2. 78% OF CEOS VIEW INCREASING
REGULATIONS TO BE THE TOP THREAT
TO BUSINESS GROWTH.
In 2015, we saw many new challenges affect the way organizations
manage one of their most important assets; their employees. In a
constantly changing environment made up of new rules and regulations,
daily advances in technology, rising healthcare costs, and increased
access to data and information, business executives must focus on three
key areas in 2016:
CONTAINING COSTS
On average, over $350 billion are lost every
year due to unengaged employees.
REMAINING COMPLIANT
According to the Department of Labor, 95
percent of employers are out of compliance.
ATTRACTING & RETAINING TOP TALENT
Only 45 percent of HR executives are very
confident they will have access to the right talent.
THE IMPACT ON YOUR BUSINESS
Now, more than ever, business executives need to creatively, strategically
and pro-actively think about how they can effectively manage their
human capital to increase organizational health. This guide will help you
navigate key trends spanning five integral areas of your organization,
including compliance, benefits administration, HR technology, employee
benefits, and culture and performance.
2
3. TREND 1
Compliance: Not Simply A Priority – A Must 4
TREND 2
HR Administration: Transform Your Data Through
Technology 6
TREND 3
HR Technology: Improve Employee Engagement
And Compliance Through Effective Technology 8
TREND 4
Benefits: Customization Is The New Normal 10
TREND 5
Culture & Performance: Designing A Culture That
Fuels High Engagement 12
Conclusion 14
About Us 15
3
4. 69%
4
Compliance
Not Simply A Priority – A Must
According to KPMG, 69 percent of U.S. CEOs
list compliance as one of the most important
issues to have an impact on companies, second
only to global economic growth (73 percent).
Navigating laws and compliance demands will
continue to be a challenge for executives this
year – especially since it’s an election year. With
recent changes to the deadlines for 1094/1095
Reporting, the delayed Cadillac tax, and
changes to DOL regulations and FLSA status,
business executives must take measures to
prepare and educate organizational leadership
and personnel in these areas. While regulation
and change may be daunting for organizations,
taking a proactive approach is paramount to
effective compliance management.
Cadillac Tax Delayed Two Years
The Cadillac tax, an annual 40 percent excise
tax on “rich” health insurance benefits that
exceed threshold limits, will be delayed until
January 2020. President Obama recently signed
off on legislation that would also make the tax
permanently deductible to employers, which is a
welcome change from the original legislation in
which the excise tax was nondeductible.
“Rich” in this instance refers to any healthcare
coverage exceeding $10,200 for individuals and
$27,500 for families, although the projected limits
will likely be higher by the time the tax becomes
effective in 2020.
The tax will be adjusted annually to the Consumer
Price Index (CPI) plus one percent initially and
then CPI.
Assume Employee A enrolls in self-insured family
coverage with an aggregate annual cost of
$30,000. With the current threshold limits for family
coverage, the administrator would be liable for a
Cadillac tax assessment equal to $1,000.
The delay is a relief for employers already
burdened with Affordable Care Act reporting
and requirements, but many experts believe that
most, if not all, employers will eventually be
covered by the Cadillac tax.
69% Percent of CEOs list
compliance as one of the
most important issues to
have an impact on their
companies.
5. 5
If the Cadillac tax had not been delayed,
employers would have needed to analyze their
benefits after the new year in order to give
themselves enough time to prepare for the
Cadillac tax in 2018. Now that employers have
been given two more years to prepare, it is
advisable to wait and see what the future of the
Cadillac tax holds to determine next steps.
This approach will be especially important
during the upcoming election cycle, when there
will continue to be attempts to reform or repeal
the Cadillac tax. Although there is now
additional time to understand the applicability of
the Cadillac Tax, it is important to remain flexible
and analyze current benefits strategy to get a
better picture of the impact that the Cadillac
tax could have on your company.
The Fair Labor Standards Act (FLSA):
Measuring The Significant Impact of
Proposed Exemption Reform
The Department of Labor proposed a provision to
the Fair Labor Standards Act, which would reform
the “white collar” exemption from minimum
wage and overtime pay for all hours exceeding
40 in a week.
