Those that have been readers for awhile know of my dislike of the NLRBâs expansion of its doctrine of protected concerted activity (e.g., here and here).
The latest on the NLRBâs hit list: employee mis-classifications. The NLRB has concluded that an employer has committed an unfair labor practice and violated an employeeâs section 7 rights by (mis)classifying its employees as independent contractors. Or so was the boardâs conclusion in its recently published General Counsel Advice Memorandum [pdf].
The case involved drivers for a drayage company, whom the company classified as independent contractors. The company opposed a unionâs efforts to organize the drivers on the ground that they were not employees covered by the National Labor Relations Act. Even after the NLRB determined that the purported contractors were employees subject to organizing, the employer still refused to re-classify them as employees.
In response, the NLRB Office of General Counsel concluded âthat the Region should issue a Section 8(a)(1) complaint alleging that the Employerâs misclassification of its employees as independent contractors interfered with and restrained employees in the exercise of their Section 7 rights.â On the one hand, the GCâs decision makes some sense. If the NLRB determines that you have intentionally mis-classified employees with the specific intent of avoiding a union, then you have likely interfered with the rights of those employees to organize.
Yet, the GCâs decision goes well beyond the facts of the case, and concludes that even a âpreemptive strikeâ in advance of any organizing campaign violates employeesâ section 7 rights.
The Employerâs misclassification suppresses future Section 7 activity by imparting to its employees that they do not possess Section 7 rights in the first place. The Employerâs misclassification works as a preemptive strike, to chill its employees from exercising their rights under the Act during a period of critical importance to its employeesâthe Unionâs organizing campaign.
Employers, thanks to the NLRB, your risk of employee mis-classifications (which is already sky high) just increased. Get ready to start fighting a two-front war against your independent contractors. Savvy plaintiffsâ lawyers simultaneously will file the FLSA lawsuit in federal court and, based on this Advice Memorandum, the unfair labor practice charge with the NLRB. Since an NLRB charge typically moves faster than a federal wage/hour lawsuit, expect the (unfavorable) Board decision first, and expect your contractors to argue the conclusive and binding effect of that decision in the FLSA lawsuit.
The NLRB is wading into uncharted and dangerous waters â creating an unfair labor practice out an alleged wage/hour violation. Moving forward, expect the employee friendly NLRB, and not federal judges, to decide whether you have classified your workers properly. This development is decidedly not to your benefit.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hymanâs blog at Workforce.com/PracticalEmployer.
By integrating benchmarks into everyday tasks, HR leaders can make informed decisions based on data-driven HCM metrics. Illustration by Jakub JirsĂĄk
Providing the right mix of competitive rewards to attract and retain talented employees can be like shooting arrows in the dark: You try to take aim but can easily miss your target.
Unfortunately, this metaphor applies to many of todayâs HR practitioners, who still rely on educated guesses and trial-and-error methods to build and engage a high-performing workforce. Benchmarking can improve your HR aim. It can be a compass that shows business leaders how their companyâs offerings â to the market and to employees â compare to competitors and the industry.
Timely benchmarks have historically been hard to find and limited in scope due to practical and technological limitations. As a result, HR leaders have underutilized benchmarks to guide decision-making. Fortunately, thatâs changing. With the rise of big data and HR analytical tools that transform information into actionable insights, benchmarking now is a strategic asset for workforce management.
Big data is improving benchmarking by providing more relevant, recent and reliable information that can help HR professionals better understand their organizationâs competitive positioning externally. It also can help them compare metrics among different business units and teams internally. Before advancements in data aggregation, benchmarking typically involved fielding surveys that could take months to plan, execute and validate.
Today, data aggregation involves massive volumes of data that â when analyzed â support a broader spectrum of human capital management activities. Using data science can make it cheaper and easier to generate and use benchmark data. As a result, HR leaders have greater access to high-quality benchmarking data they can use to guide their teamâs daily work.
One increasingly popular use of benchmarks: using it to address high employee turnover rates. For example, analysis of workforce data may reveal that a company is experiencing high turnover rates for certain functions and that the root cause for many may be their search for higher compensation.
Hereâs the good news: New data visualization tools and enhanced graphic user experiences make benchmarks more approachable and intuitive to the average HR user than ever before. With simple data visuals, HR practitioners can more accurately interpret the results of benchmark analysis.
