Beware the Legal Pitfalls of Managing Unpaid Interns

With many college students and recent graduates trying to start a career, their first step to getting introduced to what their degree can hold for them is working as an intern to learn different roles and to learn how a business operates. The U.S. Department of Labor (DOL) has raised concerns regarding what makes an intern an "employee" or a "trainee". Read this blog post to learn more about the guidelines that pertain to bringing an intern or a "trainee" into the workplace.


A college student or recent graduate is eager to make an impression. So is the early-in-career professional who’s been laid off by another company. You placed them both in an unpaid internship program because you want to give your company a chance to evaluate them as future employees. What could go wrong?

At job sites across the United States, interns not paid or earning less than minimum wage are given all sorts of jobs: answering phones, loading paper in the copiers, managing company social media campaigns.

But, federal guidelines released by the U.S. Department of Labor (DOL) in April 2010 raise concerns that employers might decide to provide fewer internship opportunities. The guidelines, which apply to “for-profit” private-sector employers, define what makes an intern an “employee” as opposed to a “trainee.” If a court or government agency decides that interns’ work qualifies them as employees, the company could face penalties that include owing back pay; taxes not withheld; Social Security; unemployment benefits; interest; attorneys’ fees; plus liquidated damages, defined by federal law as double the unpaid wages.

Six Standards

The DOL’s Wage and Hour Division lists six factors to use in determining whether an intern is a trainee or an employee under the Fair Labor Standards Act (FLSA).

  1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or other educational institution.
  2. The training is for the benefit of the trainees.
  3. The trainees do not displace regular employees, but instead work under their close observation.
  4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded.
  5. The trainees are not necessarily entitled to a job at the conclusion of the training period.
  6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.
    If all of the factors listed above are met, then the worker is a “trainee,” an employment relationship does not exist under the FLSA, and the act’s minimum wage and overtime provisions do not apply to the worker.

Federal and state labor departments are cracking down on unpaid internships “due to a concern that paid jobs are being displaced and to increase payroll tax revenues,” says employment lawyer Terence P. McCourt of Greenberg Traurig in Boston.

With so much at stake, it’s a good time for HR professionals to review their companies’ internship policies to ensure that they are in compliance with government requirements.

Legal Exposure

The DOL standards state that most nonexempt individuals “suffered or permitted” to work must be compensated for the services they perform for an employer unless certain conditions are met. In general:

  • The internship program must be similar to training that would be given in an educational environment, such as a college, university or trade school.
  • The intern and the employer must both understand that the intern is not entitled to wages.
  • The company must receive no immediate advantage from the internship and in fact may find its operations disrupted by the training effort.
  • The intern must not take the job of regular employees.

Unpaid Programs on the Rise

Despite the risks, unpaid internships appear to be on the rise. In a May 2010 survey by Internships.com, an online clearinghouse for companies and would-be interns, two-thirds of the more than 300 college and university career center professionals who responded said that overall internship postings on their campuses increased from 2009 to 2010. However, more campuses reported lower numbers of paid internships than those reporting increases.

“Unpaid internships do appear to be on the rise,” says attorney James M. Coleman of the labor and employment law firm Constangy, Brooks & Smith LLP in Fairfax, Va. Whether the rise is in “reaction to the difficult economy and an effort to save on labor costs is not completely clear.”

Companies can protect themselves by having the college intern ask his professor for academic credit for the internship. Employers should coordinate with an intern’s school to determine requirements mandated by the educational institution, experts say.

An internship is more likely to be viewed as training if it provides interns with skills that can be used in multiple settings, as opposed to skills that are specific to one employer’s work environment.

Interns should be “allowed to observe aspects of the employer’s operations, such as job shadowing, without needing to perform services at all times,” McCourt says. He adds that an intern should not supervise regular employees or other interns, and the company should define the arrangement clearly and in writing, specifying that there is no expectation of a job offer at the conclusion of the internship.

HR professionals and lawyers say it may be useful for companies to keep written records of what an intern expects to gain from an unpaid program. Attorney Oscar Michelen of Sandback & Michelen in New York City suggests preserving memos, e-mails and other documentation covering what each intern does, such as attending scheduled training sessions and luncheon meetings with regular employees, and what type of training and supervision will be provided.

SOURCE: Taylor, S. (17 January 2020). "Beware the Legal Pitfalls of Managing Unpaid Interns" (Web Blog Post). Retrieved from https://www.shrm.org/hr-today/news/hr-news/pages/managingunpaidinterns.aspx


New employee retention tool has four legs and goes 'woof'

The term "a dog is a human's best friend" can get thrown around, but what if a dog can be turned into increased production and less stress? Read this blog post to how allowing a dog at work can benefit production, engagement, and reduce stress.


There are so many reasons to allow dogs in the workplace, from increasing production and morale to decreasing absences.

And while financial institutions have not traditionally offered such an employee benefit, there are plenty of banks and fintechs that are leading the way in the industry.

For example, JPMorgan Chase not only allows dogs into its branches, but it also hands out dog treats. Wells Fargo is another company with a great pet policy. In fact, Wells Fargo has a host of dogs that have been part of various offices throughout the years.

Other companies are going the extra mile, and providing dog parks on-site or dedicated walking areas for their four-legged colleagues. The online small-business lender Kabbage is well known for its laid-back work culture, including casual dress code, beer on tap and a dog-friendly policy.

Perhaps one of the most pet-friendly companies is Redtail Technology, which is named after the founder Brian McLaughlin’s dog. Not only does the company encourage people to bring their dogs to work, it also has a dog park, and a Slack channel for employees to message each other when they’re about to take their dog out for a play.

Still skeptical about this approach? Here are five scientifically backed reasons that allowing dogs into the office can benefit employees.

First, allowing people to bring their pet along with them to work actually helps to decrease stress for not just them, but everyone in the workspace. Washington State University found that petting a dog for just 10 minutes can help to reduce stress.

Playing with or petting a dog can increase the levels of oxytocin, a stress-reducing hormone; and decrease the levels of cortisol, a stress hormone.