If approved, the minimum salary to qualify for the
overtime exemption will increase from $23,660 to
$50,440 (annually), and the minimum threshold
for highly compensated employees to qualify
for the overtime exemption will increase from
$100,000 to $123,500 (annually). Should these
rules be adopted, approximately five million
more Americans would become eligible for
overtime pay because they would lose their
current exemption.
Before the proposed rules are finalized, HR and
payroll departments must analyze the exempt
status of each employee and identify which, if
any, salaries will be affected.
Some employers are simply increasing salaries
to meet the new minimum threshold, but for
employees in the middle of the new threshold,
finding a solution is more complicated. Many
options involve increased payroll costs and, in some
cases, increased benefit costs. It is imperative that
employers be proactive in their analysis of
current compensation strategies to properly
budget for the possible increases associated
with these changes.
IRS Extends Due Dates For
ACA Form 1094/1095 Reporting
The IRS recently announced the deadline for
providing 1095-C (and 1095-B) statements to
individuals is extended from February 1 to
March 31.
• 1095-C (and 1095-B) statements now due to
individuals by March 31.
• 1094-C (or 1094-B) transmittals now due May 31
(for non e-filers) and June 30 (for e-filers).
KEY INSIGHTS
To prepare for key dates and
keep up with constant changes,
implement a compliance calendar
and checklist to limit
compliance risks.
6. 6
HR Administration
Transform Your Data
Through Technology
With the explosion of big data and analytics,
companies have access to more data and
information than ever before. Unfortunately, data
alone isn’t enough—it’s the ability to predict
employee behavior and recognize trends,
such as employee retention patterns, that truly
produces value. Successful organizations are
developing processes for leveraging data and
extracting key insights to implement strategic
change across the organization.
Many savvy organizations have migrated this
practice to HR administration in the form of
modern HR software. From tracking payroll to
aligning business goals, software makes it easier
to compile employee information, allowing
HR departments to extract insights and make
informed, strategic decisions to improve processes
that directly affect compliance matters.
With constant changes in technology and the
increased demand for HR executives to wear
more hats, there’s a movement to harnessing
data and creating human capital dashboards.
Implementing a human capital dashboard allows
your organization to measure work performance
and identify problem areas more efficiently.
Harnessing human capital metrics provides
executives with better insight into employee
performance, allowing them to make more
strategic business decisions and ensure company
goals are aligned throughout the organization.
Uncovering Value Within Your Data
A two-year study from Deloitte Consulting found
that although organizations spend more than $14
billion on HR software, “fewer than four percent
can perform predictive analysis on their people,
and only 14 percent perform statistical analysis
at all.” The study also investigated the financial
performance of the businesses in the top 14
percent of the research, and found they were
able to make better data-driven decisions about
hires, promotions and salaries.
A mix of predictive analytics and standard HR
metrics is the key to creating the most effective
human capital dashboard for the company.
Predictive Analytics
• Employee Reviews
• Surveys
• Big Data Analysis
Standard HR Metrics
• Cost Per Hire
• Turnover
• Retention Rate
• Absence Rate
• Annual Leave Revenue
Per Employee
7. 7
Before setting up a dashboard, HR executives
should survey senior executives to understand
what human capital metrics matter most for
driving business strategy forward.
HR executives should also consider the type of
dashboard that would benefit stakeholders the
most. Certain organizations may prefer layouts
that display the same human capital metrics
company-wide; other organizations may benefit
from layouts that are individually customizable for
each employee. Visual components, such as bar
graphs or pie charts, can also be used to provide
detailed information in an easy-to- digest format.
When built with executive business goals in mind,
a human capital dashboard is an indispensable
tool for HR and organizations as a whole. Most
company leaders will agree—human capital is
the most important and expensive investment,
and there’s much to be learned (and gained)
from employee data.
$14B
4%
KEY INSIGHTS
Organizations spend
$14 billion on HR software.
Percent of organizations
that perform statistical
analysis.
Percent of organizations
that can perform predictive
analysis on employees.
14%
“Although
organizations spend
more than $14 billion on
HR software,fewer
than 4% can perform
predictive analysis on
their people.
“
8. 8
HR Technology
Improve Employee Engagement and
Compliance Through Effective Technology
With the rise of mobility, HR executives have
turned to benefits administration technology to
support important compliance initiatives while
maximizing employee engagement.
