tag:blogger.com,1999:blog-14518422240663527742024-03-13T06:41:18.254-04:00Trending Toward a BalanceBy Transition Services Inc.Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.comBlogger43125tag:blogger.com,1999:blog-1451842224066352774.post-56470363852653539322015-12-14T16:05:00.002-05:002015-12-14T16:07:31.855-05:00<div class="MsoNormal">
<b>Are Affordable
Benefits a Thing of the Past?<o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
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Company sponsored healthcare is costing the federal
government an estimated $250 billion per year in tax subsidies from premiums
alone, and the Affordable Care Act is out to change that in a big way. </div>
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<br /></div>
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By imposing a so-called “Cadillac Tax” on high value health
insurance plans, beginning in 2018, the Affordable Care Act expects to bring in
approximately $87 billion over the next ten years. </div>
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<br /></div>
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Any plan that costs more than $10,200 for single coverage or
$27,500 for family coverage will be subject to a 40% tax on any value above the
set threshold, which will be adjusted annually for inflation. The Obama
Administration claims that this tax is only meant to affect those with
platinum-level healthcare, however there is some economic trickery at play
here: Medical care prices have historically risen significantly faster than all
other prices, so by linking the inflation adjustments of the Cadillac Tax
threshold to the Consumer Price Index (CPI), the administration has ensured
that the threshold will increase at a much slower rate than the cost of
healthcare. </div>
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<br /></div>
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Over time, employers will be unable to continue to provide a
standard level of care that is below the Cadillac tax threshold, which will
eventually hang average plans over the edge. According to the American Health
Policy Institute, the cost of the average family health care plan is expected to
hit the Cadillac tax threshold by 2031. </div>
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<br /></div>
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While there is still a lot to be figured out in terms of the
implementation of the tax, we do know a few things for sure: The cost of
healthcare will continue to rise, the pressure on benefit spending will
continue to increase, and companies need to be prepared.</div>
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<br /></div>
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<b>Staying Competitive<o:p></o:p></b></div>
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<br /></div>
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Studies overwhelmingly report that healthcare is the number
one consideration for a prospective employee evaluating a job’s compensation
and benefits package – something that is unlikely to change with the entrance
of the Cadillac tax. Cutting back on healthcare will not be an option for
companies committed to attracting and retaining top talent. </div>
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<br /></div>
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In light of these healthcare sanctions, business and
financial strategists are being compelled to evaluate alternative approaches to
employee benefits that are more affordable and sustainable in the long-term.
Some companies are incorporating free and inexpensive benefits such as flex
hours, nap rooms, and casual dress days, but these fringe benefits are
insignificant recruiting tools compared to a robust healthcare plan.</div>
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<br /></div>
<div class="MsoNormal">
<b>When one door closes…<o:p></o:p></b></div>
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<br /></div>
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Business and financial strategists are being compelled to
find sustainable cost efficiencies to support the huge impending healthcare
expenditures, and many are finding solutions within the very context of their
existing corporate tax outlay.</div>
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<br /></div>
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Employers in all fifty states are already required to foot
the bill for Unemployment Insurance for their workforce as part of payroll tax
obligations. Unlike health insurance however, the premiums for Unemployment
Insurance virtually never increase from use, and most companies are unknowingly
already paying the maximum rates. By creatively incorporating the benefits of
Unemployment Insurance, companies are saving millions.</div>
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<br /></div>
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<b>How it’s Being Done<o:p></o:p></b></div>
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<br /></div>
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Severance is being replaced. </div>
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<br /></div>
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Until lately, the Supplemental Unemployment Benefits Plan
(SUB Plan) has been the best kept secret of the IRS. Like healthcare, the IRS
recognizes separation payments made under a SUB Plan as “benefits” rather than
“wages” making these payments exempt from payroll taxes for both the employer
and employee. Additionally, SUB Payments make use of the aforementioned
Unemployment Insurance and are made in conjunction with State Unemployment
Benefits. Employees maintain 100% of their pre-displacement income, while the
company funded portion is reduced dollar-for-dollar by the State benefit
collected by displaced employee. </div>
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<br /></div>
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“Many of our clients see it as an opportunity to offset
their healthcare plans by making use of government program that works in their
favor rather than against them,” says Elizabeth Corley, a senior executive at
Transition Services Inc., a major provider of SUB-Plan administration. “Over
the past year the popularity (of SUB Plans) has really taken off. It’s a
no-brainer when you see the savings available to the company.”</div>
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<br /></div>
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<b>In Conclusion</b></div>
<br />
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Keeping a competitive recruiting and financial edge amidst
the changing economic and political landscape will require innovation and
flexibility. Corporate America is fast embracing the “what got you here won’t get
you there” mentality and we’re likely to continue to see antiquated programs,
like severance, being replaced with leaner, more efficient programs to
counteract the Cadillac tax. If the Affordable Care Act is indeed here to stay,
it’s our job as business leaders and thinkers to invent and implement
sustainable solutions going forward.</div>
Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-88985125730143730172015-09-23T13:10:00.000-04:002015-09-23T13:59:27.096-04:00When Employee Attrition is Inevitable<div class="MsoNormal">
<b>When Employee
Attrition is Inevitable:<o:p></o:p></b></div>
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<b><br /></b></div>
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Studies predict that replacing a salaried employee costs 6
to 9 months’ pay on average. For a
manager making $40,000 a year, that’s $20,000 - $30,000 in recruiting and
training expenses.<b> </b>Other studies have predicted even higher costs
for high-earning employees - as much as double their annual salary!</div>
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<br /></div>
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According to the Bureau of Labor Statistics, turnover is
highest in industries such as trade and utilities construction, retail,
customer service, hospitality and service – industries that are often plagued
with volatile business cycles. Weather, retail cycles, manufacturing down-time,
plant-retooling, and maintenance outages in these industries can often bring
about a temporary shut-down, resulting in a temporary work stoppage and in many
cases, pause of payroll processing. </div>
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<br /></div>
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Retaining a workforce can be challenging enough during
regular operations, but when paychecks are routinely replaced with
unemployment, a workforce starts becoming unsustainable – leaving the company
to re-start operations on a slimmed-down workforce while simultaneously
re-recruiting, re-interviewing and re-training.<span style="color: #1f497d;"><o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<b>The solution:<o:p></o:p></b></div>
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<b><br /></b></div>
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Transition Services Inc., offers a fully managed Retention
Pay Program which helps prevent the loss of valued employees (Union or Non-Union)
by protecting their income during temporary work stoppages.</div>
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<br /></div>
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Our solution to providing affordable employee retention uses
a decades-old, IRS-approved structure, the <a href="https://urldefense.proofpoint.com/v2/url?u=http-3A__www.transitionservices.com_subplan-2Dintro.php&d=BQMGaQ&c=IV_clAzoPDE253xZdHuilRgztyh_RiV3wUrLrDQYWSI&r=JgrUYo6pXXM7KaLcyNtRqD5YdyIlTPzSiVr-rNY7ESY&m=8xt0sWl6VciCwxKqbH8I7eIHW8kGDxBpN4uDRB9GSzM&s=UGufsedg4o3_nUuRQ1oo70w2CN0txbqKaAo9EPq540g&e="><span style="color: windowtext; text-decoration: none; text-underline: none;">Supplemental
Unemployment Benefits Plan (SUB)</span></a>. Using this structure, employees
may maintain their weekly income during down-time while the employer saves 30%
- 40% compared to traditional programs. This is accomplished by the integration
of State Unemployment and re-classing payments from wages to benefits, thereby
saving employment taxes.</div>
<br />
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A SUB Plan bridges the gap between employee and company
needs during downtimes. For organizations with existing retainer-pay programs,
converting to a SUB Plan can free up significant dollars for other key
benefits. Or, if you don’t have a current retainer program, imagine if you
could guarantee resource repeatability for your company and your customers
rather than losing resources during downtimes because a retention program was
too expensive. Whichever category your organizations falls in, a SUB Plan has
the potential to dramatically enhance your employment offering and deliver a
competitive advantage. <br />
<br />
<br />
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Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-40492023174395269992015-04-14T12:39:00.001-04:002015-04-14T12:39:33.992-04:00What's the Point in Having Insurance?<div class="MsoNormal" style="margin-right: 0in;">
A few years ago I decided it was
time to trade in my four story walk-up in the East Village for something a
little more stylish (and by stylish I mean something with an elevator and
working AC.)</div>
<div class="MsoNormal" style="margin-right: 0in;">
As you might guess for a newer
building, there were a few extra conditions as part of the lease agreement.
Besides needing several cosigners to satisfy the exorbitant Manhattan rental contingencies,
the building required that I take out a $150,000 renter’s insurance policy to
cover catastrophic events such as burglar intrusions, fire, flooding, etc.
