Maximizing Your Human Capital Management

Human Capital Management (HCM) transforms the traditional administrative functions of human resources (HR) departments (recruiting, training, payroll, compensation, and performance management) into opportunities to drive engagement, productivity, and business value.

It’s an organization’s comprehensive set of practices used to hire, orient, train, and retain employees (as an intangible asset) through strategic and tactical practices, processes, and applications to maximize business value, which should be focused on organizational need to provide specific competencies.

Strategic and tactical competencies may include:

Administrative Support

  • Personnel, benefits, payroll, and rules and procedures administration
  • Employee self-service portal
  • Employee information management
  • Employee service center

Strategic and Tactical Support

  • Organization visualization
  • Workforce planning and contingent workforce management
  • Recruitment and hiring
  • Onboarding
  • Compensation planning
  • Competency, performance, and time and expense management
  • Workflow
  • Education and training
  • Reporting and analytics

 

Why Value HCM?
Employees spend considerable time each day contributing to the success of your organization. They can make or break the organization. Therefore, it’s essential to acquire and retain high-performing employees.

Human resource professionals are responsible for creating and implementing ways to hire, orient, train, motivate, and engage employees. HCM plays a key role in helping your organization’s human resources department increase the overall productivity and happiness of employees. And, when employees are happy and feel productive, they work harder and care more about the success of the organization.

What Are Some Challenges HCM Can Pose?

Organizations struggling with poor performance management, non-strategic workforce planning, weak usage of workforce analytics, mismanagement of organizational change, and the high cost of failing to solve challenges need to be driven by an overall purpose—fusing together strategic and tactical approaches.0

HCM needs to ensure that your organization is best prepared to anticipate challenges and quickly adapt to them.

While HR professionals may agree that strong workforce analytics are important to an organization, some fall short by not using meaningful metrics, such as Quality of Movement and Quality of Attrition. Workforce analytics involve identifying the current and anticipated future supply of labor and skills; recognizing what you need now and into the future in terms of labor, skills, and naming competencies (demand analysis); then identifying gaps between current and future supply and demand.

Mismanaging organizational change is another shortcoming. It’s more important for HR to be proactive, rather than reactive, to avoid falling behind or failing to keep pace with sudden changes. Poorly handled change management causes employees’ frustration, discomfort, disengagement, and a hasty search to reconnect with other, more meaningful frameworks in their lives. A fast-growing company can ill-afford the halting and even paralyzing effects of poorly-managed change.

Change management incorporates the organizational tools that can be utilized to help individuals make successful personal transitions, resulting in the adoption and realization of change. It’s the process, tools, and techniques used to manage the people side of change to achieve required business outcomes. It is the systematic management of employee engagement and adoption when the organization changes—in other words, how the work will be done.

There’s a high cost to unsolved challenges. By failing to identify them early, HCM is prone to gaps between its current leadership and human capital capabilities, and the leadership and capabilities required to reach future organizational goals.

Weak change management has its ramifications. Today, more revenue than ever is spent on organizational change. With such high stakes, organizations cannot afford to fail. Enormous investments are made each year related to large scale, complex business and health care changes, such as Enterprise Resource Implementations (ERP) to new patient care models, mergers, and acquisitions. Sadly, though, the statistics around unsuccessful implementation remain high. Approximately 70% of business and health care initiatives still fall short of achieving what has been promised on time and to spec.

Such failed implementation occurs for reasons such as organizations not applying the same business-discipline when managing the human elements of change as they prepare the timeline, budget, and technical objectives of a project. Put another way, weak or poor change management exists. To get the business results and return-on-investment you identified as your goal, remain diligent with the process, rigor, and discipline that surrounds the people side of implementing change.

Weak Change Management—the Pitfalls

  • Implementing change requires sponsorship. It’s the most critical success factor to ensure a fast, successful launch of any type of business change. It’s important to not only attempt change, but to actually carry it out; otherwise, change is destined for failure.
  • Don’t let activity seduce you. Activity (referred to as busywork) doesn’t always mean that things are on track. Change management is not about keeping busy; it’s about the discipline of focusing on the right actions at the right time.
  • Change Management needs to seamlessly blend with Project Management at the start of the project.
  • Change doesn’t occur in a vacuum. It should be implemented in a climate that’s based on what’s currently going on, in conjunction with perceptions of past experiences.
  • Don’t confuse a communications plan with an implementation plan. An implementation plan clearly identifies the responsible groups that will be completing the major tasks for each recommendation; whereas, a communication plan exclusively addresses communication expectations among various stakeholders.
  • Tools and checklists aren’t the be all-end all. Principles need to drive/guide change, not simply complete checklists and templates.

