Contractors that fall into specific categories and meet certain conditions are considered statutory employees in the government’s eyes. This classification has tax implications for you. In fact, misclassification of contractors can lead to penalties. Here we look at the categories and conditions applying to employees by statute and the tax and benefit implications they present.

What is a Statutory Employee?

A statutory employee is a contract worker falling into one of the following four categories according to the IRS:

1. A driver who is your agent or paid on commission to distribute nondairy beverages, meat, vegetable, fruit, or bakery products; or pick up and deliver laundry or dry cleaning.
2. A full-time life insurance sales agent who sells life insurance and/or annuity contracts, chiefly for one life insurance company.
3. Someone working at home using materials or goods you supply, or that must be returned to you or someone you specify.
4. A full-time traveling or city salesperson whose principal business activity is working on your behalf to receive orders from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments.

They must also then work under the falling conditions:

• You have a service contract stipulating any of the above services must be performed personally by the individual.
• The worker doesn’t require a substantial investment in the equipment they use or uses the equipment and supplies provided by you.
• The services must be provided as part of a continuing relationship.

Recognizing when a contractor is actually a statutory employee is important because the IRS requires you to withhold their FICA taxes and also contribute your share. However, statutory employees can also save you money, as you don’t have to provide benefits such as health insurance.

Tax Implications of Having Statutory Employees

Tax withholding for statutory employees tends to be more complex. The main challenge is that setting up payroll for them has to be done properly to ensure you comply with withholding laws. While you withhold and pay your part of Social Security and Medicare taxes (FICA), you are not responsible for withholding federal or state taxes. Therefore, when setting up their payroll, you have to ensure you properly flag their FICA taxes and, when paying taxes, include both their withholding and your FICA contributions. It’s your responsibility to ensure the statutory employee pays half of the required 12.4% Social Security and 2.9% required for Medicare.

Do Statutory Employees Receive a W2 Form?

Yes, at year-end, your statutory employees receive a W-2 form with Box 13 – Statutory Employee selected. The form includes:

• Their total wages
• The amount of Social Security withheld
• The amount of Medicare taxes withheld

However, you do not have to provide a 1099-NEC required for independent contractors.

Benefits for Businesses Hiring Statutory Employees

Although you can hire full-time employees for these roles, you can enjoy some cost savings and reduce liability by hiring statutory employees instead. For example, statutory employees do not receive benefits such as health care, retirement, paid leave, or vacation time. Although hiring a contractor might seem easier because you don’t contend with FICA, the contractor can provide the same services to other companies.

As a result, you don’t have a dedicated person to fill the role. When it comes to project-based work, you enjoy more flexibility when hiring statutory employees without the commitment required for regular team members.

Do Statutory Employees Receive Company Benefits?

No. Statutory employees do not receive company benefits. As a result, you save money on premiums.

Onboarding Statutory Employees: Forms and Documentation

When onboarding a statutory employee, a contract is required. The contract outlines the nature of the job they are hired to do, and the type of working relationship and includes a clear indication that their working classification is statutory. To avoid confusion, it helps to include details outlining what your responsibility is regarding withholding and what they are expected to pay. If the new hire has never worked in this capacity before, they might not understand their role in tax withholding and find themselves owing a large sum of taxes when tax time rolls around. ‘

Hiring a statutory employee does not require a Form W-4: Employees Withholding Certificate, and instead, they must complete Form W-9: Request for Taxpayer Identification Number and Certification. This form provides permission to collect their Social Security number for year-end filings.

Your statutory employees are entitled to your share of FICA contributions. However, you are not involved in withholding state or federal taxes. To ensure the IRS receives proper contributions required by law and that employers follow withholding regulations, they are very strict when it comes to proper employee classification. Therefore, as an employer, you want to understand who and who doesn’t meet the standards of a statutory employee.

Although misclassification can be an honest mistake, some employers purposefully misrepresent an employee’s classification to avoid tax responsibilities. Even if your misclassification is unintentional, you can still face penalties and potential lawsuits. Instead of struggling to classify employees, it’s best to submit a Form SS-8 to ask the IRS to make the determination.