Thankfully none of these events took place and I enjoyed a peaceful year in my
new place.</div>
<div class="MsoNormal" style="margin-right: 0in;">
Skip ahead to the present – living in
a new apartment and recently engaged. The only dark cloud in those happy first
weeks of blissful wedding planning was the constant paranoia I experienced
about dropping my new ring down the sink drain, knocking the stone loose at the
gym, or leaving it at the nail salon. The solution – get good insurance on that
sucker.</div>
<div class="MsoNormal" style="margin-right: 0in;">
Doing my due diligence to find the
proper policy, I decided the best solution would be to take out the familiar
rental insurance policy and add a rider for the jewelry. Chatting with Kathy,
my friendly insurance agent, I was informed that in addition to fires, floods
and burglary, a renter’s insurance policy also covers things like accidental
damage and accidental loss. This set off an alarm – during my aforementioned
policy term I had “totaled” a brand new Macbook in a tragic water spill. The
purchase of a second laptop in a three month period was painful to say the
least. I asked Kathy what she thought of this.</div>
<div class="MsoNormal" style="margin-right: 0in;">
“Of course it would be covered! That’s what
the accidental damage clause is for, did you not file a claim?”</div>
<div class="MsoNormal" style="margin-right: 0in;">
No, Kathy, I did not know…</div>
<div class="MsoNormal" style="margin-right: 0in;">
This was rather frustrating for me
and it stayed with me a while after our conversation. I had essentially paid
for insurance, and not used it; like totaling a car and paying for a new one
out of pocket, or insisting to pay the whole bill at the doctor when insurance
would cover the visit in full. I was so annoyed with the senselessness of the
whole thing.</div>
<div class="MsoNormal" style="margin-right: 0in;">
<b>Which brings me to my next point – there’s a good chance that your
company is doing a version of this on a regular basis. Are you starting to feel
my frustration? </b></div>
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All fifty states require employers
to pay for Unemployment Insurance for their employees as part of payroll tax
obligations, and unlike car insurance, making use of these benefits virtually
never increases due to use, not to mention that most companies are already
paying the maximum rates. Why is it then, that the most commonly used severance
strategy is for a company to pay former employees their full wage during their
unemployment - including the very tax that pays for the Unemployment Insurance
that they are not using!</div>
<div class="MsoNormal" style="margin-right: 0in;">
Do your business a favor and be
informed about your rights to claims. Don’t fall prey to senseless spending
like I did.</div>
<div class="MsoNormal" style="margin-right: 0in;">
By integrating the benefits of
state UI, a company can free up significant employee benefits dollars to
reallocate where they are most needed. At a time when employee benefits dollars
are already stretched, integrating State UI into your severance plan has the
potential to dramatically enhance your employment offering and deliver a
competitive advantage in the area of attracting and retaining talent.</div>
<br />
<div class="MsoNormal" style="margin-right: 0in;">
To learn more about how to utilize
this type of strategy, visit <a href="http://www.transitionservices.com/">www.transitionservices.com</a></div>
Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-1426201460243549262015-03-09T10:21:00.000-04:002015-03-09T10:21:02.936-04:00This Year's HR Challenge: Attract and Retain Talent... On a Stretched and Finite Budget<span style="font-family: Calibri;">According to the Bureau of Labor Statistics Employment
Projections, Millennials are expected to make up the majority of the workforce
this year. It may be shocking then, to hear that a recent study by Aon Hewitt
indicated that nearly one half of this vast generation expects to switch jobs
in the next year, along with more than one third of the entire employee
population.<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">The study did a thorough job of uncovering the motivators
behind taking new employment. Although employee motivation and engagement has increasingly
been correlated with things like better work/life balance and development
opportunities, when asked what characteristic first attracted them to their
employers, 52% of employees cited good pay and benefits. A flexible work
environment came in at 35%, a far second.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">Whether your organization’s benefits are up to snuff is
likely up for some debate. Across the board when employees were asked whether
their total rewards supported their organization’s ability to attract and
retain employees, only half of respondents agreed, leaving much to be wanted in
that area. Underlining the significance of this was the finding that employees
who view their total rewards as competitive are 2.5 times more engaged than
other employees. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">It is not surprising then, that when employees were asked
what qualities they would most like to see improved to increase their overall
engagement or satisfaction, the top response was overwhelmingly good pay and
benefits.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">So then the question is: How do you improve compensation and
benefits given that you have finite resources? Where do you find the
incremental dollars to improve compensation and benefits packages? The answer
could be right under your nose. Often times benefits plans and HR strategies go
largely unexamined, wastefully leaving money on the table. Perhaps it is time
to examine your existing programs and vendors and consider less traditional
alternatives to employee benefits. Severance is a prime example. You might be
surprised to discover that updating a severance program can still provide a
generous benefit to terminated employees, yet free up significant dollar to put
towards retention.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">For insight and strategies to put more HR dollars back into
employee benefits to maintain your organizations competitive edge, <a href="http://www.transitionservices.com/" target="_blank">visit TSI on the web</a>.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-size: xx-small;"><span style="font-family: StoneSansIIITCPro-Bk; font-size: 9pt;">Aon Hewitt’s </span><i><span style="font-family: StoneSansIIITCPro-BkIt; font-size: 9pt;">Inside the Employee
Mindset </span></i><span style="font-family: StoneSansIIITCPro-Bk; font-size: 9pt;">study
comes from a survey administered by The </span><span style="font-family: StoneSansIIITCPro-Bk; font-size: 9pt;">Futures Company online within the U.S. in
August 2014. A diverse group of 2,539 employees working in companies </span><span style="font-family: StoneSansIIITCPro-Bk; font-size: 9pt;">with
at least 1,000 people completed the comprehensive survey.<o:p></o:p></span></span></div>
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Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-85528659730916485602015-03-02T10:57:00.000-05:002015-03-02T10:58:02.553-05:00Waiting for the Next Recession<div style="font-family: Calibri; font-size: 15px;">
According to the latest jobs report, the economy is on the up and up. Hiring is booming, competition is fierce and the future looks bright. We’ve made it out of the dark, are busy tackling the new challenges that come with growth, and are no longer plighted with recession-era problems. HR is consumed with enhancing benefits, retaining current employees, and competing for top talent to bring on board. As businesses bulk up on staff, memories of mass layoffs quickly fade, giving way to an optimistic future.</div>
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Lately, when I’ve spoken to organizations about updating their employee transition strategy, they ask whether it makes sense to wait until the next economic downturn to implement cost-saving changes. The answer is quite simply, no. For several reasons, but mainly that it is impossible to predict when that time will be, and once it is time to for action, it is entirely too late to implement an organization-wide program change. The reality is that what goes up will always come back down, but there is no reliable way of knowing when or why it will happen. Roles may be condensed, business might decline, reorganizations may be necessary, and new technology could disrupt the status quo - even during times of general economic prosperity.</div>
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</div>
<div style="font-family: Calibri; font-size: 15px;">
According to a <a href="http://www.bloomberg.com/news/articles/2015-02-23/viacom-said-to-plan-companywide-job-cuts-as-tv-ratings-decline"><span style="color: blue;"><u>Bloomberg report</u></span></a>, Viacom, owner of the MTV cable TV networks and Comedy Central, is preparing for a large-scale layoff following declines in ratings and advertisement sales due to a significant loss of viewers to Internet media such as YouTube, Facebook and Hulu.</div>
<div style="font-family: Calibri; font-size: 15px;">
</div>
<div style="font-family: Calibri; font-size: 15px;">
In the oil industry, falling commodity prices are affecting even the biggest players. Marathon Oil Corp. announced it would it cut its budget for a second time, to $3.5 billion this year, from their 2014 spending budget of about $5.9 billion, along with laying off about 10 percent of their workforce. Additionally, Apache Corp plans to cut about 5% of their 5,000 employees and ConocoPhillips told employees to expect a pay freeze and layoffs in the future.</div>
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These examples only begin to scratch the surface; many organizations will face challenges and downsizing unrelated to the economy at large. If your motivation behind updating your employee transition strategy is protection from future downturns, delaying implementation could be detrimental. The only time you have to prepare for tomorrow is today. To learn more about implementing cost-saving transition strategies, visit <a href="http://slidesha.re/1LIEOWf"><span style="color: blue;"><u>http://slidesha.re/1LIEOWf</u></span></a></div>
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<div style="margin-bottom: 5px;">
<strong> <a href="https://www.slideshare.net/LanaPancoast/supplemental-unemployment-benefits-by-tsi-022515" target="_blank" title="Supplemental Unemployment Benefits (SUB) by TSI ">Supplemental Unemployment Benefits (SUB) by TSI </a> </strong> <br />
<br />
<span style="-webkit-text-stroke-width: 0px; background-color: #eeeeee; color: #3b3835; display: inline !important; float: none; font-size-adjust: none; font-stretch: normal; font: 14px/22.39px HelveticaNeue, "Helvetica Neue", Helvetica, Arial, "Lucida Grande", sans-serif; letter-spacing: normal; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;">Supplemental Unemployment Benefits (SUB) Plans are quickly gaining popularity across industries as a less costly alternative to severance. The IRS approved Plan structure works to simultaneously maintain the income of displaced employees while also generating significant savings for the organization compared to traditional severance, typically 30-45%. This presentation gives a general overview of how a SUB Plan is structured and administered, and demonstrates two examples of real savings achieved by organizations that switched from traditional severance to SUB.</span></div>
Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-5532157305573570572015-02-09T12:25:00.000-05:002015-02-09T12:25:10.857-05:00Employee Engagement and OffboardingWith an abundance of jobs and a shortage of qualified professionals, high churn this year will be inevitable. In fact, according to Robert Half UK, 80% of business executives are concerned about losing their top performers to other job opportunities in 2015.
<br />
<br />
What is the solution to this?... Employee Engagement! The fix-all solution to retention, widely encouraged by HR leaders and consultants. But what about when employees still decide to leave? This is typically when we politely say goodbye and stop wasting our time and resources on a “lost cause.”
<br />
<br />
While it makes sense to direct employee engagement efforts to current employees, research give us deeper insight. A recent study by the Aberdeen Group concluded that organizations with a formal approach to off-boarding were more likely to improve both retention (71% vs 57%) and engagement (44% vs. 33%) compared to organizations with no formal process for off-boarding employees.
<br />
<br />
Saying goodbye properly through successful off-boarding can have a real impact on organizational performance and workforce engagement and therefore should be treated as a critical component of the employee lifecycle. Currently only 29% of organizations have a formal off-boarding process in place, implying a large-scale opportunity for improvement across the board.
<br />
<br />
For more tips on employee engagement, visit Aberdeen's website at <a href="http://www.aberdeen.com/research/8494/ai-offboarding-talent-management/content.aspx">http://www.aberdeen.com/research/8494/ai-offboarding-talent-management/content.aspx</a>
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Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-74218271894480333272015-02-02T09:00:00.001-05:002015-02-03T10:20:10.723-05:00Juno's Lesson on Being PreparedIf we learned anything from our recent scare with Juno, it’s that it is always better to be prepared. Last Monday night in New York City, as the blizzard was predicted to rip through my neighborhood, I slept soundly, confident that preparations were in place for whatever might happen. My stockpile was supplied with gallon jugs of water and enough granola bars to last a month, and the mayor had put every precaution in place to make sure people were safe. Waking up in my warm apartment on Tuesday to find a layer of shimmering white powder on the surrounding buildings – and no major catastrophe to speak of – quite literally looked like icing on a cake.<br />
<br />
That day on the news, officials were challenged on whether they had gone overboard with preparations. In response to the criticism, Mayor de Blasio asked, "Would you rather be ahead of the action or behind? Would you rather be prepared or unprepared? Would you rather be safe or unsafe? To me it was a no-brainer: we had to take precautions to keep people safe."<br />
<br />
Putting preparations in place cost the city of New York $200M, but what if preparations had not been made, and the blizzard did not so narrowly miss? What would it cost in dollars, time, and human lives if we did not bring in the proper equipment, did not get cars off the street, and did not have work crews ready to assist? Is a 50 mile margin worth the gamble?<br />
<br />
Working in the business of employee transition, I couldn’t help but compare this scenario to the economy and HR planning. For events like natural disasters, there is no shortage of contingency plans, which are undoubtedly updated and reexamined regularly to ensure absolute effectiveness. It goes without saying that being prepared for the next storm is just as important as it was to be prepared for the last one.<br />
<br />
In contrast, organizations have the tendency to focus on the problems that are directly in front of them and deal with disasters as they happen – especially when it comes to downsizing. As we surface from the recent financial crisis, it seems the last thing on our minds is preparing for the next one. Maybe your organization made it through the crisis without laying people off; maybe you were laid off yourself. Regardless of what happened, there is no way to know when the next crisis may come, when new technology will challenge your business, or when downsizing might really be the best option to increase your efficiency.
