Author: Tanille Royston

Once upon a time, business owners hired employees over handshakes.  Nowadays employers are more sophisticated, and they use written documents.  Those inked instruments are usually referred to as offer letters.

An offer letter is a short, informal proposal of employment which sets forth the terms of the position, such as, job title, start date, salary, supervisor’s name, work duties, conditions of employment and employment relationship.  Employers usually give offer letters to lower to middle level employees.

Some small business owners use employment agreements, which contain much of the same information as offer letters.  However, they include a few more significant details.  They specify that employment is for a certain amount of time, the circumstances of termination from employment, severance pay, more in depth benefits and restrictive covenants.  Employers often give employment agreements to higher level employees, such as, executives and specialized professionals.

Small business owners should know the difference between offer letters and employment agreements, and when to use them.  Since offer letters specify that the employment relationship is at-will, meaning that the employer and employee both have the right to terminate employment for any reason or no reason, with or without advance notice, employers may want to give them to lower to middle level workers so that employers have the flexibility to dismiss them if they are not a good fit.  On the other hand, since employment agreements are for a fixed period of time and include more fringe benefits, small business owners may want to use them to attract higher level professionals who are in demand and harder to find.

A word of caution.  Whether an employer chooses to use an offer letter or employment agreement, it must be aware of the document’s contractual implications.  Many employees have successfully brought breach of contract claims against their employers for either stating or implying in the agreement that the employee would get a raise or promotion, and he later does not.

In conclusion, employers are free to choose offer letters or employment agreements when extending job offers to new hires.  However, they should analyze the circumstances to determine which is better, and make sure that they do not state or imply a promise that they will not later honor. 

Sure, you can find workers, but are you attracting the best ones to your company? Are your employees putting in effort to grow your business? Many employers do not give as much thought as they should about bringing top talented people to their organizations.  They often think they hired the right candidates, but when they do not work out, they wonder where they went wrong in the recruiting process. One way in which employers can attract top talent to their businesses is by creating a competitive compensation plan.  

Employee Compensation Plan

An employee compensation plan is when the employer provides the employee with their total amount of monetary and nonmonetary value in exchange for their performance at the company.  

Some of the monetary features of an employee compensation plan are hourly pay, salary, bonuses, commissions, stock options, 401K, medical/dental/vision benefits, life and disability insurance, personal time off for sickness or vacation and paid holidays.

Some of the non-monetary components are training, phone usage, company car, breaks and a flexible work schedule.

Purpose

The employee compensation plan should reflect the company’s mission, values and culture.  The employer should demonstrate its standards and beliefs through its monetary and non-monetary rewards. For instance, if the business touts that it provides a family friendly environment, then it should provide a flexible work schedule so that parents are able to come late to work or leave early to attend to childcare needs.

Recruiting top talent and rewarding employees are also objectives of the employee compensation plan. Many job candidates are not only interested in the salary of a position; they are also concerned with its perks. In order for employers to compete with other companies for the best workers they have to have a competitive compensation package. Businesses have to provide a good salary and other perks, such as, bonuses, remote work and personal time off, or job candidates would just go to other companies that offers them. 

Many employees like to feel appreciated for the work that they do on their jobs.  To reward performance, employers should develop a strong employee compensation plan. They can offer some features, such as, commissions, paid vacation time and free lunches.  When employees feel like they are valued, they are more likely to stay with their current employer and continue working hard.

Creating an Employee Compensation Plan

To build an employee compensation plan, the employer should first do an analysis of the job market and its competitors.  Businesses should understand what companies are offering their workers in their industry. Also, they should really examine what their competitors are giving their employees. Next, companies should evaluate their own data. They should look at their workforce size and budget to determine how much money and energy they can devout to monetary and non-monetary benefits.  Next, when choosing the features of the employee compensation plan, employers should review their company values, mission and culture to ensure that their offerings reflect their beliefs.