A team of researchers at Virginia Commonwealth University carried out a study that compared three groups of employees: those who brought their dogs to work, those who had dogs but left them at home those who didn’t own a dog. The lead of the study, Randolph Barker, said that "the differences in perceived stress between days the dog was present and absent were significant. The employees as a whole had higher job satisfaction than industry norms."

Second, when staff bring their dog to work, they will need regular walks throughout the day, which will encourage people to be active. Being physically active not only gives people the satisfaction that naturally comes with exercise, but it will also increases productivity.

Each time someone exercises, new mitochondria produce more energy known as ATP. This gives people more energy physically and for the brain, which boosts mental output and productivity.

Third, workplaces that allow dogs into their offices usually find that employees are more cooperative with each other, and that they have better working relationships. Dogs increase morale and bring a more fun and positive outlook to office life, which encourages people to be friendlier to each other.

Dogs are a common interest between many different people from all walks of life, so having some common ground can help people to connect. Central Michigan University found that when a dog is in the room with a group of people, they are more likely to trust each other and collaborate together effectively.

Fourth, actively encouraging staff to bring their pet to work will foster a really good relationship between employer and employee. It will help to make employees feel valued and increase the likelihood they'll stay long term at the company.

The more satisfied people feel in their job role, the less likely they are to search for work elsewhere, making employee retention rates higher, according to one study.

Fifth, allowing staff to bring their pet to work increases their job satisfaction and reduces stress, which in turn will mean that they are less likely to become ill and need time off work. This can have an added effect on other employees in the business too. With the positive, stress-reducing nature that dogs bring to an office, people will be less likely to take time off.

With such benefits already working for some financial companies, hopefully others will start to catch up with these pet-friendly policies soon.

SOURCE: Woods, T. (09 January 2020) "New employee retention tool has four legs and goes 'woof'" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/pet-friendly-policies-as-employee-retention-tools


The Post-Holiday Funk Is Real

Getting out of the post-holiday funk is a difficult task in itself. After a holiday season filled with parties, breaks, food and time off, it can be hard to snap back into work mode. Here are a few things you can do to get out of that holiday funk:


Somewhere around the third week in December work in many offices starts to slow down. There are holiday parties. Customers and clients may be harder to reach. Energy and motivation wanes. And many of us sign off from work completely to spend the holidays with friends and family.

And then January arrives, and it’s time to get back in the swing of things. But, after being out for a week or two, it can be hard to snap back into work mode. If you’re feeling sluggish and unmotivated, you’re not alone. There are several reasons for this kind of the post-holiday funk — and, fortunately, there are things you can do to get out of it as well.

Focus forward
It’s common around New Year’s Day to look back at the past year. Research on construal-level theory suggests that the more distant you are from anything in time, space, or socially, the more abstractly you think about it. Getting out of the office and looking at the whole year leads you to think about your contribution and not just the tasks you did. This is natural and healthy. After all, your contribution in the last year was not the 16,471 emails you sent, but rather the relationships you solidified, the projects you oversaw, and the collaborations you continued as a result of those emails.

But while you’re likely to be proud of some things you accomplished, you may also be thinking about some of your failures. These are often the source of many people’s New Year’s resolutions.

Of course, noticing last year’s failures can be disheartening. And around the new year, you may end up in a cycle of thoughts about what you could have done differently in the past. This kind of rumination can actually heighten feelings of depression and anxiety, which sap your motivation.

When you get back to work, it’s important to start looking forward to the new year rather than back on the past one. Treat the goals you want to accomplish as new challenges and a source of energy not a penance for things you didn’t get done last year. Focusing on the future — and seeing new opportunities to succeed — can help you to generate the energy to get started.

Get specific
Your reflections on the past year might also lead you to commit to making changes. This is a good thing but not if your commitments are abstract, like “be more productive,” “get a new job,” or “become a better leader.”

In fact, these abstract goals can be paralyzing. They’re simply too big to make meaningful progress toward. Instead, turn your goal into specific actions that when added up lead to the desired outcome. This kind of specific plan is called an implementation intention. It requires that you break the general goal down into tasks that can be put on your calendar.

This specificity has two benefits.

First, it requires you to think through what actually has to be done to achieve the goal. You may discover that you don’t know all the steps or that some of the steps are ones that involve skills you need to learn. In that case, you might want to find a mentor or coach who can help you.

Second, being specific forces you to grapple with your densely packed schedule. One reason why people often fail to achieve important goals is that they cannot find the time to perform the tasks that would lead to success. When you try to add new actions to your agenda, you are forced to figure out what can be moved, delayed, or delegated in order to put you on the road to following through on your commitment.

Make the right social comparisons
A third possible source of post-holiday funk is social comparison.

Humans don’t evaluate things on an absolute scale. Instead, we assess our success relative to some standard. Often, we do that through the process of social comparison, in which we compare ourselves to someone else.

There are two kinds of social comparisons. Upward social comparisons involve comparing yourself to someone better off than you are along a particular dimension. For example, you might see a high-school friend who just got a promotion, or a college friend who just bought a car that you dream of owning some day. These comparisons tend to make you feel bad about yourself, because they highlight what other people have that you don’t, whether it’s money, social standing, or particular relationships. Downward social comparisons are comparisons to someone worse off than you. These comparisons generally make you feel good about yourself and your situation.

Unfortunately, both kinds of comparison can sap your motivation. Upward social comparisons can frustrate you, knowing that other people you know are more successful, happier, or wealthier than you are. Because of the way people curate their social media, if you just look at where people are taking vacations or what they post about their jobs, it’s easy to believe that most people are doing better than you are, which may lead you to feel like giving up.

When you make downward social comparisons, you feel better about what you have and what you have accomplished, but you aren’t motivated to continue pushing forward. Instead, it makes you satisfied with where you are and, often, complacent. The energy you need to motivate yourself comes from being dissatisfied with something about the present, along with developing a plan to get what you want.

You can’t stop yourself from making social comparisons, but you can explicitly manage those comparisons to motivate you. For example, you can find a close rival — someone who is doing slightly better than you are along some dimension, but whose performance is close enough to your own that you can see how you could take some actions to reach their level.

You can also make social comparisons to your past self. Take a look at your trajectory. Recognize that even if you haven’t achieved all of your goals, you have improved over time. Use that recognition of your own growth to spur you to keep working to reach new heights.