A merger or acquisition is a prime example of how workforce management benchmarks can impact cross-functional business activities and give an employer a competitive advantage. Given that employee compensation is one of the biggest expenses for most organizations, benchmarks can provide clarity on what competitive compensation levels look like for hiring and paying employees in new or unfamiliar markets. HR leaders can use those benchmarks to rationalize and standardize compensation strategies for the newly combined company.
Beyond compensation, mergers and acquisitions also open up other opportunities to leverage benchmarks as strategic guides. Benchmarks can help establish criteria, such as rates of high absenteeism, to help identify employees who may leave a company after the transition. In addition, HR leaders can leverage benchmarks to compare a companyâs post-merger turnover rate with competitors to gain insights that will help refine their talent retention strategies. Another example is ratios of support staff to lines of business and spans of control benchmarks that can help optimize a post-merger business structure. These types of benchmarks provide guides on how the organization can lead sizing efforts.
Business leaders look to HR to deliver strategic insights that assess workforce conditions and inform forward planning. By integrating benchmarks into everyday tasks, HR leaders can make informed decisions based on data-driven HCM metrics. In an evolving and competitive recruitment market, benchmarks can provide important guides to help companies seek and build a high-performing workforce that will drive long-term growth.
Modern data science and HR analytics tools can help companies take more accurate aim at the available talent pool and, potentially, increase the number of times they hit the target.
David Turetsky is vice president of ADP DataCloud product management.
One of the biggest compensation challenges during times of suppressed budgets around compensation increases (i.e. the standard 3 percent) centers around salary compression. This occurs when new employees or recently promoted workers receive a salary similar to or higher than their more experienced colleagues in the same position. With some market rates moving faster than others, this can inevitably happen if you are looking to hire an individual from the market into a role with other incumbents. Though it may be perceived as unfair, paying new employees the current market rate for their positions is key to attracting new talent, even if the salary of those already employed doesnât increase simultaneously.
So, how can companies address this issue and maintain a fair and merit-based compensation strategy? The key is to base salary on competitive market rates and individual performance. Looking at our CompAnalyst Market Data, we find that the market rate for software engineer 4 has increased from July of 2015 to July 2016 by 4.5 percent. With a 3 percent increase allocated uniformly across an organization, you can see that longer service employees will be paid less than your new hires.
If a current employee is performing at or above expectations, then their salary should increase to more than what their new colleague is making. Meanwhile, if the more experienced engineer is underperforming, then their performance may merit a 0 percent merit increase; management can work with the individual to help them increase their performance and earn a higher salary.
Itâs important to note that salary compression isnât limited to within a single department, it can be perceived across the organization if a department collectively receives a higher raise than others. As with individual performers, certain job families bring more value, or certain roles are in higher demand. This means the company will have to raise the salaries for some positions faster than others to attract and retain top talent.
Key to success is having the insight into the market and movement of the respective jobs in the organization, as well as tracking individualâs performance levels. Equipped with accurate data into positions, pay levels and an individualâs performance, the company can invest in its people wisely and have the data to back up why people may be paid differently.
A pay for performance program can be instrumental to a companyâs talent strategy.
An effective compensation strategy is integral in attracting new talent and retaining and motivating the best performers. Yet, if not done appropriately, the way in which a company compensates its employees can lead to a number of negative effects.
Compensation should never be a guessing game or one based on gut feel, but rather should be based on a solid foundation of actual data. Data that needs to be assessed include items such as the companyâs position against the market as it relates to wage rates, the companyâs desired market position on wages, the companyâs overall compensation philosophy, and available resources that the organization has to reward employees. It is with this data-informed foundation that more companies today are using a pay for performance program to guide their compensation decisions.
A pay for performance program can be instrumental to a companyâs talent strategy; when employees are recognized for their work through increased compensation, they will be more likely to be engaged and continue working at their best.
The challenge for many employers, however, lies in determining which positions should be eligible for performance-based salary increases and how much they should receive.
Many would contend that pay for performance is where two employees holding the same job and performing at the same performance level should get the same increase regardless of where they are paid in their respective salary range, such as all employees rated a â3â would receive a 2 percent increase and all employees rated a â1â would receive a 4 percent increase. However, this is not pay for performance, but rather increase for performance. By basing pay for performance on additional data â not just performance data but also company budgets and competitive market position â companies can make compensation a critical competitive differentiator.
