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Trusted Brand Reviews brings you expert insights to guide your payroll processes and human resource management. Discover practical strategies to optimize these systems through HRIS and software automation, freeing up time and resources and boosting productivity.
Hr functionEIN vs Tax ID: The Fundamental DifferencesHow do you know whether you need an EIN or a Tax ID? Do you even need one at all? Although there are fundamental differences between the two, chances are you'll need one if you're running a business.
While the terms EIN and Tax ID are often used interchangeably and the two are very similar, there are fundamental differences you must be aware of to be able to use them appropriately—we'll discuss what the differences are.
» What else does your business need? See the essential documents needed for online payroll processing.
What Is an EIN?
An EIN is an Employer Identification Number issued to entities conducting business in the United States and its territories by the Internal Revenue Service (IRS). This unique 9-digit identification number is used by government agencies to identify a business in order to track tax payments and filings and issue business licenses and permits. Banks and other companies also use it to identify a business when opening business bank accounts or other credit accounts.
An EIN is mandatory if the company has or will have employees and a Keogh plan or files certain taxes. The IRS also requires corporations, partnerships, and LLCs to have an EIN, even if they have no employees or other need for an EIN.
Most businesses are required to obtain an EIN, and even sole proprietorships and freelancers can benefit from having one. Using an EIN for business helps prevent identity theft and establish credibility for your company. It also creates a definite line between business and personal finances and allows you to hire employees or take out a business loan.
What Is a Tax ID?
A Tax ID is a Taxpayer Identification Number (TIN). It's an umbrella term used for different types of tax identification numbers, such as Social Security Numbers (SSNs), EINs, and Individual Taxpayer Identification Numbers (ITINs).
TINs are used to identify individuals or business entities on all tax returns and filings with the IRS. Employers must require a TIN when hiring employees and independent contractors to verify that the individual is authorized to work in the US and remit withholding taxes on their behalf. A TIN is also used when applying for credit cards and loans with banks or other lenders who use the TIN to assess and report on an individual's credit history.
» Are you properly classifying your employees? Learn what employee misclassification is and how to avoid it.
3 Fundamental Differences Between EIN and Tax ID
Although EIN and Tax ID are sometimes used in place of each other, there are significant differences between the two terms. Here are 3 ways in which they differ:
1. Function
EIN and Tax ID are both used to identify individuals or entities to government agencies, banks, and other businesses. However, Tax ID is a general term used to describe various types of tax identification numbers for business entities and individuals. There are several types of Tax IDs: SSN, EIN, ITIN, Adoption Taxpayer Identification Number (ATIN), and Preparer Taxpayer Identification Number (PTIN). Thus, an EIN is a specific type of Tax ID applicable only to business entities.
2. Level of Operation
A Tax ID is used at the federal and state levels for tax and other identifying purposes. Your employer uses your Tax ID to report earnings and state taxes withheld from your wages. Tax IDs are necessary to get a driver's license, apply for unemployment, and file taxes with your state and the federal government.
On the other hand, an EIN obtained through the IRS—sometimes called a FEIN—is used for federal tax filings, bank accounts, and credit applications. States may also issue EIN numbers to business entities that are only used for state income and employment tax filing purposes.
3. Issuing Authority
The Social Security Administration (SSA) and the IRS have the authority to issue Tax IDs. Depending on the type of Tax ID, the issuing authority may differ. An SSN is only available through the SSA, while all other Tax IDs—EINs, ITINs, ATINs, and PTINs—are only issued by the IRS.
» What type of tax should you pay as an employer? See the difference between payroll tax vs. income tax.
Conclusion
Although both are used to identify an entity, file tax returns, open bank accounts, and apply for credit, Tax ID represents various identification numbers for individuals and business entities, while EIN is a type of Tax ID only issued to business entities.
Since a business must have an EIN to hire employees and individuals must have a Tax ID to be employed, business owners must understand the differences between a Tax ID and EIN to be sure they're used correctly.
PayrollManage Your Company’s Workers’ Compensation Like a Pro With GustoIf you're an owner of a business that requires some of your employees to do physical labor, you need to be properly educated about workers' compensation. Unfortunately, accidents at the workplace happen more often than we'd like them to, so employers must be prepared in case they befall them.