<br />
<br />
Much of the time, companies resist addressing their layoff and off-boarding strategies until they are forced to take action. Having put off creating an efficient strategy, executives find themselves backed into a corner, forced to follow an outdated severance policy during a time in which this is tough to afford.<br />
<br />
Consider taking the time now to put contingency plans in place – before the state of emergency occurs. <a href="http://bit.ly/SUBplan">Become educated on what your options are</a>, and implement strategies that align with your business needs. Modernize your severance policy and your offboarding processes. It’s a smaller effort to development a plan. It’s a MUCH larger effort to respond to a crisis as it is happening.
<br />
<br />
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<script>!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+'://platform.twitter.com/widgets.js';fjs.parentNode.insertBefore(js,fjs);}}(document, 'script', 'twitter-wjs');</script>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-41148931880491507022015-01-27T13:33:00.000-05:002015-01-27T13:42:05.052-05:00The HR Role in Flux<div class="MsoNormal">
According to Deloitte’s most recent <i>Global Human Capital
Trends Report</i>, 77% of business executives believe that re-skilling the HR
function is a top global issue. As technology and automation advance and
outsourcing becomes more available, the traditional HR function of “people administration”
is quickly becoming obsolete. To keep up with today’s business world, it is
essential that HR embraces a strong focus on “people performance” and aligns
its initiatives with business leaders and issues.</div>
<div class="MsoNormal">
Making that transition sounds easy enough in theory, but it
got us thinking: what would that actually look like? How might your HR team
operate as a business unit aligned with your organization’s overall goals? How
would your focus change?</div>
<div class="MsoNormal">
Following is a list of questions that may give you insight
into how you can implement this new perspective:</div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -0.25in;">What are my organization’s 2015 objectives and
how can HR support and contribute to the business initiatives?</span></li>
<li><span style="text-indent: -0.25in;">Where has our HR organization been accepting the
status quo? In what areas are we stagnant?</span></li>
<li><span style="text-indent: -0.25in;">When was the last time we evaluated our vendors?
Are they the most efficient and effective?</span></li>
<li><span style="text-indent: -0.25in;">Are we using current technology?</span><span style="font-family: Symbol; text-indent: -0.25in;"><span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal;"> </span></span></li>
<li><span style="text-indent: -0.25in;">Where are we spending unnecessarily?</span></li>
<li><span style="text-indent: -0.25in;">How could our department contribute to the
company’s bottom line?</span></li>
<li><span style="text-indent: -0.25in;">What are we doing to ensure we have a high
performance team and culture?</span></li>
</ul>
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Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-51299174980263514622014-04-04T12:03:00.000-04:002014-04-04T12:03:10.542-04:00United States vs. Quality Stores, Inc.<div class="MsoNormal" style="margin: 12pt 0in;">
<span style="font-family: Trebuchet MS, sans-serif;">On March 25, 2014, the Supreme Court of the United States ruled in
<i><a href="http://www.supremecourt.gov/opinions/13pdf/12-1408_6468.pdf" target="_blank">United States v. Quality Stores, Inc., No. 12-1408</a></i>, that severance payments, which
were made pursuant to plans that did not tie payments to receipt of state unemployment
benefits, are taxable under the Federal Insurance Contributions Act (FICA) when
made to employees whose employment is involuntarily terminated. The Court
reasoned that the definition of wages for FICA purposes encompasses severance
payments and that the severance at issue in this case was not exempt from FICA
tax. <br />
<br />
<b>Background</b><br />
<br />
Quality Stores, Inc., a specialty retailer, discharged a large number of employees
in 2001 during bankruptcy proceedings and paid these employees severance
payments according to a company severance plan. Quality Stores reported the severance payments
as wages on W–2 tax forms, paid any required FICA taxes, and also withheld from
employees’ severance payments the required FICA taxes. The company later asked those
former employees to allow it to file FICA tax refund claims for them. Quality Stores filed a FICA-tax refund claim
on behalf of the former employees and itself, which the Internal Revenue
Service (IRS) neither allowed nor denied, and then initiated proceedings in the
Bankruptcy Court seeking a refund of the amount of taxes paid. The Court granted judgment in the company’s
favor. On appeal, both the Federal District
Court and the Sixth
Circuit Court of Appeals ruled in favor of
Quality Stores. The Sixth Circuit held
that the severance payments were not subject to FICA taxes because they
qualified as supplemental unemployment benefits compensation (SUB) as defined
by Internal Revenue Code (IRC) section 3402(o)(2)(A). The Supreme Court agreed to hear
the case to decide whether severance payments
made to involuntarily-terminated employees are FICA-taxable.<br />
<br />
<b>Considerations</b><br />
<br />
In its March 25 ruling, the Supreme Court noted that FICA’s definition of wages
includes the severance payments Quality Stores made to its employees. Under both FICA’s definition of “wages” and
the plain meaning of the terms, severance payments are wages. Further, the Court noted that the fact that
FICA exempts some termination-related payments from the definition of wages
shows that the severance payments at issue were purposely not exempted. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 12pt 0in;">
</div>
<div class="MsoNormal" style="margin: 12pt 0in;">
<span style="font-family: Trebuchet MS, sans-serif;">Quality Stores’ argument and the Sixth Circuit’s decision were
incorrect, the Supreme Court ruled, in using IRC section 3402(o) to conclude
that severance payments are not included in the definition of wages for the
purposes of income tax withholding and thus, are not included in the definition
of wages for FICA taxation purposes. Because
IRC section 3402(o) covers more than just severance payments that were excluded
from income-tax withholding, the Sixth Circuit’s and Quality Stores’ broad interpretation
of the section failed. The Court therefore
concluded that IRC section 3402(o) “does not narrow the term ‘wages’ under FICA
to exempt all severance payments” from FICA tax.<br />
<br />
The Court also noted that the severance payments at issue in the case were not
linked to the receipt of state unemployment benefits. Based on these considerations, the Court
reversed the decision of the Sixth Circuit and held that the severance payments
which had been made to involuntarily discharged employees, varied based on job
grade and seniority, and had not been linked to the receipt of state
unemployment benefits, constituted taxable wages.<br />
<br />
<b>Impact on Employers</b><br />
<br />
Employers across the United States utilizing a <a href="http://www.transitionservices.com/subplan-intro.php" target="_blank">SUB plan</a> linking separation
benefit pay to the receipt of state unemployment benefits, in accordance with
IRS SUB Plan guidelines, will be unaffected by this ruling, as the Supreme
Court left the IRS rulings intact. Separation
pay made under a SUB plan to involuntarily separated employees that is: 1) not
paid in a lump sum; and 2) linked to the receipt of state unemployment benefits,
remains FICA-exempt.</span><span style="font-family: Book Antiqua, serif;"><o:p></o:p></span></div>
Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-67050241483216727712013-10-01T12:22:00.000-04:002013-10-01T12:22:13.324-04:00<div style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: Trebuchet MS, sans-serif;"><span style="color: #222222; font-size: 11pt;">This month, five years ago,
began the greatest financial crisis in modern times. Events following the
September 15 <a href="http://www.cnbc.com/id/26638883" target="_blank">collapse of the Lehman Brothers investment bank</a>, including massive
and country-wide layoffs and a housing crisis that essentially destroyed the
U.S. market, have left many questioning the strength of our economy and
wondering if the labor market will ever recover.</span><span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="color: #222222; font-size: 11pt;"><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="font-family: Trebuchet MS, sans-serif;"><span style="color: #222222; font-size: 11pt;">The
Labor Department’s most recent jobs report suggests that yes, recovery is in
the works, although at a staggeringly slow pace. The <a href="http://bls.gov/news.release/pdf/empsit.pdf" target="_blank">September 6 reported decrease in the unemployment rate to its current 7.3%</a> should mean that the economy must be getting better. However, it has been
suggested that decline is due not to a growth in the number of people working,
but rather to a decrease in the size of the labor force. In other words,
the number of people working, those comprising the labor force, continues to
shrink. In fact, the number of people working is now at a 25-year
low. And as the 6.1 million unemployed workers continue to file for unemployment, it is interesting to consider what might
actually be the most telling measure of the number of unemployed throughout the
country.<u1:p></u1:p></span><span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="color: #222222; font-size: 11pt;"><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="color: #222222; font-size: 11pt;"><span style="font-family: Trebuchet MS, sans-serif;">Regardless
of that measure, there are<span class="apple-converted-space"> </span><b><u>fewer</u></b><span class="apple-converted-space"> </span>Americans working. This
low is due in part to the <a href="http://www.bls.gov/cps/demographics.htm" target="_blank">demographics</a> of our workers…the aging U.S.
population means <a href="http://www.bloomberg.com/news/2013-09-29/fed-too-familiar-with-lost-labor-seeking-new-message-for-policy.html" target="_blank">more workers than in past years</a> are either retiring, or choosing to no longer seek work after becoming
unemployed. It is important to understand, however, that this 25-year low
is also due in part to both discouraged workers abandoning the job search, and
to individuals choosing to be selective about returning to work.</span></span></div>
<div style="margin-bottom: 0.0001pt;">
<br /></div>
<div style="margin-bottom: 0.0001pt;">
<span style="font-family: Trebuchet MS, sans-serif;"><span style="color: #222222; font-size: 11pt;">Unemployed
workers today are savvier than those of times past. Although past trends
indicate companies are less willing to hire a long-term unemployed individual
over another with a shorter unemployment duration [link to article here], the
modern unemployed worker is reportedly holding off for a job offer that meets his or her </span><span style="color: #222222; font-size: 11pt;">requirements. While this is </span><span style="color: #222222; font-size: 11pt;">seemingly counter-intuitive at a time of high unemployment, with
large severance packages offered to the unemployed, and relatively long State
Unemployment award grants, many laid-off workers have the ability to be
selective. To recruit and retain the highest caliber talent, might it be
time for employers to improve their benefit offerings to “fit the need” of the
selective worker?<u1:p></u1:p></span><span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="color: #222222; font-size: 11pt;"><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="font-family: Trebuchet MS, sans-serif;"><span style="color: #222222; font-size: 11pt;">Recent
survey research indicates the <a href="http://www.shrm.org/research/futureworkplacetrends/documents/13-0146%20workplace_forecast_full_fnl.pdf" target="_blank">key Human Resource issues upcoming for 2014</a> include retention and recruitment. With the changing
health benefits landscape and the ongoing recession, two key issues for </span><span style="color: #222222; font-size: 11pt;">individuals
going back to work are quality health insurance and excellent separation
benefits; both can be structured in a way that strengthens recruitment efforts. </span><span style="color: #222222; font-size: 11pt;">While not government-mandated, separation benefits are
more often than not awarded to employees upon an involuntary termination.
