Optimizing Your Workforce Productivity & Retention - Human Capital Insights - Vol. 5

Maximizing Performance, Productivity, and Profitability

1A more human resource.SM

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ROI for Your Organization’s Wallet & Heart:Three Game-Changing HCM Strategies

In This Issue:

Flexible Work Arrangements: Optimizing Your Workforce Productivity & Retention

Five Eco-Friendly Strategies for Global Organizations

Data Security Checkup: Protecting Employee Health Information

ADP Human Capital Volume 5

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PeopleFlexible Work Arrangements: Optimizing Your Workforce Productivity & Retention Flexible work arrangements (FWAs) are gaining ground as a way to optimize scheduling. Here’s what you need to know to make them work for your organization.

Employee Happiness: The Link Between Positivity & Productivity Leaders know that an unhappy workforce affects a company’s overall performance, so they’re building strategies to increase the good vibes. Find out how large enterprises are prioritizing happiness.

Using Social Media to Prescreen: Is it Lawful? Although it’s common to screen the social media presence of potential employees during the hiring process, many states and countries have legislation addressing this practice. Are you on the right side of the law?

TrendsFive Eco-Friendly Strategies for Global Organizations As global climate change tops the minds of many, eco-friendly organizations use their positions to shape public perception. Learn how eco-consciousness differs from one company to the next around the globe.

The New Way We’ll Work From technology to philanthropy, new research reveals how employers should think about and prepare for the workplace of the future.

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Contents

ChangeROI for Your Organization’s Wallet & Heart: Three Game-Changing HCM StrategiesHCM is gaining importance and making its way to the forefront of business strategy. Here are three strategies that can facilitate change.

Prepping for Expansion: Tools to Know Before You Grow Expansion can affect how top managers run their teams, carry out processes and use technology. Find out key areas of focus that support expansion now and in the future.

Risk Data Security Checkup: Protecting Employee Health Information When company-supported wellness programs don’t keep employee information secure, large businesses face big consequences. Learn five best practices to ensure confidentiality.

Real Stories, Real ImpactLearn how two organizations are driving business impact with a strategic approach to HCM.

For more articles and insights that can help you ignite the power of your workforce, visit our blog for large business leaders at adp.com/spark

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ADP® publishes ADP Human Capital Insights magazine free of charge. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. ADP does not give legal advice as part of its services. While every effort is made to provide current information, the laws change regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable law in your jurisdiction and consult experienced counsel for legal advice. The ADP logo, ADP, ADP Human Capital Insights and ADP Research Institute are registered trademarks of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. All other trademarks and service marks are the property of their respective owners. Copyright © 2016 ADP, LLC. ALL RIGHTS RESERVED. Questions: Please call ADP at 1-800-225-5237.

A new year often brings with it a sense of excitement and anticipation. Whether your organization is gearing up for business growth through innovation or new market entry, or increasing its focus on core competencies – I hope 2016 is off to a strong start!

Volume 5 of ADP Human Capital Insights® magazine also takes a look into the future. The featured infographic on the Evolution of Work reaffirms the human-centric needs of our rapidly changing workplace: Freedom, Knowledge, Stability, Self-Management and Meaning. These insights, which were collected from employers and employees across generations and across the globe, encourage us

to embrace these dynamics and empower our workforce to capture competitive advantage.

As we aim to prepare our organizations to thrive in this new world of work, this issue takes a look at some of the latest Human Capital Management (HCM) trends and topics that we’ve gathered from our experience supporting more than 630,000 organizations across 111 countries. They include:

• Happiness matters – Research proves that a happy workforce is a productive one. Flexible work arrangements (FWAs) are gaining popularity as a way to increase both output and retention. Eco-friendly strategies can deliver simultaneous benefits to the planet, your business, and employee morale. And investing in the health, learning, and overall experience for your people can deliver meaningful – and measurable – returns.

• The speed of technology – From automation to benchmarking, there are ample opportunities to tap into the power of technology to fuel productivity and decision-making. With information abundantly available at the touch of a screen, we must also keep a watchful eye on potential risks, such as security of employee health information, or the unlawful use of social media to prescreen candidates.

We hope this issue offers useful insights into the workforce of today and tomorrow, and sparks dialogue within your organization. As always, we welcome and appreciate your feedback at [email protected].

We want to hear from you

Send us an email at [email protected] more information, visit adp.com/large-enterprise

Mark BenjaminPresident, Global Enterprise Solutions

How are you transforming your business?


People

Flexible Work Arrangements: Optimizing Your Workforce Productivity & RetentionScheduling optimization can take many forms: telecommuting, compressed workweeks and flextime, for example. At its most base level, it allows employees to perform work duties outside of work, and technological improvements have made those options available to a larger segment of the workforce. Some arrangements, however, have yet to garner widespread acceptance in many organizations’ current cultures.