Namely, workers' compensation is an essential part of payroll. Although business owners often think this refers solely to salaries, payroll also includes other aspects like benefits, bonuses, and workers' compensation. Retaining payroll compliance is a crucial aspect of managing a business, and you'll have a difficult time remaining compliant if you've overlooked workers' compensation. Thankfully, there are now many ways to go about properly managing payroll and workers' compensation, so your business will always be protected should something unfortunate happen at the workplace.
Now, let's dive deeper into the world of workers' compensation and how to manage it.
What Is Workers’ Compensation?
Workers’ compensation is a type of insurance that provides benefits to employees who are injured or become ill as a result of their job. These benefits can include medical expenses, income replacement, and even death benefits.
However, keep in mind that workers' compensation isn't the same as disability insurance and unemployment benefits. While the latter two offer coverage outside of the workspace, workers' compensation is a part of the business. It's also worth mentioning workers’ compensation is mandatory in most jurisdictions—just like they're legally obligated to run payroll, businesses are required to provide coverage for their employees.
Namely, there are two main types of workers’ compensation:
Statutory: A state-sponsored program that provides benefits to employees who are injured or become ill as a result of their job. Benefits are typically paid by the employer, although some states allow employees to opt out of coverage.Private: Unlike the state-sponsored program, a private policy is purchased by the employer to provide benefits to employees who were injured or became ill while working. The benefits are then paid by the insurer of the business.
» Are you compensating your employees properly? Discover the difference between employee compensation vs. benefits.
Why Is Workers’ Compensation Important?
Workers' compensation is important not only for employees, but for employers too.
For starters, workers' compensation can help you avoid lawsuits—if one of your employees is injured at work and you don't have workers' compensation, the employee could sue you for damages. Even if you're not at fault, the legal penalties can be quite costly.
Additionally, workers' compensation can help you retain good employees. If you have competent employees, chances are they'll want to work for a company that offers workers' compensation. In other words, workers' compensation can help you attract and retain reliable staff.
Finally, workers' compensation can help you improve safety in the workplace. When employees know they're covered in case of an accident, they're more likely to take safety precautions. As a result, you can create a safe work environment for your staff.
» Are you managing workers' compensation the right way? Here are simple steps to properly track and manage workers' compensation.
How to Manage Workers’ Compensation With Gusto
Gusto offers all the essential payroll features an employer can expect, which is why it's one of the most popular solutions for payroll management. Let's see how you can manage workers' compensation with Gusto.
How to Apply for a Policy
To start, you'll first need to add workers' compensation to your account by logging into your account and clicking on the "Benefits" tab. From there, click on the "Workers' Compensation" tab and select the state you're in.
Once you've clicked on the "Workers' Compensation" tab, do the following:
Enter your business information, including its name, address, and EIN. Click on the "Apply Now" button. Click on the "Check Eligibility" button. Select the policy and start the application process.
What Benefits Do Gusto and NEXT Insurance Offer?
The best way to integrate workers' compensation is to do it with Gusto and NEXT Insurance—a workers' compensation insurance provider offering both statutory and private coverage. Statutory coverage is available in all states, while private coverage is limited only to specific ones.
Of course, the amount of coverage by your policy will depend on the state your business is in, but you can expect coverage for the following if you're using NEXT:
Medical expenses.Lost wages while the employee is out of workRetraining in case of an injuryDeath benefits.
» Need to integrate Gusto with QuickBooks? Here's how to get a seamless online integration.
Conclusion
Workers’ compensation is a vital part of any business. Not only can it help you avoid lawsuits, but it can also attract and retain good employees. Additionally, workers' compensation can help you improve safety in the workplace.
If you're looking to add workers' compensation to your account, Gusto is a great option. With Gusto, you can add workers' compensation to your account and get coverage from NEXT Insurance.
» Unsure about choosing Gusto? Read our Gusto review or take a look at some alternatives instead.
Hr functionHow to Manage High Performers: 6 Proven Methods for HR ManagersHigh-performing employees are staff members that go above and beyond their call of duty, take on additional work, and adopt leadership tasks without any consternation. Some experts purport these types of workers possess six attributes known as SAVERS:
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While it's possible to transform your personnel into a crop of high-performing individuals, some are naturally like that, which is something no business should take for granted.