Many </span><span style="color: #222222; font-size: 11pt;">organizations have
recently reexamined their </span><span style="color: #222222; font-size: 11pt;">separation
benefit offerings in the wake of huge recession spending. And a key theme
is central to that examination…how to save money and still provide financial
support to a departing worker.<u1:p></u1:p></span><span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="color: #222222; font-size: 11pt;"><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="font-family: Trebuchet MS, sans-serif;"><span style="color: #222222; font-size: 11pt;">A <a href="http://www.transitionservices.com/subplan-intro.php" target="_blank">SUB Plan</a> gives an organization the ability to offer competitive separation benefits
to employees without spending a fortune. Government benefits awarded (in
most cases) to laid-off workers, integrated with monetary separation benefits
provided by a company, allow a SUB Plan to significantly reduce the cost of a
layoff for a company in distress. The SUB Plan vehicle can allow a
company to offer, for example, twelve weeks of separation benefits rather than
eight, or eight weeks of benefit instead of six. Having a SUB Plan in
place can also allow a company to strategically implement other attractive
employee benefits, such as a more comprehensive health insurance package.<u1:p></u1:p></span><span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="color: #222222; font-size: 11pt;"><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></span></div>
<div style="margin-bottom: 0.0001pt;">
<span style="color: #222222; font-size: 11pt;"><span style="font-family: Trebuchet MS, sans-serif;">Workers,
even in a tough employment market, have a leg up on hiring organizations.
It is necessary now for organizations to be not only competitive within the
industry, but also competitive within the labor market. Employee benefits
are often a deciding factor in an individual’s choice to return to work or stay
unemployed. Employers have the ability to do this, it is only a matter of
implementing the right tools and utilizing the right resources to get the best people while saving significant long-term costs.</span></span></div>
<div class="MsoNormal">
<br /></div>
Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-52666111914094322092013-06-04T16:18:00.001-04:002013-06-04T16:18:35.313-04:00Back to Basics<span style="font-size: small;"><span style="font-family: 'Book Antiqua', serif; font-weight: normal;">Recent headlines announce such things as, “<a href="http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/Post-Reform-Health-Strategies.aspx" target="_blank">Employers Adjust Health Benefit Strategies in Reform’s Wake</a>,” and, “</span><span style="color: black; font-family: 'Book Antiqua', serif; font-weight: normal;"><a href="http://www.nytimes.com/2013/05/30/business/new-rules-give-employers-leeway-on-use-of-health-incentives.html" target="_blank">Employers Get Leeway on Health Incentives</a>,</span><span style="color: #111111; font-family: 'Book Antiqua', serif; font-weight: normal;">”</span><span style="font-family: 'Book Antiqua', serif; font-weight: normal;"> as the benefits landscape continues to change to meet the country’s ever-changing employment regulations. As the benefits landscape rapidly changes, so does the unemployment situation in the United States, with nearly 75% of its metropolitan areas <a href="http://bls.gov/news.release/pdf/metro.pdf" target="_blank">reporting a continuing decrease in jobless rates</a>. With more workers returning to the workplace, lasting financial security has become of greater concern to many, as the recession has taken a significant financial toll on the millions of workers displaced in the past several years.</span></span><span style="font-family: 'Book Antiqua', serif;"><br /></span><br />
<span style="font-family: 'Book Antiqua', serif;">Individuals returning to work and the organizations hiring them face several challenges over the next several years. </span><a href="http://www.shrm.org/research/surveyfindings/articles/pages/challengesfacinghroverthenext10years.aspx" style="font-family: 'Book Antiqua', serif;" target="_blank">Recent survey data</a><span style="font-family: 'Book Antiqua', serif;"> indicates that retaining and awarding quality employees presents the biggest challenge moving forward out of the recession. At the same time, employees returning to work seek benefits beyond just reasonable salaries; employees want flexibility, career development, and financial security, especially with the ever-present threat of a double-dip recession. Combined with the evolution of health benefit strategies as the federal government requires, one might ask, isn’t it time to reexamine employment benefits as a whole, and take a step back to basics?</span><br />
<span style="font-family: 'Book Antiqua', serif;"><span style="color: #222222;"><br /></span></span>
<span style="font-family: 'Book Antiqua', serif;"><span style="color: #222222;">What is the point of an employment benefit? Theoretically, a benefit meets both the goals of an employer and those of an employee. Most employment benefits are offered to improve employee engagement and retention throughout an organization, while supporting, in some way, the financial security of an employee. Among others, employee benefits often include health insurance, retirement benefits, paid vacation leave, and separation benefits, all variable between organizations and between employees within the same organization. A quick look at these four specific types of benefits shows these benefits are becoming more employee-driven </span>and more employee-centric. Back </span><span style="font-family: 'Book Antiqua', serif;">to basics…what does the <u>employee</u> need? </span><br />
<span style="font-family: 'Book Antiqua', serif;"><br /></span>
<span style="font-family: 'Book Antiqua', serif;">Healthcare is currently under </span><span style="font-family: 'Book Antiqua', serif;">high scrutiny from its many stakeholders</span><span style="font-family: 'Book Antiqua', serif;">, with </span><span style="font-family: 'Book Antiqua', serif;">increasing</span><span style="font-family: 'Book Antiqua', serif;"> </span><span style="font-family: 'Book Antiqua', serif;">costs and changing requirements</span><span style="font-family: 'Book Antiqua', serif;">. </span><span style="font-family: 'Book Antiqua', serif;">Wellness programs are more popular as employee health behavior is a consideration for <span style="color: #222222;">many health insurance costs. Retirement benefits are an ever-evolving benefit structure, as more and more o</span>rganizations shift from offering pensions to differently structured and employee-financed 401(k) retirement plans. Vacation leave</span><span style="font-family: 'Book Antiqua', serif;"> </span><span style="font-family: 'Book Antiqua', serif;">is an increasingly important benefit as workers seek a good work/life balance in a ever more demanding employment environment. </span><span style="font-family: 'Book Antiqua', serif;"> Sep</span><span style="font-family: 'Book Antiqua', serif;">aration benefits? Rarely discussed at the time of hire, yet always expected at the time of departure. </span><span style="font-family: 'Book Antiqua', serif;">It is the rare individual who expects to remain employed with one company for life. As re-structuring has become part of normal business operations, why not have a separation benefits component to an overall benefits plan? One that balances the needs of the employer and the employees, communicated as clearly as any other benefit,</span><span style="font-family: 'Book Antiqua', serif;"> </span><span style="font-family: 'Book Antiqua', serif;">and updated as other basic benefits and organizational goals grow and change? </span><br />
<span style="font-family: 'Book Antiqua', serif;"><span style="color: #222222;"><br /></span></span>
<span style="font-family: 'Book Antiqua', serif;"><span style="color: #222222;">Going back to basics means reexamining the fundamental point of a benefit. Separation bene</span>fits were fundamentally designed to offer financial support at the time of involuntary separation to</span><span style="font-family: 'Book Antiqua', serif;"> </span><span style="font-family: 'Book Antiqua', serif;">maintain an income stream</span><span style="font-family: 'Book Antiqua', serif;"> during the time of unemployment. Separation benefits now are so far beyond basic, often providing months of pay to individuals with no regard for that individual's needs. </span><span style="font-family: 'Book Antiqua', serif;">Separation benefits</span><span style="font-family: 'Book Antiqua', serif;"> costing employers </span><span style="font-family: 'Book Antiqua', serif;">millions without clarity of purpose or result for the company</span><span style="font-family: 'Book Antiqua', serif;">. Separation benefits have veered so far away from the basic, and from the point of a benefit, that it seems time to reexamine the benefit itself. Step back and form the benefit around the employee and the employer, meeting goals of both in a modern and changing world.</span>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-41807856822484487852012-09-11T14:10:00.000-04:002012-09-11T14:10:23.516-04:00Corporate Tax Reductions Revisited<br />
<div style="text-align: justify;">
<span style="font-family: Trebuchet MS, sans-serif;">Embroiled in the 2012 election is a
battle over the economy. Whomever of the presidential candidates wins
office will be faced with unemployment numbers exceeding 12,500,000, with 40%
of those individuals having been unemployed for greater than 27 weeks. <a href="http://www.gallup.com/poll/1675/most-important-problem.aspx">Polls</a> show
the economy being one of the most important issues on deck for voters, with
unemployment and jobs creation clearly weighing heavily on the minds of
Americans. As the candidates debate the funding of unemployment benefits
and how to get people back to work, companies continue to pay tax dollars to
every state where they employ workers to fund state unemployment benefits.
And although the <a href="http://bls.gov/news.release/empsit.nr0.htm">jobless
rate</a> did slightly decrease in August, the Bureau of Labor Statistics
continually reports very large numbers of <a href="http://bls.gov/news.release/mmls.nr0.htm">mass layoff actions</a>, giving
evidence that companies continue to let employees go. Based on the
reported numbers of initial filings for Unemployment Benefits following these
layoffs, these companies presumably direct their former employees to seek
support from State Unemployment agencies.</span></div>
<span style="font-family: Trebuchet MS, sans-serif;"><div style="text-align: justify;">
<span style="font-size: xx-small;"><br /></span></div>
<div style="text-align: justify;">
Also on the docket is saving
corporations from paying taxes. Slash corporate taxes, give corporations
tax breaks for hiring people out of work, revamp the funding
of Unemployment Benefits...just a few of the suggestions put out
there. What about, however, suggesting that corporations stop paying the
same tax twice for the same person. SUI and FUTA taxes, paid respectively
to the state and federal governments by a company for each of its employees,
are the taxes that fund Unemployment Benefits. Theoretically, these taxes
will act to fund Unemployment Benefits paid to a person if that company
eliminates their job and lays them off. If a company terminates an
employee and pays severance to that person, SUI and FUTA are also charged by
state and federal governments on all severance monies paid.</div>
<o:p><div style="text-align: justify;">
<span style="font-size: xx-small;"><br /></span></div>
</o:p><div style="text-align: justify;">
While several suggestions have been put
forth arguing that the federal government stop funding unemployment
benefits, what is not addressed in this argument is that <b><u>states</u></b>
fund the initial 26 weeks of an individual's Unemployment Benefit. States
fund these initial weeks with taxes collected from the corporation who once
employed the individual now collecting the benefits. Federal funding of
Unemployment Benefits comes into play when states exhibit high rates of unemployment.
