. This leaves an astonishing figure of nearly 80 percent who received no training for at least five years, and in many cases longer.

Today it’s common for employers to expect IT staff to pick up new training on their own, or to simply hire new employees with the training and experience they’re looking for. But it can be far more cost- and time-effective to provide training and re-training opportunities for your existing employees in order to fill the worst of the skills gap in your organization. This includes both full-time staff and temporary or temp-to-hire candidates, who may even be eligible for additional training through staffing agencies.

Failing to offer competitive salaries

A high demand for talent, coupled with a low supply, has given IT candidates more bargaining power than ever at the hiring table. Employers who are unwilling to offer salary and benefits packages that are comparable with the latest market rates will lose out to the competition. In fact, the Manpower survey found that while 20 percent of employers said candidates weren’t willing to accept positions at the offered salary, only 5 percent were planning to increase their offers in response to hiring difficulties.

Simply stated, IT managers must realize that higher salaries are here to stay. In order to compete and recruit the best talent, you need to offer what other companies are willing to pay.

5 Biggest Mistakes Technical Hiring Managers Make

It’s hard not to have heard about the IT talent shortage. While many industries are still slowed, or even stopped, due to the effects of the recession, the tech job market continues to grow — and IT hiring managers are struggling to hire the right people. Unemployment is low for the IT industry, and tech pros can afford to be more discerning when it comes to accepting job offers.

With all the challenges that already surround hiring IT talent, you can make your life easier as a hiring manager by avoiding these common technical hiring mistakes.

Mistake #1: Poor job descriptions

The IT recruitment process starts with the job description — and if you don’t have it right, you’re not going to attract the right talent. Accuracy is particularly important for IT job descriptions. If candidates show up expecting to interview for a certain job, only to find the position isn’t as described, they’ll take a pass on accepting any offers.

Make sure your job descriptions convey the nature of the position and the requirements accurately, and as briefly as possible. Skip the laundry lists of every hard and soft skill you can think of — instead, focus on three-to-five core technical requirements, and one or two essential soft skills. The rest of the information you need will come out in the interview.

Also, keep in mind that your job description is selling your company to candidates, so emphasize the benefits and the reasons a candidate should choose to work for you over your competitors.

Mistake #2: Bad first impressions

You know how much significance you place on your first impression of a candidate — so remember that the candidate will also have a first impression of you and your company, and it may be good or bad. When you’re in hiring mode, it’s easy to forget about keeping your best foot forward, and many hiring managers make this mistake.

Make sure you’re dressed appropriately, the overall work environment is presentable, and you have someone to greet candidates and point them in the right direction when they arrive. First impressions definitely count for candidates who have multiple employment options.

Mistake #3: Inadequate interview prep

Just as the most successful job candidates never go into an interview unprepared, the best hiring managers make sure everything is lined up prior to interviewing candidates. On your end, being prepared for an interview means having that great first impression ready, ensuring that your interview team has clearly defined roles according to which parts of the interview they’re responsible for, and letting candidates know in advance what to expect during an interview — including any testing that may be involved.

Mistake #4: Lack of enthusiasm

Just as you want to hire a candidate who really wants to work for your company, candidates want to work for a company that really wants them on board. As a hiring manager, you’re the first line of enthusiasm for candidates — who are hoping to recognize from their interaction with you that your company is a great place to work, and they’ll make a good fit with your culture.

Be conscious of the type of picture you’re painting for candidates during the interview. If you focus too much on the issues surrounding the position, you may end up turning candidates off instead of engaging them. Offer realistic expectations, but at the same time sell the benefits of the position.

Mistake #5: Waiting too long

In slower economic times, hiring managers often have the luxury of taking their time with the hiring process, and waiting to make a job offer until they have multiple possibilities to choose from. But in today’s IT job market, this is not usually the case. If your phone screenings, interview calls, and face-to-face interviews are spread out over a week or two, you’ll find that the most desirable candidates have competing offers by the time they get to you — and you’ll have to work even harder to land them.

It’s a better idea to streamline your hiring process as much as possible. When you find qualified candidates who seem like a good fit, compress the screening and interview process down to a few days. Then, make the job offer immediately when you’ve decided on a great candidate.