So, how does a company manage high performers anyway? Here are six proven methods for HR managers:
1. Provide Autonomy
One of the worst ways to manage a high-performing person is by micromanaging them every day at the office because this will inevitably diminish their day-to-day productivity. Instead, it's critical to afford these employees a great deal of autonomy and flexibility in how they approach their assignments. By doing this, they can achieve their objectives in their own way without anyone intervening. Since they've proven to get the job done, there's no harm in extending this courtesy.
2. Make Resources Available
Because high-performing employees have shown they can handle any project or task thrown on their desks, the company should invest in the resources necessary for this person to get the job done. But what type of resources should be made available to these superstars at the office? Anything from additional staff to a slightly expanded budget to a broad array of tools should do the trick.
» Are HR managers the ones to provide resources? Learn the difference between HR vs. Talent Acquisition.
3. Give Actionable Feedback
Are high performers perfect? Of course not—they make mistakes too. The difference is that many of these staffers welcome constructive and constant feedback. Indeed, this is the function an HR manager or employer needs to incorporate into their arsenal. Essentially, providing actionable feedback consists of outlining clear goals, providing an opportunity to talk about any obstacles, and even allowing the airing of grievances. Remember, high performers are always exploring ways to improve, so never be reluctant to offer feedback they can use to their advantage.
4. Provide Growth Opportunities
One of the most important reasons why your high performers are excelling is because they want to hone their skills, obtain new credentials, gain more experience, and climb the corporate ladder. It's a case of quid-pro-quo—they give their best to get something in return. Sure, the high-performing employee is doing what they're paid to do, but in a climate of "quiet quitting," going above and beyond is no longer the norm. Therefore, it's crucial to discuss a wide array of growth opportunities, which can also lead to the person's long-term involvement with the firm. This could consist of training, conferences, courses, and a whole host of other mechanisms to bolster the employee's human capital.
» Is providing growth opportunities important for your workplace culture? See ways to improve workplace culture for your employees.
5. Recognize Achievements
Of course, high-performing employees should never be taken for granted. It's imperative for the office to recognize high performers' achievements, so they feel their hard work is appreciated and valued. They might feel frustrated or even disliked if they don't receive as much as a thank you for their dedication. So, it's the job of the company to offer tokens of their appreciation, whether it's a bonus or a raise. These incentives ensure high performers will maintain their efficient performance and stay with the company.
» Are you properly compensating your employees? Discover the difference between employee compensation vs. benefits.
6. Avoid Burnout
While high performers are dedicated to their jobs and want to put the pedal to the metal, they'll inevitably experience a degree of burnout. As this isn't something you want to happen to one of your most prized employees, it's critical to create a workplace climate of healthy boundaries and understanding of your staff's limits. This doesn't require handing out vacation time all year round, but it's the little things that can make a huge difference, such as refraining from rewarding high performers with more work or expecting them to pick up other employees' slack. Ultimately, the more work that's put in front of them, the greater the chance of burnout.
Conclusion
At a time when the economy is slacking from lackluster productivity, your company hit the jackpot by hiring a high-performing applicant. But this hire should never be taken for granted. From offering many different growth opportunities to showing appreciation for their work, there are many methods HR managers, supervisors, and employers can use to ensure high performers are managed effectively and allowed to live up to their potential.
Hr functionOutsourcing Employees Within a Small Business—Should You Do It?As a small business owner, deciding when to hire an employee for a specific business function can be challenging. Outsourcing employees could be a valuable alternative for certain businesses that aren't yet ready to hire an employee.
Small business owners may not have the time, knowledge, or infrastructure to perform certain tasks or functions in-house, or can't yet afford to hire and properly train employees for some of these roles. Therefore, it's a common practice among businesses to outsource particular tasks to an outside party, either a service agency or an individual contractor. Outsourced services might include marketing, accounting, payroll, and HR services.
Advantages of Outsourcing
Outsourcing employees for some of your business' essential functions can have many benefits, such as reduced costs, increased productivity, faster recruitment, and access to a larger talent pool.
1. Reduced Operating Costs
When you outsource tasks like bookkeeping or marketing services, you'll typically pay less than you would by hiring a full-time employee. Hiring employees for these tasks requires paying a salary and benefits, purchasing office equipment and supplies, and providing the necessary training. A full-time bookkeeper could cost upwards of $4,000 per month, while outsourcing the task could cost you around $500 per month, depending on your level of service.
» Outsourcing payroll services: Learn whether HR functions still do it.
