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May Hot Topics:
  1. Modernize Your Recruiting Metrics
    By Alden Reynoso, VP Recruiting and Client Service, Human Resources Professional Group
  2. Quick Guide to Insurance Terminology and Coverage
    By Eric Sheetz, Commercial Insurance Broker
  3. Shave Payroll Costs for Shared Employees
    By Fred Patterson, lll, District Sales Manager, AmCheck
  4. New I-9 Form for Employment Eligibility Verification


Modernize Your Recruiting Metrics
By Alden Reynoso, VP Recruiting and Client Service, Human Resources Professional Group


Recruiting impacts your company's bottom line. Yet it seems few companies actually attempt to tie any metrics to recruiting program outcomes. Just like any other profit and loss center within your organization, your recruiting function needs to be measured so that course corrections can be made as necessary to meet organizational objectives.

The staffing model has remained relatively unchanged since the time Human Resources was called “Personnel.” A requisition is opened, postings are purchased, resumes reviewed, names logged into a spreadsheet, candidates interviewed, and eventually someone is hired. (Crossing your fingers that you selected the right candidate is optional.)

Short time-to-fill and low cost per hire metrics are the hallmark of an “efficient” Recruiting Process. However, there are problems with both these traditional metrics.  Consider:
  • Cost-per-hire: A metric that focuses on the initial cost of making the hire. It overlooks the quality of hire and the effectiveness - or ineffectiveness - of the employee while working in the position.
  • Time to Fill: Although the cost of having a position stand open may be significant, this metric does not take into account a variety of mitigating factors such as the complexity of skill sets you are recruiting or other market demands. Rather, tying this number to recruiting success forces Recruiters and Managers to grab the first available candidate in order to fill the role quickly.
Cost-Per-Hire and Time to Fill are focused on transactional aspects of recruiting and are measures of efficiency, not effectiveness. Staffing.org recently published their updated Staffing Effectiveness and Retention report. The authors observed:

“...from a business standpoint, staffing efficiency, while important, is less consequential to financial success over the long term than whether the workers hired are able to perform their work to a high standard, and whether they stay with the organization long enough to maximize their contribution.  Those two criteria, performance and retention, measure a staffing department's effectiveness. Superior hiring efficiency means little if those hired are not also effective...If staffing is all about transactions, then efficiency is paramount. If it's about business impact, then effectiveness becomes much more important.”
So how do you measure effectiveness vs. efficiency?  We recommend the following four metrics be included in your measurement program:
  1. Source of Hire: For this metric, data is gathered on the percentage of new hires from each defined candidate source. Ideally, this number will also be tied to the percentage of hires per source, with highest on-the-job performance and tenure rates. In this manner, you may start to quantify where your highest-performing workers are coming from.
  2. New Hire Quality Metric: Some companies have selected this metric to address problems with past new hire evaluations. To fairly judge the quality of a new hire, it's important to define performance goals and expectations prior to recruiting, and then compare these expectations to actual performance. I have written articles in the past on the usefulness of the Performance Profile to the recruiting process. This is another instance where performance measures provide a strong link between hiring and performance management.
  3. Manager Satisfaction: Data for this metric may be gathered by use of a simple survey on hiring manager's preferences---before recruiting begins. The data is then used to assess recruiting performance once a hire is made. Customer satisfaction is an important element to assessing recruiting effectiveness, but should not be used as a stand-alone measure because it is easily influenced by unrelated factors.
  4. Candidate Experience: The best recruiting programs by today's standards also pay close attention to the Candidate Experience during the hiring process. New Hire Satisfaction may be measured when the candidate first accepts a position and then again in six months in a manner similar to hiring manager satisfaction. Again, it is not recommended that this be used as a stand-alone measure.
Hopefully, you are now thinking about how your organization can better track the success of your recruiting function beyond its efficiency. Remember, no one wins if your Hiring Managers and Recruiters are working together to hire the wrong people really fast!


For more information or questions, contact Alden Reynoso, VP Recruitment and Client Services, Human Resources Professional Group. Alden may be reached at areynoso@hrpg.com, or (760) 730-9531.


Quick Guide to Insurance Terminology and Coverage
By Eric Sheetz, Commercial Insurance Broker


Liability Insurance: Pays on behalf of an insured for loss arising out of negligence imposed by law or assumed by contract. This includes defense costs and will defend you against allegations, even if completely false. Liability insurance is usually required by your landlord once a lease agreement has been signed.