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But research by the Society for Human Resource Management1 (SHRM) shows that participation in some type of optimization has risen in recent years and yielded positive results for employee recruitment, retention, development and productivity.

The Importance of FWAsAccording to the SHRM 2015 “Employee Job Satisfaction and Engagement Report,”2 scheduling optimization options, or flexible work arrangements (FWAs), are important to employees and affects their willingness to stick around. Fifty-five percent of employee respondents, for example, noted work-life balance flexibility as a “very important aspect of their job satisfaction.”

FWAs are also vital for retention according to SHRM’s 2015 HR Jobs Pulse Survey,3 in which 38 percent of respondents indicated they continue at their current enterprise because of the “flexibility to balance work and life issues.”

Without FWAs, an enterprise could put itself at risk of understaffed shifts which, according to the latest “U.K. Health and Safety Enterprise Report”4 on staffing levels, can lead to:

• Safety-critical tasks going uncompleted, or completed later than they should have been

• Maintenance becoming backlogged

• Increases in overtime

• Increase in complaints and absences related to stress, fatigue and other ill health

• Turnover due to high workload, stress and fatigue

• Bottlenecked communications

• Customer complaints and increased delivery times

Trending UpIn the SHRM 2015 “Employee Benefits Report,”5 more than half of employers surveyed said they now offer the following FWAs: telecommuting (60 percent), telecommuting on an ad hoc basis (56 percent), flextime (54 percent) and flextime during core business hours (52 percent). Other common options include compressed workweeks (31 percent), full-time telecommuting (22 percent) and shift flexibility (21 percent), all in an effort to appease employees while keeping shifts at full strength.

Employers’ participation in some options has substantially increased over the past five years, according to the report. Fifty-six percent, for example, offered ad hoc telecommuting in 2015, up 14 percent from 2011.

1 SHRM Research: Flexible Work Arrangements, Society for Human Resource Management, 2015.2 Employee Job Satisfaction and Engagement, Society for Human Resource Management, 2015.3 HR Jobs Post Survey Report, Society for Human Resource Management, Summer 2015.4 U.K. Health and Safety Enterprise Report, 2015. 5 Employee Benefits, Society for Human Resource Management, 2015.

38% of respondents continue at their current enterprise because of the “flexibility to balance work and life issues.”


Looking ForwardOver the next few years, many HR professionals (89 percent) believe flexible scheduling and telecommuting options will increase in some way, according to the SHRM 2014 “Workplace Flexibility: Overview of Flexible Work Arrangements Survey.”6 The survey also shows that 83 percent believe telecommuting, in particular, has improved certain aspects of organizations’ operations and will be more commonplace overall.

Similarly, the survey revealed that “one-quarter (26%) reported the productivity of employees who previously worked 100% on-site had increased, and one-third (32%) reported absenteeism rates had decreased.”

FWA Success and EffectsIn the 2014 survey, HR professionals were asked to comment on the success of FWAs. Ninety-one percent said a compressed workweek “has had some degree of success” (61 percent said “very successful” and 30 percent said “somewhat successful”). In addition, more than 50 percent of the respondents also believed that FWAs “had a positive effect on various business operations, including recruitment and retention, employee excellence, and organizational success.” Most critically, support or buy-in from top management, employee commitment and “a supportive organizational culture” determine scheduling optimization success.

Another benefit of FWAs comes in recruiting various demographics. Thirty-seven percent of the survey respondents of SHRM’s “Aging Workforce: Recruitment and Retention Survey”7 cited using “flexible scheduling as a means of attracting older workers,” and 97 percent said flexible scheduling has been effective for recruitment and retention of older workers (63 percent said “very effective”).

Millennials are another demographic that appreciates FWAs. They “have shown an increased preference for having greater control over their own schedules, and many place greater emphasis on organizational culture, rather than on compensation-related aspects of a job,” according to SHRM’s 2015 “Strategic Benefits Survey: Leveraging Benefits to Recruit Employees.”8

If you’re struggling to show positive results in recruitment and retention of a diverse population, while raising overall productivity, flexible work arrangements might be a key to help unlock the full potential of your workforce.

6 Workplace Flexibility Survey, Society for Human Resource Management, 2014.7 The Aging Workforce — Recruitment and Retention, Society for Human Resource Management, January 2015.8 Strategic Benefits — Leveraging Benefits to Retain Employees, Society for Human Resource Management, 2015.

83% believe telecommuting, in particular, has improved certain aspects of organizations’ operations.

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Employee Happiness: The Link Between Positivity & Productivity

Is your workforce happy? Does it really matter? The answer to both questions is definitely yes. According to a 2014 study on employee happiness by the University of Warwick,1 emotionally healthy and supported employees are more productive. Happy employees are 12 percent more productive than the average worker, and unhappy employees are 10 percent less productive.