Last, the employers should look at the monetary and non-monetary rewards from their employees’ perspectives.  The employee compensation plan should showcase what the employees value. If most of the workers are retirement age, then they may appreciate a more robust 401K package than a happy hour event, which many younger employees may like better.  If the employers do not know what is of importance to their workers, then they should ask them during meetings or request them to offer their opinions in a survey.  

Conclusion

Employers must create an employee compensation plan to attract and retain top talent to their organizations. 

Time after time employers are baffled as to why they keep hiring employees who horribly fit the job positions.  They have no idea where they went wrong.  Perhaps they thought that hiring was easy, and all Human Resources professionals know that is not true.  It can take a lot of time sifting through resumes that do not remotely describe experiences related to the job position.  Human Resources specialists can also spend countless hours scheduling and conducting interviews.  Although employers exhaust their precious time on hiring activities, they can still run the risk of letting incompetent people in the door. There are a couple of steps that employers can take to increase their chances of attracting the right talent to their organizations.

1. Focus on Your Company Values

Employers should reexamine their company’s mission statement and value proposition to ensure that they really understand them.  The managers should draft job descriptions with those ideas in mind.  The advertisement should not only communicate the requirements and qualifications of the position, but it must also describe some of the company’s most prized beliefs.  This gives the job candidates an opportunity to determine if they share similar values.      

Also, the Human Resources professionals should design recruiting strategies based on the company’s mission statement and value proposition.  They should search for and hire candidates who show an interest or understanding of those ideas.  The managers should hire people who they believe will follow and uphold the company’s principles. 

2. Ask the Right Questions

Employers should only ask job related questions during interviews, and most of the time they do.  However, employers are not making the right type of inquiries.  Most managers request that candidates explain their past experiences and how they handled specific problems.  Questions about work history are great, but they do not provide enough insight into the true character of the person.  Managers should inquire into the ethics and ideas that the candidates possess.  Those types of questions afford the manager an opportunity to assess whether the character of the person complements the values of the company.

Although attracting the right talent is challenging, employers can implement a few steps to help them.  Hiring managers should focus on the company’s mission statement and value proposition when creating a job description, recruiting strategy, and developing interview questions.

This is a question that a small business owner may ask himself at some point.  He may respond by stating that his worker is indeed an independent contractor.  The small business owner may think about the ways that the individual fits his idea of a freelancer, and he may be unequivocally wrong.  Many people believe they know what an independent contractor is, but they are mistaken. 

According to the Internal Revenue Service (IRS), a person is an independent contractor when he exercises control over how the work he is paid to do will get done. The individual who offers to pay for the job can only direct the result.  Alternatively, an employee is a person who is employed by a business to perform a duty.  He is expected to follow his superiors’ directives, and do his work according to their instructions.      

The IRS indicates that there are two major points when determining whether a person is an independent contractor or an employee.  The first factor is control.  The employer can only control the end product or service.  The second point is relationship.  The IRS will look at the facts of a situation to determine how both the business and the worker perceive their relationship to one another.

When deciding whether the individual is an independent contractor or an employee, a small business owner may want to consider whether he has to provide the tools and resources for the worker to complete the job.  He may want to think about whether the person is free to work for other businesses.  Also, the small business owner may want to consider whether the job duties are an essential element to the company’s business.  Last, he may want to think if he wants the worker to sign an employment contract.  These are just some points to consider, the IRS will look at the entire relationship when determining whether a person is an independent contractor or an employee. 

Although, many small business owners may think of their workers as independent contractors, it’s imperative that they make sure that they are following the IRS’ guidance on the matter.

Lately, we’ve heard a lot about the economy doing well and the unemployment rate at an all-time low.  What some people may not know is that many small business owners would like to hire even more employees, but they struggle to find the right talent.  Business owners will look into various ways to find what they need.  Some will give serious thought to bringing aboard independent contractors, also known as freelance workers. If they choose that route, they will need a strategic plan.  What is that?