No one wants to start the year off in a rut. And yet many of us begin January too focused on the past and feeling bad about what we have yet to accomplish. With some small changes in your perspective, though, you can hit the ground running in the new year.

SOURCE: Markman, A. (03 January 2020) "The Post-Holiday Funk Is Real" (Web Blog Post). Retrieved from https://hbr.org/2020/01/the-post-holiday-funk-is-real?ab=hero-subleft-3


Managing the Social Butterfly in Your Office

Enjoying the work environment is important, but too much play and not enough work can cause conflict, distraction, and dissatisfaction. Research from the platform Udemy discovered that most employees like to work without distractions from their peers. Read this blog to learn how to manage the social butterfly in your workplace.


Although they might pretend to enjoy playing foosball, catching up on TV shows, and socializing in the office, most employees would prefer to just do their work without distractions, and keep their private lives private, according to new research from online learning platform Udemy. And it’s not just the “older” folks at the office. Udemy’s findings show that this wish is consistent among baby boomers, Gen X, millennials, and Gen Z alike.

So why aren’t more offices heads down and focused on work, if that’s what most of us want? The research shows that the more social minority tends to set the overall tone in the workplace. This difference in work style can cause interpersonal conflict, employee distraction, and dissatisfaction. While that might not sound like a big deal, unhappy, actively disengaged workers cost U.S. companies up to $550 billion per year.

Why we have trouble setting boundaries
Business leaders today are struggling to set boundaries for “appropriate” workplace behavior. Behavior that has traditionally been viewed as unprofessional — such as hugging, sharing deeply personal information, and using profanity — has become much more common.

Part of the problem is that managers often wrongly assume employees “just know” how to interact with each other at work. They don’t. This is partially due to changing employment trends, such as a decrease in entry-level positions, and fewer teens working summer jobs, which has resulted in less familiarity with workplace norms. Also, that old scapegoat, social media — and business messaging apps that mimic social media — may contribute to a perception that more informal communication styles are also OK at work. (Just do an internet search for “Slack etiquette”; the abundance of articles about how to communicate professionally indicate that this is a common challenge.)

Another factor contributing to why we have trouble with boundaries is a lack of self-awareness; that is, understanding how we come across to others. In fact, research shows that although 95% of people think they’re self-aware, only 10-15% actually are. When we’re not self-aware, we don’t realize that what we do, such as hanging around someone’s cubicle to chat, or using profanity, bothers or distracts others.

Despite this confluence of factors, many managers aren’t proactive about putting guidelines in place to set expectations of how employees should interact in a professional way. When there’s no clearly communicated norm about what constitutes “professional behavior” in the workplace — even if those norms are culturally or company specific —  it’s difficult to call out if someone has crossed it.

Best practices for managing behavior and minimizing distractions
Defining which social behaviors are “too social” or distracting at work is not an exact science, and the right balance will be different in every workplace. However, in general, the Udemy survey found two distinct groups — across generations — with opinions around which behaviors were appropriate for the workplace. “Social butterfly” personalities were more likely to rate social behaviors, such as hugging, casual communication style, and gossiping more appropriate for work. “Worker bee” personalities, on the other hand, rated these same behaviors as less appropriate.

So how can a manager help the social and less social (at least at the office) work better together? Here are five best practices managers can implement to support change and open communication about expectations for interaction — and fewer distractions — at work.

Emphasize positive intent when giving feedback. When feedback is about something personal, like work style, rather than specific to task and performance outcomes, it can cause feelings of social rejection. Because most of us shy away from causing emotional distress in others, giving this sort of feedback is hard. A lens of “positive intent” can help you more positively frame feedback, for example to an employee who is extremely chatty, if you assume they are just behaving in a way that is natural for them, feels “right” to them, and is not intentionally trying to bother others. You might say something like: “I would like to give you some feedback about your communication style at work. You stop by my desk several times a day to talk to me about non-work topics, and it’s hard for me to stay focused on my work when you do that. To be clear, I feel confident that you’re not trying to bother me intentionally, and that you want to be friendly and inclusive. Did I get that right?”

Own the awkward.  One way to initiate a discussion with employees about behavior that causes distraction or distress is to simply admit feeling uncomfortable: “This feels uncomfortable, but I wanted to talk about something that’s been on my mind and may not be on your radar.” Since you’re about to make the other person feel vulnerable, it can be effective to be a bit vulnerable yourself; for example: “It might sound silly to say ‘don’t hug me,’ but hugging my colleagues makes me uncomfortable — and affects my ability to maintain professional boundaries.”

Be specific. It’s important to articulate specifically and neutrally what the other person is doing that is affecting you or another member of the team. “You’re being too friendly at work” is an interpretation of behavior, not a behavior itself. Instead, try the more neutral: “I notice that on Mondays, you come into my office to tell me about your weekend without asking if I have a few minutes to chat. I’m usually trying to catch up on time-sensitive emails at that time. Would you be willing to ask if I have a few minutes free? I’d like to be able to give you my full attention — or let you know when I can give it to you.”

Encourage your employees to give each other feedback. The most effective way to change behavior is through feedback. However, most of us aren’t naturally great at giving or receiving it, so managers should practice and encourage a culture of regular feedback. Peer-to-peer feedback can be particularly impactful; research shows it can boost employee performance by as much as 14%. Furthermore, it’s a manager’s job to encourage employees to speak up to one another instead of complaining behind closed doors. And, managers should make an effort to recognize and reward those who give feedback well and consistently, as well as those who take the feedback without defensiveness.

Offer training. As mentioned above, more employees are coming on the job with little awareness about workplace norms around professional behavior. In addition, Gallup reports that only about 20% of managers have even basic people management skills. Fortunately, this soft skills gap can be filled with training in areas such as conflict management, effective communication, and emotional intelligence. To put training in place, incorporate specific trainings as part of new hire onboarding, and offer training courses as part of the performance evaluation outcomes for improvement.

Differences in work style can result in unwelcome distractions in the office. However, by supporting a culture of regular feedback, having brave, candid conversations, and providing training, the workplace can be more comfortable for everyone.