Be Aware of Failure…Learn From It!

  • When an organization implements a weak change management process, money in the form of both short- and long-term direct and indirect costs to the organization are affected. When the business’s objectives haven’t been achieved, the short-term, direct costs are somewhat obvious. Wasted resources include money, time, and people. And, long-term, direct costs, while more subtle, encompass low morale, lack of confidence in leadership and resistance to change. Based on these factors, the next round of changes is less likely to launch.

How to Use Change Management to Win

  • How can the problem be fixed? Employ a structured change management model that’s not a lock-step protocol (lose adherence to and emulation of another’s actions). The goal of change management shouldn’t be “to do” a process. Instead, it’s to have core principles guide you on what you should be doing, given the day-to-day realities and challenges of the project. There’s no time to do things that fail to drive you toward system optimization.
  • Leaders must equally understand how change is implemented and to what gets implemented.
  • People need to be enrolled in the change that’s being implemented. When the people side is mismanaged through poor change management, it becomes a costly decision. Is that decision worth taking the chance?

Using HCM Software
HCM software refers to applications an organization can use to track, manage, and maintain its workforce. It’s very effective at integrating an organization’s HCM applications into one user-friendly platform and the software may be installed locally or through an online subscription service.

HCM software can help with:

  • Recruiting/tracking applicants
  • Onboarding forms
  • Employee profiles, performance reviews, history
  • Integrating with payroll, tax processing, and benefits administration systems
  • Employee self-service
  • Events dashboard
  • Report writing
  • Access 24/7 from anywhere
  • Secure data encryption

Implementing cloud-based HCM software saves time. Benefits include:

  • Easy updates and added new features.
  • Fewer internal technology and server resources.
  • Maintenance even when organizational hardware changes.
  • Reduced human errors that can occur when inputting data into multiple HR systems.

HCM software functions are generally organized as follows:

  • Core HR, includes payroll, benefits administration, onboarding, compliance management, and maintenance of employee data.
  • Talent management—the collective term for recruiting, developing, and retaining employees. Talent management suites consist of distinct, yet integrated modules for recruitment, performance management, compensation management, learning, and succession planning.
  • Workforce management—set of functions to deploy employees with the necessary skills for particular regions, departments, or projects. Includes time- and attendance-management, workforce planning, labor scheduling, and budgeting.
  • Service delivery, such as HR help desks, intranet portals, employee self-service, and manager self-service.

HCM suites also typically have technologies that cut across functional areas, notably analytics, social media, collaboration, and employee engagement. Many also allow mobile access to HR data and applications, especially self-service features.

In terms of technology, HCM and human resource management system (HRMS) software features are blending, blurring the function of each. The terms may soon become interchangeable; many software vendors tend to confuse or intermingle them.

Incorporate both cloud computing, databases, and other elements to handle workforce management, and include most elements found in a standard HRIS system.

HCM systems include:

  • HRIS capabilities and features
  • Employee performance and goal tracking
  • Onboarding
  • Analytics
  • Position control and salary planning
  • Access to company databases, policies and procedures, documentation, and data
  • Global capabilities, including multi-lingual, multi-currency, and country-specific formatting

And, HRMS products include:

  • Features and capabilities offered in both HRIS and HCM systems
  • Time and labor management (TLM)

HCM continues to transform HR, as technology-driven business models take center stage. Automating repetitive HR tasks and technologies, such as artificial intelligence (AI) and machine learning (ML), will allow HR professionals to expend less time addressing routine employee questions and more time engaging with employees and candidates.
Ultimately, whether you’re looking to outsource your entire payroll and HR function, handoff some components, such as tax filing and COBRA administration, or prefer to do it all in-house, ASAP Payroll Service has a solution for you.