1 Happiness and Productivity, University of Warwick, February 2014.


How Much Does Unhappiness Cost?Lost productivity, due to the poor state of employee happiness, costs American enterprises billions of dollars: 300 billion, to be exact, according to the Gallup-Healthways Well-Being Index.2 That study details how increasingly unhappy people are with their jobs, managers, coworkers, and work environments. It also reveals that employee unhappiness results in absenteeism, presenteeism (at work, but mentally elsewhere), lower productivity, and lower-quality work.

What Should Your Enterprise Do?Take a page or two from Intuitive Research and Technology Corporation’s (IRT) playbook. They have been named, for the second year running, the number one place to work for midsized organizations by Great Place to Work.

IRT, which provides engineering and analytical services, focuses on five main areas:

Bonus and Profitsharing

The bonus and profit-sharing program is special, because it’s robust. It includes significant OTS (On-the-Spot) bonuses throughout the year, along with an organization-wide bonus in November that’s based first on organization-level performance, then group, then individual. IRT also shares profits with everyone in March, and the cash goes into 401(k) accounts.

Certification Boot Camps

To promote employees’ professional development, IRT provides “boot camps” in-house to assist employees who need to prepare for specific certification courses, e.g., Certified Systems Engineer Professional (CESP). The organization brings in instructors, provides materials, and also pays for the exam (once passed).

Productivity loss isn’t the only place where employers are feeling the pinch of unhappiness. They’re also feeling it in the form of turnover. When you lose employees, you lose revenue. The cost of that, according to the Society for Human Resource Management (SHRM),3 can be as high as 100 to 300 percent of the recently departed employees’ base salary.

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What’s a CHRO to Do?As you help your enterprise find ways to create a happier work environment, HR can support the process by paying closer attention to the screening process to ensure new hires fit into the culture. A Globoforce4 “work mood tracker” report adds that it’s important to also ensure employees feel appreciated. Sixty-nine percent of employees, according to the survey, say they will work harder when they feel recognized for their achievements, no matter how small.

Savvy CHROs also help employers attend to employees personal needs. A Net Impact-Rutgers University5 study shows that 88 percent of employee believe it’s not just important, but crucial, to have a healthy work-life balance along with a positive atmosphere in the workplace.

A big part of that balance doesn’t cost a dime: It can be as simple as fostering workplace friendships. A Jobsite UK6 study shows that 70 percent of participants say cultivating friendships while at work creates a positive influence on both their productivity and happiness.

Finally, CHROs should help managers and supervisors understand the importance of focusing on their employees’ individual strengths. This, ultimately, could double the number of happy employees, according to research from Gallup.7

The Bottom LineStatistics have plenty to say about employee happiness and its affect on productivity and the bottom line. That’s why clever HR leaders pay more attention to the concept of creating a workplace climate conducive to overall satisfaction, not just job satisfaction. Yes, implementing changes may cost more in time and money, but if research results are to be believed, the payoff is invaluable — in employee retention, productivity, and earnings.

2 Healthways Well-being Index, Gallup, 2015. 3 Measuring and Mitigating the Cost of Employee Turnover, Society for Human Resource Management, July 2012.4 Workforce Mood Tracker Report, Globoforce, September 2011.5 Talent Report: What Workers Want in 2012, Net Impact and Rutgers University, 2012.6 Jobsite UK, 2012. 7 State of the American Workplace Report, Gallup, 2012.

CARE Day For the quarterly CARE Day program, IRT brings in a clinician, physical therapist, nutritionist, health food store representative, and massage therapist. IRT pays for treatments, tests and consultations, and blood work and other test results are sent to employees’ homes.

VIP Leave The Veterans Information Program (VIP) Leave is a special program to assist veterans prior-to-hire, post-hire, and throughout the year through Lunch ‘n’ Learn programs on veteran-related topics. VIP Leave provides up to three days off each year, with pay, for VA hospital visits and mid-tour return visits for active-duty spouses.

Benefits Allowance

IRT provides a general annual allowance to full-time employees to help pay for voluntary benefits. If the allowance is not used for benefits, it becomes additional income.

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Using Social Media to Prescreen: Is it Lawful?According to the Society for Human Resource Management (SHRM)–Ascendo Resources survey1 published in September 2015, 65 percent of organizations actively searched and made new hires using social media in the past year. More than half (57 percent) found people through LinkedIn. Thirty percent hired people found on professional or social networking sites (SNSs), and 19 percent made hires from Facebook.

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Laying Down the LawWhat is the current state of legislation on prescreening employees? Well, it isn’t unlawful to find and vet candidates using social media. But how and when you obtain information, as well as how you use it, can pose problems. Why? Bias can slip into decision-making when trying to make decisions on screening, interviewing and then hiring.