Self-service platforms put the bulk of benefits
management directly into the hands of the
employees, allowing them to view their plans
at any time, in any location. The software helps
build a stronger commitment between the
employer and employee, and provides better
education of company benefits overall. Intuitive
HR technology platforms also offer a seamless
educational environment for employee job
development, which helps boost job satisfaction,
innovation and performance.
Additionally, giving employees advanced access
to their benefits affords the HR department time to
focus on initiatives that add value to the
company, boost team morale and address
problem areas. Before implementing software,
it’s important to compare and evaluate several
platforms based on the following criteria.
Mobile Access
According to Pew Research Center,
nearly two-thirds of Americans are
smartphone owners. Smartphone users
seek instant gratification, so it’s only
natural for employees to prefer access
to payroll, time off and benefits from
their smartphones in real-time. HR
mobility is helpful for speedy vacation
time approval, submitting expense reports
while on-the-go, and accessing benefits
and payroll from remote locations.
User Friendly Design
It is important to compare functionality vs.
ease-of-use. Implementing an intuitive, user
friendly platform makes it easier for employees
to use the tool, ultimately saving HR resources.
A straightforward benefits platform helps
drive adoption and ensures HR systems
are being used properly.
9. 9
Support/Service
Most employers know that a system is
only as good as its implementation and
ongoing support. HR executives should
ensure the platform provider can provide
support and solutions. Where applicable,
consider partnering with internal IT
departments to offer ongoing support.
Conduct a Needs Audit
Prior to implementing a platform,
conduct an internal audit to determine
which features align with organizational
needs. Most providers sell multiple in
bundled packages, so preparing an
audit will allow you to strategically
select the appropriate implementation
for your organization.
Switching Platforms
There’s much to be considered if
switching platforms is necessary,
especially in terms of data. Understand
the platform’s process for moving
historical data from one platform to
another. Additionally, it’s important to
align with key departments, stakeholders
and senior leadership.
Today’s HR executives wear many hats, and
administrative tasks can consume a great deal
of time that would be better spent on talent
management, job performance and other
functions that significantly impact the bottom
line. Additionally, implementing the right HR platform
empowers, educates, and aligns employees –
making HR technology a key contributor to effective
human capital management.
“Giving employees
advanced access to
their benefits affords
the HR department time
to focus on initiatives
that add value to
the company.
“
10. 10
Benefits
Customization Is The New Normal
Effective human capital management in
2016 will require more customization, attention
to detail, and creativity when developing an
employee benefits program.
Today, retaining top talent requires much more
than a competitive salary and a 401(k) match
modern employees look for unique company
benefits that emphasize flexibility and ease
Work-life balance.
To gain a competitive advantage in recruitment,
company leaders should consider these cost-
effective options when creating a custom
company benefits package.
Voluntary / Worksite Benefits
Health, dental and vision insurance coverages
are considered core benefits, and voluntary/
worksite benefits generally include any benefits
that employers may offer outside of the core
group (such as short- and long-term disability
coverage, accident insurance, critical illness
coverage, etc.). Voluntary / worksite benefits are
individual-style benefits usually deducted from
payroll and used to offset out-of- pocket medical
costs. Worksite benefits are more popular and
critical to the overall plan that employees desire.
Consider establishing plans that complement
core benefits to increase your coverage offering.
Strategies Behind Selecting the
Right Healthcare Plan
Senior executives and HR executives may
want to consider self-funded employee health
insurance to better manage healthcare costs.
Under self-funded plans, employers take on the
financial burden of funding their own health plan,
giving them more control over benefit administration,
healthcare customization and health plan reserve
capital. A high-deductible health plan (HDHP) also
offers employees more control over healthcare costs
by lowering insurance premiums. For employees in
good overall health, HDHPs are viable because
they avoid overpaying for health insurance that is
rarely used. An assessment of overall staff health
can help business leaders decide which plan
best serves the organization’s employees. In fact,
many organizations have designed programs
that promote and incentivize health initiatives.
Collecting data from these programs can assist
leadership as they search for the healthcare plan
that appropriately balances employee needs
with cost-efficiency.
KEY INSIGHTS
Instill processes to better
understand your team and set
the standard for your ideal
benefits program. Once you
understand what’s important
to your workforce, work with a
consultant to get it work for you.