Now letâs define what a true pay for performance system is. A pay for performance system looks not only at your performance level but also at your compensation level as well. For companies seeking to utilize data to create an effective pay for performance program, there are three main steps to get it right.
Three Steps to Implementing a Pay for Performance System
Measure employee performance. Most companies rely on a performance management system offering quantifiable metrics to determine how employees are performing. Key to doing this successfully is to calibrate performance criteria with managers, allowing them the ability to subjectively identify those who are exceeding expectations, those who are meeting expectations and those under-performing. Calibration can be a time-consuming exercise but is critical in ensuring that performance is managed consistently across the company.
Appropriately allocate the compensation budget. Once the company has calibrated performance criteria and assessed their employees against the same criteria, the next step is to determine which employees will receive an increase and by how much, based on market position and desired market position. For instance, you may decide to increase the salary for some job families that are further behind the market, or job families you deem more critical to the success of the organization.
In addition to looking at current market position for specific jobs or job families, you should also be assessing trends in the markets as some job families may be moving faster than others. We have found that technical positions tend to move at a faster rate than non-technical positions. As an example, we looked at our CompAnalyst Market Data rates for software engineers and accountants and compared the movement of the rates for those jobs between July 2015 and July 2016.
While software engineers levels 1-3 went up by approximately 2.3 percent, we found the market rates for accountants levels 1-3 dropped by 1.7 percent. Since the market rate for software engineers is moving faster, a company should seek to increase compensation for these job families. Certainly, we can see that we should be allocating more to software engineers than accountants in order to keep pace with the market movement.
Understanding where you stand and what the market is doing allows you to allocate precious compensation dollars appropriately, such that you are not overpaying the slower moving positions and underpaying the faster moving ones.
Connect compensation to performance. Use technology to measure and analyze internal compensation practices against market rates by creating a salary increase matrix â a function of how much an individual is paid and their performance level. Doing so will ensure that an employeeâs pay is moved toward the appropriate position in their salary range based on their individual performance and the movement of their position in the market as a whole.
Utilizing a pay for performance system, you may find instances where an individual might receive what I would refer to as a â0 percent meritâ increase, even if they are meeting performance expectations. This would be appropriate when an individualâs performance level is eclipsed by their pay.
As an example, an employee who is meeting the expectations of their job but is paid in the upper part of a salary range would be a situation where a â0 percent meritâ may be appropriate. While it may be difficult to tell an employee theyâre not getting a salary increase, I would submit the more difficult discussion would be explaining to company leadership why top performers in the most business-critical positions are leaving the company.
What to Keep in Mind When Implementing Pay for Performance
The ability to use relevant data to tie compensation to performance management is crucial to developing and retaining a high-performing workforce, while ensuring compensation is aligned with company budgets.
Key to success is underscoring the focus on pay for performance rather than increase for performance. Giving all employees extra compensation for doing their job isnât as effective as basing their increase on both their current pay and performance levels. By leveraging real-time performance data, the company has a defensible way to determine how much each employee should receive. This will help to differentially reward top performers, while ensuring appropriate allocation of increased dollars to all other employees. It will also help to spur performance improvements; when employees understand that any increase will be based on their performance, they are likely to strive to work at their best to receive the maximum increase.
Just as important is understanding the market. To utilize pay for performance most effectively, the company must remain aware of how the market is moving for its job families, and ensuring the compensation strategy reflects such movements. Being able to track which roles are increasing in value and adjusting compensation accordingly will ensure crucial decisions around compensation are based on actual data.
Getting Pay for Performance Right
As compensation is often a companyâs biggest expense, it is critical that companies get it right. Leveraging data on compensation rates and performance alike and ensuring alignment with the company budget is key to striking that balance. With the insight into what employees are currently making, the market rates of their positions and their individual performance, the company can make informed decisions on how best to allocate its compensation dollars. As a result, the company can ensure it pays its employees based on the value they bring to their organization.
The EEOC has sued a Colorado hospital for age discrimination. The key allegation? That it forced employees to resign because of their age. The lawsuit claims hospital managers made ageist comments, including that younger nurses could âdance around the older nursesâ and that they preferred younger and âfresherâ nurses.
