People Processes: Open Workspaces, Short Term Incentives, and Background Checks

Workers value sense of community in the workplace

About half (47 percent) of part- or full-time employees value a community atmosphere in the place where they work, according to a new survey by Clutch, a B2B research, ratings and reviews company. The number increases to 55 percent for millennial workers aged 18-34. These findings suggest that workspaces, including traditional offices, coworking spaces, coffee shops, and other public work areas, benefit from finding ways to bring their young employees together.

While Generation X and baby boomers also value community, they don’t prioritize it at the same level as their younger coworkers. This is likely because millennials are the first generation to grow up with the internet, says Laurel Cummings, a makerspace researcher and member of Building Momentum, a science and engineering consulting company.

Cummings says that the internet is a connective tool that allows people to create projects of previously unimaginable scale and reach. “The internet has brought this idea of multi-disciplinary work to a whole new level.”

Kfir Shaked, senior architect lead at WeWork, a coworking network, agrees that making workspaces that encourage community-building interactions, such as stopping to chat, collaborating on projects, or teaching new skills, is key. “When designing the community spaces, I’m thinking about these spontaneous conversations that might happen,” Shaked said. Putting community building at the forefront of workspace design is critical.

The top quality that employees want in their physical surroundings is a pleasant, comfortable workspace. More than 3 out of 5 office workers (61 percent) want their workspaces to look and feel good. When workers have access to space they find agreeable and cozy, they’re able to concentrate better and think more positively about the work they do.

Source: Clutch.

Short-term incentives no longer just for executives

Short-term, cash incentives continue to dominate the incentive-pay landscape at both private companies and nonprofit/government organizations according to research released on May 8 by WorldatWork in partnership with Vivient Consulting. “Spending on short-term incentives (STIs) increased modestly at private companies from 2015 to 2017, which reflects the tight labor market and competition for talent,” said Bonnie Schindler, partner and co-founder of Vivient Consulting.

On the nonprofit side: “U.S. nonprofit organizations continue to make significant use of short-term cash incentives to motivate and reward employees. Long-term incentive (LTI) use is still a little-used compensation element, but prevalence increased modestly in 2017 and may signal an emerging trend,” Schindler said.

As for private companies, the research reveals:

  • Spending on STIs increased to 6 percent of operating profit at median, from 5 percent in prior years.

  • The prevalence of exempt, salaried employees and nonexempt (salaried or hourly) employees included in annual incentive plans increased in 2017. The biggest jump occurred for nonexempt employees. Approximately two-thirds of nonexempt employees are eligible for annual incentives, up from half in 2015.

  • The majority of respondents consider their annual incentive plans to be only moderately effective, with plan communication, the level of discretion, goal setting and the risk-reward trade-off noted as areas for improvement.

And non-profit/government findings reveal:

  • Nonprofit and government organizations favor simplicity by offering a limited number of STI plans. Of the respondents, more than 75 percent reported having three or fewer STI plans in place.

  • By far, the most common type of STI plan at nonprofit and government organizations continues to be an annual incentive plan (AIP). However, prevalence of AIPs dropped to 77 percent in 2017 from 86 percent in 2015.

Source: WorldatWork.

Employment background checks an essential component to reducing liability

Liability for negligent hiring is “alive and well” but can be reduced by comprehensive employment background screening, said Debra Keller, presenter at a Health Care Compliance Association (HCCA) webinar entitled, “Background Screening: What You Don’t Know Can Hurt Your Organization.” In addition to describing the benefits for background screening, Keller, vice-president of compliance at Reference Services, Inc., outlined the components of a quality background check.

Benefits of background checks. One benefit of background checks is an increase in applicant quality because the screening discourages applicants who are trying to hide something. They could also help prevent violence in the workplace—1.5 million workers are assaulted in the workplace each year, at a loss of $55 million a year in lost wages alone. Background checks can also help reduce and employee theft, which Keller described as “rampant and growing.” She said that 43 percent of workers admit they have stolen from their employer, and 70 percent of people who steal will reoffend.

Negligent hiring. Negligent hiring is the failure of the employer to investigate an applicant’s work experience, character, criminal history, and other relevant information before hiring the employee. Employers are responsible for both what they know and what they should have known about their employees. Keller noted that employers lose about 75 percent of negligent hiring cases, and average settlements in negligent hiring lawsuits average seven figures. Knowing that a potential employee was involved in criminal activity such as drug abuse, theft, or violent behaviors allows an employer to determine if the applicant is suited for the job and whether he or she poses a potential threat to other employees.

Comprehensive background check. To minimize risk, the following should be included an employer’s background screening package:

  • a nationwide criminal search, which Keller described as the foundation of all comprehensive background checks;

  • a Social Security trace to ensure that the applicant record belongs to that person;

  • manual county courthouse searches for seven years of applicant address history;

  • former employer verification; and

  • education verification, if applicable.

Keller emphasized the importance of doing a manual county search; while a nationwide criminal report captures convictions only, county records provide the most up-to-date information and include pending, dismissed, and deferred charges. In addition, many counties do not report up to a nationwide data source. She warned against instant county data, which is not a real search and not guaranteed to be up to date.

In addition, employers should not rely on fingerprinting as the sole source of background screening. Keller noted that the FBI databases were not intended to be used for background screening and are incomplete and inaccurate.

Choosing a background screening firm. Criminal records come from many sources and each background screening firm chooses its own sources, Keller said. The number of records searches varies widely among firms; for example, some contain sex offender registry information and other watch lists, while others do not. If you are paying for a cheap background check you are getting substandard results, said Keller. She recommended that an employer ask about a firm’s data sources:

  • Is the firm nationally accredited by the National Association of Professional Background Screeners?

  • Are team members Fair Credit Reporting Act (FCRA) certified?

  • How many records are searched and how many data sources are used?

  • Request a nationwide criminal source list.

The firm should perform “order review,” a process of reviewing criminal records, ensuring the records belong to that applicant, and ensuring that the employer is seeing only those records it is legally able to see.

Compliance problems. The past several years have been a “hotbed of activity” with legal action against employers related to noncompliant background screening practices:

  • Under 15 U.S.C. 1681, the FCRA, the applicant authorization form cannot be attached to the application, and it must not contain any waiver or indemnification language. The employer must also include a summary of consumer rights, as well as specific forms for certain states.

  • Before taking any adverse action based on a consumer report, the employer must mail the report, summary of consumer rights, and an adverse action letter to the applicant. After five days, if there is no dispute, the employer must send a post-adverse action letter.

  • While convictions stay on a person’s record forever, several states impose time restrictions (e.g., an employer cannot consider convictions beyond seven years). Under certain circumstances, an employer might consider information on an arrest with no conviction as “underlying conduct.”

Source: Written by Sheila Lynch-Afryl, J.D., M.A.

About the author, Rhamy

Rhamy grew up watching and working with his mother and grandmother in the seniors insurance market. This familiarity with the struggles faced by people trying to navigate the incredibly complicated and heavily regulated healthcare market led him to start Poplar Financial while working on his degree at the University of Memphis. After completing his MBA and Bachelors in Finance and Economics, Rhamy guided Poplar Financial through the disruptive opportunity that is the Affordable Care Act. Since then Poplar Financial has received numerous awards from major insurance carriers, and has completed its fourth year in a row of doubling in size. Now his team focuses on the processes around human resources, and specializes in providing companies with between 20 and 1000 employees with the payroll, benefits, and HR needs.

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