A strategic plan is the process of outlining a crystal clear direction, and designing steps to pursue it. In terms of a blueprint for working with independent contractors, the small business owner should focus on the purpose of the freelancers, sourcing them, contracting with them, communicating with them and assessing their effectiveness. 

Purpose

The small business owner should have objectives for working with independent contractors.  Some like the idea of freelancers because they may appear to cost less; however, that may not always be the case. A cost analysis will help determine if they are worth the investment.   Small business owners may view independent contractors as sources of fresh ideas; however, before you bring them aboard, it’s wise to get an understanding of their thought processes.  

Sourcing

Securing an independent contractor is like finding a needle in a haystack.  They seem to be everywhere, but nowhere when you need one.  A good way to find a freelancer is on social media.  There are many freelancers who advertise their services.  Also, asking people in your personal network may prove helpful.  Many men and women are happy to refer you to someone they’ve worked with, and more importantly, liked.  Last, search industry specific job forums, and you may find a long list of independent contractors who have the skills and experience you seek.

Contracting

After you select the independent contractor of your choice, make sure that the both of you discuss the details of the project, and put them in writing.  Some of the important aspects of the agreement should include the specific tasks that the independent contractor will complete, when they will do them, where the work would take place, and the compensation for the project.  Both parties should feel free to put any additional terms and/or conditions in the contract. After the negotiations are done, both sides should sign the agreement, and give each other a copy.  

Communication

Once the work has started, it’s a good idea for the small business owner to contact the independent contractor periodically.  He may want to check to see how the project is coming along and if it’s on schedule.  The small business owner may want to determine if the freelancer has any questions or needs anything in order for him to complete the task.  Also, by staying in contact with the independent contractor, the small business owner shows that he hasn’t forgotten about the project, and cares about its progress. 

Assessment

After the project is completed, the small business owner may want to determine if using the independent contractor was beneficial.  The small business owner may want to reexamine his purpose in using free lancers.  If he decides that the independent contractor helped him meet his goals, then he would probably use one again.  If not, then the small business owner will maybe hire an employee or continue to work without one.   

In conclusion, having a strategic plan is important because it will help the small business owner determine if he should work with independent contractors.

When the COVID-19 pandemic arrived, it hit the workplace hard.  Many people were contracting the virus, getting sick, and passing away.  In order to stop the spread of COVID-19, many businesses temporarily closed leaving people out of work.  Although some employers permitted their employees to work from home, many people faced challenges completing their job responsibilities and navigating virtual teaching their school aged children.  The COVID-19 pandemic brought several unpredictable changes, and many people felt overwhelmed, stressed, anxious and depressed.  Employers can assist their workers with their emotional state by implementing mental health-based employee wellness programs.  

An employee wellness program consists of events and activities that support, maintain and improve the employee’s well-being.  In the context of mental health, an employee wellness plan promotes initiatives to help reduce stress or other psychological conditions.  Employee wellness programs are needed when an employee feels isolated because of working from home and not engaging with co-workers.  Also, they are a good resource when an individual has a sense of hopelessness that the pandemic will never end.

Not only are employee wellness programs beneficial to workers, but they are advantageous to employers as well.  They increase work productivity, employee engagement, morale, retention, and decrease stress and depression.  

For employers who do not have employee wellness programs, it is never too late to start!  They can develop them by surveying their workforce to determine the types of events and activities that workers would like to have.  Next, they can take the information from the studies to create programs and goals.  Then, the employers can implement the events and activities.  Last, they can determine if their goals were met, and collect feedback from the participating employees.

For employers who have no clue about employee wellness programs and want to learn more about them, please contact me!  I can get you started; I have implemented many of them.  Some of the resources that I have seen in the workplace that promote and support mental health well-being are on site yoga classes and meditation breaks.  If an employer has a mostly remote workforce, it can schedule virtual activities to encourage mental health wellness.  Thus, there are many events and activities that employers can develop to help their employees!