According to Phoenix District EEOC Regional Attorney Mary Jo OâNeill, âResearch shows that pervasive stereotypes about older workers still persist â for example, there are widespread stereotypes that older workers are less motivated, flexible, or trusting and that a younger workforce is preferable. These stereotypes are flatly untrue and must be recognized for what they are â prejudice and false assumptions.â
Image: Slate
While not necessarily on point, this case does segue into an important issue â mandatory retirement. Itâs still a fairly popular misconception that businesses can force employees to retire at a certain age.
In truth, with the exception of a few limited circumstances, mandatory retirement ages are about as close to a slam dunk case of illegal age discrimination you can find. The exceptions permit â but do not require â mandatory retirement:
At age 65 of executives or other employees in high, policy-making positions.
At age 55 for publicly employed firefighters and law enforcement officers.
Forcing an employee out is the same as requiring an employee to retire. While lessening duties and responsibilities, demotions, and reductions in pay could cause an older employee to retire, it could also cause that same employee to claim a constructive discharge. However, there is no law that says that an older employee does not have to meet the same legitimate expectations of the job as any other employee. If an older worker is not performing as needed or required, document and treat as you would any other employee.
Treat the employeeâs performance, not the employeeâs age.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hymanâs blog at Workforce.com/PracticalEmployer.
One of the biggest misconceptions that employees hold is that the First Amendment grants them free speech rights in a private workplace.
Quite to the contrary, the First Amendment right to free speech grants private-sector employees zero constitutional rights or protections.
Today, I bring you a guest post by Ellen Gipko of HubShout, which takes a deep look at this important issue, with a special focus on online speech and social media.
“According to a June 2016 survey by HubShout, 41.2 percent of American workers say they believe that getting fired because of a social media post is an infringement of First Amendment rights.
“A Google search for ‘fired because of social media’ turns up a long list of results that are packed with stories proving that people have been fired for a variety of bad social media behaviors. The stories would certainly surprise those who believe they have an all-encompassing right to free speech and canât be fired because of something theyâve shared on Facebook or Twitter.
Social Media and Employment
“Social media has become a valuable recruitment tool. According to social media entrepreneur Natalie Zaft, a whopping 94% of recruiters used social media to find talent in 2015. JobVite reports that 52 percent of recruiters say they always search for candidatesâ online profiles during the hiring process. Furthermore, 55 percent of recruiters have reconsidered candidates based on their social profiles, with 61 percent of those reconsiderations being negative.
“The social media scrutiny does not always stop once an individual is hired.
Think Before You Post
“Rosemary Haefner, chief human resources officer at CareerBuilder says that, âSocial media is booming with networking opportunities and the chance to share your accomplishments. But it could also lead to the end of your career if used incorrectly.â In fact, a survey by CareerBuilder found that that 18 percent of employers say they have dismissed employees because of something they posted on social media.
“People absolutely do get fired because of content theyâve posted on social media.
When an American is fired because of a social media post, has his or her First Amendment right to freedom of expression been infringed?
What the First Amendment Really Says
People who believe that it is against the law for an employer to fire them for an offensive social media post misunderstand the scope of the First Amendment.
The First Amendment of the United States Constitution protects the right to freedom of religion and freedom of expression from government interference. The most basic component of freedom of expression is the right of freedom of speech. The right to freedom of speech allows individuals to express themselves without interference or constraint by the government.
The First Amendment says nothing about private employers.
State and federal government employees may have more protections. According to workplacefairness.org: Public employees work for the government. So, public employees do have protection from retaliation for exercising certain First Amendment rights. Courts have been cautious in this area, limiting the protection to speech that is on matters of âpublic concern.â
And, the National Labor Relations Board ruled that using social media can be a form of âprotected concertedâ activity. Employers have the right to address work-related issues and share information about pay, benefits, and working conditions with co-workers on Facebook, YouTube, and other social media.
“While there are a few exceptions, getting fired for a social media post is typically not an infringement of First Amendment rights.
It Can Happen to You
“Some 34.6 percent of respondents to the HubShout survey are not concerned about employers or potential employers viewing their social media posts because their posts are ‘private.’
“Tom Risen of U.S. News & World Report has found plenty of data that proves that the notion of online privacy is an illusion.
“Scott Kleinberg of the Chicago Tribune writes, ‘Itâs easy to overlook potential consequences when you think that all youâre doing is speaking your mind to someone in response to a tweet or Facebook post. Nine times out of 10, what you say is being read by a much wider audience and information about the person saying it is more widely shared than youâd ever imagine.’