There are avenues of guidance that give employers a road map for what they can and cannot do. Outside of the courts, information comes from the Equal Employment Opportunity Commission (EEOC)and the National Labor Relations Board (NLRB) cases due to alleged social media abuse.

65% of organizations actively searched for and made new hires using social media in the past year.

Employers get into trouble when they access social media too early in the process. Social media accounts have profile pictures that can reveal what the EEOC deems “protected characteristics,” such as gender and race. Online profiles and posts may reveal even more protected characteristics such as gender identity, sexual orientation, religion or disability. Sometimes, you can even learn of home life issues that affect a person’s ability to be on time. If you obtain this type of information prior to a face-to-face interview, ensure you design your interview questions and keep your decision-making strictly within legal interview limits.2

Taking it to CourtToday, the courts are paying attention to the use of social media in prescreening employees. The Neiman v. Grange Mutual Insurance Co.

(GMIC) case is a current example of a violation of the Age Discrimination in Employment Act (ADEA).3 In that case, a U.S. District Court denied GMIC’s motion to dismiss the plaintiff’s age discrimination claim. The employer argued that the plaintiff’s age was unknown because the interview was conducted over the phone. The plaintiff alleged the defendant knew his age because, on his LinkedIn profile, he clearly stated he graduated from college in 1989. The court found the allegation sufficient to place GMIC on notice that Neiman belonged to a protected class because a reasonable person would assume someone who graduated college in 1989 was over the age of 40.

1 The Importance of Social Media for Recruiters and Job Seekers, Society for Human Resource Management, September 2015.2 Keep the Interview Legal, Monster.com, 2015. 3 Neiman v. Grange Mutual Insurance, 2013.

Organizations must tread lightly when using social media to screen potential candidates. Legislation on prescreening employees is in its infancy when it comes to social media. Viewing a candidate’s social media profiles, especially before you meet the candidate in person, could subject your organization to a discrimination lawsuit. Below is a guide to help navigate the choppy waters of social media screening.


Passwords and PrivacyAs LinkedIn, Facebook, Twitter and other networks have become more popular, some employers have tried to use social media to gain personal information on both candidates and employees. This would be information to which they would not ordinarily have access. Employers have gone so far as to ask, and sometimes require, passwords to gain full access to personal sites.

As of July 2015, 22 states,5 in response to the potential privacy issues and risks, passed laws banning such practices. As a result, employers may no longer request or require passwords. They must instead obtain personal information at the appropriate intervals in the employment process.

To stay ahead of the law, it’s critical for employers, especially those doing business in multiple jurisdictions, to stay up to date on all the developments in this area because intricacies in the law change federally and by state.

What’s Happening Overseas?In contrast, in other parts of the world, according to a recent U.S. social recruiting study done by Jobvite,6”European employers are lagging American organizations in terms of adopting social recruiting and hiring.”

StepStone,7 one of Europe’s most successful online job boards, recently published its “Recruitment via Social Media: Fact or Hype?” study on recruiting and hiring practices in Europe. In the study, they quote another study by TNS that said the volume of candidates generated by SNSs is lower than other channels, and only 24 percent of organizations surveyed are happy with the candidate volume from SNSs.

It’s clear that social media’s influence on recruiting will increase as its use continues to rise. While a valuable tool, it’s imperative that your organization dedicates a watchdog with social media expertise, but doesn’t

make hiring decisions, who will keep their finger on the pulse of changing regulations and guide your organization as these laws change over time.

The volume of European candidates generated by SNSs is lower than other channels, and only 24% of organizations surveyed are happy with the candidate volume from SNSs.

5 State Laws Ban Access to Workers’ Social Media Accounts, Society for Human Resource Management, 2015.6 How Social Media is Used for Recruiting in 2013, Link Humans, 2013. 7 Recruitment vs. Social Media: Fact or Hype?, StepStone, 2013.

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Five Eco-Friendly Strategies for Global Organizations

Following the Conference of Parties (COP21)1 meeting of the United Nations Framework Convention on Climate Change in December 2015, 195 nations agreed to a historic deal to reduce greenhouse gas emissions. According to The New York Times,2 “the core of the Paris deal is a requirement that every nation take part” by developing a plan to reduce emissions and publicly report on the results every five years. Are eco-friendly strategies for global organizations something you need to worry about? Although the COP21 Accord is binding only for participating nation states, global organizations can lead by example in adopting the same guidelines and forging new, greener paths. HR leadership can and should be at the forefront of these initiatives.

Trends

1 Conference of Parties, United Nations Framework Convention of Climate Change, December 2015.2 Nations Approve Landmark Climate Accord in Paris, The New York Times, December 2015.