The Nuances of Restaurant Payroll

There’s more than meets the eye when it comes to managing restaurant payroll. It’s crucial that you pay your employees accurately. Plus, you need to track industry one-of-a-kind tax and wage/hourly laws.

Another challenge is high staff turnover. Prior to COVID-19, The National Restaurant Association estimated that the average restaurant lost $150,000 annually due to staff turnover. According to the Center for Hospitality Research at Cornell University, losing a front-line employee costs a restaurant employer an average $5,864. This kind of sky-high rate can take its toll on your payroll process.

Many restaurants conduct most of their new hire paperwork using pencil and paper—a time-consuming endeavor. Switching to a digital onboarding process, such as ASAP Payroll Service’s Evolution software, can save you significant time each year. When a new employee completes an electronic W-4 as part of the onboarding process, the information will automatically flow to the payroll system to establish the proper federal income tax withholding.

Offboarding employees who leave your business create extra work, too. This means understanding final paycheck laws and abiding by them. For example, in California, a terminated employee must be given their final paycheck on their last day. In this instance, ASAP Payroll Service’s clients can go into the system or call to figure out the exact amount. However, not every state has this level of final pay standards, but most have rules regarding when a terminated employee must receive their last paycheck. Check your state’s department of labor for regulations.

Besides servers, you need to track cooks, bartenders, and assistant managers, because each may have a different pay rate. While tracking different wages isn’t unique to businesses, the process is more complicated for restaurants.

There’s more to consider than accurately processing payroll and paying your employees on time.

  • Classifying your employees/tips—while most employees will be classified non-exempt, meaning they will be paid a minimum wage (federal minimum wage—$7.25 per hour) and any accrued overtime, their tips also need to be tracked. According to the U.S. Department of Labor, an employee who classifies as receiving tips engages in an occupation where he or she customarily and regularly receives more than $30 per month in tips. In this instance, the employer of a tipped employee is only required to pay $2.13 per hour in direct wages, if that amount, combined with the tips received, at the very least equal the federal minimum wage. If the employee’s tips and the employer’s direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, then the employer must make up the difference. Many states, however, require higher direct wages for tipped employees. Please note that certain states and cities have higher minimum wage rates than the federal minimum requirements. It’s important to keep up-to-date on these changes, which generally occur on January 1 or July 1. In addition, states may have different tip credits, so be sure to check your state’s department of labor. It’s important that employers and managers follow federal and state rules.
  • Exempt employees—there are strict rules regarding when to classify an employee as exempt. While most restaurant workers won’t meet the job duties or salary requirements that qualify them to be considered exempt from overtime, be sure to check the Department of Labor’s website for more details. However, when overtime is warranted, it must be paid at a rate of at least 1.5 times the nonexempt employee’s weekly regular rate for each hour worked over 40 hours. States like Alaska and Nevada calculate the time based on hours worked per day, not 40 hours per week. Again, check the Department of Labor’s guidelines (dol.gov).
  • Cash/check tips vs. credit card tips—when a diner leaves a cash or check tip, that money is 100% the property of the server. However, credit card tips are handled differently. Depending on the state you’re in, the employee either receives 100% of the tip or the credit card processing fee is deducted from that tip. Then, too, service charges that you add to a customer’s bill, then pay your service staff, are considered wages, not tips. But tips issued via tip-splitting or tip-pooling (see below) are considered tips, regardless of which employee actually received that tip.
  • Tip pooling— means that, instead of employees keeping all the tips they earn, the tips must to be put into a pool and divided equally among the waitstaff, bussers, bartenders, and possibly the back-of-house employees during a work shift. In this instance, the employer needs to communicate to tipped employees that they must participate in a tip pool, and, a tip credit can only be issued for the number of tips that employee ultimately receives. For further clarification refer to the U.S. Department of Labor’s website (dol.gov) and look for Tip Regulations Under the Fair Labor Standards Act.
  • To take advantage of this benefit, make sure your payroll tax calculations, filing, and payments are all accurate. This is a general business credit equal to the amount of employer Social Security and Medicare taxes that you paid on wages over and above the minimum wage for each employee (see IRS Form 8846).
  • Tip credit—make sure your employees report all tips, because, at the end of the year, if they were paid total wages that exceeded the applicable minimum wage for your business location, you can file for the Fair Labor Standards Act (FLSA) tip tax credit. Related to the restaurant industry, the FLSA allows a business owner to apply a credit up to $5.12 for the employee’s pay. The reasoning is that tips should make up this amount, which leaves the employer paying the difference in a wage, which is to be no less than $2.13. If the employee does not make up the difference in tips between the minimum wage and $2.13 an hour, the employer must meet the hourly minimum wage standard, which, in most cases, is the minimum wage of $7.25 an hour.
  • More than 10 employees— if more than 10 employees worked for you during the previous year, based on using the average number of employee hours worked on a typical business day, you need to complete IRS Form 8027, which tracks total tips, service charges, and gross receipts from food and beverages. If the total tips reported amount to less than 8% of your gross receipts, you must allocate the difference to your tipped employees. If you can prove that a lower rate should apply to your business, then you may request a rate lower than 8% from the IRS. And, if you are granted a lower rate, you should use it in the allocated tip calculation on IRS Form 8027.
  • Benefits and deductions—restaurants customarily provide a free or discounted meal during an employee’s shift. The IRS classifies this as a fringe benefit and it should be treated as taxable income. Because it’s considered a fringe benefit, it needs to be added to an employee’s pay when running payroll.
  • Within a single job, such as a cook, there can be different pay rates, depending on the shift worked, and employees may cover more than one shift during a pay period.
  • There may be employees who work more than one type of job within the same pay period. And, if you have multiple restaurant locations, it’s common for employees to work in more than one location. In this instance, labor expenses will need to be allocated based on the location.
  • As the restaurant owner—what deductions can you make from an employee’s paycheck? The FLSA allows employers to deduct certain costs of doing business from employees’ wages, only if the deductions do not result in the employee earning less than the minimum wage standards after the deduction. Such costs include uniforms, customers who fail to pay, or broken objects. Technically, deducting these costs is allowable, but restaurant owners need to make sure they’re not violating FLSA rules and regulations if this results in an employee’s wage falling below minimum wage.
  • Hiring restaurant employees can be a revolving door. Some may be receiving some form of government assistance, while others may have recently been released from the military, or perhaps jail. In these instances, if your restaurant hires such individuals, you can get up to $2,300 in tax credits after that employee has accrued 300 hours of work.