SOURCE: Riegel, D. (17 December 2019) "Managing the Social Butterfly in Your Office" (Web Blog Post). Retrieved from https://hbr.org/2019/12/managing-the-social-butterfly-in-your-office


Nonprofit launches student debt benefits program for employees

With the cost of college increasing, employers are trying to help employees tackle their student debt. According to the Federal Reserve, student debt has increased to more than $1.6 trillion. Read this blog to learn about how Northern Rivers Family of Services, a New York-based nonprofit, is paying their employee's student debt.


Northern Rivers Family of Services, an Albany, New York-based nonprofit social services organization, has partnered with IonTuition to bring a student loan repayment benefit to the employer’s 1,400 employees.

Northern Rivers decided to take on the student loan problem by offering employees the valuable wellness benefit, which is also a powerful recruitment and retention tool, company representatives said. Indeed, student loan debt has soared to more than $1.6 trillion, according to the Federal Reserve, yet only 8% of employers offer their workers a student loan benefit, according to the Society for Human Resource Management.

“Student loans are a growing concern for today’s workforce,” says Linda Daley, chief human resource officer with Northern Rivers. “Sixty-five percent of our staff holds a bachelor’s degree or higher, and they’re saddled with the burden of student loan debt.”

Some employers that offer student loan repayment programs include Trilogy Health Services, Selective Insurance, Travelers Insurance, Wayfair and New Balance.

Employees with Northern Rivers will have access to a complete suite of student loan repayment tools plus a monthly contribution program, including concierge student loan advising, free accounts for family members, unbiased refinancing, default and delinquency recovery services, and college research tools.

“The repayment program is available for all benefit-eligible employees at Northern Rivers, which is approximately 1,060 of our employees,” Daley says. “With the IonTuition platform, the program was easy to roll out and our employees were immediately equipped with all the tools they need to reach financial wellness.”

Employees must have a minimum of six months with Northern Rivers to sign up for the contribution plan in which the organization will pay $35 a month toward employees’ student loans.

“Attracting and retaining quality talent in the nonprofit space is challenging,” Daley says. “This benefit gives our employees the security that their student loan payments are more manageable. ”

SOURCE: Schiavo, A. (16 December 2019) "Nonprofit launches student debt benefits program for employees" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/nonprofit-launches-student-debt-benefits-program-for-employees


personalized-health-plans-aided-by-technology

When productivity increases, so do wages

Although productivity is the baseline of wages, deviations do occur. Productivity and pay can diverge for multiple reasons that are not included in the standard economic model. Read this blog post to learn more about pay versus productivity.


“Workers are delivering more, and they’re getting a lot less,” argued former Vice President Joe Biden in a speech at the Brookings Institution this summer. “There’s no correlation now between productivity and wages.”

Senator Elizabeth Warren, a Democratic presidential rival, agrees. Her campaign website states that “wages have largely stagnated,” even though “worker productivity has risen steadily.”

The claim that productivity no longer drives wages is common enough on both the political left as well as the right. Proponents of this view argue that workers aren’t getting what they deserve based on their contributions to employers’ bottom lines.

Income inequality — the gap between the incomes of the rich and everyone else — supposedly demonstrates that the economy’s rewards are flowing, undeservedly, to those at the top. Populists take that conclusion even further, arguing that capitalism is fundamentally broken.

If that is what’s happening, it refutes textbook economics, which argues that wages are determined by productivity — by the amount of revenue workers generate for their employers. If a company paid a worker less than her productivity suggests she should be making, then she would go down the street and get a job that would pay her what she’s worth. Employers compete for workers, ensuring that workers’ wages are in line with their productivity.

This theory leaves out a lot, of course. Pay and productivity can diverge for any number of reasons not included in the standard economic model. Workers may not know how much revenue they create, or what other employment options are available to them. And changing jobs has its own costs, which in the real world gives employers some power over wages.

For critics of the current system, “some power” is a drastic understatement. In their telling, the decline of labor unions; erosion of the minimum wage; rise of non-compete and no-poaching agreements; inadequate enforcement of workplace standards and the like have dramatically reduced the bargaining power of workers. This has allowed businesses to drive down wages to the bare minimum job applicants and current workers will accept, pushing their pay below what their productivity suggests it should be.

Which view is correct? The latest piece of evidence on this question comes from Stanford University economist Edward P. Lazear, who analyzed data from advanced economies and confirms a strong link between pay and productivity.

Like several previous studies, Lazear’s research finds that low-, middle- and high-wage workers all benefit from growth in average productivity. This suggests that improvements in overall economic efficiency help all workers, not just the rich.

But Lazear argues, correctly, that a relevant issue is not whether workers benefit from changes in average productivity. Instead, if you want to know whether workers are being paid for their productivity, you should look at whether changes in the productivity of, say, low-wage workers affect the pay of that specific group.

It is infeasible to measure the productivity of individual workers. (How much revenue per hour of work do I generate for Bloomberg?) So Lazear examines productivity at the industry level, and compares industries that employ highly skilled workers with those that employ lesser-skilled ones.

Using data on the U.S. from 1989 through 2017, Lazear finds that productivity in industries dominated by higher-skilled workers increased by (roughly) 34 percent in that period. The wages of those workers grew by 26 percent. For industries requiring lesser skills, productivity increased by 20 percent, while wages grew by 24 percent.

In other words, pay increased faster than productivity in industries with lesser-skilled workers, and slower than productivity in industries with higher-skilled workers. Another striking implication of this finding is that “productivity inequality” — the gap in productivity between workers — may have grown faster than wage inequality over this period. While wage differences have increased over time, differences in productivity between groups of workers have increased even more.

The upshot: Slower wage growth for lesser-skilled workers is not prima facie evidence that employers have significant power over wages or that productivity doesn’t determine wages. Instead, Lazear concludes that productivity growth for high-skilled workers has increased rapidly enough (actually, more than enough) to account for growing inequality.

What caused this? Lazear points to two familiar explanations. Technological change disproportionately benefits the highly skilled, increasing their wages and productivity. And the globalization-led shift to a services economy has reduced the productivity of goods-producing, lesser-skilled workers.

Lazear also suggests that colleges may have improved more than high schools in their ability to impart skills to graduates. If so, industries dominated by college graduates would be expected to have had faster productivity growth over the last three decades. This would have caused both a wider dispersion in productivity across industries and in wages across groups of workers.