Here are five eco-friendly strategies for global organizations to get your business headed in the right direction:

Be an Early AdopterThe first action global organizations

can take is to publicly and voluntarily agree to the terms of the Paris Accord, which includes developing a plan and publicly reporting on results of environmental initiatives.

Newsweek3 publishes an annual Green Companies List ranking the largest global enterprises’ environmental impact, and it’s possible your organization is already making voluntary disclosures for this list. If not, the simplest way to get your organization’s hat into the ring is to make a firm commitment to be more eco-friendly, using the framework of the Paris Accord.

Reduce Employees’ Carbon Footprints

Increasing commuting hours are contributing to both greenhouse gas emissions and employee stress, according to an article in The Atlantic.4 So one specific, eco-friendly strategy for global organizations is to promote the reduction of employee commuting. Not every global enterprise can have a fleet of commuter buses driving thousands of employees to and from work every day, a la Google, Facebook, Yahoo!, Cisco, Box and other Silicon Valley organizations. However, new services, such as RidePal, are popping up so organizations can share in the benefits of busing employees without the need to arrange their own transportation systems. Uber also now offers a service to encourage carpooling to work, according to the Verge.5 Not only can organizations promote public transportation by offering employees annual bus, subway, and train passes, but you can also offer Uber credits to promote more carpooling.

As more corporations move to centralized, downtown office spaces, and more employees move to the suburbs, global organizations could help reduce commuting by offering more flexible work-at-home arrangements or opening suburban satellite office space.

As more corporations move to centralized, downtown office spaces, and more employees move to the suburbs, global organizations could help reduce commuting by offering more flexible work-at-home arrangements or opening suburban satellite office space.

3 Green Rankings, Newsweek, 2015.4 Yes, Rush-Hour Traffic is Getting Worse, The Atlantic, August 2015.5 Uber Launches Uber Commute, A Carpooling Service Starting in China, The Verge, September 2015.

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A New Way for Executive Pay

As an incentive for leaders of global organizations to develop eco-friendly strategies, executive compensation plans could be linked in part to these goals. According to Newsweek,6 53 percent of the largest organizations in the United States — and 69 percent globally — have already “linked at least part of their executive bonus payout to green factors like energy use and greenhouse emissions.”

Thinking Globally Starts Locally

As an extension of your efforts to change the culture of your organization from within, there is also a wonderful opportunity to promote and support your employees’ work to better their own community. For instance, back in 2009 Wal-Mart launched a “Personal Sustainability Project,”7 which helps employees “make and keep commitments to their planet and to their health” through environmentally friendly activities such as biking to work, conserving water or otherwise finding new and different ways to conserve energy in their everyday lives.

A Green TakeoverMaking the world around your

organization a better place can go beyond one initiative and become a core element of your corporation’s overall culture. Consider IBM’s “Smarter Planet”8 campaign. It is a marketing campaign, of course, but also a business strategy and a global environmental initiative all rolled into one. IBM employees rally around this concept of a “Smarter Planet,” and prospective employees and clients see an organization that values projects and products that actually create a smarter, safer planet.

CHROs who push to incorporate eco-friendly strategies into the fabric of their organization will find that these ideals not only have a positive impact on the environment, but also offer a fantastic return on investment.

6 Corporations are Going Green by Linking Executive Pay to Energy and Emissions Targets, Newsweek, June 2015.7 Energize Employees with Green Strategies, Harvard Business Review, September 2009.8 World’s Greenest Companies and What We Can Learn from Them, Environmental Leader, July 2013.

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The New Way We’ll WorkADP Research Institute’s Evolution Of Work Study Sheds Light on How Employers Should Think about the Future Workplace

58% of respondents believe a standard retirement age will eventually cease to exist.

45% surveyed fear that automation, smart machines and artificial intelligence will replace people for repetitive work.

In Asia Pacific, 81% of people surveyed are excited about the future and embracing change.

Europeans remain wary about workplace shifts as only 59% of

respondents feel optimistic.

89% of respondents will want to work on personal interests and things that impact society.

92% of those surveyed believe technology will allow for deeper connections across distance and time.

While most workplace changes are perceived positively, there is fear that automation and smart machines will replace work being done by humans.

Openness to workplace changes varies by region.

The modern definition of job security requires employees to adapt to different roles.

Younger workers are searching for meaning beyond lucrative salaries to feel fulfilled.

HR departments should look to improve global connectivity.

82% of those respondents hope to define their own work schedule.

95% of employees in our study believe they will be able to work from anywhere in the world.

Our research showed that in order for employers to prepare for the future of work, they may want to cultivate an environment that allows for greater freedom and collaboration, manage employee concerns around job security, and provide opportunities for meaningful work.

Learn more at: adp.com/EvolutionWork

The ADP logo, ADP, and ADP Research Institute are registered trademarks of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. All other trademarks and service marks are the property of their respective owners. Copyright © 2016 ADP, LLC. All rights reserved.