Managing the Details

If you’re new to the restaurant business, managing your staff can seem daunting. This is where a good online time and attendance system, such as ASAP Payroll Service, can help you track all your employees’ movement between shifts, job types, and locations. It will save you time and reduce payroll errors. We understand how the restaurant industry works and we can help you track:

  • Minimum Wage Alerts. We help keep you compliant with your state’s minimum wage laws and make sure your employees receive their accurate pay.
  • FICA Tip Credit Report. We run this report to help you configure and track what you can claim on your annual tax return.
  • Tip sign-off report. This report provides you with written proof of your employees’ tips received and declared. This helps to keep you compliant.

And, if the IRS or another agency contacts a restauranteur regarding filing their taxes, based on how ASAP Payroll Service filed the paperwork, we’ll work with that government agency, representing the restaurant owner to resolve the issue. If ASAP Payroll made an error, we’ll talk to the government agency on your behalf and pay any fines.

Taking on Union Workers?

Collective Bargaining

A controversial Supreme Court ruling was issued in late June 2018 stating government employees who elect to opt out of joining a labor union aren’t obligated to help fund collective bargaining.

This means that government workers aren’t required to finance union activity; forcing them to do so violates the First Amendment, as it requires payments to unions that negotiate with the government and forces workers to endorse political messages that could disagree with their beliefs. In contrast is the belief that government employees who choose not to join a union are entitled to refunds of their dues spent on political activities, such as promotional advertising that supports a political candidate.

What’s Involved with Hiring Union Workers?

Before taking on a project that uses union employees, research the union’s requirements. The local union’s business manager can assist you with:

  • What are the effective dates for payment and dues?
  • How and when will union workers get paid?
  • Are there any rate changes within the union?

Tracking union payroll can keep contractors up at night. Meticulous records need to be kept. Errors, such as incomplete reporting, late payments, and delayed distribution of paychecks, can result in expensive fines, lost contracts, or being removed from a union. The outcome can seriously strain HR and payroll departments when it comes to deductions that have to be tracked on union workers.