Such research doesn’t settle the debate, of course. Yet it does strengthen my view that wages are heavily influenced by market forces, even if they are not entirely determined by them. While productivity sets the baseline for wages, deviations from that baseline occur.

So contrary to what Biden, Warren and (many) others say, market forces, not power dynamics, are the principal driver of inequality.

This gets at the heart of the moral properties of the market economy. Capitalism produces unequal outcomes: The wages for some grow faster than for others. Those disparities are palatable if they are caused by differences in risk-taking, work effort and skills. They are tolerable if people are getting, in some sense, what they deserve. But if wages aren’t determined by productivity — if hard work doesn’t pay off and if workers aren’t receiving just returns — then something has gone badly wrong with the system.

Fortunately, the system doesn’t seem to be broken. It does need to be fine-tuned, however, with the goal of increasing the productivity of the lesser skilled. And we should be confident that if their productivity increases, so will their wages.

SOURCE: Bloomberg News (03 January 2020) "When productivity increases, so do wages" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/articles/when-productivity-increases-so-do-wages


How to prevent employees from taking advantage of unlimited PTO

Attracting and retaining is becoming more difficult. Because of this companies are now offering competitive benefits to bring that talent to their company. Companies have added unlimited paid time off, along with work from home policies to their benefits offering. Read this blog post to learn how to prevent employees from taking advantage of new benefits being put in place.


In the quest to attract and retain top talent, more companies are offering competitive benefits including unlimited paid time off and generous work from home policies. But what if you have workers who abuse the policy?

To prevent workers from taking advantage, it’s critical that companies set proper guidelines, says Jonathan Wasserstrum, CEO and founder of Squarefoot, a commercial real estate company, which offers its staff unlimited personal time off. At his company, people were utilizing the policy from “all ends of the spectrum,” which led him to reassess how they monitored and encouraged time off.

“The war for talent is so strong right now, and when an employee is looking to make a decision, you don’t want to disqualify yourself because you don’t offer this benefit,” he says. “But people don’t use the amount of vacation days intended. You get some people who underutilize and over utilize. The bad spoils the good, and that's not the intent of unlimited policy.”

Unlimited paid time off is becoming a more popular benefit, especially in the tech space. According to Indeed, 65% of companies mentioned “unlimited PTO” in their job postings, and companies like General Electric and Kronos offer the benefit to employees.

While the standard time off has typically been two to four weeks, 55% of employees do not use all of their paid time off, according to the U.S. Travel Association. To level the playing field among his employees, Wasserstrum says he established guidelines that made unlimited PTO flexible, but still within reason.

“There are top performers who work a lot, and you don't want them to burn out. On the other end of the spectrum, there are those who take advantage of policy,” he says. “We frame it as flexible and not unlimited. The intent is for everyone to use it as time away from the office — it helps you refresh — so we encourage you to take anywhere from two to four weeks.”

Paid time off has a multitude of benefits, including increased employee morale and a better sense of work-life balance. And today’s workforce is in desperate need of time away from the office. According to Deloitte, 77% of employees say they have experienced burnout, and 70% say their employer does not do enough to prevent or mitigate work stress.

“Work-life balance looks very different now than it used to,” Wasserstrum says. “If I'm on vacation 20 years ago, you really can't get in touch with me. Now, everyone is 24/7 on, so you have to set the boundaries as an employer.”

In addition to more paid time off, more people are also reaping the benefits of remote work. According to a Gallup poll, 43% of the workforce works remotely some or all of the time, but employers like IBM, Aetna and Yahoo have pulled back on those policies and required workers to be on site instead, according to the Society of Human Resource Managers.

"[Managers] may have realized how blind and invisible remote workers are and they don't know what's going on at the remote location — what work that person is doing or what distractions they may have to deal with,” Judith Olson, a distance-work expert and professor at the University of California Irvine, told SHRM.

With more employees weighing the benefits of workplace policies, time off is still the top benefit employees look for. Metlife found 72% named unlimited paid time off as their most desired benefit, ahead of wellness plans and retirement programs.

While it may put companies at an advantage, PTO and other flexible work policies are just one part of the overall picture of a company’s workplace culture, Wasserstrum says.

“If you're winning people based on benefits, they're coming to you for the wrong reasons,” he says. “But every company looks and feels different from the inside and has a company culture that shouldn’t be one size fits all. This works for us and the work-life balance experience we want people to have.”

SOURCE: Place, A. (17 Decemeber 2019) "How to prevent employees from taking advantage of unlimited PTO" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/how-to-prevent-employees-from-taking-advantage-of-unlimited-pto


10 Quick Tips for Avoiding Distractions at Work

The number of notifications that the average employee gets interrupted by each day is between 50 and 60. With more than half of the interruptions being unimportant, these distractions are reducing the productivity rate of their work. Read this blog for tips on how to avoid distractions at work.


In a world of push notifications, email, instant messaging, and shrinking office space, we’re becoming increasingly distracted at work. The average employee is getting interrupted 50 to 60 times per day, and about 80% of these interruptions are unimportant. As a result, people are spending little time in what psychologists call “the flow state,” a space where people are up to five times more productive, according to research from McKinsey.

The constant distractions are not only leaving people less productive, but also more stressed than ever, with a lack of control over one’s work being cited as a major contributor to workplace stress, according to the American Institute of Stress. So, how do we avoid distractions in the office in order to take control of our days, do our best work, and improve our emotional well-being?

1. Practice Asynchronous Communication

When you get an email, it’s actually OK to think: “I’ll get to this when it suits me.”

Aside from the benefit of giving people more time for uninterrupted focus, asynchronous communication predisposes people to better decision-making by increasing the amount of time we have to respond to a request. When you’re on a phone call or video chat, you’re making real-time decisions, whereas if you’re communicating via email, you have more time to think about your response.

In order to practice this successfully, we must do away with the arbitrary “urgency” that still plagues workplaces the world over, almost a century after Dwight D. Eisenhower, who, quoting Dr. J. Roscoe Miller, president of Northwestern University, said: “I have two kinds of problems: the urgent and the important. The urgent are not important, and the important are never urgent.” This “Eisenhower Principle” is said to be how the former president prioritized his own workload.