2. Increased Productivity
You can increase your business's productivity by outsourcing the most time-consuming tasks. Engaging a third party to perform some of the most tedious and complicated tasks allows you to focus more on the core functions of your business and other critical issues.
3. Faster Recruitment
Finding someone to fill a specific role in your company is much faster when you choose to outsource. Recruiting a new employee is a lengthy process and comes with additional costs. The hiring process involves advertising the position, interviewing candidates, onboarding, and training the employee. In contrast, locating a third-party service with a simple internet search is a much faster process.
» HR vs. Talent Acquisition: Learn the difference.
4. Bigger Talent Pool
Third-party service providers are specialists in the services they offer, hiring and training employees that are highly skilled in what they do. The service provider likely has broader access to high-quality talent than a small business owner. By outsourcing, you'll have access to a bigger and better talent pool and receive quality work from experts in their field.
Disadvantages of Outsourcing
Outsourcing some of your business's functions also comes with several disadvantages, including limited control over the function, increased data risk, poor work quality, and strained communication.
1. Reduced Control
Suppose you move forward with outsourcing a particular business function to a third party. You wouldn't have full control over the service because it's not conducted in-house. When the task is outsourced, you can tell the service provider what you need, but you can tell them how to do their job. And, if you make a request that's not included in their service offering, you may not receive the quality of work you were hoping for.
2. Increased Data Sharing
A significant risk is involved in outsourcing services like HR, payroll, or accounting. Outsourcing tasks like these involves sharing sensitive data such as employee Social Security Numbers, bank account numbers, and customers' personal information with a third party. Data breaches are a frequent issue, so you want to be sure you can rely on the data security of the third party you engage.
» In-house payroll software vs. outsourcing: See which works better for your business.
3. Compromised Work Quality
Sometimes, your outsourced service providers may not meet your standards. Providers may deliver poor-quality work, deliver their work late, or fail to meet your needs. To increase the likelihood of your expectations being met, request a portfolio or sample of the provider's work beforehand whenever possible.
4. Poor Communication
Good communication is vital to successful business operations, which includes communicating with third parties about outsourced services. However, keeping lines of communication clear and open can be challenging when the function isn't performed in-house. Many factors, such as time zones, unstable internet connections, and even language barriers, can interfere with good communication.
Should You Outsource Employees?
Whether you should outsource employees depends entirely on your specific business and its setup. Your budget will be a major factor in determining whether you should outsource a particular business function. And, depending on the services you require, there may not be a service provider that can meet your needs. In some cases, hiring an employee in-house may better suit your business if control over work quality and performance is more important to you than short-term cost savings.
PayrollCalculate Overtime: How to Automate Your Payroll SystemWhen businesses are overloaded with work but don't have the time or resources to acquire new talent, existing employees might need to work more than usual. This phenomenon is known as overtime, referring to the hours the employee has worked outside their usual schedule. Unfortunately, business owners sometimes don't adequately compensate employees for working overtime, primarily because it can be difficult to calculate since it exceeds the total amount of hours worked per week.
Fortunately, there are now specific solutions helping business owners calculate overtime and adequately pay employees who worked more than usual. Calculating overtime manually can be quite difficult, as one small error in calculations might lead to an incorrect payment amount later on. This is one of the benefits of automated vs. manual payroll, as it minimizes the chance of human error and makes such calculations much easier. Now, let's see how you can automate your payroll system to properly calculate overtime.
» Employee compensation: See how it differs from employee benefits.
Automatically Calculate Overtime With Payroll Software
Automated payroll software offer many benefits over HR team or finance department manual processing. As long as you provide the software with the correct data, you'll know the calculations are accurate. Let's see how you can calculate overtime with payroll software.
» Unsure how to set up online payroll? Follow our tips for first-time HR managers.
Input Correct Timesheet Data
When using payroll software, you need to ensure the timesheet data is properly input. This means employees must clock in and out at the right time every day. Of course, there will be exceptions such as sick days, vacation days, or personal days, but these can be easily accounted for if you use an attendance tracking system that integrates with your payroll software.
Most sophisticated payroll solutions offer these features by default, so employees and managers only need to enter the correct overtime hours.
» Which employees have access to timesheet data for payroll? Discover internal controls to prevent payroll and personnel fraud.