“Kleinberg also shares this story that illustrates how a ‘private’ social media post can make its way to an employer: ‘I read a story not too long ago where someone tired of being the subject of abusive Facebook comments reached out and complained to that person’s boss. The company subsequently fired the person.’
Post Freely. Beware the Consequences.
“By and large, American people are free to post whatever they want on social media. Theyâre free to be provocative. Theyâre free to offend, insult, and disparage others. Theyâre free to share videos and photos of themselves that may indicate poor character or lack of judgment. But, American people take heed: do not depend on the First Amendment to save you if you get fired because of a social media post.”
Author Bio:Â Ellen Gipko is a digital marketing specialist for white label SEO reseller HubShout LLC, and a writer specializing in the topics of social media and digital marketing. She has contributed content to Social Media Today, Search Engine Watch, Search Engine Journal and other industry websites.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hymanâs blog at Workforce.com/PracticalEmployer.
I have been blessed with employers that are sympathetic to the fact that my son was born with some life-long medical issues. Iâve never had an issue taking time for a doctorâs appointment, or an unexpected illness, or the three weeks he spent inpatient at the Cleveland Clinic five (very) long years ago.
Some employees arenât so lucky.
The EEOC reports that New Mexico Orthopaedics Associates will pay $165,000 to settle a lawsuit for associational disability discrimination. According to the agency, NMOA violated the ADA by firing a temporary employee, and failing to hire her for a full-time position, because of her relationship with her then 3-year-old disabled daughter.
The ADA prohibits three different types of associational discrimination.
Expense â discrimination based on the cost of insuring the associated disabled person under the employerâs health plan.
Disability by association â discrimination based on the employerâs fear that the employee may contract the disability, or the employee is genetically predisposed to develop a disability that his or her relatives have).
Distraction â discrimination based on the employeeâs inattentiveness at work because of the disability of the associated person.
EEOC v. New Mexico Orthopaedics Associates was based on the latter â distraction. According to EEOC Regional Attorney Mary Jo OâNeill:
The ADA specifically prohibits discrimination against mothers, fathers, caregivers, family members or others who are associated with persons with disabilities. Employers, especially those employers in medical fields, should be careful to provide employment opportunities based solely on the qualifications of the employee or applicant and not impermissible factors such as their association with an individual with a disability.
While this statement is very true, these cases are also very rare. Indeed, New Mexico Orthopaedics Associates was the first and only case ever filed by the EEOC in New Mexico alleging associational disability discrimination. Nevertheless, as this case illustrates, rare does not equal inexpensive. This employer learned an expensive and necessary lesson â caregivers have rights.
Iâll leave you with the words of the victim in the case, Melissa Yalch Valencia:
It should never have happened. A mother should never have to worry about losing her job because her child has a disability. I hope the lawsuit encourages moms and dads to stand up fearlessly when things like this happen. I also hope this lawsuit and this resolution encourages companies to train supervisors and employees to assure things like this donât happen in the workplace.
Employers, take heed and avoid discriminating against those with caregiving responsibilities for disabled family members. Itâs not just the legal thing to do; itâs also the right thing to do.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hymanâs blog at Workforce.com/PracticalEmployer.
Can an employer include prescription medications in its drug screening of job applicants and employees? Hereâs a good lawyer answer for you: It depends.
Last week, the EEOC announced that it had sued an Arizona car dealership for disability discrimination after it rescinded a job offer when a pre-employment drug test revealed a prescription drug used to treat a disability.
According to EEOCâs lawsuit, Bell-Arrow Automotive, Inc. (doing business as Bell Lexus), a subsidiary of Bell Leasing, Inc. (doing business as The Berge Group), maintained a policy of refusing to employ any applicant who tested positive for one of several enumerated substances on a list identiÂfied by Bell Lexus and the Berge Group. Bell Lexus extended a job offer to Sara Thorholm to work as product specialist or a salesperson, but rescinded it when her drug test returned positive for a single substance. Thorholm explained to Bell Lexus that the substance was legally prescribed to treat a disability and would not affect her ability to perform the duties of the job. Bell Lexus refused both Thorholmâs offer of proof and her offer to change medications.