These <a href="http://workforcesecurity.doleta.gov/unemploy/supp_act.asp">Emergency
Unemployment Compensation</a> (EUC) benefits can last up to 99 weeks in some
cases. While EUC is 100% federally funded, <a href="http://workforcesecurity.doleta.gov/unemploy/uitaxtopic.asp">FUTA taxes</a> paid
by corporations to the federal government fund these emergency benefits used
only in times of high unemployment. </div>
<div style="text-align: justify;">
<span style="font-size: xx-small;"><br /></span></div>
<div style="text-align: justify;">
The Internal Revenue Service, a branch
of the federal government, put into place 60 years ago a program to help
organizations save money on severance through tax breaks. This
program, called a <a href="http://www.transitionservices.com/subplan-intro.php">Supplemental
Unemployment Benefits</a> program, allows organizations to save money in SUI and
FUTA taxes by paying separation benefits to an employee under an alternative
tax structure. When paying separation benefits under a Supplemental
Unemployment Benefits program, an employee takes advantage, in the form of
either State or EUC Unemployment Benefits, of funds paid to the government as
SUI and FUTA, and the company can first deduct that amount of money from the
separation benefits paid to employees. Second, the former employer does
not have to pay SUI and FUTA taxes on separation benefits, as it would by law
on a severance payment. By doing this, a company pays taxes for an
employee’s separation benefits <b>one time</b>, when that person was employed,
in the form of one-time taxes. Choosing to pay severance effectively
forces an employer to pay these taxes twice, as well as increasing an
employer’s overall financial burden to a terminated employee.</div>
<div style="text-align: justify;">
<span style="font-size: xx-small;"><br /></span></div>
<div style="text-align: justify;">
Arguably, what should be petitioned for
is a revamping of separation benefits programming in all corporations.
Perhaps call it regulation, or perhaps merely revisiting what is too often
considered a “golden parachute” to well-paid employees But at the same
time, recognize that it provides a corporate tax break. A bipartisan
solution that doesn't require reinventing the wheel.</div>
</span>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-69198692469008829692012-05-31T15:56:00.000-04:002012-05-31T15:56:42.842-04:00Evolving Benefits and the Lack Thereof<br />
<div class="MsoNormal">
<span style="font-family: Georgia, 'Times New Roman', serif;">A <a href="http://money.cnn.com/2012/05/31/pf/employee-benefits/index.htm?source=cnn_bin" target="_blank">new report</a><span style="font-size: small;"> by </span><a href="http://www.cnn.com/" target="_blank">CNN</a><span style="font-size: small;"> discusses the shift in
company-paid employee benefits over the past five years, as employees have been
confronted with the growing need to take on the cost of some portion of their
own benefits. Medical insurance has been cited as the most commonly and
most often updated benefit, as has a reduced or, in some cases, completely
eliminated, 401(K) employer match. Such changes have been forced upon
employers in the face of tough economic times, and some </span><a href="http://money.cnn.com/2012/05/31/pf/employee-benefits/index.htm?source=cnn_bin" target="_blank">forecasts</a><span style="font-size: small;"> indicate that more than 50% of large organizations may drop health
care coverage altogether in the next five years if economic conditions and
medical costs do not improve. Considering the new </span><a href="http://www.irs.gov/pub/irs-drop/rp-12-26.pdf" target="_blank">IRS ruling</a><span style="font-size: small;"> increasing the personal out-of-pocket contribution limit for Health
Savings Accounts for 2013, this forecast may very well be accurate.</span><o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Georgia, 'Times New Roman', serif;">Notwithstanding, benefits continue to cost organizations huge
amounts of money, and managing these in a cost-demanding environment is
a substantial investment in itself. Using a recent announcement
by Hewlett Packard that the organization's restructuring efforts will cost
27,000 employees their jobs, consider the team responsible for that layoff.
This team will presumably include many human resource professionals,
employment counsel, payroll representation, and a dedicated group of
individuals tasked with designing and managing the ongoing benefits for this
group of 27,000. Further, as noted in an </span><a href="http://www.cnn.com/2012/05/25/opinion/matloff-hp-layoffs/index.html?iref=allsearch" style="font-family: Georgia, 'Times New Roman', serif;" target="_blank">opinion piece</a><span style="font-family: Georgia, 'Times New Roman', serif;"> about the HP layoff, those HP-ers who survive the massive force reduction will
be faced with increasing job demands and greater overtime requirements. </span></div>
<div class="MsoNormal">
<span style="font-family: Georgia, 'Times New Roman', serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Georgia, 'Times New Roman', serif;">Severance benefits, while not as drastically affected over the
past five years as have been medical benefits, are often on the chopping block
as organizations strive to reduce costs. However, because severance
benefits are too often viewed as an entitlement rather than a benefit, few
companies are swift to update severance benefit plans even in the times of
struggle. Growing healthcare costs have forced the burden of the costs
partially onto the beneficiary. Why has the business world been so
reluctant to update a benefit so costly and outdated?</span></div>
<div class="MsoNormal">
<span style="font-family: Georgia, 'Times New Roman', serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Georgia, 'Times New Roman', serif;">Modernized severance plans don't have to cost employees a dime,
unlike modern medical benefit plans. Modern severance plans can, however,
restructure the IRS tax burden of a separation benefit and be less costly to
both an organization and an individual. Modern severance plans can also
integrate sources of funding such as state and federal unemployment benefits
provided to involuntarily-separated individuals, allowing a company to perhaps
save costs and terminate fewer employees, or perhaps even enhance a separation
benefit awarded to a terminated individual to provide financial support for a
longer amount of time. Further, modern severance plans can be
administered by an outside party, eliminating the need for a (costly) internal
"layoff team" and leaving the administration and legal regulation of
the plan to an outside vendor.</span></div>
<div class="MsoNormal">
<span style="font-family: Georgia, 'Times New Roman', serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Georgia, 'Times New Roman', serif;">Thinking again about the HP restructure, what could potentially
amount to a billion-dollar total severance payout could be reduced
exponentially by simply adopting a modern and cost-effective separation
benefits plan. And just a though, perhaps severance benefit savings may
allow those leftover employees, still with greater workloads and more overtime,
to have reduced out-of-pocket healthcare costs. Benefits that are
actually beneficial!</span></div>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-62370235753002128872012-03-06T09:19:00.004-05:002012-03-06T10:36:30.725-05:00How to Make Severance Equitable<p class="MsoNormal"><span><span>The 2012 election has, for a good number of reasons, many economic undertones. Tax cuts, welfare spending, healthcare, unemployment benefits...all are on the table. Should all people throughout the country have rights to all benefits and services, such as healthcare and ongoing unemployment support, due to the mere virtue of living in the United States? Some voters believe every person should be given unrestricted access to all benefits. Others say only the specifically</span><span class="apple-converted-space"> </span><span style="background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; ">qualified<span class="apple-converted-space"> </span></span><span>should have rights to certain of these. An unanswerable question, as dissatisfaction is inevitable under any solution.</span></span></p> <p class="MsoNormal"><span>What about a benefit, however, whose regulations governing its availability to people throughout the country vary drastically between states? When a person living in California is allowed to collect a benefit yet an identical person living one mile east in Nevada cannot? Or two identical people in New York and its neighboring Massachusetts? Such is the case with Unemployment Benefits.</span></p> <p class="MsoNormal"><span>Massachusetts and Nevada, as is the case in all states, allow persons involuntarily separated from their jobs to collect Unemployment Benefits. As is often the case in an involuntary termination, separated persons receive severance benefits of some sort. In Massachusetts and Nevada, a person may not collect State Unemployment Benefits at the same time as any company-paid severance benefits. Assuming a severance benefit is paid as a lump sum, in Massachusetts, a separated individual may not collect State Unemployment during the week in which this lump sum is paid. In Nevada, the individual may not collect State Unemployment for the entire period of time for which the severance benefit is designed to support the newly unemployed person. If an individual is given a lump-sum payment equal to eight weeks of pay, this means a Nevada resident may not collect unemployment for the first eight weeks of unemployment.</span></p> <p class="MsoNormal"><span>Take New York and California, however. Both of these states allow individuals to collect company-paid severance and State Unemployment Benefits at the same time. For an organization who has employees in multiple states, this creates an inequity when terminated people receive identical benefits yet are located in different states, and some may collect what often amounts to a few hundred more dollars each week than others.</span></p> <p class="MsoNormal"><span><span>One way to solve this problem is the institution of a Supplemental Unemployment Benefit (SUB) Plan, a plan designed to support unemployed persons during their period of unemployment. Under such a plan, severance benefits become FICA non-taxable, and covered individuals in all states are required to file for and be eligible for State Unemployment Benefits to be collected</span><span class="apple-converted-space"> </span><b>at the same time</b><span> as company-paid separation benefits. An IRS-approved benefits structure, a SUB Plan allows employers to provide equitable access to benefits to all employees while saving significant amounts of money.</span></span></p> <p class="MsoNormal"><span>Prominent economists are again <a href="http://money.cnn.com/2012/02/24/news/economy/double_dip_recession/index.htm?source=cnn_bin">predicting a double-dip recession</a>. If this does in fact occur, large organizations will be forced to perform even more layoffs and again spend money on severance. In ongoing layoffs, organizations often concern themselves with employee backlash in the face of a change to the severance package. However, those with employees is multiple states should begin to realize the imbalance that exists between states, allowing some former employees to essentially take home more money.</span><span style="font-family: Georgia, serif; font-weight: normal; font-size: 100%; "><o:p></o:p></span></p>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-84361430782651293382011-12-13T13:31:00.002-05:002011-12-13T13:52:21.446-05:00Unemployment Law and a SUB Plan<p class="MsoNormal"><span style="font-size: 12pt; "><a href="http://money.cnn.com/2011/12/05/news/economy/unemployment_benefits_extension/index.htm">According to CNN</a>, "</span><span style="font-size: 10.5pt; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">Jobless Americans have collected $434 billion in unemployment benefits over the past four years." Furthermore, 17.6 million Americans have reportedly utilized some facet of the Unemployment Benefit system since 2008.