To optimize an asynchronous message and to avoid a lot of follow-up emails, include the following in your initial request:

  • Sufficient details
  • Clear action item(s)
  • A due date
  • A path of recourse if the recipient is unable to meet your requirements

2. Batch Check Everything

“Just quickly checking” anything, even for one-tenth of a second, can add up to a 40% productivity loss over the course of a day, and it can take us 23 minutes to get back into the zone after task switching.

Rather than sporadically checking things throughout the day, we should batch check email, instant messages, social media, and even text messages, at predetermined times.

If you struggle with self-control, tools like Gmail’s Inbox Pause plugin enable you to pause your inbox once you’ve checked it and only unpause it when you’re ready. Blocksite and the Freedom app also allow you to block access to specific websites and apps during specified intervals.

3. Do Not Disturb

If you’re reading this and thinking: “But I work in an open-plan office, and it’s impossible to avoid interruptions,” try using a signaling mechanism to let your team know that you’re in the zone (or trying to get there) and that they shouldn’t disturb you unless it’s legitimately urgent. This could be as simple as a pair of headphones.

4. Avoid Calendar Tetris

In today’s workplace, it’s a widely accepted norm that others can book time in your calendar, usually at the expense of your own priorities.

Basecamp CEO, Jason Fried, told me on an episode of the Future Squared podcast that at Basecamp, you can’t book time in someone’s calendar without first getting buy-in. This means that most meetings just don’t happen because the would-be meeting organizer usually opts for a phone call or an instant message instead.

Alternatively, consider blocking out meeting-free zones on your calendar, or using a meeting scheduling tool such as Calendly so that people book meetings with you only during scheduled windows, leaving the rest of the day free for focus, and ensuring that you avoid the email tennis matches that scheduling meetings often degenerates into.

5. Close the Loop on Meetings

Instead of risking follow-up interruptions and a meeting to discuss the previous meeting, ensure that you leave each meeting with actionable next steps, clearly assigned responsibilities, and due dates.

6. Stop Using “Reply All”

Reply All, used as a mechanism to share accountability, only adds unnecessary chatter to people’s inboxes and headspace. Take more ownership over your decisions and only email people who need to be informed.

7. Use Third Spaces

As Sue Shellenbarger wrote for The Wall Street Journal, “All of this social engineering (open-plan offices) has created endless distractions that draw employees’ eyes away from their own screens. Visual noise, the activity or movement around the edges of an employee’s field of vision, can erode concentration and disrupt analytical thinking or creativity.”

If you’re struggling with open-plan offices, then try to incorporate more third-space work into your day for critical thinking; try to find a quiet space in the office, a serviced office, or negotiate some time to work from home.

8. Turn off Push Notifications

The average executive receives 46 push notifications per day. To avoid our Pavlovian impulses to respond on cue, simply turn off your push notifications. Find out how here.

9. Use Airplane Mode

You can also use airplane mode to limit text message and phone call interruptions during certain times of day. If the idea of doing this gives you anxiety, you can always exempt specific numbers, such as those of loved ones or valued and important business associates. You can set “Do Not Disturb” mode on an iPhone to allow your designated “favorite” contacts to get through, while silencing other calls or messages.

10. Limit Layers of Approval

While harder to implement, becoming a “minimum viable bureaucracy” — stripping away unnecessary layers of approvals required to get trivial and not-so-consequential things done — means that there will be less paperwork to move around, which means fewer interruptions for people.

Awareness Is Key

Environmental changes aside, human beings evolved to conserve energy in order to stand a shot at surviving on the savannah. As such, we are predisposed to picking the lowest hanging fruit or doing the easiest thing first — think checking email instead of working on that presentation. Becoming more aware of our tendencies to pick the low hanging fruit, getting distracted by low-value activities, is step one towards changing our behaviors.

Organizations that build a culture around minimizing distractions will enjoy the compounding benefit of a focused workforce and will leave their people feeling less stressed and ultimately more fulfilled.

SOURCE: Glaveski, S. (18 December 2019) "10 Quick Tips for Avoiding Distractions at Work" (Web Blog Post). Retrieved from https://hbr.org/2019/12/10-quick-tips-for-avoiding-distractions-at-work?ab=hero-subleft-2"


How to Motivate Your Team During Crunch Time

Keeping teams excited and enthusiastic during busy times of the year is a struggle that most HR departments and employers experience. Whether it's a nearing deadline or seasonal ends, it's important to make sure that teams stay motivated. Read this blog to learn how to keep motivation within teams.


There are times when work ramps up and you need all hands on deck. Ideally, you want people to jump into the work excited and enthusiastic rather than dreading what’s coming. So, what can you do to rally the troops when the team’s workload is particularly heavy? How do you talk about the project or time period so that people don’t feel daunted? And, how do you keep an eye on stress levels while still motivating people to get through the crunch?

What the Experts Say
Whether it’s a seasonal crunch time or a particularly demanding project with a tight deadline, it can be hard to keep people focused and motivated when they’re overloaded. The fact is, “most people already have a lot on their plate,” says Lisa Lai, a business advisor and coach. And so when you ask your team for more, “it can leave people feeling overwhelmed and inadequate.” On top of this, as the pace of work increases and our always-on technology serves as a tether to the office, intense periods are becoming more prevalent, says Ethan Bernstein, a professor of leadership and organizational behavior at Harvard Business School. “There is a greater quantity of crunch times and more of the work that we get done happens during a crunch,” he says. This has critical implications for you, the boss. By “focusing your attention on your employees” and projecting a calm, confident presence, you can make these times easier for the people on your team, Bernstein says. Here’s how.

Project positive energy
For starters, says Lai, “check your own emotional energy as a manager.” If you’re feeling beleaguered, worried, anxious, or frustrated about a project “there’s no way you can show up in front of your team” and be a confident guiding force. To lead, you need to be “engaged, motivated” and “emotionally bought in.” Start by “reflecting on why the work matters.” Figure out “why this project is relevant and who benefits from it,” she says. Remember, too, that crunch times can be useful learning opportunities. Yes, critical, time-sensitive projects are often tense, but “you want peaks and valleys,” says Bernstein. “Peaks — when everyone is engaged and motivated at the same time — are good” for team morale and drive. But they should not be the status quo. “There is a value to intermittency,” he says. If your team is in a constant crunch, employees “are not operating at an [optimal] level of productivity and effectiveness.”