If you are struggling with employee classification, onboarding processes, and proper tax withholding processes, it helps to work with an expert. Using appropriate tax filing systems that automate the payroll process also helps avoid common filing errors. At Paypro, our team of dedicated payroll and tax specialists provide personalized advice.

We can also implement a payroll automation system to ensure you remain compliant with the complexities of withholding rules and regulations for all employee classifications. Set up a demo with our team today.

Q1 workforce activity started off hotter than expected and cooled down as the quarter progressed.

Table of Contents

1. Introduction
2. Key Findings
3. Data Sources & Methodology
4. Top Trends in Q1 ‘23
5. Decline in Shift Work
6. Shrinking Labor Participation Rate in the Overall Economy
7. Public Sector Weakness
8. Strengthening Healthcare Sector
9. Slowdown in the Northeast
10. Smaller Companies Saw Moderate Improvements
11. Unsteady Shift Recovery in Retail
12. Strong Rebound in Shift Recovery for Larger Organizations
13. What to Expect for the Rest of 2023

Introduction

The year’s workforce activity started off strong and better than expected following an uneven Q4, but levels declined throughout the quarter. 

Much of the slowdown in workforce activity that was seen in March is aligned with what experts had anticipated throughout the start of the year, especially amid a rise in recessionary fears that are resounding throughout the country. We saw a gradual decline of workforce activity throughout the quarter, despite a strong labor market with demand for workers and labor shortages in certain industries. 

Following the heights of the pandemic, this normalization of the market is welcomed in part, though looming talks of a recession will be a factor to consider as the year continues. 

Key Findings

• Q1 2023 workforce activity down from Q1 2022
• The monthly change in shifts worked in March ‘23 is the biggest decline since Aug ‘21
• The number of shifts worked declined -0.7% over Q1
• Retail workforce activity dips over the quarter
• Larger organizations see a strong rebound in shift work growth in March after falling throughout the earlier parts of Q1

Data Sources & Methodology

To complete our analysis on the state of workforce activity in Q1 2023, we compiled data gathered by UKG, a leading HCM cloud provider. 

We assessed their monthly workforce activity reports from January through March of 2023 to uncover ongoing trends in workforce activity in Q1 that HR and finance executives should be aware of: 

• UKG Workforce Activity Report – January 2023
• UKG Workforce Activity Report – February 2023
• UKG Workforce Activity Report – March 2023

Throughout this report, all metrics reported are derived directly from these above reports. 

In these reports and as we present our own findings, you should be aware of a few key terms to better understand the data:

• Workforce Activity: a comprehensive term describing the current state of labor and employment outlook in the United States, based on factors like the number of shifts worked by employees and pay statements
• UKG Workforce Recovery Index: a rolling 12-month scale created by UKG that measures the level of workforce activity relative to the same month one year ago

-The index tracks workforce activity levels of 4.2 million employees across more than 35,000 businesses across the United States

-The index offers directional insight about the anticipated changes in the labor participation rate (e.g. if the index is <100% then the labor participation rate is shrinking compared to last year levels, it if is >100% it is growing)

• Shifts Worked: a total that is derived from aggregated employee time and attendance data, this metric reflects the number of times that employees “clock in” and “clock out” via a time tracking system at the beginning and end of each shift
• Shift Recovery: reflects month-over-month shift growth for a company or industry, as measured by time punches

Top Workforce Trends in Q1 ‘23

Workforce activity for many companies, sectors, and regions in the U.S. have slowed down quite a bit over the first quarter of 2023, but not at an alarming rate. 

There were some outliers that we will discuss in more detail below, such as healthcare seeing improvements throughout the quarter and larger organizations rebounding in March. 

Let’s take a look at some of the prominent trends in workforce activity in the U.S. that we noticed throughout Q1. 

1. Decline in Shifts Worked

An overarching theme that occurred in the U.S. economy throughout the first quarter of 2023 was that there was a decline in shift work compared to the previous period.  