Property Insurance:  Provides protection against most risks to property, such as fire, theft and some weather damage. Specialized forms of insurance coverage such as fire, earthquake, and boiler & machinery insurance are extensions to the property form which is insured in two main ways; Open Perils and Named Perils. Open Perils cover all the causes of loss that are not specifically excluded in the policy. Common exclusions on open peril polices include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war. Named Perils require an actual cause of loss to be listed on the policy. Common Named Perils are damage by fire, lightning, explosion and theft.

Workers Compensation:  Is a state-mandated program that provides wage replacement and medical benefits to employees who have been injured in the course of employment in exchange for mandatory relinquishment of an employee's right to sue their employer for tort of negligence. Specific laws vary by state, but key features are consistent - employees are automatically entitled to receive certain benefits when he/she suffers an occupational disease or accidental injury arising out of and in the course of employment. Each Work Comp class code has a rate that is charged for each $100.00 of payroll. The minimum and maximum payroll limitations for executive officers, partners, individual employers, and members of LLC's are amended to $41,600 and $106,600.

Excess Liability: Provides additional protection over and above your general liability and automobile liability limits by adding higher limits. The more your earning power and assets increase, the more you have at risk, and therefore, the more you need to protect. Excess insurance is often referred to as Umbrella liability; it is protection that pays beyond the maximum paid by your primary insurance policy when damages or losses exceed that amount.

Directors and Officers Liability (D&O): This is liability insurance that provides protection for the Directors and Officers (D's & O's) of your company in the event they are sued as a result of the performance of their duties as they relate to the company. A very important aspect of this coverage is that it provides defense coverage, even if the allegations are false. I urge my clients to explore this coverage option, especially if they have outside investors, as these types of claims are becoming more and more common.

Employment Practices Liability (EPLI):  Provides protection for an employer against claims made by employees, former employees, or potential employees. It covers discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations. You typically need this insurance as soon as you start to hire employees. Most investors and directors require you carry this coverage as part of your D&O Liability since they can also be liable in suits relating to the employment practices.


For more information or questions regarding your companies risk exposure, please contact Eric Sheetz, Property and Casualty Insurance Broker at ESheetz@ehrenfeldinsurance.com, (760) 809-8510.



Shave Payroll Costs for Shared Employees
By Fred Patterson, lll, District Sales Manager, AmCheck


If you run your business operations through two or more corporations, the different entities may share some of the same employees. In that case, you can save payroll taxes by using a "common paymaster."

IRS Definition: "Concurrent" employment is defined by the IRS as the "contemporaneous existence of an employment relationship between an individual worker and two or more corporations."

The common paymaster option is only available to corporations. Sole proprietors and partnerships are not eligible.

Instead of having each business pay Social Security and Medicare tax for shared employees, common paymasters remit the appropriate amount of tax just once.

In other words, no more tax would be paid than would be the case with a single employer. The savings apply to employees who on a combined basis earn more than the Social Security tax wage ceiling, which for 2013 is $113,700 (up from $110,100 in 2012).

For example, let's say you have two corporations equally sharing a business manager who earns $140,000 a year and collects two different $70,000 paychecks. If each company pays Social Security tax for the manager, each separate Social Security tax bill is $4,340 (6.2 percent of $70,000) for a total of $8,680. However, if a common paymaster takes over in 2013, the total Social Security tax bill is limited to $7,049 ($113,700 times 6.2 percent). Result: The corporations save $1,631 in Social Security tax ($7,049 versus $8,680).

You can only take advantage of this calculation when related corporations employ a worker "concurrently," or at the same time. However, there are some restrictions on what constitutes a "related corporation." Ask your tax adviser for more information.

For more information or questions regarding your payroll processes, please contact Fred Patterson III, District Sales Manager for AmCheck, a payroll solutions firm with offices throughout the United States. Fred may be reached at fred.patterson@amcheck.com or (619) 595-7900.



New I-9 Form for Employment Eligibility Verification


Effective May 7, 2013, employers are required to use the new I-9 Form for Employment Eligibility Verification. The I-9 form is used to document verification of the identity and employment authorization of each new employee (both citizen and non-citizen) hired after November 6, 1986, to work in the United States.
It is an employer's responsibility to complete and retain Form I-9. Be sure to complete all three sections within the form. If the entire form is not complete, employers may be fined. It is important to note that an employer may not ask an individual to complete section 1 before he/she has accepted a job offer.
Below you will find a link to a Citizenship Status/Document Matrix and a link to the I-9 Form and Instructions.

HRPG is ready to help you with your questions about I-9 form completion. Please contact Linda Cortez at lcortez@hrpg.com.

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