Asking all employees about their use of prescription medications is not job-related and consistent with business necessity. In limited circumstances, however, certain employers may be able to demonstrate that it is job-related and consistent with business necessity to require employees in positions affecting public safety to report when they are taking medication that may affect their ability to perform essential functions. Under these limited circumstances, an employer must be able to demonstrate that an employeeâs inability or impaired ability to perform essential functions will result in a direct threat. For example, a police department could require armed officers to report when they are taking medications that may affect their ability to use a firearm or to perform other essential functions of their job. Similarly, an airline could require its pilots to report when they are taking any medications that may impair their ability to fly. A fire department, however, could not require fire department employees who perform only administrative duties to report their use of medications because it is unlikely that it could show that these employees would pose a direct threat as a result of their inability or impaired ability to perform their essential job functions.
In other words, it is the rare case in which an employer is justified in asking about prescription meds, or disqualifying from employment one who tests positive.
How is an employer supposed to to maintain a safe workplace in light of these limitations? Here are four thoughts.
Blanket prohibitions are illegal. The ADA imposes on employer an obligation to make individualized inquiries about implications such as reasonable accommodations and direct threats. A blanket prohibition against on-the-job use of prescriptions medications violates this obligation.
Drug testing. Drug testing programs can include legally prescribed drugs. An employer cannot, however, have a blanket policy excluding from employment any employee testing positive for a prescribed drug. Instead, following a positive test, the employer should ask if the employee is taking any prescribed drugs that would explain the positive result.
Drug-free workplace policies. It is permissible to include prescription drugs in drug-free workplace policies. These policies can require employees to disclose prescription drugs that may adversely affect judgment, coordination, or the ability to perform job duties. After disclosure, an employer must, on a case-by-case basis determine whether it can make a reasonable accommodation that will enable the individual to remain employed.
Post-disclosure handling. After an employer learns that an employee is taking a prescription drug that may affect job performance, it should request a medical certification regarding the effect of the medication on the ability safely to perform essential job functions. That certification will enable the employer to engage the employee in the interactive process and making the individualized determination of whether a reasonable accommodation is even possible.
âWhat about medical marijuana,â you ask? How do these ADA concerns impact its impending legality? Iâll have more to say about this in a future post, but, most of the courts that have examined the issue of workplace drug testing for states in which medical marijuana is legal have concluded that the ADA does not protect medical marijuana because the drug remains illegal under federal law.
Stay tuned, however, as the issue of medical marijuana under the ADA is nuanced and certainly developing and subject to change.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hymanâs blog at Workforce.com/PracticalEmployer.
Forget software as a service; human capital as a service is the hottest trend in staffing today, with a vast segment of the workforce choosing work-on-demand options over full-time employment.
âIt is the economy of the human cloud,â said Barry Asin, president of Staffing Industry Analysts, a global advisory service in Mountain View, California.
Asin isnât just talking about Uber and Lyft drivers, though they are a part of this trend. The human cloud is also full of contractors, consultants, freelancers and subject matter experts who are seeking new models of employment for a variety of reasons. Some do it to bolster their traditional income with after-hours gigs, while others do it full time because they can earn more money or achieve greater control over their work life. Still, many contractors find themselves in these roles because itâs the best option they have, especially as companies begin to see the value of bolstering their full-time workforce with contract staff.
Regardless of the reason, their ranks are growing. Contingent workers make up 53 million people, or 34 percent of the American workforce according to a survey commissioned by Freelancers Union and Elance-oDesk. And as more professionals flock to contract positions, staffing industry companies are expanding their offerings to better meet the needs of clients.
Online Platforms Fill the Gap
Responding to this shift, many traditional staffing agencies are building or partnering with online platforms that specifically link companies with contractors to manage and complete contingent work arrangements. This area of the staffing industry has grown rapidly in recently years, with dozens of sites now available, including upwork.com, freelancer.com, and Proworkers, as well as many industry-specific and specialty sites, such as UpCounsel for lawyers, Toptal for software developers and ShiftPixy for hospitality industry shift workers.
âThe migration of this niche part of the industry to the internet has made it much easier for contingent workers to participate in the gig economy,â said Teresa Carroll, senior vice president of talent solutions for KellyOCG, the outsourcing and consulting group of Kelly Services in Troy, Michigan. It has also enabled more workers to make the transition from full-time to freelance.
These online matching sites are still a small trend in the broader staffing economy, but the trend is growing. According to Staffing Industry Analysts data, 4 percent of Fortune 1000 companies used online platforms to hire contingent labor in 2014, but that rose to 11 percent in 2015 with another 5 percent considering the tools within the next two years.