Following uneven patterns at the end of 2022 and a holiday season that was lackluster compared to expectations, shift work levels in 2023 started off flat, with no change reported in January from December levels (0% change). 

This was a stronger-than-expected start to the year; however, each month that progressed throughout the quarter saw incremental declines, including: 

• January: 0.0%
• February: -0.5% 
• March: -1.6%

March’s decline, in particular, was the largest monthly decline in shift work in over a year, since August ‘21 to be specific. 

When taken together, shift work declined by about -0.7% over Q1. All in all, this data shows that there continued to be fewer shifts worked across the economy throughout the quarter. 

A dip in shifts worked in Q1, particularly early in the quarter, is not uncommon after seasonal highs that typically occur in Q4 from the holiday season. However, the continued decline throughout the quarter indicates that labor activities may become more in line with the recessionary fears that are rippling throughout the macroeconomic environment. 

2. Shrinking Labor Participation Rate in the Overall Economy

Another major trend seen in Q1 ‘23 was evidence of a declining labor participation rate compared to Q1 ‘22 levels. 

The labor participation rate is a commonly referred to term in the industry which reflects the portion of the population that’s over 15 years of age that is actively working or looking for work. This includes unemployed individuals who are still searching for jobs. 

The change in the UKG Workforce Recovery Index between this year and last year is what indicates this trend, as the index is a directional indicator of the changes in labor participation in the country: 

• Q1 ‘22: 100.3%
• Q1 ‘23: 93.3%

This index has gradually declined each month over the past year, so the current levels aren’t out of the ordinary. However, the index has slipped significantly between Q1 of 2022 and Q1 of 2023. 

This decline gives us a clue that the rate of labor participation is on the decline, meaning that more people have left the labor force altogether, or have given up looking for work compared to last year.  

3. Public Sector Weakness 

Data from the past quarter alludes to weakness in the public sector, with a significant drop in workforce activity in this segment over Q1 ‘23. 

The public sector refers to public government roles as well as employment in public K-12 education and public higher education. 

Referring to the UKG Workforce Recovery Index, the index for the public sector saw a big downward swing throughout the quarter, worse than any other industry at this time: 

• January: 114.8%
• February: 99.0%
• March: 85.2%

What’s driving this decline isn’t entirely evident at this time. However, a few factors at play may include an aging workforce that is retiring at a more rapid pace as well as some lingering impact from the COVID-19 pandemic that pushed more people out of the labor market. 

4. Strengthening Healthcare Sector

On the flip side, we saw the Healthcare sector pick up strength in workforce activity as the quarter progressed. 

We draw this conclusion from the fact that the UKG Workforce Recovery Index for the industry saw steady improvements throughout Q1: 

• January: 83.2%
• February: 90.7%
• March: 91.3%

This shows positive momentum for the Healthcare industry in comparison to other struggling areas of the economy like the public sector. However, the fact that the index for each month was below 100% tells us that current work levels are down from the previous year. 

From this data, we can conclude that workforce activity in the sector has improved so far throughout 2023, albeit still below last year’s levels at this time.   

5. Slowdown in the Northeast

Particular regions of the country have also shown weakness to start off 2023 aside from just specific sectors in the economy. 

Namely, the Northeast region of the United States saw larger declines in workforce activity than any other region in the country–many of which actually improved over the quarter. 

Here is what the UKG Workforce Recovery Index looked like in the Northeast throughout the first quarter of 2023.

• January: 107.3%
• February: 95.1%
• March: 96.8%

The year started off with better workforce activity levels than January 2022, though this quickly shifted as February and March showed lower levels than the previous year. 

As you may be able to gather, the decline in this index throughout Q1 indicates that the labor participation rate is likely down in the Northeast. 

Again, there are many factors that could be leading to this shift; though the decline is meaningful enough to point to a trend that is likely ongoing in the region. 

6. Smaller Companies Saw Moderate Improvements

Companies with less than 100 employees and companies with 101-500 employees saw better workforce activity throughout the first quarter of 2023. 