Confirm Overtime Laws in the Relevant Territory
Every country and state has different overtime laws you need to take into account when calculating employee salaries. For example, in the United States, employees must be paid 50% more than their hourly rate if they work more than 40 hours in a week, while overtime hours in France are paid with a 25% bonus.
On the other hand, some countries don't have any overtime laws, so employees will be paid at the default rate unless otherwise specified in the contract. Since wage regulations differ from country to country, it's important to check the relevant laws to avoid any legal issues later on. Moreover, laws can be changed down the road regarding minimum salary for overtime exemption, so staying up to date with the relevant jurisdiction is crucial.
Contact Customer Service
If you're struggling when using automated payroll software to calculate overtime, then it might be a good idea to contact the customer support team of the solution you're using. Since calculating overtime is one of the essential features of payroll software, the customer support team will be willing to help.
Consequences of Withholding Overtime
There are multiple consequences a business could face if it fails to properly pay overtime. These include:
Decreased Productivity & Morale
The most obvious downside of withholding overtime is that it will almost certainly lead to decreased productivity and morale in the workplace. If employees feel like they're being treated unfairly, they'll be less likely to go above and beyond in their work. This will inevitably have a negative impact on the bottom line of the business.
» Does workplace culture influence employee productivity and morale? Discover how to improve your workplace culture.
Fines & Legal Fees
Just like businesses are legally obligated to run payroll, they're required by law to adequately compensate employees for overtime. Withholding overtime pay might result in your business receiving hefty fines from a federal body. Depending on the relevant jurisdiction, the fine for withholding overtime from the Department of Labor can be quite high. Moreover, if the employee decides to pursue the case in court for criminal behavior, they'll also have to cover the legal fees, which can be quite costly.
Reputational Damage
Another consequence of not paying overtime is reputational damage. In today's day and age, word spreads quickly, and one disgruntled employee can cause a lot of problems. If the story goes viral, it could even lead to a PR nightmare that will be very difficult to recover from.
Conclusion
Paying employees for overtime hours can be quite a complex process, as one small error could lead to multiple problems down the road. However, as long as you use an automated payroll solution and stay up to date with the relevant overtime laws, you should be able to properly pay overtime without any issues.
» Looking to automate your payroll system? Read TBR's reviews to find the perfect payroll solution.
PayrollPaying Employees Instantly With QuickBooks' Same-Day Deposit—Is It Worth It?Administering payroll accurately and punctually is essential for keeping employees happy, maintaining precise records, and anticipating cash flow—and you can ensure this with QuickBooks Payroll and same-day deposits. The feature is easy to set up and use, and offers significant benefits over manual payroll methods.
Payroll by QuickBooks provides time tracking, automatic tax calculations and remittance, benefits administration, and same-day direct deposit. Here, we'll take a deeper look into this feature's benefits so you can decide whether it's worth it for your business.
» Need help running payroll? See the payroll software features you need.
How Do Same-Day Deposits Work on QuickBooks?
The same-day deposit function is available at no additional cost for the subscribers of either the Premium or Elite payroll package. It's important to note that the feature can only be used to pay full-time employees, not contractors. The setup and use of the same-day deposit function are straightforward, and QuickBooks has dedicated customer support should you need assistance.
How to Set Up the Same-Day Deposit Function
To deliver same-day deposits to your employees, you'll first have to set up the same-day deposits function by following these steps:
Upgrade your QuickBooks Payroll subscription to a Full-Service Payroll plan to get the same-day deposits feature for free.Download the direct deposit authorization form from QuickBooks. Have each employee fill out, sign, and date the form and provide a voided check. Use the employees' forms and voided checks to enter their bank details into the payroll system.
How to Use the Same-Day Deposit Function
Once you've set up the same-day direct deposit function, here's how to use it:
Enter your employees' details into the system. For accurate payroll, details such as hours worked, sick leave, overtime, or vacation pay must be entered. Schedule the pay run to process before 7 AM Pacific Time on payday. You'll see the cash deducted from your account and deposited into employees' bank accounts on the same day.
» Do you know the difference between employee compensation and benefits? Learn the fundamental ways in which they differ.
Benefits of Same-Day Deposits
Same-day deposits hold many benefits both for you and your employees. As the employer, same-day deposits can be significantly more convenient—you can make payroll processing more effective by automatizing it or setting payroll to run from anywhere. Same-day deposits also help with cash flow, as opposed to other payroll services with which you might wait several days before payroll deductions are made. This could cause your account to be overdrawn, especially if you're tight on cash.