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The New Way We’ll WorkADP Research Institute’s Evolution of Work Study sheds light on how employers should think about the future workplace. We surveyed over 2000 employees and employers across the globe to understand the human-centric needs that are changing the way we work.





















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82% of those respondentshope to define their own work schedule.


See the full research results at: adp.com/EvolutionWork



















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Our research showed that in order for employers to prepare for the future of work, they may want to cultivate an environment that allows for greater freedom and collaboration, manage employee concerns around jobsecurity, and provide opportunities for meaningful work.


ROI for Your Organization’s Wallet & Heart:

Change

As government regulations grow, CEOs are relying even more on their HR leaders to unlock the benefits of their Human Capital Management (HCM) solution to inform business strategies. In fact, according to the Harvard Business Review,1 71 percent of CEOs view human capital as the top factor contributing to sustainable economic value.

1 The Big Data Opportunity for HR and Finance, Harvard Business Review, 2013.

Three Game-Changing HCM Strategies

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Economist Gary Becker2 describes human capital as the “knowledge, information, ideas, skills, and health of individuals.” If the C-suite believes human capital is the component that contributes most to sustainable value and growth, then CHROs must be ready to execute Human Capital Management business strategies to help their organization develop. In other words, CHROs need innovative approaches to investments in education, training and health.

Here are innovative HCM ideas that can improve employee and organizational performance.

Implement a Data-Driven ApproachCHROs must change the HR culture and get the right tools in place so they can measure the results of human capital investment. In a world of big data and cloud computing, the list of excuses for not having the means to measure human capital’s contribution to organizational results is shrinking rapidly. The CHRO cannot have a seat at the table in the C-suite without the ability to report business results directly tied to investing in human capital.

Educated Employees Drive Economic ValueThe American Society for Training & Development (ASTD) has been collecting data on employee training and development for many years. A joint study with HR.com3 was done to find out if there’s a link between the investment made in employee training and organizational value measures (defined by stock performance, income per employee, gross profit margin and market value per employee). According to the study, almost all financial measures are higher for those organizations that spend an “above average amount” on training per employee. Not only that, the training investment is the single most important statistical predictor of total stockholder return for the following year.

2 The Age of Human Capital, Gary S. Becker, 1993. 3 Investing in Companies that Invest in People, HR.com, February 2002.

One example of an organization showing a financial result is the Cheesecake Factory. It invests $2,000 per year per employee on training and its sales per square foot (a top metric used to measure retail performance) is almost double the industry average, per SkilledUp.4

Training may not be considered an innovative approach to improving business results, but linking an investment in training to a financial result is a strategic approach more CHROs must take.

Investing in Health: Good for Employees and Your OrganizationIn addition to education and training, investing in health is a major factor of human capital effectiveness. Anecdotally, it’s easy to understand that people who are healthy, in the broadest sense, will generally be happier, more satisfied with their work, and more productive. But there’s also evidence to support this.

As reported in the Harvard Business Review,5 Towers Watson

and the National Business Group on Health conducted a study that showed organizations with wellness programs reported “lower voluntary attrition.” SAS, the analytics, business intelligence and data management software firm, attributes much of its four percent voluntary attrition rate to its wellness program. Employee health programs can save organizations big money as well. Johnson & Johnson estimates that its wellness initiative has saved the organization $250 million on health care costs over the past decade.

Another innovative way CHROs can improve employee wellness is to incentivize movement. For example, Target now offers FitBits®

to all 335,000 employees, according to an article in Bloomberg Business.6 At a cost of $59.95 for each FitBit (plus the cost of the service), Target is making a huge investment in trying to help employees be healthier. However, according to Target, “the cost of a FitBit device and the associated services is very small compared to the savings from a healthier employee population.”

Your organization can take a cue from these innovators and see a sharp ROI from a data-driven approach to investing in human capital, as long as you also go the extra mile to ensure you have the tools in place to measure and report the results.

Another innovative way CHROs can improve employee wellness is to incentivize movement.

For example, Target now offers FitBits to all 335,000 employees, according to an article in Bloomberg Business.

4 How Top Companies Make the ROI Case for Employee Training, Skilledup, December 2014.5 What’s the Hard Return on Employee Wellness Programs?, Harvard Business Review, December 2010.6 Target Offers Fitbits to 335,000 Employees, Bloomberg Business, September 2015.


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Prepping for Expansion:Tools to Know Before You Grow

During times of transition, HR should be a key strategic player. Tools, such as automated technology and Big Data can help your HR team maximize its energy and keep the focus on optimizing Human Capital Management (HCM) practices for your organization’s future.