This is in comparison to businesses of all other sizes that saw declines in workforce activity over the start of the year. 

Let’s take a look at the UKG Workforce Recovery Index for companies with less than 100 employees:

• January: 86.5%
• February: 89.9%
• March: 89.8%

Here is the data for companies with 101-500 employees over Q1: 

• January: 91.4%
• February: 92.2%
• March: 92.6%

While workforce activity moderately picked up for these smaller companies over the quarter, it’s still important to note that activity is much lower than it was a year ago, owing to a slowdown in the overall economy year-over-year. 

7. Unsteady Shift Recovery in Retail

Back on the industry-specific level, we saw uneven levels of shift growth across the retail sector throughout the first quarter. 

Shift recovery, or the month-over-month shift growth as measured by time punches, yo-yo’ed throughout the period, ending down slightly for the quarter compared to the last. 

Here is the monthly breakdown of shift recovery in the retail sector for Q1 ‘23: 

• January: -2.9%
• February: +1.0%
• March: -2.2%

Especially following the holiday season when retail is generally strong, this is not too concerning to start off the year. However, it is worth watching going forward to see how retail responds to the looming threats of a recession. 

8. Strong Rebound in Shift Recovery for Larger Organizations

Lastly, shift growth for large organizations saw a sizable rebound over the period, while shift recovery for smaller companies got worse over Q1. 

Companies with over 5,000 employees had the following shift growth in each month of the quarter: 

• January: -3.0%
• February: +0.2%
• March: +2.4%

As a reminder, workforce activity declined overall for these companies throughout the period, though their shift growth improved month-to-month. As you can see, the quarter started off with negative growth which then turned positive towards the middle of the quarter.  

What to Expect for the Rest of 2023 

Q1 started off strong, with activity rates mostly easing throughout the economy as the quarter progressed. There were some outliers to this trend, though the overall direction tends to be a slowdown in workforce activity alongside other economic indicators amid a period of economic challenges. 

For the rest of the year, HR and finance executives can keep an eye on the following trends to make informed hiring and workforce decisions in their organizations: 

• Shift recovery by region to normalize: the COVID-19 pandemic created widespread disruptions to shift growth that were felt nationwide; however, as the impacts of the pandemic largely remain in the past at this point, disruptions to shift work and growth will return to more localized and regional factors like extreme weather events
• Workforce activity continues to tighten: the labor market remains tight with labor shortages still prevalent in many sectors and continued positive job growth each month. But as economic conditions shrink across the country and the globe, workforce activity will tighten as companies look for cost savings and ways to cut back on spending with fewer and shorter shifts worked
• White-collar layoffs: at this time, layoffs will continue to be more widespread across white-collar workers as we have seen so far this year, and not as much for frontline workers

Payroll and payroll taxes are complicated. Where many organizations drop the ball is understanding State Unemployment Tax Act (SUTA) rates. While most accountants and business owners are familiar with FUTA, SUTA is more challenging as the tax varies from state to state. Here we take a look at SUTA tax and how it affects your payroll tax filing.

What is SUTA Tax?

State Unemployment Tax Act is also known as SUTA, state unemployment insurance and SUI. It is a payroll tax that goes towards the state unemployment fund. SUTA rates, wage bases and rules are determined by the state. In some states, just the employer contributes to the tax, while in others the employee must also contribute. The tax is used to support unemployed workers who lose their jobs through no fault of their own.

How Are SUTA Rates Determined?

Each state has its own SUTA tax rate as well as their own taxable wage base. The base determines the maximum amount used to calculate an employee’s contribution based on their gross income. However, employers also receive an assessment or tax rate which tells them how much they are required to pay.

When are SUTA Rates Changed?

It is important for employers to keep up to date with SUTA rates as they can increase from year to year. Because of the assessment aspect of the tax, in some cases increased rates often only apply to certain industries. Depending on where your organization operates, the rate can change on an annual basis.

Who Pays SUTA Tax?