Distributing paper payroll checks can be problematic for many reasons. With same-day deposits, you won't have to worry about checks going missing or getting lost before being cashed. What's more, employees who may be sick or out of town won't have to personally come in to collect their checks, and they won't have to go into the bank to deposit their payment.
» You've overpaid your employee wages using payroll software? Here's how to fix it.
Is QuickBooks' Same-Day Deposit Function Worth It?
QuickBooks's same-day deposit function has both advantages and disadvantages, so its worth as a small business payroll software can only be determined by your business' needs and budget.
Implementing the same-day deposits feature is an easy process, and QuickBooks offers several customer support options. Same-day deposit is a feature that very few competitors offer to their customers.
However, despite its benefits, the higher cost of the packages this feature comes with and limited integration can deter some businesses from signing up. Although QuickBooks can seamlessly integrate with Gusto, you can't integrate payroll with your accounting system if you use one other than QuickBooks.
Ultimately, whether the same-day deposit function is worth it depends on you as the business owner. Your business needs and budget will determine if this feature is feasible for your business.
» Interested in QuickBooks' same-day deposit function? Read our review of QuickBooks to learn more about the software or find some of its alternatives.
Hr function5 Tips and Tricks to Smoothly Manage Your Global WorkforcePreviously, it was not uncommon for a company to maintain a global workforce. However, in the last couple of years, with the rise of remote work, it's more common than ever for businesses—large and small—to maintain an international team. Because of technological advancements and widespread adoption, it's easier than ever to put together staff located worldwide and in different time zones.
The primary challenge might be managing a workforce that's not locally based, but there are several measures you can employ to smoothly manage your global workforce.
1. Implement Software
One of the biggest hurdles when working with a global workforce is the lack of in-person communication and interaction. This can often make task management and performance evaluation difficult. However, various online solutions and software are now available that can help train, manage, and monitor a global workforce.
This includes a broad array of task and time management tools and communication apps that are user-friendly and automate many tasks to not only save time but also boost productivity. From tracking hours worked to project management functions, the marketplace of apps is enormous.
At the same, it's important to ensure that all employees have an in-depth understanding of these tools and are able to access them in their respective regions. Employees should be provided adequate training and manuals to become familiar with the workings of these applications.
» Looking for payroll software? These are the essential features payroll software should have
2. Facilitate Open Communication
Communication is the key in any professional work environment and is even more important when working with a global workforce. Since workers are from diverse backgrounds and cultures, the way they're accustomed to communicating with one another and with their colleagues might be different. For example, there are often situations where something that's considered polite in one culture may seem rude in another.
Additionally, transparency is another critical factor in advancing an organization's communications and actions. A successful organization with a global workforce needs to implement and facilitate open communication where employees are encouraged to give their input, share feedback, and express themselves confidently with their supervisors and colleagues. This can prevent misunderstandings and miscommunication.
3. Simplify Workflow and Collaboration
Working with a team spread across the globe can become challenging in terms of managing different time zones, cultural differences, and language barriers. Plus, it might not be easy or convenient to schedule meetings, and project handovers may not be smooth.
Workflows can be designed with consideration of the different time zones of employees so that they don't feel overwhelmed or under pressure to work or finish tasks during odd hours, as this can negatively affect their performance and productivity. Indeed, employers must be flexible and accommodating to find the best solution for their employees.
4. Create a Positive Company Culture
While time zones might be the primary factor in constructing company culture, addressing cultural differences and language barriers might be the ultimate solution to manufacturing a positive digital environment. This does not need to be a losing proposition because all it takes is respecting these cultural differences, whether it's understanding that staff members might require a day off for a religious holiday or accepting that personnel from non-English speaking countries may not be 100% proficient in English. Even if an employee dresses a certain way, which is demonstrative of their culture or religion, their decision to do so should be respected by everyone.
These measures can help create a positive company culture and make global employees feel welcome and supported, which will feed directly into increased productivity and a bolstered bottom line.