The most innovative staffing firms see this growing trend as an opportunity to find new ways to bring talent to their clients. For KellyOCG, that means partnering with a dozen online communities, including Upwork, Work Market, and most recently Elevate Direct in the U.K. Other staffing companies are acquiring innovative online start-ups to fill their contract labor gaps. Earlier this year Monster acquired the San Francisco based start-up Jobr, which offers a job-finding app that the company described as âTinder for jobsâ; ManpowerGroup acquired Ciber Inc., the Dutch IT solutions and staffing provider, to improve its global IT staffing capabilities; and Randstad acquired twago, a European freelance marketplace where companies can create client-branded freelance recruitment platforms that can be integrated with their vendor management system.
Legal Concerns Drive Caution
Staffing firms are also working more closely with clients in an advisory role to help them figure out how to best take advantage of contingent labor trends, and to make sure their choices align with business and legal goals. âCompanies have all sorts of questions and concerns about compliance risk when using these platforms,â Asin said, noting that larger companies are especially cautious about working with contractors, and are turning to staffing firms for guidance.
Itâs a smart move, especially as policymakers begin to explore what the gig economy means from a legal and economic standpoint, and how they may adapt statutes to create a social safety net for these workers, said Richard Wahlquist, CEO of the American Staffing Association. In a recent ASA survey, one of the leading issues keeping executives up at night is their concern about labor employment law and where their liability begins and ends when working with staffing firms. âPeople have a lot of questions about their legal obligations to temp workers,â he said. And as they introduce more temporary and project labor into their workplace, they increase the risk of introducing non-compliant practices into the organization.
It isnât always easy to decipher obligation, he said. For example, with the Affordable Care Act, the staffing firm is responsible for handling all employee insurance issues, but for laws related to Occupational Safety and Health Administration requirements and equal opportunity hiring, the client is responsible for providing a safe work environment that is free from discrimination.
âThese rules all extend to a flexible labor force and you have to be aware of your obligation to these workers,â Wahlquist said. The Department of Labor is paying closer attention to compliance issues related to temp workers and recently released a series of guidance documents as part of its Temporary Worker Initiative, specifically focused on compliance with safety and health requirements when temporary workers are employed under the joint (or dual) employment of a staffing agency and a host employer.
âI think the majority of noncompliance that we see is people just not getting what the law is, and what their responsibilities are under it,â Department of Labor Wage and Hour Division Administrator David Weil said in an interview with The Washington Post. âWe also find cases of people who are clearly playing games and clearly trying to shift out responsibility, and often have structured things in a way that lead toward more noncompliance.â
When companies fail to meet the needs of these contract workers it can backfire. In May of this year, for example, OSHA cited Cooper University Hospital in Camden, New Jersey, for failing to fit temporary workers with proper respirators or provide training on protocols related to exposures to blood and other potentially infectious materials. The hospital faces $55,000 in penalties.
Concerns about legal issues link to a broader shift in the staffing industry where larger companies are looking to their vendors for more than just workers. âThey want advice and analytics that will help them better manage their overall talent equation,â said Carroll. This demand for consulting services is being driven by a number of trends, including interest in using more contingent labor, internal pressures to reduce the time and cost of hiring, and the inability of big companies to keep up with technology innovations used to find and track talent. âThey realize they canât be the best at everything, so they are turning to service providers to fill the gaps,â she said.
In response, staffing firms are working with clients much earlier in their decision-making process. In some cases, they are working with clients months in advance of a project to determine what types of talent they need, whether those hires should be full time or temporary, and how to manage the compliance issues related to these decisions, said Paul McDonald, senior executive director for Robert Half International in Los Angeles. âThey want us involved in these conversations from the planning stage to advise them on what choices will help them execute their plan.â
Many firms are also expanding their data mining and workforce analytics offerings to give companies greater insight into which types of talent deliver the greatest benefits for different types of projects or positions, and how to attract this talent to their brand. Some staffing companies are building out these services from within, while others are acquiring analytics expertise. For example, Protiviti Inc., Robert Half Internationalâs consulting division, recently acquired the assets of Decision First Technologies, a business intelligence and SAP solutions provider.
Supply Still the Biggest Challenge
For all the hoopla around gig workers, most staffing agencies continue to say their biggest challenge is finding qualified talent to fill their pipeline. âThe impact of the skill gap and declining labor force is a constant burden for recruiters trying to fill talent needs, whether they are in-house recruiters or outside firms,â Wahlquist said.