As an enterprise leader, you know that human resources and business growth must work in tandem. Attracting and retaining talent while developing your existing workforce’s skills will be top priorities for any growing enterprise. For HR leaders, staying abreast of upcoming changes no longer means simply hiring new talent and preparing current employees for expansion. It also means spearheading the adoption of tools and practices that will better support your enterprise’s growth.

Big Data

Benchmarking

Automation

Training and Development


Automation: Enabling Strategic FocusEven if your business is not looking to expand globally, there’s a strong chance that other organizations outside your home country are looking to expand internationally into your market, unleashing a variety of disruptive competitive forces. To compete effectively, your HR team will need to shift focus toward employment branding efforts, compensation structures, leadership development, succession planning, and skills enhancement to continue to hire and retain the best people.

In order to free your team from transactional burdens and enable them to work on these strategic areas, it may be wise to invest in more automated solutions. According to an ADP study,1 Harnessing Big Data: The Human Capital Management Journey to Achieving Business Growth, the average large organization has 33 payroll systems and 31 HR systems. Taxing your team with manually keying in and moving data across these disconnected systems, or other tasks that a computer could do just as well, is not efficient and not likely to build employee loyalty and engagement. You have built a solid team, so use their energy and skills where they count.

Big Data: Optimizing InsightsUsing insights gleaned from Big Data has become increasingly important for HR leaders. The same ADP study advised that “strengthening the data infrastructure is clearly a critical first component” in growing organizations. Big Data helps uncover trends and insights into your workforce, which can then be used to optimize the efficiency

1 Harnessing Big Data: The Human Capital Management Journey to Achieving Business Growth, The ADP Research Institute, 2015.2 Why You Need to Embrace the Big Data Trend in HR, Entrepreneur, April 2015.

of both new and old practices to support business growth.

As an article in Entrepreneur2 explained, HR leaders can use big data analytics in four key areas: performance management, retention, training, and hiring to enable and support a workforce that can deliver real business impact. Xerox, for example used insights from Big Data analytics to cut attrition rates in its call center by 20 percent.

The average large organization has

33 payroll systems and 31 HR systems

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3 Using Big Data Smartly, ADP Blog, 2015. 4 Age and Retirement Benchmarks: Key Analytics that Drive Human Capital Management, ADP Research Institute, 2013.5 Preparing Your Organization for Growth, McKinsey & Company, May 2011.

The TakeawayToday’s HR leaders play a strategic role in successful business growth that comes directly from maintaining and grooming talent. Automation frees up valuable HR resources for more strategic activities, and activating Big Data provides critical insights that will drive retention and inform your decision-making. Utilizing these tools will give you a host of advantages as your organization expands, allowing for human resources to play a key role in developing a workforce that will support continued business growth and success.

Contemporary BenchmarkingBig Data is also a great tool for benchmarking compensation3 in a specific role or industry, helping you identify flight risks proactively, thus driving retention. Benchmarking age and retirement with Big Data can also be a strategic advantage. As an ADP Research Institute® report4 explains, organizations “gain tremendous strategic insight when they measure Human Capital Management (HCM) data and then benchmark, or compare, that data to organizations of analogous size within the same or similar industries.”

For example, Big Data analytics might highlight that some of your organization’s talent is nearing retirement age, which should provide the impetus to create opportunities for these retiring employees to share their outgoing know-how with younger employees who will eventually fill those vacated roles.

Training and Development: Enhancing Organizational CapabilitiesAnalytics and insights are only useful if they result in optimized organizational capabilities. This might mean refreshed training and development protocols, for example, since the skills necessary for success are sure to change as your organization expands.

HR leaders have an essential task in providing training and support so that new and old employees, at every level of the organization, can adapt to changing markets. As a report from McKinsey Quarterly5 notes, “many underestimate the importance of organizational factors in translating a growth strategy into reality. This oversight can dampen a company’s growth plans. Organizational processes and structures that are well suited to today’s challenges may well buckle under the strain of new demands or make it impossible to meet them.”

Organizations “gain tremendous strategic insight when they measure HCM data and then benchmark that data to organizations of analogous size within the same or similar industries.


Risk

Employee wellness programs give organizations the opportunity to provide better health outcomes to their valued employees and help increase workplace productivity. Better health outcomes can lead to positive results, such as reduced company-paid health costs and reduced absenteeism. Yet, employee wellness programs come with a risk relating to the security of private health information collected in connection with those programs.

Data Security Checkup: Protecting Employee Health Information

Hackers are getting more technically capable every day and are increasingly targeting health records. According to the U.S. Department of Health and Human Services (HHS),1 there have been over 1,300 “large” incidents of breaches (500 records or more breached) of protected health information since 2009, impacting tens of millions of people. These breaches have happened via laptops, desktops, network servers and portable electronic devices, as well as old-fashioned paper files.

