BIZGrowth Strategies
Aligned with our goal of providing outstanding solutions that empower businesses to reach their objectives, we've curated these insights to assist your organization in tackling its most critical needs and challenges. In this issue, we offer strategies to enhance your employee experience and improve retention, optimize your compensation plan, ensure you’re prepared for your employee benefit plan (EBP) audit, de-risk your pension plan, develop a severe weather risk management strategy, and address the gender disparities in caregiving and long-term care financing.
Building Trust through Understanding: The Key to Employee Retention
In a workplace landscape where the lines between professional and personal lives are increasingly blurred, understanding employee sentiment has never been more critical. Trust is at the essence of a thriving work environment — a crucial element intricately tied to employee engagement, satisfaction and retention. Adding to the urgency, a recent SHRM statistic reveals that 44% of workers feel burned out at work, highlighting the importance of addressing employee well-being to foster a positive and productive workplace.
The Heart of Retention: Trust and Sentiment
Trust within the workplace is the foundation upon which loyalty and a strong corporate culture are built. Employees who feel their voices are heard and valued are more likely to be committed to their organization's mission and less likely to seek opportunities elsewhere. However, the shifting workplace dynamics resulting in remote work, flexible hours and the digital transformation of business operations present challenges in maintaining a cohesive, motivated and engaged workforce. Central to navigating these challenges is understanding and positively influencing employee sentiment.
Strategies to Gauge and Improve Employee Sentiment
Organizations are increasingly adopting sophisticated tools and methodologies to better understand and improve employee sentiment. These strategies help identify areas for improvement and underline the company's commitment to its workforce's well-being and professional growth.
Regular Surveys and Feedback Mechanisms
Regular, anonymous surveys are popular for gaining insights into employee sentiment. With many readily available survey tools, companies can ask targeted questions about various aspects of the work environment, from job satisfaction and management effectiveness to workplace culture and growth opportunities. Feedback mechanisms that allow for solicited and unsolicited feedback can also provide valuable insights into employee sentiment. Open forums, suggestion boxes (digital or physical) and town halls encourage open dialogue, signaling to employees that their opinions are valued.
Leveraging Data Analytics
Understanding patterns and trends in employee behavior, turnover and satisfaction levels is crucial in creating a more engaging and supportive work environment. Data analytics tools provide an objective perspective on employee engagement and satisfaction.
By using HRIS systems, businesses can effectively manage and analyze vast amounts of data, enabling them to proactively address issues.
Fostering Open Communication
Creating channels for open communication is paramount in building trust. Leadership training focused on transparency, empathy and active listening can empower managers to foster a more open, communicative work environment. Regular one-on-one meetings between employees and their managers, where conversations go beyond the scope of day-to-day tasks and focus on the employee's aspirations, concerns and overall well-being, can also significantly impact employee sentiment.
The Path Forward
As employees and employers face unprecedented economic pressures, understanding and positively influencing employee sentiment is more important than ever. It requires a commitment to ongoing dialogue, transparency and action. It's not a one-time initiative but rather a continuous effort that needs to adapt as the workforce and the broader business environment evolve. Fostering a culture of trust through understanding enhances employee retention; it's fundamental for attracting top talent, enhancing productivity and ultimately driving sustained business success.
Key Steps Employers Can Take to Build Trust
Building trust within the workplace is a dynamic process that requires consistent effort and strategic actions. Employers looking to foster a trustworthy environment can implement the following:
Communicate transparently. Ensure all communications are clear, consistent and transparent. Sharing company news — good or bad — in a timely and honest manner helps build credibility and trust among employees.
Recognize and reward contributions. Acknowledge employees' hard work and achievements. Recognition can be public or private, formal or informal, but it should always be genuine and timely to boost morale and validate the individual’s contribution to the company.
Provide professional development opportunities. Show a genuine interest in employee career growth by offering training programs, workshops or tuition reimbursement for courses that align with their career goals. This demonstrates an investment in their future within the company.
Encourage employee autonomy. Give employees the freedom to approach their tasks as they see best. This autonomy indicates trust from the employer, which can significantly enhance job satisfaction and productivity.
Implement fair policies. Develop and enforce policies that ensure all employees are treated fairly and respectfully. This includes transparent procedures for resolving conflicts and grievances, which can significantly improve trust.
Lead by example. Leadership should embody the organization's values and ethics in their behavior. Leaders who demonstrate honesty, integrity and consistency in their actions inspire similar behaviors among their employees.
Involve employees in decision making. When appropriate, include employees in decision-making processes. This can enhance their sense of ownership and alignment with the company’s objectives, reinforcing a mutual trust bond.