Express empathy
Once you’ve personally connected to the work and its purpose, “convey that message to your team,” says Lai. “Don’t just say, ‘Here are the deliverables. Here’s the deadline.’” Instead, “develop the story” around why the project has meaning and what the ultimate goal is. “Define what success looks like.” Be upfront with your team and acknowledge the “burden and sacrifices” involved, such as late nights and weekends at the office. Express empathy and be vulnerable, adds Lai. “Say: ‘This is going to be hard. I am feeling it, too.’” Convey solidarity in the spirit of, “we are in this together,” says Bernstein. “We have to grind this out as one team.” And try not to dwell on the negatives. Tell your reports that, “there are going to be parts of this that are going to be fun, too.” Maintaining team camaraderie is a priority. That way, “it doesn’t have to hurt so much.”

Think about milestones
Next, consider breaking up the work into manageable chunks so that the overall deliverable isn’t so intimidating. Lai recommends, “creating meaningful arcs” to the project based on the work that matters most. Setting short-term targets for each phase directs the team’s focus, creates accountability, and helps to bring them closer to the end goal. “Say: ‘We will take a breath after each one. We will evaluate and make sure we’re on the right track. If we need to change course, we will do that.’” Milestones ought to help the team feel good about the incremental progress it’s making, so make sure you’re instituting them for the right reasons. “Don’t have all these mini crunches for the purpose of micromanaging,” says Bernstein. It’s also important to consider how multiple deadlines may affect the pace of your team’s work. If you give a team a defined amount of time to do a task, research shows that the team will work at a different speed before and after the midpoint. “The rubber meets the road” the closer a deadline looms, Bernstein says.

Offer autonomy
Allow the team to structure their workdays in ways that maximize their productivity. Crunch times are not the time for politics around face time or HR rules about working from home to get in the way,” Lai says. Let your employees play a role in defining the team and how they work together. “If they have a voice, they are more likely to lean into the work,” she says. “You want people to participate and feel involved in the process.” While they should be in charge, do what you can to clear the way for them. For example, says Bernstein, it’s helpful to clear the decks so employees can concentrate on the task at hand. You have the power to “take away distractions” and “make the crunch time relieving in some respects,” he says.

Be judicious with incentives
Rewards and incentives can be a key motivational tool. Lai suggests deploying them throughout the projected timeline, not just when it ends. “You need moments of celebration,” she says. “That’s how you create sustained engagement.” Think about ways to recognize your team’s hard work: a Friday afternoon off perhaps, or an all-office ice cream social. And yet, warns Bernstein, “extrinsic rewards have some downsides.” If, for instance, you tell your team that everyone gets the morning off after you reach a deadline, “you’re only incenting the completion of the work rather than the quality of it,” he says. Instead, he recommends “placing intrinsic rewards front and center.” Focus on how the project represents a “good developmental opportunity for team members,” and the reasons why “working closely together” will benefit the team in the long run.

Watch for red flags
You can often judge whether or not your direct report is anxious by the expression on their face or the way they talk. “You have an ability to read people, so use it,” says Bernstein. If you see that an employee is struggling, reach out. Don’t “keep plowing forward” at all costs, says Lai. “The biggest red flag is when people stop talking,” she says. “When your team goes quiet,” it’s an indication that employees “are feeling lost or overwhelmed.” Talk to your team. “Ask them: What’s going well and what is not going well? What do we need to pivot on? What roadblocks need to be removed?”

Be present and grateful
One final piece of advice: “be accessible,” says Bernstein. Lai concurs: “Even if you do all the other things right, if you disappear behind closed doors,” your leadership will be “an epic failure.” You need to be consistently available. Let your employees know you have their backs. “Walk the floor and talk to people. Ask: ‘Who needs help?’” Your colleagues “will value that you are present,” she adds. It goes without saying that you need to express gratitude for the sacrifices they’re making. Regularly say “thank you” and find small ways to show you appreciate what they’re putting in. And Lai adds: “it never hurts to bring donuts.”

Principles to Remember

Do

Check your own emotional energy. You can’t motivate your team if you’re not engaged and excited about the project.
Break up the work into manageable chunks so that the overall deliverable isn’t so intimidating. Milestones can focus the team.
Encourage your team members to structure their workdays in ways that maximize their productivity.

Don’t

Be dishonest or sugarcoat matters. Acknowledge to your team the burden and sacrifices involved.
Ignore obvious problems. If you see that an employee is struggling, reach out. Ask: What roadblocks need to be removed?
Disappear behind closed doors. You need to be accessible and visible to your team.
Case Study #1: Project enthusiasm and communicate why the work matters
Syed Irfan Ajmal, a digital marketing entrepreneur based in Pakistan, has had a lot of experience motivating teams during crunch times.

To “do it right,” he says, “you’ve got to know your team well. You have to know what excites them, what scares them, and what their deepest desires and biggest challenges are.”

In January 2013, Syed partnered with another entrepreneur — Yasir Hussain Sheikh — on a technology startup. The two of them assembled a small team of eight people to create and license a specialized spatial intelligence product.

The product, inspired by CNN’s “Magic Wall,” was to help TV hosts demonstrate the results of Pakistan’s elections using maps and data visualization on a multi-touch screen.

The pressure was intense — the elections were being held in May and so the team only had a few months to deliver. “We had an extremely short time period to work with,” says Syed. “If we failed to build and license the product by March 2013, all our work would have been futile.”

Syed and Yasir were worried about hitting the looming deadline, but they knew they needed to project positive energy to their team. Together, they reflected on what success would do for their startup and mean for Pakistan. They thought about their goals and their purpose. “What we were trying to accomplish had never been done in the country before,” recalls Syed.

When they communicated the significance of the product to their team, “everything changed for the better,” he says.

“My partner was very good at motivating the team by sharing his vision about what completing this project on time would mean for everyone,” he says. “Yasir’s passion was contagious, and did wonders for everyone’s energy and enthusiasm.”