Depending on the union, either online submission or check deposits are required. Keep track of payment dates made to the union and your union workers. If you miss a deadline, you can be charged for each hour a union employee’s paycheck is past due.

And follow the same protocol when working outside your local union’s jurisdiction, as you could be responsible for a different set of wage, fringe, and deduction requirements and rates.
HR departments not familiar with union regulations may be surprised to learn how this affects members who work in certain areas of a business. For example, unions need to closely track workers’ time to make sure their employees don’t work more hours than contracted or their hours worked align with their schedules.
When processing union workers’ payroll, also keep in mind that union deductions are handled differently from non-union employees. A predetermined portion of each union worker’s paycheck needs to be set aside for union dues. If your business employs union and non-union workers, this can be challenging to track.
ASAP Payroll Service can simplify union payroll processing, despite it varying, based on each job and contractor. While there’s no universal answer that streamlines the process, you can reduce stress related to reporting by accurately tracking and recording, or by investing in a construction-specific payroll system (for example, ASAP Payroll Service) that will do it for you. ASAP has software that automates deductions related to union, open, and agency shop agreements between employers and organized labor unions, so that proper deductions are always handled on time and in full. Tracking time and attendance or mobile punching functionality can simplify the process, so workers don’t have to clock in from outside a building or geographic area designated by the employer.

Union, Agency, and Open Shops

As mentioned earlier, there are union, agency, and open shops. Closed shops aren’t included here, because they’re prohibited according to national law (the Taft-Hartley Act). In a union shop, it’s not mandatory for employees to join a union as a condition of being hired; however, they’re required to join within a specified amount of time, generally after 30 days. Technically, though, employers aren’t allowed to fire employees who refuse to join the union, provided those employees pay union fees and dues.

In an agency shop, employees must pay union fees and dues; however, they’re not required to participate as members. And, with an open shop, employees don’t have to join a union or pay dues and fees. Generally, open shops are found in right-to-work states where laws prohibit both union and agency shop agreements.

When dealing with these different kinds of shops, remember that, if your payroll solution automates calculations, this reduces human-error and saves you from getting bogged down with manual processing and correcting errors. ASAP Payroll Service’s time and attendance software can track union employees’ hours worked, vacation time taken, and can gather said data for purposes of creating quick and accurate reports. Each is tracked through Evolution Advanced HR, one of the top HCM systems on the market.

Processing Payroll
ASAP can help you process payroll across collective-bargaining union contracts and maintain accurate week-to-week payroll. We track different pay rates, shift differentials, deductions, and overtime rules. If you’re looking for a more audit-proof, scalable solution to process payroll across collective-bargaining employees, we can also help.
ASAP customizes differential rules; if the employer chooses to offer shift differential pay (extra compensation for employees who work less preferred shifts, such as evening or night), rather than make manual adjustments to employees’ paychecks each pay period, union employers can benefit from ASAP Payroll Service’s technology that records and runs shift differential rules and automatically makes adjustments to pay statements. Because shift differential rules and rates can vary among different bargaining units, our software can customize and run these rules according to each bargaining unit.

Tracking Collective Bargaining Agreements
Accrued time off, sick pay, and other employer-specific types of leave may require different rules based on collective bargaining agreements. Variations in the maximum time an employee earns, based on the union contract, might also need to be addressed. For example, maximum time, tenure changes, waiting periods, and how often the time needs to be processed. ASAP Payroll Service can monitor these through its payroll or time-keeping software. In addition, enhanced tenure changes can be tracked. We also offer mobile tracking through an app that can “geo tag” employees’ locations.
Akin to shift differentials, an employer can customize accrual calculation profiles that can then be applied separately to each collective-bargaining group. And, in terms of audits or grievances, employers with automated accrual systems can rapidly validate or amend accrual calculation disputes.
ASAP Payroll Service also uses one of the top payroll products on the market, Evolution Advanced HR. It’s a dynamic payroll, HR, and tax management system developed by payroll and HR service bureau veterans for the Human Capital Management (HCM) industry. It’s designed to reduce payroll errors. Check out the Human Capital Management page on our website: asappayroll.com.