</span><span style="font-size: 13.5pt; "><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-size: 10.5pt; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">Separation benefits are one form of company-provided benefits not regulated by U.S. government. However, could, or should, for that matter, a SUB [Supplemental Unemployment Benefit] Plan become an employment law? Think of how beneficial having such a system in place would be to our current economy. Two issues currently on the political financial table are either continuing or ending income tax breaks and either continuing or ending federal unemployment benefit extensions. </span><span style="font-size: 10.5pt; color: rgb(51, 51, 51); ">A SUB Plan....income tax savings? Check. Efficient use of unemployment benefits? Check. While providing unemployed Americans with money to support their periods of unemployment? Seems an excellent idea.</span><span style="font-size: 13.5pt; "><o:p></o:p></span></p> <p class="MsoNormal"><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 14px; background-color: rgb(255, 255, 255); ">Another hotspot right now is the myriad of grievances presented by the many "<a href="http://occupywallst.org/">Occupy Wall Street</a>" movements, including are recent corporate bailouts by the government followed by ongoing, seemingly endless layoffs, growing the proverbial 99%.</span></p> <p class="MsoNormal"><span style="font-size: 12pt; "> </span><span style="font-size: 13.5pt; "><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-size: 10.5pt; color: rgb(51, 51, 51); ">Consider the 434 billion dollars distributed by both State of Federal governments to those people who lost jobs during the Great Recession. Logically, under a SUB Plan structure, every dollar of that 434 billion paid to the unemployed would have been spent by the governments regardless. However, that 434 billion dollars would at the same time have been saved by whichever organizations were laying off those people collecting these exorbitant amounts of money. Because a SUB Plan allows a company to offset weekly Unemployment benefits from the weekly separation benefit payments, allowing terminated employees to receive amounts equal to the pre-displaced wage during the unemployment period, there is the probability that this $434 billion would have been saved by companies in this country over the past four years and the economy would be in a far better place and the unemployment rate far lower.</span><span style="font-size: 13.5pt; "><o:p></o:p></span></p> <p class="MsoNormal"><span style="font-size:11.5pt;mso-bidi-font-size:11.0pt;mso-ascii-font-family:Calibri; mso-fareast-font-family:"Times New Roman";mso-hansi-font-family:Calibri; mso-bidi-font-family:"Times New Roman";color:#333333">Stimulating the economy requires spending by the people in that economy. This includes getting some of the unemployed back to work. Hiring people requires a company have money to spend on headcount. Imagine if more companies in this country had utilized a SUB Plan. Funds delivered in the form of unemployment benefits would not only go to the people who needed them, but also save money for the companies doing the layoffs. Logically this would provide a company a greater cash flow, more money, fewer required layoffs, and faster recovery.</span><span style="font-size: 13.5pt; "><o:p></o:p></span></p>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-77212241202285576752011-09-19T13:52:00.001-04:002011-09-19T13:57:53.833-04:00Putting Workers Back on The Job<!--[if gte mso 9]><xml> <w:worddocument> <w:view>Normal</w:View> <w:zoom>0</w:Zoom> <w:trackmoves/> <w:trackformatting/> <w:punctuationkerning/> <w:validateagainstschemas/> <w:saveifxmlinvalid>false</w:SaveIfXMLInvalid> <w:ignoremixedcontent>false</w:IgnoreMixedContent> <w:alwaysshowplaceholdertext>false</w:AlwaysShowPlaceholderText> <w:donotpromoteqf/> <w:lidthemeother>EN-US</w:LidThemeOther> <w:lidthemeasian>X-NONE</w:LidThemeAsian> <w:lidthemecomplexscript>X-NONE</w:LidThemeComplexScript> <w:compatibility> <w:breakwrappedtables/> <w:snaptogridincell/> 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Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} </style> <![endif]--> <p class="MsoNormal">The new <a href="http://www.whitehouse.gov/the-press-office/2011/09/08/fact-sheet-american-jobs-act">jobs bill</a>.<br /><br />Preceding the <a href="http://money.cnn.com/2011/09/12/markets/wall_street_layoffs/index.htm?hpt=hp_t2">announcement by Wall Street</a> of the impending layoffs of nearly 50,000 workers, the jobs bill seems to have come at just the right time. The <a href="www.bls.gov">unemployment rate</a> in the United States continues to hover between nine and ten percent. Coupled with the nonexistent job growth in August, this indicates the urgency of the new jobs initiative. Our stalled economy will continue to force companies into more headcount reductions. And consequentially into spending huge sums on severance packages - a mistake from which too many organizations, including the Wall Street firms again reducing headcounts, did not learn after significant initial layoffs in 2008 and 2009.<br /><br />For fear of employee backlash, Human Resource professionals in many major corporations are loathe to revisit, much less modify, severance plans despite significant overspending when separating employees. Although there exist no federal mandates in the United States requiring severance be given to departing employees, companies feel obligated to hand out money to employees whose jobs disappear. The role of severance, once meant to bridge the financial gap between job loss and reemployment, is now to appease potentially angry people by giving them money.<br /><br />Getting back to basics. Putting workers back on the job. Requiring accountability not only from workers but also from the unemployed seeking reemployment. Reversing the idea that severance is an entitlement and reminding human resource professionals that severance is a benefit, something that should change and evolve with an organization's evolving culture. Our constantly changing economic and employment landscape demand organizations examine what it means to provide a benefit to an employee. Employee backlash over a changed separation benefits package rarely occurs because it is not the law that an employer give out severance awards. Employers must understand that failure to examine and modify separation benefit packages does little to help support the goal of cost cutting at a time when it matters the most.</p> <p class="MsoNormal">The jobs bill is only the first step in fixing how businesses spend money on employees. Putting in place benefits programs that streamline spending while supporting the goals of the employers and the employee comes next. Utilizing funding sources from the government to support separation benefit payments and tailoring each benefit to the employee’s needs while out of work. Alternate <a href="www.transitionservices.com">separation benefits plans</a> are designed to allow companies to get this done. Now if Congress can agree for five minutes and pass the jobs bill, businesses may well be on the way to recovery.</p>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-19264706249731787502011-07-25T12:39:00.004-04:002011-07-25T12:57:13.495-04:00Debt Ceiling: No Strings Attached?The ongoing <a href="http://www.reuters.com/article/2011/07/25/us-usa-debt-idUSTRE7646S620110725">debt ceiling debates</a> shed light on our country’s severely overstretched Unemployment Benefits programs. The number of initial unemployment claims filed weekly continues to rise, proving payrolls are headed in the opposite way than economists predict and hope. Where is this so-called economic recovery?<br /><br />Raising the debt ceiling will most certainly come with strings attached. If those strings don’t include raising taxes, it’s highly probable one of those strings lists a handful of spending cuts to Federal programs such as education or health programs, another targeting loans to businesses around the country. With American businesses already offshoring the country's jobs to nations where labor is cheap, if they are forced to operate on even less cash, the effect on the unemployment rate may be, to quote Federal Reserve Chairman Ben Bernanke, “<a href="http://thehill.com/blogs/on-the-money/budget/141993-bernanke-dont-make-debt-limit-a-bargaining-chip">catastrophic</a>.”<br /><br />The <a href="http://bls.gov/news.release/pdf/empsit.pdf">unemployment rate</a> has been hovering slightly above or below 9% for months now. Nearly half of the states in the country have been forced to borrow money from the Federal Government to continue to pay their unemployment assistance “payrolls.” With the worsening financial crisis, companies must either stop the layoffs, or incent laid-off workers to seek new employment quickly rather than expecting the government to bankroll their lifestyles. With more Americans working, fewer depend on State Unemployment payrolls and more dollars are paid in income taxes to the Fed, contributing to the government’s liquidity.<br /><br />Keeping Americans working is simply a matter of spending less on certain programs to save money. If a company is forced to displace five workers, if that company <a href="http://transitionservices.com/program-components.php">funds severance</a> for those five workers using available State Unemployment Benefits, that company may save enough money to maintain the jobs of two other workers on the chopping block. On a grander scale, as we see now that most major corporations around the country have and are once again facing layoffs, using such a program could equal significant dollars saved by States and taken in by the Feds. More importantly, fewer Americans out of work.<br /><br />Once the government reaches a decision on the debt ceiling, getting Americans back to work should be its primary concentration. There is no way to predict how the strings attached to the debt ceiling decision will affect nationwide corporations. Until the government can come to a spending and revenue decision (and to think that if the <a href="http://www.nfl.com/news/story/09000d5d820f4c7f/article/agreement-in-place-players-reviewing-deal-prior-to-vote?module=HP11_breaking_news">NFL can do it</a>, so might our country’s elected officials…), organizations must take a role in controlling the unemployment rate to support the country and avoid further “catastrophe.”Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-731439105237474792011-06-14T12:07:00.001-04:002011-06-14T12:11:24.856-04:00A More Efficient Separation Benefit<a href="http://bls.gov/news.release/pdf/empsit.pdf">May’s jobs report</a> indicates employers are still not looking to hire. Dire news for an economy hoped to be on its way toward recovery. The May BLS paper also reports there are 4.6 unemployed workers for every job opening in the country. That’s a pretty radical number. And it means only about 25% of the unemployed persons in the country can even get jobs in the current market. Layoffs are reportedly slowing, but is this because the workforce been so trimmed that there are not many people left to lay off? With such a microscopic number of jobs available to the unemployed public, does the BLS think a slowing number of layoffs is a good measure?<br /><br />In an excruciatingly slow job market such as ours today, a laid off worker faces several challenges. In addition to the simple lack of open jobs and the endless black hole of the internet job search, a laid off worker has financial challenges to anticipate. Those who are lucky get laid off with a generous severance package and job search support. The unlucky and sometimes more in need, however, are those laid off with scant or no separation benefits. Workers in lower job tiers whose only guaranteed income comes in the form of a few weeks of severance are forced to support themselves using these meager amounts during what is, on average, a long period of unemployment. While State Unemployment Benefits do typically last a considerable while longer than severance funds, State UI is hardly a replacement for a full weekly salary.<br /><br />Consider a terminated employee given eight weeks of severance located in a state that does not allow this employee to collect severance and State Unemployment Benefits at the same time. This employee exhausts his eight weeks of severance and while he remains unemployed and continues to look for a job, he will apply for and collect State Unemployment, an amount usually equal to a bit more than half of his former weekly wage, for several more weeks until he becomes reemployed.