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Compensating flexible workforce
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Compensating flexible workforce
- 1. Compensating Flexible Workforce: Contingent Employees and Flexible Work Schedules Dr. G C Mohanta, BE(Mech), MSc(Engg), MBA, PhD(Mgt) Professor
- 2. Flexible Workforce/Contingent Employees Part-time employees Temporary & on-call workers Leased employees Independent contractors Freelancers Consultants
- 3. Contingent Workers Engagein tentative employment 50% male/female 12.5 million employed in 2001 29 million worked on flexible schedule 26.1% of all civilian workers
- 4. Employed Contingent Workersin 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. Benefits Costs Benefit Full-time Part-time Paid leave $1.89 $0.37 Supplement pay 0.81 0.17 Insurance 2.07 0.50 Retirement 1.09 0.19 Other 0.05 <0.01 Legally-required 2.27 1.44 Total $8.19 $2.68
- 6. Job Sharing 2or more part-timers perform 1 job Reduces costs Increases flexibility Maintains productivity levels May increase morale & loyalty
- 7. Temporary Workers Fillin 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. 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. Rise In UseOf Contingent Worker Economic recessions International competition From manufacturing to service More females in workforce
- 10. Service Divisions Transportation Communication Public utilities Wholesale trade Retail trade Government
- 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. Wage Comparisons in2004 Group F-T P-T Management & Professional $30.38 $23.79 Production 14.62 8.92 Service 10.26 7.57 Overall Average $19.05 $10.17
- 13. Benefits Offered In2004 % of Companies Type Offering Benefits Paid time-off 25% Medical insurance 11% Retirement 20%
- 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. 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. 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. 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. Right To ControlTest IRC test to determine workers’ independence 20 Considerations, including: Hiring, training, supervising, firing Hours Services Compensation Equipment, materials, location
- 19. Flexible Work Schedules Flextime Compressed work weeks Telecommuting
- 20. Flextime Set weeklynot 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. 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. Telecommuting Employees workon-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. Telecommuting Arrangements Satellitework centers Neighborhood work centers Nomadic executive office Work off-site and/or on-site Temporary or permanently
- 24. The flexible workforce Definition: Aworkforce that can respond quickly in quantity and type to changes in demand a business may face. © PhotoDisc
- 25. The flexible workforce Theorganization of a flexible workforce Periphery Workers Core workers © PhotoDisc
- 26. The flexible workforce Full-time employees Core workers Core workers who have specific skills and job security
- 27. The flexible workforce Part-time or temporary workers who available Core workers Core workers whenever needed Periphery workers Periphery workers
- 28. The flexible workforce Examplesof flexible workforce practices: Part-time Temporary Bank time Job sharing © PhotoDisc
- 29. The flexible workforce Majoradvantages 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. HR Issues inthe 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 employees 30
- 31. HR Issues inthe 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 location 31
- 32. HR Issues inthe 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 & sabbaticals 32
- 33. HR Issues inthe 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 employees 33
- 34. The Flexible Workforce Coreworkers Fulltime workers Contingent workers Part time employees Contract / Outsourced workers Temporary workers Interns
- 35. Flexible Schedules Flexible workhours Core time Flextime Compressed work weeks Telecommuting
- 36. Case Everyone telecommutes atyour firm. All work is done in virtual teams of four. Divide up into groups of four and respond 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?
Editor's Notes
- #35 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.
- #36 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.
- #37 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.