As mentioned, in some states employees contribute to SUTA, but in all states, the employer pays SUTA taxes. The states requiring employee contributions are Alaska, New Jersey, and Pennsylvania. Even when the employee contributes to the tax, it is still the employer’s responsibility to make the deductions at payroll and remit the money to the state on the employee’s behalf.

Do Non-Profit Organizations Pay SUTA Tax?

Yes, all employers contribute to SUTA tax. In this case, you can either pay into your state unemployment tax program or reimburse the state when an unemployment claim is paid out to one of your former employees. If you choose the reimbursement option keep in mind you have to pay out 100% of the employee’s benefits.

How is Your Organization’s SUTA Tax Rate Determined?

Each state sets SUTA rates based on the following:

1. Wage base: This rate is based on an employee’s gross income and the maximum amount used to calculate SUTA tax. Any income exceeding the wage base does not require SUTA tax payments. These rates are managed by the American Payroll Association. It is your responsibility to keep up with current rates.
2. Tax rate: This is the SUTA tax rate set by your state. In most cases there is a minimum and maximum rate which ranges based on the following criteria:

• How long you have been in business
• Your industry’s rate of turnover
• Your organization’s unemployment claims history for former employees

When you set up an account, your state considers these factors to determine your SUTA tax rates. From then on you must keep up to date with changing rates.

How To Calculate and Pay Your Organization’s SUTA Tax

SUTA taxes are due quarterly on January 31, April 30, July 31 and October 31. They are applied to each individual employee using the wage base and your organization’s specific assigned rate. To avoid mistakes or what appears to be avoidance due to miscalculations it makes sense to use payroll software. The software ensures you remain compliant and avoid unpleasant surprises due to inadvertent underpayment.

Can Employers Reduce the Amount of SUTA They Pay?

Yes and no. While rates are set in stone for the year, because the government considers industry turnover and your organization’s layoff history, ensuring you manage your workforce scheduling and hiring wisely helps minimize the risk of layoffs. The lower the number of unemployment claims you have from former employees, the lower your rate. Focusing on best practices in hiring to avoid bad hires, while also nurturing employees to improve satisfaction helps reduce turnover. This is made easier with the following:

• Employee tracking software: Improving your hiring and employee career management process helps increase employee retention.
• Time management: Ensure you always operate efficiently to avoid layoffs using workforce scheduling software to provide optimal labor coverage.
• Streamline processes: You can also consider HR software tools to streamline operational processes for hiring, talent retention, and talent planning to optimize your workforce.
• Improve workflow: HR Workflow Optimization software automates tasks while identifying inefficiencies in scheduling, employee onboarding, payroll and more.

Using comprehensive software solutions allows you to audit pay cycles to ensure proper SUTA best practices, while also optimizing your workforce to avoid increased SUTA rates.

About the Author

Kayla is the Marketing Manager at Paypro Corporation overseeing all inbound and outbound marketing and sales efforts. She has 7+ years of experience working within the B2B and SaaS based solutions space and thrives on creating messaging and campaigns that introduce products and services to those who need them most.

HR departments and small businesses alike face major timing issues when trying to fill positions. The time involved to write, post and receive responses to job openings involves many manual tasks, but the recruitment process becomes easier when using an automated system. Here we discuss the benefits of applicant tracking systems (ATS) and the critical features you should look for when choosing one.

What Is an Applicant Tracking System?

An ATS streamlines the hiring process by collecting information and then sorting it based on the criteria you set for your ideal candidate. This makes it easier to sort through resumes received and narrow down the best prospects efficiently. A good ATS also allows you to store and search resumes received for future use while making it easier for candidates to apply.

How Do Applicant Tracking Systems Work?

Applicant tracking systems work in a few different ways:

Collect, sort and store resumes: Using criteria set by your hiring team, the system makes it easier for candidates to apply. It then collects applications, sorts them based on that same criterion to filter out the wheat from the sheaf and then allows recruiters to view the suitable resumes using a process that suits their needs.

