Post on 14-Jan-2015
description
Dr. G C Mohanta, BE(Mech), MSc(Engg), MBA, PhD(Mgt)
Professor
Compensating Flexible Workforce: Compensating Flexible Workforce: Contingent Employees and Flexible Contingent Employees and Flexible
Work SchedulesWork Schedules
Flexible Workforce/Contingent Employees
Part-time employees
Temporary & on-call workers
Leased employees
Independent contractors
Freelancers
Consultants
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
Employed Contingent Workers in 2001
TYPE NUMBERIndependents 8,858,000Part-Time 2,245,000On-Call 2,089,000Temporary 1,169,000
Leased 633,000
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 <0.01 Legally-required 2.27
1.44 Total $8.19 $2.68
Job Sharing 2 or more part-timers perform 1 job Reduces costs Increases flexibility Maintains productivity levels May increase morale & loyalty
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
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
Rise In Use Of Contingent Worker Economic recessions
International competition
From manufacturing to service
More females in workforce
Service Divisions Transportation
Communication
Public utilities
Wholesale trade
Retail trade Government
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
Wage Comparisons in 2004Group F-T P-T
Management & Professional $30.38 $23.79
Production 14.62 8.92Service 10.26 7.57
Overall Average $19.05 $10.17
Benefits Offered In 2004 % of CompaniesType Offering Benefits Paid time-off 25%
Medical insurance 11%
Retirement 20%
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
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
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
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
Right To Control Test IRC test to determine workers’
independence 20 Considerations, including:
Hiring, training, supervising, firing Hours Services Compensation Equipment, materials, location
Flexible Work Schedules
Flextime
Compressed work weeks
Telecommuting
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
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
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
Telecommuting Arrangements Satellite work centers Neighborhood work centers Nomadic executive office Work off-site and/or on-site Temporary or permanently
The flexible workforce Definition: Definition: A workforce that can respond A workforce that can respond
quickly in quantity and type to quickly in quantity and type to changes in demand a business may changes in demand a business may face. face.
© PhotoDisc
The flexible workforceThe organization of a flexible The organization of a flexible
workforceworkforce
© PhotoDisc
Core workers
Periphery Workers
The flexible workforceFull-time employees Full-time employees
who have specific who have specific skills and job skills and job security security
Core workers Core workers
The flexible workforcePart-time or Part-time or
temporary workers temporary workers who available who available whenever neededwhenever needed
Core workers Core workers
Periphery workers Periphery workers
The flexible workforceExamples of flexible workforce
practices:Part-time Part-time Temporary Temporary Bank time Bank time Job sharing Job sharing
© PhotoDisc
The flexible workforceMajor advantages of a flexible Major advantages of a flexible
workforceworkforce: : Employee benefiting from flexible working Employee benefiting from flexible working
hours hours More employee opportunities of training More employee opportunities of training
and being multi-skilledand being multi-skilledReducing business costs and increasing Reducing business costs and increasing
productivityproductivityReacting quickly to changes in the Reacting quickly to changes in the
workforceworkforce © PhotoDisc
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HR Issues in the New Workplace
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
Temporary Employees
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HR Issues in the New Workplace
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
Technology
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HR Issues in the New Workplace
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
Work-Life Balance
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HR Issues in the New Workplace
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
Downsizing
The Flexible WorkforceCore workers
Fulltime workers
Contingent workers Part time employeesContract / Outsourced
workers Temporary workersInterns
Flexible SchedulesFlexible work hoursCore timeFlextimeCompressed work weeks
Telecommuting
Case
Everyone telecommutes at your 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?