By prioritizing the sentiment of their workforce, organizations can unlock the full potential of their employees, fostering a thriving, innovative and resilient work culture. The key lies in consistent and earnest efforts to listen, understand and act, thereby building a solid foundation of trust that supports not just retention but comprehensive growth and success.
Employee Benefit Plan Audit Checklist
Preparing for your employee benefit plan (EBP) audit is a crucial annual task for your organization. To simplify this daunting process, we've developed an EBP audit checklist. By following these steps, you can ensure a smooth and efficient audit experience.
The employee experience refers to every interaction an employee has with your organization and its people. Each workplace exchange, reward and relationship has the potential to positively or negatively impact this experience and your company’s reputation as a whole.
Therefore, proper evaluation and optimization of your employee experience strategy is crucial. However, before you start adjusting your strategy, it’s important to first understand each stage of the employee experience timeline.
Discover strategies to enhance your company culture from the executive level down in our webinar, Top-Down Retention Tactics: How to Support & Empower Your People Leaders.
Stage 1: Attraction & Recruitment
A potential new hire’s first impression of your organization is formed during the recruitment and hiring stages, before they even become an employee. Professional, thoughtful interactions with recruiters, interviewers and other parties throughout the recruitment process can positively impact candidates’ perceptions of your organization. In addition, your company’s careers page, social media accounts and other aspects of your digital footprint will affect the way potential new hires view your organization. Ensure these elements are polished and present your organization in a positive light.
A strong employee experience can also serve as an impactful value proposition for your organization as you strive to attract and recruit top talent. Showcasing competitive compensation and benefits paired with a positive workplace culture in which individuals are supported, celebrated and encouraged to grow can tip the scales in your favor during this crucial stage of the employee experience.
Stage 2: Onboarding
The onboarding process kicks off your employees’ introduction to what it means to be a member of your workforce. However, it’s rarely done right. A study conducted by Paychex found that only about half of all new hires felt satisfied with the onboarding experience at their current job, while 32% found it confusing and 22% found it disorganized. If an employee’s onboarding experience is chaotic or different from what was advertised to them, it can jeopardize your ability to retain them long-term.
Stage 3: Development
In the development phase, employees begin to get a true sense of their future at your organization. Throughout this stage, ample opportunities for continual learning and internal advancement are key to showing your employees that you’re committed to growing their career.
Stage 4: Engagement & Retention
Once employees have progressed to the engagement and retention phase, it’s essential to ensure their experience continues to be a positive one that reinforces the value they bring to your business. Don’t take long-tenured employees for granted; they serve as signals to candidates and new hires that they’re joining a company where retention and treating employees right are prioritized.
Stage 5: Offboarding
When an employee retires or pursues an opportunity elsewhere, their employee experience should not abruptly conclude. The offboarding stage presents a valuable opportunity to gather feedback on what went right and what could have gone better during their time at your organization. Don’t underestimate the power of an effective exit interview.
How Can Employers Enhance Their Employee Experience?
Gaining a better understanding of each stage in the employee experience timeline is crucial to building the foundation for a strong employee experience strategy, but how should employers go about making measurable improvements?
We recommend taking a total rewards approach to optimization, as this comprehensive tactic will allow you to hone in on the key drivers of employee attraction and retention. Think of total rewards as the “total package.” When you offer the total package, employees are likely to stick around long-term, engagement is likely to be high and your organization is likely to succeed as a whole.
When portions of the package are absent, employees notice, and they gravitate toward organizations that offer what you don’t. An effective employee experience is one that delivers on each element of total rewards: compensation, employee benefits, growth and development opportunities, a sense of purpose and a sense of community.
Connect with our team at CBIZ Employee Benefits for more tailored guidance on your employee experience strategy.
Pension De-risking With Lump Sum Windows
Pension plans are critical components of retirement security, yet they pose significant financial and operational risks to sponsoring organizations. The volatility of funding requirements, coupled with longevity and investment risks, compels companies to seek innovative de-risking strategies. Offering a temporary lump sum window to active employees over age 59½, as facilitated by the Miners Act of 2019, has emerged as a strategic tool for de-risking pension plans.
Background
The Pension Protection Act of 2006 introduced the concept of phased retirement whereby pension plans could allow in-service distributions starting as early as age 62. The Miners Act of 2019 further reduced the minimum to 59½, which also coincides with the minimum age participants can withdraw retirement funds without incurring an early distribution tax.
With these legislative changes, plans may now introduce more flexible payment options, including temporary in-service distributions to participants over the minimum age. These changes also open the door for pension plan sponsors to consider lump sum distributions to active employees as a de-risking strategy.