Resume search: Recruiters can also choose to store resumes that might not meet the requirements for the specific job applied for but be suitable for the company’s needs. These resumes can then be searched using specific criteria for future job openings.  

Viewing applications: Recruiters can view applications with a quick glance with systems that highlight key qualifications. They can choose the applications they feel are most appealing and read in more detail based on the top skilled and qualified candidates the system shows them.

Rankings: In some cases, the ATS “ranks” applications based on the job description using a scoring system matching the exact job description to the resume. This further narrows down prospects for recruiters to consider.

Keywords: Recruiters can also use keywords to filter applications based on things such as skills, education, previous job titles, software, credentials, etc. It is important for recruiters to think carefully about the keywords they use to avoid screening out exceptional candidates.

Candidate tools: ATSs also offer candidate portal features such as self-service FAQ sections to attract better candidates while reducing calls to HR.

These are some of the basic ways applicant tracking systems work to help sort and identify ideal candidates.

What Features are Critical to an Effective ATS?

ATS systems should make life easier. They streamline and automate the recruitment process using HR best practices, so you not only attract and hire top talent but also start to build an extensive talent database. As a result, you can fill positions quickly as openings come up. Therefore, critical features for an effective ATS should include:

Applicant Tracking

Automatically comparing candidate eligibility against a checklist of suitable criteria streamlines the interview process. You can quickly create a list of prospects you can reach out to immediately before they are hired by a competitor. You can find qualified candidates without time-consuming resume screening so your team becomes far better at filling roles with suitable candidates.

Ease of Application

On the flip side, you also want to make it easier for candidates to apply. Effective systems, therefore, allow candidates to enter their own information into a self-service model that then automatically adds the information directly into your employee database for future reference. This cuts out several steps not only in the recruitment process but also for your onboarding process.

Candidate Criteria

Your ATS should make it easier to understand your applicants at a glance. To do so, you need to easily define the employment metrics to evaluate talent. Not only should the system allow you to define the metrics, but also collect data available for future analysis.

Integration

Some ATS software misses the mark because they don’t integrate with your employee database. As a result, they fail to meet both your recruitment and HR needs. A strong ATS solution fills gaps and allows for smooth integration that collect, manage, sort and track employee data from initial application through separation. This reduces manual, time-consuming tasks such as double keying employee data.

Web-based Tracking

Web-based applicant tracking allows candidates to apply online making it easier to submit their resumes for your consideration. The resumes received are filtered to quickly move suitable candidates through the hiring cycle.

Automated Emails

ATS portals that include email-based registration send out automatic notifications, so the candidate always knows the status of their application. This is key as it avoids losing the candidates you are seriously considering due to the slow response time caused by manual processes. 

You can send out timely interview requests or offer letters further down the line. Additionally, your team can access critical recruiting and applicant information on any device, at any time. This entire process ensures candidates can’t slip through the cracks.

Customization

Customization is also critical as it allows you to either create a new hiring system or improve your existing process by eliminating manual tasks.

Finding an ATS solution for your organization is easier when you can narrow down your choices based on these critical features.

However, the more complicated the worksite or production line, the more challenging management becomes. The good news is advancements in technology provides an effective tool that improves performance in workforce management.

Workforce management (WFM) solutions allow managers to track performance across all roles in real time to mitigate risk, improve efficiencies and make real time adjustments to meet changing project needs.

Here are the benefits of WFM tools and software for the construction and manufacturing industry.

Tracking Labor Requirements

In both industries, managers are faced with the challenge of working in unionized environments. As well, many participate in federally funded projects that fall under certified payroll restrictions. Tracking labor requirements becomes easier with an effective WFM solution. An integrated management solution allows you to track labor requirements including the often complicated mix of skills and wages. Because those requirements change at a head-spinning rate, it is difficult for project managers and payroll teams to remain compliant in their certified payroll reports.

Project managers can keep track of the changing demands of their workforce and effectively share that information with HR. This ensures certified payroll reports remain up to date to avoid fines and the potential to lose future government bids.

