The HRK Blog

Company Fraud are there signs?

Can You Spot Someone Committing Fraud at Your Company?

Believe it or not, someone committing corporate fraud, or "cooking the books" is not that difficult to spot, once you know what to look for.  According to the study "Who is a Typical Fraudster?" developed and based on analysis of corporate fraud by KPMG International’s member firms, "fraudsters"  typically meet the following critera:

• 36-45 year old male in finance related role
• 10+ years longevity with the company
• Rarely takes vacations
• May only want to work with certain vendors
• Stressed-out most of the time

Also, their behavior is suspect:

• They cut corners
• They may have poor performance or make mistakes
• They tend to hire "Yes men" who will go along with whatever they say or do
• They seem to live well beyond their means
• They may exhibit signs of alcohol or substance abuse

Although this information is designed to give you an overview of someone most likely to commit fraud, it's imperative that you refrain from profiling.   HR execs must take measures to protect not only the company, but the employee.

During the hiring process please make sure you perform a background check on the people you hire, often times there can be a history in their past that might demonstrate some or all of the following:

• Criminal activity in the past
• Financial trouble for late payments to vendors
• Bankruptcy
• Employer Lawsuits for Workers' Compensation or an Employment Practice Lawsuit for Wrongful Termination

Checks and Balances in the workplace are vital to assist in prevention of fraud.  Always have a different person reviewing and balancing the checking accounts and monitor all cash and check writing capabilities.

For more comprehensive guidance on all things HR, contact HR Knowledge, Inc. at Sales@hrknowledge.com or call at 508-339-1300.

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Age Discrimination and Compliance (ADEA)

Age Discrimination and Compliance (ADEA)

The current economy and the changing roles of older family members are just a couple of reasons why older Americans are re-entering or remaining in the workforce.  Because of this, it's imperative that those who are hiring have a good understanding of age discrimination.  The Age Discrimination in Employment Act (ADEA) prohibits age discrimination in employment with respect to hiring, firing, layoff, promotion, transfers, compensation, benefits, job assignments and training of anyone age 40 or older.

Age discrimination includes:

-Hiring only younger workers.

-Providing younger workers with better employment terms or conditions.

-Younger workers are the only ones promoted or offered better job opportunities.

-New training intiatives exclude older workers.

-During layoffs or restructuring, younger workers are retained while older workers are not.

During the interview process, be aware of questions that are potentially discriminatory, such as:

-How old are you?

-What year did you graduate from high school?

-Are you a Social Security recipient?

Older workers will more than likely have more experience and/or education than their younger counterparts.  How do you address the "overqualified" during the interview process to ensure that the person would be a good hire?  Questions that are "safe" to ask may include:

“How will you be challenged in this role?” and “What are your salary expectations?”

For more information about hiring, compensation or benefits please feel free to contact Jeff Garr, CEO at HR Knowledge www.hrknowledge.com or Call 508-339-1300.

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Hiring Employees with I-9 Compliance

Our most recent hire worked for almost a full week before it was discovered that she failed to meet I-9 eligibility criteria.  How are we supposed to pay her?

It is a challenge to pay someone for work performed when there is no proper documentation, but she must be paid, period.

The Department of Labor’s (DOL) states “work not requested but suffered or permitted to be performed is work time that must be paid for by the employer…The reason is immaterial. The hours are work time and are compensable.”

And, regardless of her I-9 status, the Internal Revenue Service (IRS) expects you to withhold payroll taxes.

There's really only one way to avoid this type of situation and that is by planning carefully.  Here are some tips to follow in order to ensure there is no violation of the Fair Labor Standards Act or IRS rules:

• Pay the employee to ensure you fulfill the requirements of DOL and IRS.  You may pay the wages owed the employee in cash or by check (via the company's payroll system) minus the amount deducted for taxes.
• When hiring, be sure to require work authorization PRIOR to the commencement of work
• Obtain and complete ALL paperwork on new employees BEFORE any work is performed, which of course includes the I-9.  And, be sure Payroll has a copy of the employee's Social Security card on file

For more comprehensive guidance, contact HR Knowledge, Inc. at Sales@hrknowledge.com or call at 508-339-1300.

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

How do you incentivize sales people and compensate them correctly?

Compensating your Sales people correctly can be a great challenge to the average business manager/owner.  If you don’t compensate them correctly or adequately, your sales people's production may suffer, which will directly affect business growth and profit.  If you do incentivize them correctly but pay them too much, it could create future problems related to growth and or profitability of your business.

Below are 7 key points to building a strong sales team:

1. Consider a Compensation Model prior to targeting and hiring sales people.  It helps to have a good understanding of what makes some people "tick", yet not others.  Maslow’s Hierarchy of Needs states that there are a number of aspects that generate needs for any person, some of which may be of more interest to one person and less interest to another.  Once you understand which aspect(s) motivate people, you can create a better environment to help create greater success.  According to Malsow, people are motivated by need, from the most basic biological/ physical needs (food, shelter, sleep, etc.) and safety needs (security, protection, stability) to the more emotional needs of belongingness (relationships, work group) and esteem needs (achievement and reputation) to self-actualization needs (personal growth and fulfillment).  For example, someone who is unemployed would be motivated through the fulfillment of the more basic physical and safety needs, whereas a person who already has job security, would be more motivated through promised fulfillment of esteem or self-actualization needs.