» How important is workplace culture? Discover how to improve workplace culture
5. Ensure Employment Regulations Are Correct
Lastly, this may seem like a clerical issue, but maintaining exceptional compliance surrounding employment law is imperative. From salaries to benefits to tax compliance, these laws and regulations differ in each country. Therefore, it's up to your team to ensure all employment rules are adhered to. Apart from being compulsory, if you don't comply, employees may feel they're being exploited or are not receiving what is rightfully due to them based on their local laws.
Depending on the size of your global workforce, it might be a prudent step to outsource human resources and payroll functions by hiring one of the many types of PEOs (Professional Employer Organizations) so that your firm can guarantee compliance in these particular jurisdictions. It might not be your intention, but it can be easy to mistakenly engage in employee misclassification or offer incorrect minimum wages.
» Unsure whether you're payroll compliant? Follow these tips for payroll compliance
Conclusion
From startups to multi-national corporations, it's clear that more companies are embracing a global workforce. What might have seemed like an experiment a couple of years ago is now the go-to solution for businesses that maintain employees from across the globe, thanks to communications apps, time management solutions, and automated task management tools. But it's crucial that organizations also add the human touch to their management efforts, be it sympathizing with cultural differences or understanding time zones. It may appear daunting at first, but having and managing a global workforce has far more advantages than drawbacks.
Hr functionThe Importance of Workplace Culture and 9 Ways to Improve ItWorkplace culture is perhaps what defines a company. It's the character, personality, and uniqueness that separates the office space from other businesses. Workplace culture is a crucial component for a company since it can retain employees, bolster productivity, and improve the bottom line. Of course, if the culture becomes toxic, it can result in negative consequences for the business, from more people quitting to decreased output.
So, how can any firm improve workplace culture?
» How do you create a workplace culture for a global team? Follow these tips to smoothly manage a global workforce
1. Provide Open Communication Channels
Every seasoned business veteran will typically utter the same piece of advice: Be sure to maintain open communication with your staff. Indeed, the office must maintain a culture where it's easy to reach any employee and where staff members are never afraid to speak up and engage with their colleagues. Suffice it to say, regular communication and consistent feedback are critical components of any successful organization.
2. Encourage Employee Input With Decision-Making
Unfortunately, too many businesses maintain a policy of "on a need-to-know basis". Put simply, this means that employees are only informed on a subject if it's absolutely necessary. But this can leave too many workers feeling dejected and unappreciated. Positive workplace culture will instead value employees' opinions and incorporate them into the decision-making process. This is a wise investment since allowing their voices to be heard will foster a more collaborative and productive atmosphere.
3. Avoid Micromanaging
If employees are constantly interrupted because they're being checked up on, it can result in diminished morale and lower output, because employees feel they're not being trusted. The longer micromanaging is embedded in the fabric of the office environment, the more employees will feel resentment toward the company. Ultimately, it is about minimizing any semblance of micromanaging and encouraging more autonomy and independence.
4. Acknowledge Employee Achievements
A team finished a project early? An employee has never missed a day of work? Another worker ran a meeting and impressed a new client? Whatever achievement a staff member made should be acknowledged and celebrated. By homing in on excellent work, employees will feel empowered and incentivized to continue delivering this exceptional work. This might even rub off on other employees to go the extra mile.
5. Provide Opportunities for Growth
An employee who expresses a desire to grow or shows an impressive aptitude in their field should be extended an opportunity for growth. In other words, when businesses notice terrific talent, they should consider offering training opportunities or sending certain employees for classes or courses. Once again, it's a feeling of empowerment because these employees will feel that management is invested in them. This pays dividends because these same workers will utilize this education to bolster the quality and quantity of their work.
6. Create an Inclusive Environment
In today's global economy, it's more important than ever before to make sure the workplace understands the critical nature of inclusivity and diversity. Every business should accept and promote cultural and language differences and include these aspects in their day-to-day operations. What's more, this could certainly be identified as a terrific team-building exercise, which is imperative in the modern remote work phenomenon.
7. Provide Transparency
A common demand that employees have is that they want their employers to be transparent. They don't want to be in the dark or be part of any odious practices. Being transparent with the workforce—whether it's being clear about expectations and plans or being honest about intentions and future goals—is a positive attribute since it will promote trust and foster loyalty.
8. Implement Flexibility
Over the last couple of years, working conditions have tilted in favor of the worker. Tight labor conditions have made employers desperate, essentially making them beholden to the desires of employees. The most in-demand workplace component these days? Flexibility. Employees want more flexible working hours, the option of working from home, and the freedom for special arrangements under special circumstances. So, while implementing flexibility might be a tad difficult, it is part of the new working world and needs to be done.