<br /><br />Consider another terminated employee in the same state, this employee terminated from a company who pays Separation Benefits through a <a href="http://tsitest.powerserve.net/subplan-intro.php">SUB Plan</a> rather than as severance wages. Because this company utilizes a SUB Plan and integrates State UI Benefits into its separation benefit, the company can save upwards of 25% of its benefit costs. As is often seen, this company may take advantage of these savings to initially offer the employee some additional weeks of benefit. While these additional weeks of might not be enough to carry this particular employee through the entire period of unemployment, it could be a full month’s worth of living expenses, mortgage, gasoline and car insurance. For those employees with less tenure or seniority whose benefits are typically smaller numbers of weeks than high-tenured employees, these extra weeks could become a lifeline.<br /><br />The uncertainties related to unemployment in a job market where only 25% of job searchers can be successful are many. Paying a separation benefit using a SUB Plan vehicle lessens those uncertainties by providing a few more weeks of income, at the same or even reduced cost to the employer, as a shorter severance benefit. The staggering unemployment numbers leave it to the imagination to comprehend how a huge chunk of our population must be feeling without income. A more efficient SUB Plan can ease these uncertainties for those with lesser incomes and support the transition through the unemployment period with more weeks of benefit at no extra employer cost.Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-62970278590340501172011-05-09T15:58:00.004-04:002011-05-09T16:05:21.481-04:00$72,600,000The release of the <a href="http://www.bls.gov/">Bureau of Labor Statistics</a>' monthly <a href="http://bls.gov/news.release/pdf/empsit.pdf">Job report</a> on Friday did little to ease the minds of the Unemployed, as the growth of the Unemployment rate to 9% served as a reminder that the economy has a long way to go before it's healthy again.<br /><br />One of the more interesting statistics in a seemingly contradictory report is the growth in the number of short-term unemployed. Those reporting being unemployed in April for between one and five weeks grew by 242,0000. Assuming each of these 242,000 unemployed persons collected State Unemployment Benefits for each of these five weeks, 1,210,000 State Unemployment Benefit payments were made for the period of time discussed in this report by the BLS.<br /><br />Companies looking to save money by performing force reductions are likely successful in the short-term. With productivity and employee morale often decreasing in parallel during large force reductions, one might wonder if there is a better approach to achieving immediate cost savings?<br /><br />For argument's sake, assume the average State Unemployment Payment is $300 per week, about $1500 for an individual over the course of five weeks of unemployment. In April, 242,000 people collectively collected $72,600,000. Presumably more, as these people were laid off and, as is typical, collected severance.<br /><br />72 million dollars. 72 million dollars of money freely available for companies to integrate into their separation benefit programs. 72 millions dollars companies could have used as an offset to the traditional severance awards. If businesses in the United States had paid separation benefits through a <a href="http://www.transitionservices.com/tsi-program.php">SUB Plan</a> vehicle, in the first five weeks of the unemployment periods of the 242,000 people reported about in April, they could have saved 72 million dollars.<br /><br />The use of a SUB Plan allows immediate cost savings. As our economy recovers, saving money is what companies need to do. Implementation of a SUB Plan program to save such vast amounts of money is the simple answer.Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-86764399258679090672011-03-23T12:32:00.010-04:002011-03-23T13:12:22.182-04:00<div style="text-align: left;"><span style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="color:#333333;">The unrest throughout the Middle East. The earthquake and nuclear disaster in Japan. The Dow jumping and fa</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="color:#333333;">lling more than 200 points in one d</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="color:#333333;">ay. Historically, these types of events are predictive of many immediate and long-ter</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="color:#333333;">m changes in the economy. However, one measure very susceptible and highly predictable following such types of events is the United States Unemployment Rate. And typically, we see it rise.</span></span></span></div><p class="MsoNormal"><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">The United States Bureau of Lab</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">or Statistics </span></span><a href="http://bls.gov/news.release/pdf/empsit.pdf"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333399;">reported on March 4</span></span></a><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;"> a .1% decline in the February Unemployment Rate. At the same time, oil production in Libya nearly halted, forcing the price of oil to $106/barrel. A rule of thumb is that for each $10 dollar increase in the cost of a barrel of oil, the price of ga</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">s as the pump will rise $0.2</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">4 over the short-term, with increases remaining steady and continuous over the long-term. With an </span></span><a href="http://www.eia.doe.gov/petroleum/"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333399;">increase in gas prices</span></span></a><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;"> come increases in transportation costs and food prices. Chan</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">ge in the Unemployment Rate in </span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">th</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;font-size:medium;"><span class="Apple-style-span" style="color:#333333;">e </span></span><span class="Apple-style-span" style="font-family:ArialMT;font-size:medium;"><span class="Apple-style-span" style="color:#333333;">United States predictably shadows the change in oil prices.</span></span></p><p class="MsoNormal" style="text-align: right;"><span class="Apple-style-span" style="font-family:ArialMT;font-size:medium;"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 287px;" src="http://1.bp.blogspot.com/-_GzAO3K7NZk/TYopQ-ONTyI/AAAAAAAAACw/e3FNqo1xOas/s400/Gas-Unemployment.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5587323659263758114" /></span></p><p class="MsoNormal"><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="color:#333333;">With the crisis in Libya escalating, we know gas prices will remain high over the long-term, </span></span><span class="Apple-style-span" style="font-family:ArialMT;font-size:medium;"><span class="Apple-style-span" style="color:#333333;">and c</span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="color:#333333;">an predict that the Unemployment Rate will therefore grow.</span></span></p><p class="MsoNormal"><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">Consider that </span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">some o</span></span></span><span class="Apple-style-span" style="font-family:ArialMT;font-size:medium;"><span class="Apple-style-span" style="color:#333333;">f America's major employers include car manufacturers. </span><a href="http://automotivemagazine.us/2011/03/19/stalled-japanese-car-production-ripples-through-global-auto-industry/"><span class="Apple-style-span" style="color:#333399;">Cessation of production in Japan</span></a><span class="Apple-style-span" style="color:#333333;"> by Toyota, Nissan and Honda has affected not only what built vehicles the United States can import, but also the import of critical vehicle parts. Decreased production of Japanese cars in America requiring parts now unavailable from Japan will require fewer workers. While this may bode well for the U.S. car industry, international automotive industries are large employers here, so these forced cuts in production can only act as additional contributors to the Unemployment Rate.</span></span></p><p class="MsoNormal"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;"><span style="font-family:ArialMT;"></span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">We saw the Dow drop and again increase in the wake of the events in Japan. We can expect, even by glancing not too far back in history, that this will also help the Unemployment Rate to grow. When would be a better time to restructure a severance program than when layoffs are looming in the not too distant future?</span></span></span></p><p class="MsoNormal"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;"><span style="font-family:ArialMT;"></span></span></span><span class="Apple-style-span" style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">Outsourced alternative severance management programs have proven to save companies both time and cost. The Unemployment Rate will, unfortunately and most certainly, rise to some degree as gas prices continue to increase. Too often, organizations fear changing separation benefits plans when layoffs are imminent and/or immediate. Restructuring separation benefits at a time when layoffs are low yet probably six to twelve months down the road is a financial safeguard. </span><a href="http://www.transitionservices.com/"><span class="Apple-style-span" style="color:#333399;">Outsourced severance plan providers</span></a><span class="Apple-style-span" style="color:#333333;"> can quickly and seamlessly redesign severance programs to integrate alternative funding sources and efficiently transition impacted employees through the unemployment period.</span></span></span></p><p class="MsoNormal"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;"><span style="font-family:ArialMT;"></span></span></span><span style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">Gas prices have now risen to above where they were mid 2008. 2009 gave us one of the worst recessions in decades. Layoffs happened. If organizations can predict this will happen again, restructuring severance should happen </span></span></span><span style="font-family:Arial-BoldMT;"><b><u><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">now</span></span></u></b></span><span style="font-family:ArialMT;"><span class="Apple-style-span" style="font-size:medium;"><span class="Apple-style-span" style="color:#333333;">, before layoffs are announced and monies wasted yet again.</span></span></span></p> <!--EndFragment-->Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-56473484316900035892011-02-18T15:32:00.002-05:002011-02-18T15:49:08.420-05:00Modernize Severance<span class="Apple-style-span" style=" border-collapse: collapse; font-family:arial, sans-serif;font-size:13px;"><p dir="LTR"><span class="Apple-style-span" style="font-family:georgia, sans-serif;"><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="font-family: arial, sans-serif; font-size: -webkit-xxx-large; "></span></span></span></p><span class="Apple-style-span" style="font-family:georgia, sans-serif;"><p dir="LTR"><span class="Apple-style-span" style="font-family:georgia, sans-serif;"><span class="Apple-style-span" style="font-size: medium;"> <!--StartFragment--> </span></span></p><span class="Apple-style-span" style="font-family:georgia, sans-serif;"><p class="MsoNormal"><span style="font-family: Georgia; "><span class="Apple-style-span" style="font-size: large;">A </span><span style="color:#4D2088;text-decoration:none;text-underline:none"><span class="Apple-style-span" style="font-size: large;"><a href="http://bls.gov/news.release/mslo.nr0.htm">February 11</a></span></span><span class="Apple-style-span" style="font-size: large;"><a href="http://bls.gov/news.release/mslo.nr0.htm"> report</a> from the Bureau of Labor Statistics indicates 2010 closed with a slight decrease in the unemployment rate and a record low number of annual layoffs. As stated in the report, compared to 2009, the number of mass layoff events in 2010 decreased by 39 percent, the first over-the-year decline since 2005. Yet 1,213,638 workers were affected by involuntary terminations in 2010. This is still a significant number of people.