McDonald agrees. He noted that while overall unemployment is at a comfortable 4.7 percent rate, specific professional sectors, including finance, tech, legal and accounting are much lower. âFor certain IT roles the unemployment rates are less than 1 percent,â he said. âDemand is dramatically outstripping supply.â Even though enrollment in engineering and related fields is rising, McDonald doesnât expect to see much relief in the years to come. âThe pace of technology and demand for talent is moving faster than these programs can deliver graduates.â
In response, companies like Robert Half are trying to ramp up the recruiting side of their services, and developing mobile applications that enable swift â but vetted â matches between candidates and clients. âSpeed is critical in this field, though you canât skip the thoroughness of the review process. Thatâs where misfires happen.â
The need for speed wonât go away any time soon, and staffing firms will continue to face pressures to expand their reach and make it easier for talented laborers to find work through their recruiting services and online platforms. That means offering transparent and efficient tools, like mobile sign up and interviews via Skype to make the process speedy and efficient, McDonald said. âIt has to be quick and easy for candidates and clients, or they will go elsewhere.â
Sarah Fister Gale is a writer based in the Chicago area. Comment below or email editors@workforce.com.
Last week, in Trustees of Columbia University [pdf], the National Labor Relations Board upended decades of precedent by holding that federal labor law covers graduate and undergraduate teaching assistants, and graduate research assistants.
This case has received widespread national coverage (such as here and here). It is academically and politically interesting, and worth your time to read even if your business doesnât involve academia. Moreover, the boardâs willingness to so easily depart from such well established precedent should be troubling to all employers.
The aspect of the decision I want to focus on in Member Miscimarraâs dissent, specifically his argument that because of the NLRBâs recent super-expansion of the doctrine of protected concerted activity, this decision will harm the very students it intends to protect.
Non-Confidential Investigations. If your son or daughter is sexually harassed by a student assistant and an investigation by the university ensues, the university will violate federal law (the NLRA) if it routinely asks other student-assistant witnesses to keep confidential what is discussed during the universityâs investigation.
Witness Statement Disclosure. In the above example, witness statements submitted by your son or daughter about sexual harassment by a student assistant must be disclosed to the union, unless (i) the university can prove that the statementâs submission was conditioned on confidentiality, and (ii) even then, the statement must be disclosed unless the university can prove that your son or daughter needs protection, or other circumstances outweigh the unionâs need for the witness statement.
Invalidating Rules Promoting Civility. The university will be found to have violated the NLRA if it requires student assistants to maintain âharmonious interactions and relationshipsâ with other students.
Invalidating Rules Barring Profanity and Abuse. The university cannot adopt a policy against âloud, abusive or foul languageâ or âfalse, vicious, profane or malicious statementsâ by student assistants.
Outrageous Conduct by Student Assistants. The university must permit student assistants to have angry confrontations with university officials in grievance discussions, and the student assistant cannot be lawfully disciplined or removed from his or her position even if he or she repeatedly screams, âI can say anything I want,â âI can swear if I want,â and âI can do anything I want, and you canât stop me.â
Outrageous Social Media Postings by Student Assistants. If a student assistant objects to actions by a professor-supervisor named âBob,â the university must permit the student to post a message on Facebook stating: âBob is such a nasty mother fucker, donât know how to talk to people. Fuck his mother and his entire fucking family.â
Disrespect and Profanity Directed to Faculty Supervisors. The university may not take action against a student assistant who screams at a professor-supervisor and calls him a âfucking crook,â a âfucking mother fuckingâ and an âassholeâ when the student assistant is complaining about the treatment of student assistants.
The dissent concludes:
It is also a mistake to assume that todayâs decision relates only to the creation of collective-bargaining rights. Our statute involves wide-ranging requirements and obligations.⌠Therefore, parents take heed: if you send your teenage sons or daughters to college, the Board majorityâs decision today will affect their âcollege experienceââŚ.
The above examples constitute a small sampling of the unfortunate consequences that will predictably follow from the majorityâs decision to apply our statute to student assistants at colleges and universities. The primary purpose of a university is to educate students, and the Board should not disregard that purpose in finding that student assistants are employees and therefore subject to all provisions of the NLRA.
I could not agree more.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hymanâs blog at Workforce.com/PracticalEmployer.