Strategic Value of Lump Sum Distributions
De-risking Pension Liabilities: Offering lump sum distributions can significantly reduce pension plan liabilities. By transferring the longevity and investment risks from the plan to the participants, plan sponsors can achieve a more predictable and stable funding status.
Enhancing Participant Engagement: Providing a lump sum option enhances participant engagement by offering more control over retirement assets. This empowerment can lead to increased satisfaction and loyalty among employees, aligning their interests with the broader goals of the organization.
Improving Financial Well-being: For participants, especially those over age 59½, accessing a portion of their pension benefits as a lump sum can offer financial flexibility to address immediate needs or opportunities, potentially improving their overall financial well-being.
Implementation Considerations
Plan Amendment: To offer a lump sum window to active employees, pension plans must be carefully amended to ensure alignment with plan sponsor objectives and the participant interests. Legal analysis and numerical tests may also be needed to ensure compliance with the Miners Act of 2019 and other statutory and regulatory requirements.
Communication Strategy: Effective communication is crucial to ensure that participants understand their options. Tailored messaging can help participants make informed decisions and plan more effectively for their retirement.
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Financial and Actuarial Analysis: Offering a lump sum option to active employees will affect the plan’s funded status and the organization’s financial health. A thorough financial and actuarial analysis is necessary to assess the impact in advance. This analysis should consider various scenarios and market conditions to ensure a resilient strategy.
Management and Administration: Adoption will increase day-to-day administrative activities, including participant calls or other requests for service, benefit calculations, election form processing and payment transactions. A third-party administrator can help manage the additional volume while introducing technological tools to improve the overall participant experience.
Next Steps for Plan Sponsors
Offering a temporary lump sum window to active employees over age 59½ is a potentially valuable approach to de-risking pension plans. By leveraging the provisions of the Miners Act of 2019 and other related legislation, companies can enhance participant engagement and financial wellbeing while managing pension liabilities more effectively. Successful implementation requires careful planning, clear communication and ongoing administration to align the interests of all stakeholders and achieve the desired outcomes.
Pension plan sponsors should consider the strategic value of amending their plans to offer temporary in-service distributions. By undertaking a comprehensive evaluation of the financial, legal and operational implications, organizations can position themselves and their participants for success in the evolving pension landscape.
Connect with a specialist to learn how we can help you navigate the complexities of de-risking your pension plan.
Investment advisory services provided through CBIZ Investment Advisory Services, LLC, a registered investment advisor and a wholly owned subsidiary of CBIZ, Inc.
Third-party administration, actuarial and other consulting services offered through CBIZ Benefits & Insurance Services, Inc.
A well-crafted sales compensation plan is crucial for building a motivated, high-performing team that consistently achieves targets. In contrast, a poorly designed or overlooked plan can lead to missed key goals and expensive setbacks.
Designing and assessing a sales compensation plan can be challenging due to its complexity and the significant impact on sales success. Following a thorough, best-practice approach may be time-consuming, but it’s essential to avoid missing targets or losing top talent.
Here are 10 strategies to optimize your sales compensation plan, aligning it with business objectives and empowering your team:
1. Align plan with strategy and job roles.
Start with a clear strategy and a model that identifies needed sales resources like field sales, telesales and partners. For each role, identify critical success factors, detailed descriptions and necessary competencies. Make sure base pay, draw and performance measures correspond with the role's current functions, not outdated job descriptions. This way, you can set accurate target pay, a balanced pay mix and appropriate performance measures, and ensure incentives reflect each role's key responsibilities.
2. Match pay mix to job role
Tailoring the pay mix — the ratio of base salary to incentive at target performance — involves balancing the ratio of base salary to incentives in a way that aligns with the specific responsibilities, objectives and challenges of the role. Consider account management versus acquisition, buying complexity and sales cycle length when setting the mix. An overly aggressive mix won't suit long and complex sales cycles while a conservative one might stifle performance in quick acquisition cycles. Ensure top sales reps earn more than average performers without overpaying underperformers.
3. Focus on relevant performance measures.
Use measures that reflect priorities for each role with financial and strategic metrics. Keep them simple and focused, with up to three primary metrics that indicate progress on reaching business goals. Best-in-class plans use a maximum of three primary metrics, each accounting for at least 10% of the target incentive.
4. Establish a clear link between pay and performance.
Your sales compensation plan should communicate business goals and reward their achievement. Determine if the plan rewards revenue, profit, growth or retention. Also, ensure it does not unintentionally encourage counterproductive behaviors, such as discounting, territory competition, quota manipulation and the like. The performance results should be clearly tied to the incentive measures and pay with critical success metrics.