9. Be Firm When Necessary
Sure, it's a wise business policy to be ebullient and amiable. But it's also vital to be firm when necessary, especially when certain behaviors risk diminishing the positive workplace culture your company has developed. This includes removing toxicity, rectifying inappropriate behavior, and discouraging employees from further engaging in this. Remember, employees can feel at a disadvantage if they think their colleagues are not being reprimanded for any wrongdoing. All employees must feel safe at work, so it's the management's job to ensure that everyone is welcomed and ready to work without being the target of harassment.
Conclusion
Respect is a crucial feature for any workplace, be it in a brick-and-mortar establishment or online. Positive workplace culture must be the goal for all organizations, and the best way to enable positivity is by ensuring mutual respect between all parties. Everyone is working toward a common goal, so why should there be any room for toxicity?
Hr functionTalent Acquisition vs. HR: What Are the Fundamental Differences?Business owners know that managing a business is no easy task, and as the business grows so does the responsibilities of managing it. Because of this, specific functions like human resource (HR) management and talent acquisition have appeared, making the process of employee management much easier.
Many use "HR" and "talent acquisition" interchangeably, because both functions contribute toward hiring new employees and keeping the existing ones satisfied. However, there are important fundamental differences—let's uncover them.
What Is Talent Acquisition?
Talent acquisition is the process of identifying, attracting, and hiring the best-suited candidates for a company. The talent acquisition team's ultimate goal is to hire employees that will help the company reach its long-term business goals.
To achieve this, talent acquisition teams use various recruitment strategies and tools, such as job boards, social media, and employee referrals. They also work closely with the HR department to ensure that they're hiring the right candidates for the company. So, the responsibilities of the talent acquisition team include:
Identifying and acquiring potential candidates. Diversifying the employee team. Sourcing and attracting prospective hires.
What Is Human Resources?
Human resources is the department within a company that's responsible for managing all aspects of an employee's life cycle, from recruitment and onboarding to development and retention.
The HR department is also responsible for ensuring that the company complies with all employment laws and regulations, and that each employee is properly compensated. So, the responsibilities of the HR team include:
Processing payroll for all employees. Maintaining employee records. Providing the right employee benefits in addition to paychecks. Regularly updating company policies.
» How can you manage employee data? Discover how you can benefit from HRIS
3 Fundamental Differences
We've now established the innate responsibilities of both teams, but you might have noticed that there are some aspects where they overlap. Let's see the fundamental differences in their approach:
1. Perspective
Talent acquisition teams focus on the future and hire employees that will help the company reach its long-term goals. Because of this, they focus on branding and portraying the business in a positive light to make it an appealing workplace for prospective employees.
The HR department focuses on the present while ensuring the company complies with all employment laws and regulations. They make decisions based on what is best for the business, including monitoring employees' performance and ensuring that the hires are successful.
» Should new employees fit within the company's culture? Discover the importance of workplace culture
2. Stage of Involvement
Talent acquisition teams are only involved in the pre-onboarding process, whereas human resources teams are involved in every stage of an employee's life cycle.
This means that talent acquisition teams are only responsible for recruiting and selecting candidates, whereas human resources teams are involved post-onboarding, helping employees develop within the company and making sure they're satisfied, both financially and personally.
3. Length of Investment
Talent acquisition teams are invested in the long term because they align their goals with the company's long-term goals. They aim to find prospective employees that will stay with the company and not rotate within 2-5 years. Talent acquisition teams' work processes are also more long-term focused, because searching for and recruiting specific talents and building a talent database is a continuous process.
The HR teams are invested in the present and manage current employees' work cycles and needs. Their goal isn't to look to the future and new employees that may be hired—they're primarily invested in the development and retention of current employees and providing them satisfaction with salaries, bonuses, and benefits.
Conclusion
Although talent acquisition and HR are two different functions, they both play an important role in managing a company's employees. Talent acquisition teams focus on the future and hire employees that will help the company reach its long-term goals, while HR teams focus on the present and ensure the company complies with all employment laws and regulations. Understanding these differences will help you to correctly and fully optimize each team's roles and functions.
» Are there more dimensions to HR? Explore the differences between HCM vs HRM