Improved Workforce/Workload Balance

Communication between managers, administrators and line/site workers can be ineffective. This increases the risk of falling short on workforce requirements which can result in decreased productivity, missed deadlines and even increased risk for injury. With advanced WFM software, foremen and project managers track manpower demands in real-time. This provides complete visibility at the job site/floor level so that labor demand is met.

Managers become proactive using responsive scheduling so they can ensure their workforce matches workload demand. This works in the opposite way as well. When too many people are working, it cuts into the bottom line. With effective workforce management solutions, manpower levels match workload demand, saving money by cutting hours as required.

Accurate Cost Projections

When field productivity is optimized profitability increases. Managers who have access to the data they need to make accurate cost projections consider not only material and equipment-related costs, but also labor requirements. Because labor costs tend to be one of the most impactful cost variables, an effective workforce management solution is the best way to optimize labor productivity.  It allows construction companies, and in some cases manufacturers to keep track of labor costs so they can accurately predict this aspect of the budget for future projects. As a result, they can improve pre-construction bids that help acquire higher profile and bigger budget projects. ‍

‍Optimized Workforce Scheduling

On a more personal note, your team is your greatest asset. However, in construction and manufacturing, personnel hours are often dictated by demand. When business is good, hours are plentiful, and when it’s bad, hours drop. Because of this, it’s important to use a workforce management solution that allows you to track hours worked and keep hours equally distributed. Employees who work too many hours can burn out and be at higher risk for accidents. On the flip side, those who don’t get sufficient hours will seek work elsewhere. When you understand how hours are assigned, you can optimize your workforce scheduling to improve employee satisfaction and performance.

Avoiding Downtime

Smooth transition from task to task allows manufacturers and construction sites to operate at maximum efficiency. When you balance schedules that predict completion of each task accurately your schedules tighten up. An optimized schedule reduces downtime with paid certified workers standing around waiting to start their work. You control who is on-site or online to complete work when needed. That’s the best way to reduce time wasted and avoid unnecessary worker downtime. Your deadlines are met, your payroll budget becomes more cost-effective and your team remains productive. You also can reduce costs associated with equipment rentals sitting idle due to poor planning and scheduling.

‍Workforce Management Software Functions

An effective WFM solution manages vital tasks while integrating collaboration among all stakeholders. Managers can optimize performance across the board and streamline day-to-day processes with automated functions including:

• Email approvals and alerts to reduce approval steps for various processes
• An analytics platform to allow managers to make informed, data-backed decisions
• An integrated workforce optimization solution that works with existing processes to ensure maximum impact across your organization
• Optimized scheduling capabilities and time tracking
• A portal where employees can share vital information to enhance productivity and safety
• Cloud capabilities to improve collaboration for all stakeholders

The right WFM solution allows you to better understand employee performance and skills across your organization. In turn, you can identify skills gaps, predict workforce demand, and reduce costly downtime.

10 Misconceptions About DEI

by Kayla Kelly

What is DEI? Diversity and Inclusion (D&I) or increasingly more commonly Diversity, Equity, and Inclusion (DEI) strategies embrace a variety of perspectives to build companies that better understand their employees and customers.

McKinsey & Company in partnership with The Society for Human Research Management (SHRM), conducted research on the performance of companies with different levels of workplace diversity. They found that:

“Companies that exhibit gender and ethnic diversity are, respectively, 15 percent and 35 percent more likely to outperform less diverse peers. The same study found that organizations with more racial and gender diversity bring in more sales revenue, more customers and higher profits.”

DEI Diversity Misconceptions

Misconceptions about DEI are common, even among HR professionals responsible for developing DEI strategies. Misunderstanding DEI can lead to a less capable workforce and missed business opportunities, not to mention possible legal repercussions for unfair or unequal employment processes. We’re here to help by sharing the top misconception about DEI.

Misconception #1: DEI diversity is primarily about race and gender and specifically under-represented employee groups.

Diversity takes many forms, and yes, race and gender differences do account for diversity, but other types of diversity include age, disability, sexual orientation, gender identity, language, culture, socioeconomic status, religious beliefs, and political perspective.