2. Hire the right team of sales people.  Before hiring, understand the type of sales person you need and then target them.  Are you looking for an “order taker”? This is a person who can call on existing accounts and build great relationship with the client.  Are you looking for a sales person who can “make it rain”?  This person has the ability to create and generate business.  If they are able to "find" business then they are the “hunter”. Understand what type of sales person you need and then target them in recruiting.

3. Adhere to the "Three A's" when hiring.  Once you understand the type of sales person you are looking for, remember the "Three A’s" when hiring for a sales position in your company.  The first and most important "A" is Attitude. The right attitude is everything when hiring people.  If they have the right attitude they will go through the wall for you to close business and follow the direction of the company.  Attitude is vital and without it, you have the wrong person on your team. The second "A" is Aptitude.  Ask yourself if s/he has the aptitude for the position of the company. Webster Dictionary defines aptitude as “capability; ability; innate or acquired capacity for something; talent".  If they don’t have the aptitude or capability or ability to take the sales position, then s/he is the wrong person for the company as well.  The final "A" is Altitude, meaning, how high can they go? How high do you need them to go? Will they plateau at a certain point and coast?

4. Beware of complacency.  The next concern when hiring sales people and thus managing them is complacency.  Most sales people will reach a point of complacency and then coast in the job.  Less work and more play becomes their mantra. The key challenge for management is to do all you can do to prevent complacency by your sales people.  Most people become satisfied (and have obtained fulfillment of Maslow's higher level of emotional needs) once they attain job satisfaction or reach a particular level of income or status.  With sales people, the challenge is to prevent this from happening.

5. Utilize your Compensation Model.  It is vital to keep sales people motivated and “in the game”.  From a managerial standpoint, it is far easier to compensate sales people and steer them in the direction the company wants them to go than it is to create compensation models to drive operations people, where you have to rely on coaching and management techniques.  Sales people are experts in understanding compensation models and how they can maximize their income in the quickest time frame.  They are usually very highly motivated and understand how the game works. This being the case, it is imperative that you find a compensation model to drive the sales team to do what you want them to do.

6. Understand what your company’s objectives are and then create the compensation model to attain those objectives.  For example, if your interest is to expand and grow your client base, then the compensation model needs to reward your sales team for new business and retention. You can create additional incentives to ensure that a large portion of their pay will be derived from new business acquisition.  If it is imperative that your sales team be involved in the retention of clients, then you need to find a compensation model which will reward them for retaining and maintaining great relationships with clients. If they lose clientele, you must ensure that this will affect their compensation. This is a delicate area because if your operations team is not equally committed to retaining clients and the service or product you are delivering is not up to standard, then the sales team has no chance to retain the business no matter how great their relationship is with that client.

7. Do all that you can to ensure that the product or service you deliver is “remarkable!"  Make sure that your company is setting the tone and the barometer in the marketplace for what you do. This will allow your sales people to confidently and comfortably sell your product or service. Without this, no sales person of any quality can survive and thrive in today’s business environment.  Make sure that your operations team are as committed and passionate about clients as your sales team.

For more information about compensation, HR and or benefits please feel free to contact Jeff Garr, CEO at HR Knowledge or 508-339-1300 www.hrknowledge.com

 

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Top Reasons Companies are Struggling with Staffing

How are companies going to handle the increased demand for qualified candidates when so many companies are struggling with staffing now?  Why are these companies struggling?  Here are the top reasons:

Feast.  With the economic downturn, employers have been faced with a deluge of job applicants and the vast majority of these applicants are not suited to those job positions. 

Famine.  Skilled people are still hard to find, even in this economy. Many positions go unfilled simply for a lack of qualified candidates, particularly in many skilled trades.

Fewer “job changers”.  Many people are risk averse in today’s economy and would rather play it safe and stay with a current employer than risk a job move.

Benefits costs are soaring.  An increasing number of employers are deciding to put off hiring or rely on temporary workers to avoid such uncertainty.

Reluctance to fill vacant positions causing increased employee stress.  With companies reluctant to hire, the workload of existing employees, with regard to the scope of responsibilities and total number of hours worked, is increasing noticeably. 

Increase in litigation by the unemployed.  When faced with the loss of employment and income, people are much more apt to seek legal redress than when jobs are plentiful. 

Low levels of employee commitment and productivity.  Studies suggest that employee loyalty is at an all time low, due largely in part to the prevalance of downsizing.   Such feelings generally result in decreased productivity; reduced attention to the quality of work and increased risk for customer dissatisfaction.

