Compensating flexible workforce


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Compensating flexible workforce

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  • Modern organizations require worker flexibility. Core workers have fulltime jobs with benefits. Contingent workers are those who work based on the needs and efficiency of the organization and are easily dismissed when the organization no longer needs their services. They actually help protect jobs of core workers, as a result.
  • Flexible work hours give employees control over the starting and ending times of their day – when they do their work. Core time means that everyone is onsite at the organization – perhaps 11 am – 2 pm. Flextime means that employees can work outside the organization before 11 am and after 2 pm. Core time allows staff to schedule meetings or trainings, knowing everyone will be on site.
  • Students will have various responses to each questions. Some type of “virtual leadership” will probably be necessary – maybe a rotating leader position. The virtual team will probably be selected much as any other team would be selected – based on skills, expertise, ability to collaborate, etc. The accountability is crucial when not face to face. They may email drafts of their work – one person circulates their draft and all edit or provide feedback, etc.
  • Compensating flexible workforce

    1. 1. Compensating Flexible Workforce: Contingent Employees and Flexible Work SchedulesDr. G C Mohanta, BE(Mech), MSc(Engg), MBA, PhD(Mgt) Professor
    2. 2. Flexible Workforce/Contingent Employees Part-time employees Temporary & on-call workers Leased employees Independent contractors Freelancers Consultants
    3. 3. Contingent Workers Engage in tentative employment 50% male/female 12.5 million employed in 2001 29 million worked on flexible schedule 26.1% of all civilian workers
    4. 4. Employed Contingent Workers in 2001 TYPE NUMBER Independents 8,858,000 Part-Time 2,245,000 On-Call 2,089,000 Temporary 1,169,000 Leased 633,000
    5. 5. Benefits CostsBenefit Full-time Part-timePaid leave $1.89 $0.37Supplement pay 0.81 0.17Insurance 2.07 0.50Retirement 1.09 0.19Other 0.05 <0.01Legally-required 2.27 1.44Total $8.19 $2.68
    6. 6. Job Sharing 2 or more part-timers perform 1 job Reduces costs Increases flexibility Maintains productivity levels May increase morale & loyalty
    7. 7. Temporary Workers Fill in for core employees Help ease high demand periods Help determine future employment needs May be assessed for a core position Don’t receive company benefits
    8. 8. Leased Employee Arrangements  Lease company does all HRM functions  Fees either % of payroll, or % per employee  Employees work for contract duration  Food service, security, building maintenance, administration
    9. 9. Rise In Use Of Contingent Worker Economic recessions International competition From manufacturing to service More females in workforce
    10. 10. Service Divisions Transportation Communication Public utilities Wholesale trade Retail trade Government
    11. 11. Federal Compensation Guidelines ERISA (Employee Retirement Income Security Act) NLRA (National Labour Relations Act) ADA (Americans with Disabilities Act) ADEA (Age Discrimination in Employment Act) Title VII of 1964 Civil Rights Act - outlawed major forms of discrimination against blacks & women including racial segregation FLSA (Fair Labour Standards Act ) - established minimum wage, guaranteed ’time and a half’ for overtime, prohibited employment of minors COBRA (Consolidated Omnibus Budget Reconciliation Act ) - workers and their families can choose to continue group health benefits during voluntary or involuntary job loss/reduction in hours worked/transition between jobs/ death/divorce FMLA (Family and Medical Leave Act) – employees can take unpaid, job- protected leave for specified family & medical reasons with continuation of group health insurance coverage
    12. 12. Wage Comparisons in 2004 Group F-T P-TManagement & Professional $30.38 $23.79 Production 14.62 8.92 Service 10.26 7.57 Overall Average $19.05 $10.17
    13. 13. Benefits Offered In 2004 % of CompaniesType Offering BenefitsPaid time-off 25%Medical insurance 11%Retirement 20%
    14. 14. Leased Workers’ Benefits Leasing company is legal employer In 2001, average wage was $19.75 Leasing & hiring companies responsible for discretionary benefits Covered by safe harbor rules
    15. 15. Safe Harbor Rules Leased employees covered by leasing company’s pension plan Nonintegrated employer contribution rate of 10% Full & immediate participation in vesting Leased employees less than 20% of non-highly paid workforce