Syed wasn’t bashful in laying out the sacrifices involved. “I didn’t use any scare tactics, but I told everyone that this project required us to work day and night,” he says. “I think the team appreciated my honesty.”

He and his business partner also tried to foster camaraderie and collaboration by dividing their small team into even smaller sub-teams, where each member’s skills complemented those of others. That way, each team member had a say in how the work would be accomplished. “Yasir and I were always available to provide instant and constructive feedback,” he says.

Ultimately, the team prevailed and was proud of their accomplishment. “We were successful and we witnessed our product being used on national TV.”

Case Study #2: Think about ways to be helpful to your team and say thank you
Carl Ryden, co-founder and CEO of PrecisionLender, an AI-powered software company for commercial banks, says that the most important thing to bear in mind when motivating staff during an intense period is that the “crunch has to be anomalous.”

“People can’t pedal as hard as they can all day, every day,” he says. “It has to be temporary. [Employees] need to trust that this isn’t the norm and that [they work] for an organization that respects work-life balance.”

Recently, his company — which is based in North Carolina, needed to launch the first release of its intelligent virtual assistant, Andi, within its application. “We had a deadline that we had to meet,” says Carl. As the deadline drew closer, it became clear that “there was still a lot of work that needed to get done and that many of our developers were going to have to work on the weekends to do it.”

Carl knew that the team was stressed — and he wanted to help in any way that he could. “I wanted to show solidarity but I also wanted to get out of their way and let them do their jobs,” he says.

Carl says that if he stayed at the office alongside his team, “it would have seemed like [he] was there in a supervisory role” in need of constant “status reports.” Instead, he decided to give his team autonomy. “I said, ‘I trust you to get this done. And I want to make sure you have everything you need. What can I take off your plates to let you focus your attention?”

“I didn’t want to make things worse.”

The team appreciated his vote of confidence. Once it was over — “the team got it done on time and it turned out to be a great success” — Carl made sure to express his gratitude. “I said thank you, individually and collectively, to the team,” he says. “I wanted to acknowledge their great work.”

SOURCE: Knight, R. (18 December 2019) "How to Motivate Your Team During Crunch Time" (Web Blog Post). Retrieved from https://hbr.org/2019/12/how-to-motivate-your-team-during-crunch-time?ab=hero-subleft-3


Employers should ‘double down’ on tech and benefits data analytics. Most still aren’t

Did you know: 53 percent of benefits leaders say the biggest challenge they face regarding effective benefits programs is gaining access to their data. Read this blog to learn why employers should 'double down' on technology.


Utilizing data to understand which health benefits will best work for employees is key to staying ahead of the curve, but just 18% of benefits managers believe their organization has the right tools to implement these programs.

That’s according to a new survey by Artemis Health, which found that while 88% of benefits leaders say data is somewhat to extremely important in designing and managing an effective benefits program, some 53% percent say access to data is their biggest challenge.

“Benefits analytics is the key to feeling confident in building better benefits programs for their organizations and their employees,” says Grant Gordon, CEO and co-founder of Artemis Health.

Obtaining this data is often the biggest challenge to understanding what companies should be offering and if it’s in line with the demands of their workforce, the survey found.

“When you look at data, you can make a hypothesis about what you should do, and if it's working, you double down. If it's not working, then you change tactics,” Gordon says. “But because data is so hard to get here, many benefit leaders don't have that reflex or muscle memory.”

Gordon spoke with Employee Benefit News about the role of data analytics in benefits planning and how companies can best utilize these tools.

Why is data such a critical part of benefits planning?

The top cited source of information that benefits leaders are relying on to define their benefits is employee feedback, and you absolutely have to have that. But if you take a step back from that, the role that I view data having is an objective way to look at what's actually happening with your employees and understand what the big strategic issues are. You may miss a silent group of people who really need help or an emerging trend that you need to address that you could have caught with data.

Most employers said that they didn't have the proper tools to use data effectively. Why do you think that is?

Just getting your hands on the data is a big challenge. You have to go the vendors that hold it, you have to give them assurances and sign legal documentation that you're going to use it appropriately and that you’ll keep it private, and that can take a long time. And then once you get the data, there's no really good data infrastructure in this industry to share data securely. So there's some orchestration challenges in shipping data around. You might get wrong data or you might get incomplete data. And then once you get it, it can be full of errors that need to be corrected. So before you even get to the starting gate, there's a big challenge.

Then you get to the next problem, which is that the data is very complex, and there's a lot of subject matter expertise that you need to have to understand it. And so in order to make this useful to a benefits person who's maybe not a deep, deep expert on medical, clinical knowledge or pharmaceuticals or certain programs, you need to simplify it so they can get to the trends. We can’t expect them to look at raw claims data and make anything of it. There’s a tooling challenge in getting the data and really making sense of it.

How can benefits managers bridge that knowledge gap?

Make sure that people get the healthcare and the benefits that they need. We saw [in the survey] that if they had more confidence in the moves that they were making, perhaps with data, they could get more things that are relevant to their employees into their hands faster, but it's just not the case today. So something needs to be addressed.

Get a data platform. I think some of the players that have been around for awhile, they do a fantastic job at data management and all those other things. I would look at something like Artemis or one of the newer companies, just to get a jumpstart on data-driven decisions on what's important and what's working and what's not. A lot of these companies work with advisers like consultants or brokers and many of them have inner resources internally. There are people who know the data really well who can really help you get more value out of that. So I would encourage them to make sure that they're asking specifically about getting data support from some of those advisers.

What does the future look like when it comes to utilizing technology and data in the benefit space?

If you look at other departments like marketing or finance or sales, they're all using data as a matter of course. It's a fabric that they weave the rest of what they do. The future of data here is making it easy for benefit leaders to understand all of those things and how to do those things and do them every day. When you're deciding what your major strategic initiatives should be for the year, being able to have that on tap in the data and actually being able to rely on that, and once you roll out a program or make a benefit change, measuring the impact of that.

SOURCE: Place, A. (12 December 2019) "Employers should ‘double down’ on tech and benefits data analytics. Most still aren’t" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/news/employers-should-double-down-on-tech-and-benefits-data-analytics-most-still-arent