Perhaps the answer to the staffing challenges of feast or famine lies in retained searches.  These days, retained searches are typically conducted for only the highest levels of staff, namely the CEO, CIO and CTO.  There seems to be a reluctance to use retained searches for non-senior staff.  The argument being that qualified applicants may be found by employee referral or via Craigslist and similar mediums. 

Or, maybe less technology, more “hands on” is the answer.  Could it be that the candidate selection process depends too much on technology and companies are inadvertently eliminating qualified candidates solely on the basis of not having enough “key terms” listed in their electronically submitted resumés?

Thankfully, a few of the staffing problems we mentioned should resolve on their own in time as the economy improves.  We should start to see an improvement in employee productivity and loyalty; people who are more willing to change jobs and a decrease in employee stress as vacancies are filled and the workload is redistributed.

By Jeff Garr, CEO and Frank Zych, Director of HR Services, HR Knowledge, Inc.

To read more, visit http://www.busex.com/article/operations-human-resources.HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Background checks: How far can you go?

Background checks: How far can you go? - Jun. 13, 2011

Issue: Your company is opening a new branch office and getting ready to hire workers. You would like to conduct background checks to get more information on the candidates in order to make informed decisions. What is permitted when checking applicants’ background and work history?

Answer: Employers do not have unlimited rights to investigate applicants’ backgrounds and personal lives. If individuals’ privacy rights are violated, they can take legal action against you. The following list summarizes the types of information that employers often consult as part of a pre-employment check and the laws governing access and use for making hiring decisions.

• Credit reports. Under the Fair Credit Reporting Act(FCRA), employers must obtain an employee's written consent before seeking an employee's credit report. If you decide not to hire or promote someone based on information in the credit report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report under the FCRA. Be aware that some states have more stringent rules limiting the use of credit reports.
• Criminal records.To what extent a private employer may consider an applicant's criminal history in making hiring decisions varies from state to state. Because of this variation, you should consult with a lawyer or do further legal research on the laws of your state before probing into whether or not an applicant has a criminal past.
• Lie detector tests. The Employee Polygraph Protection Actprohibits most private employers from using lie detector tests. The law includes a list of exceptions that apply to certain sensitive businesses that provide armored car services, alarm or guard services, or manufacture, distribute, or dispense pharmaceuticals.
• Medical records. Under the Americans with Disabilities Act,employers may inquire only about an applicant's ability to perform specific job duties and cannot request an employee's medical records.
• Bankruptcies. Bankruptcies are a matter of public record and may appear on an individual's credit report. The Federal Bankruptcy Actprohibits employers from discriminating against applicants because they have filed for bankruptcy.
• Military service.Military service records may be released only under limited circumstances, and consent is generally required. The military may, however, disclose name, rank, salary, duty assignments, awards, and duty status without the member's consent.
• School records. Under the Family Educational Rights and Privacy Actand similar state laws, educational records (such as transcripts, recommendations and financial information) are confidential and will not be released by the school without a student's consent.
• Workers' compensation records. Workers' compensation appeals are a matter of public record. Information from a workers' compensation appeal may be used in a hiring decision if the employer can show that the applicant's injury might interfere with his ability perform required duties.

Source: U.S. Small Business Administration; http://www.SBA.gov.

www.hrknowledge.com

508-339-1300 Call Today for More Information!

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Personnel Files Are You Compliant?

EMPLOYER DOCUMENTATION GUIDELINES

Employers receive, generate, and accumulate substantial volumes of documents beginning with hiring documents, including job postings, employment applications, resumes, and reference checks and once a worker is employed, personnel files, wage and hour records, payroll records, and disciplinary files. At the conclusion of employment, there may be separation documents generated as well. Part of being a successful employer is properly generating, drafting, and retaining quality professional records, before, during and after the employment relationship.

Recommended Contents of Personnel Files

A. Employment

• Resume

• Online job inquiries (i.e., through monster.com, etc.)

• Original employment application

• Education verification

• Employment verification

• Other background verification

• Rejection letter, if any

• Employment offer letter, if any

• Employment agency agreement, if hired through an agency

• Employee Handbook acknowledgment form showing receipt of Handbook

• Checklist from new employee orientation showing subjects covered

• Transfer requests

• Relocation records

 

B. Payroll

• W-4 Form

• Weekly time records, i.e. timesheets or timecards

• Individual attendance record

• Pay advance request records

• Garnishment orders and records

 

C. Training and Development

• Training history records

• Training program applications/requests

• Skills questionnaire

• Training evaluation forms

 

D. Wage/Salary Administration

• Job description form

• Payroll authorization form

• Compensation history records

• Notification of wage and or salary increase/decrease

 

E. Employee Relations

• Report of discipline/counseling session

• Commendations

• Employee written warning notices

• Employee progress reports

• Performance appraisal forms

• Performance improvement program records

 CLICK HERE FOR MORE INFO

www.hrknowledge.com

 

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.