</span></span></p> <p class="MsoNormal"><span style="font-family: Georgia; "><span class="Apple-style-span" style="font-size: large;">A quick </span><span style="color:#4D2088;text-decoration:none;text-underline:none"><span class="Apple-style-span" style="font-size: large;"><a href="http://www.google.com">Googling</a></span></span><span class="Apple-style-span" style="font-size: large;"> of benefit plan changes in 2011 shows the huge number of employers and various benefits providers that have made changes to one benefit or another (or many) in 2011. It is a standard practice across businesses today to update benefits on a regular basis, keeping up with the times to offer modern yet competitive benefits to suit employees' needs and retain/attract key talent. An old-school medical benefit, for example one without modern options such as a flexible spending plan or pre-tax health savings account, would do many employees less good today in the world of fast-changing technology and medical practices. A 401(k) plan design left unchanged since 1985 could do little to address the needs to the modern retiree.</span></span></p> <p class="MsoNormal"><span style="font-family: Georgia; "><span class="Apple-style-span" style="font-size: large;">How is it that severance practices are stuck in the olden days?</span></span></p> <p class="MsoNormal"><span style="font-family: Georgia; "><span class="Apple-style-span" style="font-size: large;">The </span><span style="color:#4D2088;text-decoration:none;text-underline:none"><span class="Apple-style-span" style="font-size: large;"><a href="http://bls.gov/news.release/mslo.nr0.htm">BLS' February 11 report</a></span></span><span class="Apple-style-span" style="font-size: large;"> gives hope that layoffs are slowing down. A hopeful indicator of what is to happen over the next year or two or five. Of the 1.2 million people laid off in 2010, however, statistics would show that a significant percent received severance packages. And IRS data indicates that many of these severance packages were of the 'old-school severance' type. 2011 is an excellent opportunity for employers to modernize their separation benefit practices, taking advantage of a time when fewer and fewer involuntary terminations are expected to occur.</span></span></p> <p class="MsoNormal"><span style="font-family: Georgia; "><span class="Apple-style-span" style="font-size: large;">A </span><span style="color:#4D2088;text-decoration:none;text-underline:none"><span class="Apple-style-span" style="font-size: large;"><a href="http://www.transitionservices.com">modern separation benefit</a></span></span><span class="Apple-style-span" style="font-size: large;"> will do more than merely meet the modern needs of an employee, such as provide income during the period of employment. A modern separation benefit will also save money for an employer, perhaps giving businesses the opportunity to decrease layoffs moving forward through 2011. A modern separation benefit package will seek to fund separation benefits from available government sources, freeing up a company's immediate cash flow. A modern separation benefit does just what other benefits are already doing for an organization - meeting the needs of an employee in the most cash-savvy way. Modern, strategic, and smart.</span></span></p> <!--EndFragment--> </span><p></p></span><p></p><p dir="LTR"><span lang="en-us"></span><span lang="en-us"></span></p></span>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-71441145351102453312011-01-26T12:55:00.005-05:002011-01-26T15:07:56.772-05:00The State of the UnionPresident Obama's <a href="http://www.whitehouse.gov/state-of-the-union-2011">State of the Union address</a> served as a poignant reminder of the myriad of changes the country hopes to make as we move toward economic recovery. One of his more interesting themes was the spirit of innovation and reinvention amongst Americans and American businesses. Using the example of the Allen brothers' roofing company, a small business that, prior to being innovative, suffered when its factory went unused during the recession, the President showed just how well innovation and reinvention (change!) can help a business, (government) to survive and succeed a recession. "Fix what needs fixing" to move forward, because the country "can't win the future with a government of the past."<br /><br />The same principles of innovation and reinvention should be applied to companies of all sizes in all industries throughout the U.S., not merely small, family-owned businesses. Many, many organizations <a href="http://bls.gov/news.release/pdf/mmls.pdf">laid off huge numbers of employees</a> under severance programs and processes designed for a workforce of the past, knowing all the while these programs were costing billions of dollars. At the same time, other organizations choose to approach employee separations utilizing benefit programs with innovative, forward-looking principles, such as a <a href="http://www.transitionservices.com/">Supplemental Unemployment Benefit Plan</a>, a type of separation benefit plan aligned with a more modern workforce. These organizations saved real cost while still providing benefits to support those put out of work due to the recession. They took what wasn't working, changed it, and made it through the recession with a little less severance spend on their balance sheets.<br /><br />Make changes to move forward into the future. In recent decades, this concept has affected most classes of benefits offered to most workers throughout the country. Why are the severance trends stuck in the past? Companies, like the government, cannot win with policies of the past. Companies should accept the trends of the recession - that money must be saved, benefits must meet actual needs of the employee, and innovative approaches must be taken while working toward the future - and reexamine old-fashioned and ineffective severance plans.Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-90766244873565860052011-01-12T09:17:00.007-05:002011-01-12T14:05:22.755-05:00Workforce Strategizing for 2011<span class="Apple-style-span" style=" border-collapse: collapse; font-family:arial, sans-serif;font-size:13px;"><div><span class="Apple-style-span" style="font-size: medium;">As the economy remains in the gutter, business leaders must ask themselves how to approach workforce management in 2011. Huge layoffs in past years have left companies with skeleton crews, and temporary staff recruited to assist over-taxed employees give businesses the advantage of not having to pay costly benefits. Is this the best approach to staff management in the new year? Are there more advantageous Human Resource strategies companies can adopt to effectively keep costs down yet keep workers happy and sane?</span></div><div><span class="Apple-style-span" style="font-size: medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size: medium;">Temporary staff and skeleton crews may, and have actually proven to be, effective in the short-term where costs are involved. But as a long-term strategy? Probably not. A strategy should give a company a significant market advantage, and components of a successful strategy are typically those ideas which have proven to be successful over time. </span></div><div><span class="Apple-style-span" style="font-size: medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size: medium;">In the past sixty years, the unemployment rate in the United States has only two other times (briefly in 1975; for a duration from early 1982 to mid-1983) reached above 9.0% (U.S. Bureau of Labor Statistics, January, 2011). During neither of these two times, however, did the utilization of temporary staff reach the proportions of that [seen] throughout the workforce now. As </span><a href="http://bls.gov/news.release/empsit.nr0.htm"><span class="Apple-style-span" style="font-size: medium;">reported by the Bureau of Labor Statistics</span></a><span class="Apple-style-span" style="font-size: medium;">, employment in temporary help services continue to trend up as temporary help positions have increased by 500,000 since September of 2009. </span></div><div><span class="Apple-style-span" style="font-size: medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size: medium;">A strategy such as this is nothing the workforce has ever seen before. Can it prove to be timeless and successful or will it fail companies over the long-term? Companies with workforce management solutions, such as offering quality benefits to full-time employees, tend to be more successful in distressed financial times when </span><a href="http://www.businessweek.com/managing/content/jan2009/ca20090116_444132.htm"><span class="Apple-style-span" style="font-size: medium;">employees are more engaged</span></a><span class="Apple-style-span" style="font-size: medium;">. A better 2011 strategy may be to re-hire some of those positions and guarantee benefits, including separation benefits, which will, over time, cost a company less.</span></div><div><span class="Apple-style-span" style="font-size: medium;"><br /></span></div><div><span class="Apple-style-span" style="font-size: medium;">Adopting a strategy to gain a competitive advantage by keeping employees happy might, during these still distressed times, provide a business with that necessary competitive edge. A balanced benefits package can do much to keep employees fully engaged. Rather than a guilt-driven and expensive severance package, the adoption of a </span><a href="http://transitionservices.com/tsi-program.php"><span class="Apple-style-span" style="font-size: medium;">Supplemental Unemployment Benefit Plan</span></a><span class="Apple-style-span" style="font-size: medium;"> - a plan which enables a company to provide appreciated separation benefits while still delivering significant short- and long-term savings - can be a component of an attractive benefits package. An employee who knows he will be taken care of while employed and in the case of a reduction in force will likely still be willing to fight for a company's success.</span></div><div></div></span>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0tag:blogger.com,1999:blog-1451842224066352774.post-60234007421043447882010-12-02T13:02:00.007-05:002010-12-02T13:37:13.184-05:00<div><div>The <a href="http://www.cbo.gov/">U.S. Congressional Budget Office</a> stated in a <a href="http://www.cbo.gov/ftpdocs/119xx/doc11960/11-17-UnemploymentInsurance.pdf">late November 2010 report</a> that more than half of people receiving regular State Unemployment Benefits in 2009 exhausted the full duration of their benefit periods. Federally-funded unemployment benefit extension programs provide additional benefit weeks to individuals whose state benefits have expired and can provide up to an additional 53 weeks of benefit to unemployed persons.<br /><br />December 1 marked the expiration of the funding of these additional benefits by the Federal Government. While many people think these funds are a necessity, the <a href="http://severancetrends.blogspot.com/2010/10/subsidizing-unemployment.html">previously </a><a href="http://3.bp.blogspot.com/_epOPrvxq6y8/TPfhCr8TqMI/AAAAAAAAAB4/XYE4PSBEERw/s1600/pictureforblog.jpg"></a><a href="http://severancetrends.blogspot.com/2010/10/subsidizing-unemployment.html">discussed idea of “unemployment subsidies”</a> provides some evidence as to <a href="http://1.bp.blogspot.com/_epOPrvxq6y8/TPfjYdJmaCI/AAAAAAAAACA/s-EXd082wMM/s1600/pictureforblog.jpg"><img id="BLOGGER_PHOTO_ID_5546151475411314722" style="FLOAT: right; MARGIN: 0px 0px 10px 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 279px" alt="" src="http://1.bp.blogspot.com/_epOPrvxq6y8/TPfjYdJmaCI/AAAAAAAAACA/s-EXd082wMM/s320/pictureforblog.jpg" border="0" /></a>why yet another extension is not necessarily a good idea. The CBO suggests extending the benefit yet again will infuse the economy with money. However, it is more reasonable to believe that getting unemployed workers back into the workforce will have more numerous positive effects on the economy. Not only will these workers no longer need subsidies from the government to eat, but as individuals reenter the workforce, more money is put into their hands than would be in the form of an unemployment benefit, and therefore greater amounts of money fed into the economy.<br /><br />Another consideration is the position that “there are no jobs”. The U.S. DOL's <a href="http://www.doleta.gov/">Employment and Training Administration </a>reports there are five people unemployed for every one open position. For the <a href="http://www.bls.gov/news.release/empsit.nr0.htm">14 million people out of work</a>, that would mean there are roughly 2.8 million jobs. Getting working income into the hands of 2.8 million people would be far more beneficial to the economy than another miniscule unemployment subsidy extended by the government, which would actually be just about enough money to keep these 2.8 million fed and therefore not working.</div></div>Transition Services Inchttp://www.blogger.com/profile/03839414805656749887noreply@blogger.com0