    16. 16. Independent Contractors Freelancers & consultants Companies not responsible for  Federal Taxes  FLSA Overtime or Minimum Wage  Workers’ Compensation  ERISA, FMLA, NLRA, ADA, Title VII of Civil Rights Act Economic reality test Right to work test
    17. 17. Economic Reality Test Extent a worker controls methods & results The control a company has on worker’s earnings Importance of worker’s service to the company Initiative or skill level required Permanency, exclusivity, or length of assignment Worker’s investment in materials or equipment
    18. 18. Right To Control Test IRC test to determine workers’ independence 20 Considerations, including:  Hiring, training, supervising, firing  Hours  Services  Compensation  Equipment, materials, location
    19. 19. Flexible Work Schedules Flextime Compressed work weeks Telecommuting
    20. 20. Flextime Set weekly not daily hours May have to work core hours Possible employer benefits  Lower tardiness & absenteeism  Higher productivity  Extended business hours Possible employer drawbacks  Increased overhead costs  Coordination problems
    21. 21. Compressed Workweeks Example:  40 hours in 3 - 4 days Possible benefits  Can promote recruitment and retention  Can reduce commuting time  Can allow more family time
    22. 22. Telecommuting Employees work on-site & off-site Constant direct contact with other employees Possible benefits  Same as with flextime Possible disadvantages  Less direct employee interactions  Makes performance appraisals difficult
    23. 23. Telecommuting Arrangements Satellite work centers Neighborhood work centers Nomadic executive office Work off-site and/or on-site Temporary or permanently
    24. 24. The flexible workforceDefinition:A workforce that can respond quickly in quantity and type to changes in demand a business may face. © PhotoDisc
    25. 25. The flexible workforceThe organization of a flexible workforce Periphery Workers Core workers © PhotoDisc
    26. 26. The flexible workforce Full-time employees Core workers Core workers who have specific skills and job security
    27. 27. The flexible workforce Part-time or temporary workers who available Core workers Core workers whenever neededPeriphery workersPeriphery workers
    28. 28. The flexible workforceExamples of flexible workforce practices:Part-timeTemporaryBank timeJob sharing © PhotoDisc
    29. 29. The flexible workforceMajor advantages of a flexible workforce:Employee benefiting from flexible working hoursMore employee opportunities of training and being multi-skilledReducing business costs and increasing productivityReacting quickly to changes in the workforce © PhotoDisc
    30. 30. HR Issues in the New Workplace Temporary Employees In opening years of the 21st century, largest employer in U.S. was a temporary employment agency, Manpower, Inc. Temporary Employees do everything from data entry to interim CEO Contingent workers = people who work for an organization, but not on a permanent or full-time basis, including temporary placements, contracted professionals, or leased employees30
    31. 31. HR Issues in the New Workplace Technology Telecommuting and virtual teams are related trends Telecommuting = using computers and telecommunications equipment to perform work from home or another remote location Work anywhere - wireless Internet devices, laptops, cell phones, fax machines Extreme telecommuting = people live nd work in countries far away from the organization’s physical location31
    32. 32. HR Issues in the New Workplace Work-Life Balance Telecommuting is one way organizations help employees lead more balanced lives Flexible scheduling important in today’s workplace – 27% of workforce/flexible hours Broad Work-Life Balance initiatives – critical retention strategy – on-site gym & childcare, paid leaves & sabbaticals32
    33. 33. HR Issues in the New Workplace Downsizing Downsizing = intentional, planned reduction in the size of a company’s workforce Managers can smooth the downsizing process Regularly communicating with employees Providing them with as much information as possible Providing assistance to workers who will lose their jobs Using training and development for remaining employees33
    34. 34. The Flexible WorkforceCore workers Fulltime workersContingent workers Part time employees Contract / Outsourced workers Temporary workers Interns
    35. 35. Flexible SchedulesFlexible work hoursCore timeFlextimeCompressed work weeksTelecommuting
    36. 36. CaseEveryone telecommutes at your firm. All work is done invirtual teams of four. Divide up into groups of four andrespond to the following questions: How will you organize your team? Do you need a virtual leader? How will you select your virtual team? How will you hold team members accountable?