Business owners need proven solutions and partners to better navigate the tough economic conditions that exist today. Learn how Oasis can contribute to your success.
HR Cost Savings in a Challenging Economy
As our economy faces one of the most challenging moments in its history, it will be critical to run our businesses and manage our workforce as efficiently as possible. While immediate layoffs and budget cuts may be necessary, major cost savings can also be achieved by taking a hard look at your human resources strategies. Examining your current health benefits, recruitment and hiring practices, performance management and employee engagement processes can yield significant benefits and savings by identifying existing gaps.
As health and welfare premiums continue to rise, employers must find a balance between cost savings and benefit design without compromising the critical needs of employees and their families.
Employee Benefits are usually one of the biggest costs and most important benefits that companies provide to their employees. Some simple strategies can be put in place to gain significant returns for your business and for your workers.
Cost Saving Strategies
- Evaluate your current health plan deductibles, co-pays and employer/employee contribution rates. Consider offering a higher-deductible plan as your company’s base plan while allowing employees the opportunity to buy up to a lower deductible plan through increased employee contributions.
- Implement a Flexible Savings Account (FSA). FSAs allow employees to put away pre-tax money that can be used for qualified IRS expenses. This pretax money not only results in lower payroll taxes for the employee but also for the employer.
- Conduct “dependent audits. to ensure that covered dependents are truly eligible to be on your insurance plans. Offering incentives for spouses or employees to opt out of your plan can also save your company significant money in future claims and premiums.
- Shop your benefits on a yearly basis to ensure that you are receiving the best benefits for the best price out in the market. You may also be able to negotiate smaller yearly increases with your existing carrier if unusual circumstances resulted in large claims or if the claim is no longer ongoing. Oasis may also be able to reduce your rates as part of a PEO services plan.
- Implementing appropriate skill-testing can mean the difference between choosing a candidate that is actually proficient at a skill vs. a candidate that has simply been exposed; thereby reducing the time and cost associated with training.
- Training your hiring managers to effectively conduct behavioral interviews can assess the ability of your candidate to handle critical situations inherent in their positions.
- Conducting background and reference checks can weed out potential undesirable and expensive employee actions and behaviors.
- Dealing with problem employees and situations immediately can also deter future costly lawsuits and settlements. Training your management team to identify and deal with problematic employees appropriately (using proper documentation) and in a timely manner can mean the difference between losing and winning a case.
Hiring the right people and doing your due diligence from the beginning can prevent costly turnover.
According to the Equal Employment Opportunity Commission (EEOC) charges rose 15.2% in 2008 from 2007, and we are likely see an increase in claims due to the downturn in the economy. It will be imperative for managers to be familiar with applicable employment laws and their responsibilities to ensure compliance in the workforce and to prevent discriminatory actions.
EEOC Charges on the Rise
Figures compiled from: http://www.eeoc.gov/abouteeoc/plan/par/2008/managements_discussion.html
Assessing your human capital needs and maximizing efficiency will be vital to the financial stability of your company. Doing more with less is a common theme these days.
Some ways in which companies are doing more with less include:
- Identifying areas where employees can be cross-trained or pick up extra responsibilities to help reduce the need for extra personnel.
- Ensuring that employees have efficient time management skills to ensure the organization is operating to capacity.
- Reducing onsite or offsite training costs by using eLearning or webinars.
- Freezing salaries and/or tying merit increases to true performance through an objective performance appraisal practice to control the rise of wages.
- Maintaining effective and constant employee communication about the status of your organization will keep employees engaged and avert the decline of employee morale.
It is a tough time for many businesses, but careful spending and planning can help your business get through it.