Is BYOD the Right Policy for Your Company

Bring-your-own-device (BYOD) has become an increasingly popular policy as more employees work both remotely and on-site from their mobile devices. This is especially popular for small businesses or companies with limited budgets — letting employees use their own devices is cheaper than investing in and distributing company devices. But is BYOD the right choice for your company in particular?

The answer depends on a number of factors. Even companies without big budgets to invest in worker tech may find that it makes more sense to find a way for company-owned devices — or conversely, those with less limited resources might find that BYOD is a better choice.

Here’s a look at the benefits and drawbacks of BYOD policies, and how you can decide what’s right for your business.

The advantages of BYOD

While the cost savings are usually the first benefit that comes to mind, perhaps the biggest advantage of a BYOD policy is productivity. Typically, your employees will be more productive when they’re working from a device they’re intimately familiar with.

However, it should be noted that there is a learning curve with company-issued devices, and employees can reach similar levels of productivity once they’ve used the new device enough.

Some of the other benefits of BYOD include:

  • Cost savings: This applies not only to the initial device investment, but also to maintenance and upkeep expenses — which are typically the employees’ responsibility for personal devices.
  • Increased responsibility: When employees use personal devices for work, they are fully responsible for handling them, which can decrease the occurrence of damage or device loss.
  • Greater flexibility: With a BYOD policy, it’s easier to try different technologies or the latest tools without having to commit to costly upfront investments or get tied up in long-term contracts.

The disadvantages of BYOD

While a BYOD policy comes with many benefits, there are also some serious challenges to consider. These challenges can affect multiple departments in your company, including human resources and IT/security.

Some of the issues that can arise with BYOD include:

  • Security challenges: With multiple users accessing your company’s network from potentially unprotected devices, it can be difficult to secure your data and systems.
  • Resource consumption: The need to support a variety of operating systems and device formats can be draining on infrastructure and programming resources — not to mention your IT team.
  • Increased costs: With BYOD, you may end up paying additional licensing fees to install programs on employees’ personal devices, unless you’re using Web-based software or VPN protocols.
  • Employee dissatisfaction: In some cases, employees may consider company-issued devices a highly positive perk — and asking employees to purchase their own equipment for work may demotivate some of your staff.

What to do if you implement BYOD

If you decide that BYOD may be the right model for your business, it’s important to have a strategy for implementation — other than simply announcing that employees can use their personal devices at work. You’ll need a BYOD policy in place that covers things like:

  • Whether employees are required to have personal devices, or if it’s optional to bring mobile devices to work.
  • Who can use personal devices for work (some companies have BYOD policies that only permit personal devices for employees who travel frequently).
  • Any usage implications or restrictions on personal devices (i.e. personal devices can be used for certain purposes, or at certain times).
  • Software and security requirements for personal devices.

The use of mobile devices continues to increase, for both personal and professional areas. Whether your company chooses to implement BYOD or invest in company-issued devices, it’s important to address how you’ll handle mobile devices in the workplace, and set policies and best practices that make the most sense for your particular business.

Tired of Losing Top IT Talent Heres How to Stop It

There’s a new market for organizations to find and recruit the best IT talent—your company. With the war for talent heating up, savvy companies are bringing their IT employee searches to the competition, effectively doubling the blow by enhancing their own talent pool and weakening their rivals.

If your best talent is jumping ship to work for your competitors, you need to understand how they’re being lured away and what you can do to keep them on board. Here’s how your talent is being poached, and how you can turn the tides.

Professional search tactics

Professional search firms employ a subtle approach to luring in talent. They research and identify potential targets, then make contact with them to discuss a “great opportunity” through social media, professional networking events, industry events, and conferences.

Companies looking to tap their competitors’ talent pools will often hire these firms—or if it’s not in the budget, they’ll use the same subtle strategies to entice even employees who like their current jobs to consider a move.

Career matchmaking services

Recruiting passive candidates—IT talent who are not necessarily looking for a new job, but will make a move if they get a better offer—is a challenging strategy, but one that can pay off for hiring managers and recruiters. In the current market, both candidates and employers are interested in passive tactics: candidates for the opportunity to demand higher pay, and employers in the interests of solving the talent shortage and lengthened time-to-hire for IT jobs.