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Direct and Indirect Penalties for Breaches of Health InformationIn addition to the public embarrassment and the justifiable anger from those who gave out their health information (assuming it would be kept confidential), there are regulatory penalties for failing to comply with privacy standards defined in the 1996 Health Insurance Portability and Accountability Act2 (HIPAA). Each violation of the law will cost you from $100 to $50,000,3 and even more if you don’t have adequate protective systems in place. HIPAA applies to anyone collecting and managing protected health information, which would include employee wellness programs. Whether you outsource your wellness program or manage it in-house, you’ll need to maintain the data security of employee health information.

1 U.S. Department of Health and Human Services, 2015. 2 Health Insurance Portability and Accountability Act, 1996. 3 HIPAA Violations and Enforcement, American Medical Association, 1996.

1. Establish ProtocolsFirst and foremost, you should have clear privacy policies and procedures in place for anyone handling employee health data. Of course, those policies and procedures should be fully compliant with HIPAA and other related state laws. A firewall should also be installed between those handling the data on behalf of the wellness program and the people making all operational decisions. Because employees are already hesitant to disclose private health information, freely communicate that this information is only for the wellness program and no other purpose.

2. Educate SystematicallyHave regular and effective security and awareness training for all staff and vendors who work with protected health information. Every organization is only as strong as its weakest link, so employees who become casual about compliance (for example, leaving a sticky note with their passwords on their computer) put the entire reputation of the wellness program at risk. When staff working on the wellness program violate the rules, take it seriously and deal with the situation swiftly.

5 Best Practices for Health Data Security in Wellness Programs

3. Encrypt DataUse strong data encryption, whether on a desktop, laptop, server or other device, as a way to keep data confidential. Encryption makes data unintelligible to anyone without the code to decrypt, so it’s a pivotal layer of security against hackers. When sharing protected health care information by email, these messages should also be encrypted.


4. Employ Secondary VerificationUse multi-factor authentication as an additional security measure. This would require users who have access to protected information to have both a password and additional method, such as a smartcard, authentication app or biometric (a fingerprint, for example). Similar to encryption, multi-factor authentication represents a further level of data security in your efforts to prevent unauthorized disclosures of information.

5. Examine InternallyReview and audit your policies and procedures, ensuring that your staff and partners are following them. Always retain your audit records in case your compliance efforts are called into question by regulators, who will then audit you independently. In every partner/supplier agreement, be certain that you reserve the right to audit said partner for compliance related to the protection of employee health information. Work with your partners to carefully define HIPAA compliance best practices, including the necessity of your partner’s use of encryption and multi-factor authentication, which will help to certify that they don’t transfer protected employee health data to anyone without your approval.

The Office of the National Coordinator for Health Information Technology also offers a detailed, 21-page approach to protect employee health information, containing a wealth of related links and pertinent resources.4

3 Guide to Privacy and Security of Electronic Health Information, Office of the National Coordinator for Health Information Technology and U.S. Department of Health and Human Services Office for Civil Rights, April 2015.

Dell, an end-to-end computing solutions company, has transformed computing for 32 years and counting. As a global organization, they needed HCM solutions that could handle the volume of their employees across 22 countries and 91 entities. The company sought a partner that understood their needs and the needs of their team members to provide scalable solutions, help streamline their services, secure their data and ensure payroll accuracy.

Watch Dell’s story at bit.ly/1S4JLhy and hear from Najuma Atkinson, Executive Director, Global HR Services.

Challenges:· Scaling HCM solutions · Securing employee data· Maintaining accurate global payroll· Supporting business growth

Student Transportation Inc. is North America’s largest independent provider of school bus transportation services, operating more than 13,000 vehicles, transporting over one million students per year and employing more than 14,000 team members. Diverse payroll schedules — hourly, salary, full-time and part-time — prompted the need to streamline and centralize payroll into one unified solution. And with employees working across 146 terminal locations, an efficient tracking system was critical to smooth operations. Integrated solutions from ADP® helped the organization to streamline its payroll, effectively track and manage employee leave and improve the workflow of their HR managers.

Watch Student Transportation’s story at bit.ly/1ZxwzTP and hear from Sharon Phillips, Manager of Corporate Payroll.

Challenges:· Managing employee growth· Ensuring ACA compliance· Streamlining payroll· Efficiently tracking employee time

Centralizing solutions to support growth and improve HR workflows

The right business intelligence to make impactful workforce decisions

Real Stories, Real Impact

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Student Transportation Inc. Dell

Collaboration and success translate worldwide.

#helloworkCreating a global workforce that maintains a local touch isn’t easy. ADP human capital management solutions utilize data-driven insights with innovative software to help you manage and connect your workforce, no matter where they live. Because taking pride in what you can accomplish together is a feeling that knows no borders.

Visit adp.com/hellowork and see how we can provide a more human resource for your business.

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