11. 11
Private Exchanges
A valuable resource for HR, private exchanges
are online insurance marketplaces where
employees can choose coverage based on
individual needs. Employers determine their
contribution amount, then offer a variety of
health plan options for employees. Employees
may use the employer’s stipend to purchase
a health plan that addresses specific needs.
Typically, this approach offers more variety and
freedom to employees while simplifying
administration. This shift can reduce overall
healthcare costs for companies because
employees can avoid paying for unnecessary
benefits, and ultimately, companies may be able
to avoid the Cadillac tax.
Flexible Hours / Telecommuting Options
In a survey from Indeed, 51 percent of the
respondents stated that flexibility in work hours
was a top reason they were interested in a new
job. Mobility has given employees more freedom
to work from remote locations, and employers
can provide leeway by cutting out commute times
and in-office distractions. Flexible schedules and
telecommuting options offer improved work-life
balance for employees with families, pets and/or an
active lifestyle outside of the office. Skyrocketing
health insurance costs and shrinking company
budgets have encouraged company leaders
to get more creative with customized company
benefits packages. In 2016, tailored company
benefits will be essential to creating a healthy,
dynamic work culture.
“Custom benefits
that complement
a dynamic work
culture is key
to transforming
comparable
benefits packages
into competitive
ones.
“
12. 12
Culture and Performance
Designing A Culture That Fuels High Engagement
As modern businesses become more
transparent, it’s important for executives to play
a central role in building a work environment
that supports high employee engagement.
Executives (in growing companies especially)
must set the vision and facilitate a culture that
sets a solid foundation for continued growth.
To understand what gets employees to interact
and feel connected to the company, it helps to
get straight to the source. A high engagement
workplace will always be in style, so here’s a list
of do’s and don’t’s for creating an environment
that sustains a positive work culture.
Make Organizational Changes Where
Needed
Ask for employee feedback via surveys,
focus groups, social media communities and
employer-employee conversations. Even if an
employee’s suggestion is out of the employer’s
scope, being receptive to feedback encourages
employees to be open with management and
invites employees to take an active role
in workplace improvement.
Support Career Path Development
The Bureau of Labor Statistics recently found
that between 2.7 and 2.8 million employees quit
monthly. A high turnover rate is largely due to a
lack of empowerment and potential for
professional growth. Successful leaders create
a culture that invests in employee growth and
education programs.
Focus on Shared Organizational Values,
Instead of Skill Alone
Successful organizations are altering formal
interview processes to assess values (in addition
to skills) to determine if prospective employees
align with core organizational values. For current
employees, core value workshops can be held
to ensure employees have the right approach to
aligning with corporate vision. Core values guide
work behavior and determine how employees
conduct business, so it’s essential for leaders to
ensure employees share similar values.
13. 13
Don’t Assume Money is the Sole Factor in
Driving Employee/Recruit Decisions
Inclusion, peer engagement and camaraderie
will ultimately determine if your employees go the
extra mile. Employees who earn the trust, respect
and cooperation of their colleagues are likely
to outperform groups that lack working
relationships. Leaders must establish an
environment that fosters collaboration to build
a more connected work culture.
Don’t Let Hard Work Go Unnoticed
Large or small, achievements should be recognized
by both leadership and peers. Encouraging peer
recognition gives a stronger sense of teamwork
and freedom to appreciate hard work. Positive
feedback clarifies employer expectations,
making it easier to achieve continued positive
results in the future.
A lack of a high employee engagement in the
workplace can create a void between leadership
and workforce, hindering business goals and
organizational performance. When employees
work in an environment that drives engagement,
productivity is maximized, maximizing efficiency
and performance.
“ The Bureau
of Labor Statistics
recently found that
between 2.7 and 2.8
million employees
quit monthly.
“
14. 14
Conclusion
In 2016, business executives must address pressing
human capital management concerns and adjust
to an evolving corporate landscape. Leveraging
insights provided by the human resources de-
partment can help executives find long-term
economical solutions to three major challenges:
• Containing costs and maximizing the
HR budget
• Remaining compliant with changing
employment regulations
• Attracting and retaining top talent as
competition increases
With our help, senior executives and HR personnel
can benefit from the five key industry trends
discussed in this guide. By bringing their partnership
with HR to the next level, executives can build a
company that works seamlessly toward company
goals without losing sight of the bottom line.