But hiring managers struggle with finding the right passive candidates, and employees who are working full time and not necessarily unhappy often don’t have time to search for passive opportunities. That’s where new tools like Poachable come in.

Poachable is an “anonymous talent marketplace,” geared for IT. Employees create a profile that describes their skills and experiences, and outlines their dream job—one that would lure them away from their current position. Employers then search these anonymous profiles for a match. The service, which has been called “Tinder for job searches,” makes passive candidate strategies easier on both sides of the equation.

Baiting with benefits

Smart companies looking to attract talent from the competition understand that money doesn’t always make the world go ‘round. Many talented IT professionals place a high value on the benefits and perks offered by a job—sometimes higher than the salary itself.

And they’re not just looking for healthcare, although a great employee-paid healthcare package is important. According to a recent study from Dice.com, tech pros are driven by benefits like flexible work schedules, free food, and the opportunity to work with cutting-edge technologies. Remote work opportunities, subsidized child and elder care, job sharing, on-site fitness facilities, and generous vacation time are also highly valued by top talent.

Showing them the money

While benefits can and often are a deciding factor, offering a truly competitive salary is crucial to retaining top talent—because if you don’t, your rivals will. Paying your IT talent well demonstrates that you’re invested in their future, highlighting their recognized and valued role in your company.

The best monetary incentives are more than a salary. IT talent values meaningful pay increases (those not tied to length of employment), generous bonus structures, and long-term incentive plans that hinge on the overall success of the organization as well as individual performance.

Keep your IT talent from working for the competition by offering competitive, meaningful compensation and great benefits, and being alert to strategies like passive recruiting and professional search tactics.

How to Make a Final Selection from a Pool of Qualified Candidates

You’ve scoured resumes and held interview after interview, and now you’re faced with a happy dilemma—choosing your new hire from several equally qualified candidates. While this is a problem most IT managers love to have, it can be challenging to make the final decision. You want the best possible hire, one who’ll make a long-term, productive employee and add the most value to your company.

And of course, you don’t want to second-guess your decision down the road.

If you’re struggling to choose between two or more candidates with excellent qualifications for the job, these tips will help you make that important final selection.

Take your time

Hiring in haste often leads to significant, or even disastrous, mistakes. While your company may be operating short-handed right now, it’s better to give yourself the time you need to make the best decision and hire an excellent employee who’s likely to deliver value for years. Otherwise, you risk hiring the wrong candidate—and if things don’t work out, you’ll have to start the hiring process all over again.

Consider cultural fit

With technical qualifications being equal, an important differentiator for the right candidate is cultural fit. Look for a candidate with soft skills and personal qualities that will balance out the team they’re being hired to, as well as the organization overall. Choose someone who holds values and ethics that align with the company, and who will get along well with other employees.

Identify unique skills

Review your top candidates’ backgrounds and ask yourself what kind of unique skills each of them would be able to bring to the company. For many organizations, one of the best deciding factors is finding a candidate who has demonstrated the ability to adapt their expertise to various environments. A sense of willingness to learn new skills or adopt new viewpoints is also a big plus.

Hold a final interview round for outside opinions

Ask your top candidates to come back for another interview—and this time, have the department manager or other team members sit in. This will give you a working idea of the chemistry between the candidates and the existing team, helping you determine the best cultural fit. It’s also an opportunity to ask further, more in-depth questions about the candidates’ specific skills and experiences in areas that are most important for the position.

Look for the little things

Did one candidate arrive for the interview in formal attire, while the rest were somewhat dressed down? Did any of your top choices send a handwritten thank-you note as a follow-up to the interview? Consider hiring a candidate who took things a step further than the rest—their attention to detail is a good indication that they’ll make a valuable employee.

Pick the passionate candidate

If you’re still struggling to make a final decision, passion may be your trump card. A candidate who’s passionate about the profession, and the specific position at your company they’re interviewing for, may be the best choice.

Consider personal passions as well as professional aspirations here, and look for places where the two align. Employees will be putting 40 or more hours a week into their jobs—so they should be doing something they enjoy, or their morale and productivity will suffer.