5. Promote teamwork and minimize conflict.
In complex sales environments, the plan needs to foster cooperation among direct sales and channels, instead of creating friction. Encourage collaboration across sales roles and minimize conflict among product lines, geographies, segments and sales processes. Test the mechanics to ensure the metrics are not too high level for individuals to influence.
6. Refine plan mechanics.
Plan mechanics define how performance translates into pay. They should be simple, intuitive and suited with pay levels for each territory and job. Eliminate outdated commission structures that skew incentives and ensure the plan offers clear direction for the sales team.
7. Understand plan economics.
Analyze the total cost of sales, not just overall compensation costs. Examine costs by strategy, product, customer segment, geography and job type to ensure they align with your sales strategy.
8. Set market-based quotas.
Avoid quotas based solely on historical performance, which may misrepresent opportunities. Quotas should be market-based and account for territory size, growth rates and market potential. Ensure objectives are equitably distributed and gain the sales team's input on quota setting.
9. Build organizational buy-in.
Involve key stakeholders early and often in the plan's evaluation, design and implementation. A good plan executed effectively beats a great plan implemented poorly. Conduct regular audits to verify understanding, behavior and results.
10. Follow a proven design process.
Plan redesigns require more than minor adjustments. Begin with the sales strategy and role definitions before proceeding to the payout details. Evaluate qualitatively and quantitatively, then implement and refine the plan using a systematic approach. Regular evaluation cycles will help proactively manage the plan's success.
These simple strategies will help to optimize your plan to drive results, foster collaboration and support your organization's success.
Looking for a sales incentive compensation solution? Our consultants provide a proven plan design process to ensure your company produces a compensation plan that attracts, retains and motivates top sales talent. Connect with us today to get started.
Severe weather incidents such as hurricanes, flooding, tornadoes and wildfires are becoming more frequent and intense. Preparedness is crucial for any business to survive such disasters. Severe weather not only causes physical damage but also disrupts operations, so comprehensive planning is essential to safeguard all aspects of your business (e.g., data, employees, inventory).
An effective risk management strategy:
Our guide offers insightful tips and strategies to help you tackle these areas along with comprehensive checklists to assess and improve your level of readiness and lessen the impacts.
More Than Mom: Why Women Carry the Long-term Care Burden
Long-term care is an essential yet often overlooked component of life planning, encompassing a variety of services tailored to individuals requiring ongoing support due to aging, illness or disability. From in-home assistance with daily tasks to residency in nursing homes or assisted living facilities, the spectrum of care options aims to preserve the quality of life and independence in later years.
Setting the Stage
Women typically outlive men by about five years on average. This longevity brings a distinct set of responsibilities, including the need for extended care as we journey through our golden years. Women not only live longer but also face a higher likelihood of needing assistance with activities of daily living (ADLs). This means they are more likely to spend longer stents of time in a long-term care facility.
Moreover, women often find themselves in caregiving roles for themselves, spouses and other family members. Holding these multiple responsibilities further emphasizes the need for addressing long-term care early on.
Clarifying the Details
Contrary to common belief, relying solely on Medicare or Medicaid for long-term care needs can lead to challenges. While Medicare may cover certain expenses for a limited duration, it's not a comprehensive solution. Medicaid, the primary payer for long-term care, poses its hurdles, with eligibility reliant on strict financial criteria. The limited availability of Medicaid beds in long-term care facilities complicates access to necessary services.
Women as Caregivers
The burden of caregiving disproportionately falls on women, often daughters stepping into the role of primary caregiver for aging parents. A study from the American Association for Long-Term Care Insurance shows that approximately 75% of those providing home care are female, with most being daughters or spouses. These caregivers, typically women around 46 years old, spend an average of 20 hours a week caring for their loved ones. However, the commitment extends beyond these hours, as one in six caregivers provides 40 hours or more of care per week.1
This commitment comes at a significant cost, with caregivers sacrificing their personal and professional pursuits to ensure the well-being of their loved ones. Economic vulnerability looms large, as caregiving responsibilities can push women into poverty, making them more likely to depend solely on Social Security for financial support.
Starting the Conversation
It's crucial to initiate open conversations about long-term care and stress the importance of planning for comfortable aging. Together, we must ensure that every woman has access to the support and resources needed to thrive in their later years. By addressing the gender disparities in caregiving and long-term care financing, we can work toward a more equitable future where everyone can age with dignity and security.
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DISCLAIMER: This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. This information is general in nature and may be affected by changes in law or in the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information. CBIZ assumes no
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Excellent insights, thanks for sharing!