Misconception #2: DEI is about the makeup of a company’s staff.

Diversity is not just about ‘including’ people who have been under-represented as employees. It’s also about creating a team and a business that better understands all of the potential customers for your products and services. Understanding the diversity of your prospective customers needs will help your business grow and thrive. DEI creates a culture in which each member of your team can contribute to the best of their ability and serve your ever-more-diverse market.

Misconception #3: DEI is a fad.

You’re hearing more about DEI diversity in the workplace not because it is a fad, but because it works! SHRM writes, “Smart companies reflect [diversity] in the collective makeup of their employees. Their leaders understand that yesterday’s workforce can’t lead them into tomorrow.” Markets are becoming more global and buyers represent all of humanity – understanding diverse customer needs is not fad – it is a necessary part of your success.

Misconception #4: DEI is the same thing as Equal Employment Opportunity or Affirmative Action.

The legal standards for equal employment laws and the corrective efforts of Affirmative Action programs are focused on removing historic barriers that made workplaces less diverse. DEI is about building and managing teams that make companies smarter, more resilient and more connected to their customers by having a deeper understanding of the range of needs in the marketplace. DEI studies show that the performance of non-minority employees also improves when they are part of a workforce that include diverse experiences. DEI applies to everyone and is not government mandated, but rather it is something businesses take on voluntarily to improve their workforce and business prospects.

Misconception #5: DEI diversity is about treating everyone equally.

On its face, this seems reasonable. But sometimes, treating everyone the same can have the unintended consequence of making things unnecessarily difficult for some people and not others.

For example, if a company requires everyone to start work at the same time in the morning, it might be unduly difficult on an employee with a medical condition that is worse in the morning or who needs to take medication at and wait for it to take effect. This shouldn’t be thought of as “special treatment,” but rather a consideration that will help the worker excel.

Taking a flexible approach does not mean that you will have to compromise your business’s needs, only that a one-size-fits-all policy isn’t always appropriate.

Misconception #6: There’s no return on investment in DEI.

DEI is all about ROI. Companies with well-defined and funded DEI initiatives lower employee turnover, increase employee satisfaction and make better and faster decisions about new market opportunities. These benefits are in addition to the traditional metrics of legal risk reduction from compliant business practices.

Misconception #7: Diverse teams are less efficient.

It can take time for any group to get to know each other and figure out how to work most effectively together as a team. This is no truer for diverse teams than any other teams. A range of perspectives can, in fact, be of great benefit to a team’s output.

Misconception #8: It’s more difficult to manage a diverse team.

Successful managers in global businesses are expert in learning about local needs and expectations. Early experiences in managing diversity helps managers succeed as their career spans different locations, business units, and leadership needs. Managing a diverse team is not necessarily any more difficult than managing a non-diverse team. Managing any group of people presents challenges, but as a skilled manager learns his or her team’s capabilities and weaknesses, results will follow.

Misconception #9: It’s difficult for people of different generations to work together.

Age diversity can present numerous opportunities for productive collaboration. Many Baby Boomers nearing retirement have wisdom and a lifetime of experience that they can draw upon to help nurture and support their younger colleagues. The younger generations typically bring technological skills, creativity, and enthusiasm. An intergenerational team can offer the best of both worlds.

Misconception #10: We’ve implemented a DEI policy, now we’re done.

Many famous business leaders follow the saying that ‘execution eats strategy for lunch’. Creating a DEI policy is just the first step. If your DEI efforts are not incorporated into annual performance reviews and pay and promotion programs your DEI strategy will fail. Successful DEI programs are recognized by business leaders who discuss them as mission-critical strategies connected to the success of the business. Milestones are celebrated and the work of diverse teams is held up as examples to be modelled.

Workforce Management Solutions

DEI requires that you measure your workforce demographics and have structured compensation management that includes DEI. Paypro can help with a wide range of solutions fully customizable to your business’s needs. Contact us to find out more about how our services can help make your workforce management tasks more efficient.