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A New Era for Manufacturing

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As baby boomers reach retirement and generations X and Y tweet their way into the workforce, manufacturers face a shortage of skilled workers. No surprise there. Now, if only a small consensus of manufacturers were affected, a simple fix would get the job done: a little less social media and a lot more elbow grease. Unfortunately, the problem is more than hashtag-deep. (#FirstWorldProblems)

Here are three issues the manufacturing industry will need to address, if it hasn’t already.

Issue 1: Qualified workers are harder to find

The committed, hardworking employees keeping your doors open for years are hitting their 60s and starting to retire, leaving a shortage of skills behind. In a recent Deloitte study, 82 percent of manufacturers nationwide reported a moderate to serious shortage in skilled production workers. The same survey indicated that as a result, 75 percent of those manufacturers were unable to expand their business.

In a country where the manufacturing industry by itself could be the eighth largest economy in the world, a lack of solid labor is not for HR to fix alone. If not managed correctly, many vacant positions will be filled with workers whose comparative shortfall in experience and training makes them unable to produce at the same level as their predecessors. If these employees are not brought up to speed properly – and promptly – manufacturing companies will face a vicious turnover cycle.

Because aging is unavoidable, top talent must be recruited or developed.

Issue 2: External hiring may not be the best road

It won’t be long before the older workers in your company start to retire, so it is crucial you take proactive steps now to prevent future problems. Before running to Monster or LinkedIn for hiring, consider the obstacles of external hiring vs. internal mobility. According to a study from Wall Street Journal, external hires were 61 percent more likely to be fired from the new position and 21 percent more likely to leave the company on their own. If your external hire is gone within six months, you haven’t fixed anything. Consider, too, the monetary statistics included in the process.

In a separate study, research showed external hires were paid 18 percent to 20 percent more, yet received lower performance evaluations for several years into the job. To avoid this, consider the workers you already have in surrounding positions. They could produce more in the new position while doing it at a lower cost. When opting for internal mobility, there are fewer distractions and smaller obstacles for the promoted employee, whereas outsiders must deal with new relationships and new scenery while adapting to a high-paced environment. The inside hire is accustomed to the speed, already knows his fellow employees and can focus on learning the position.

Maintain high standards for production and do not pay more for an external hire when a lower-level employee could do it for less money. Looking for an external hire is not necessarily the wrong call, but that road will always be there.

Issue 3: How to leverage talent

Regardless of whether you hire externally, the talent you have still requires development. In the manufacturing industry, this means training and accountability. As manufacturing has evolved, the tools it operates have grown more complex. One tool in particular is Computer Numerical Control machinery (CNC). CNC works alongside Computer Aided Design (CAD) software to convert an image into numbers. These numbers are used like coordinates on a graph for a separate tool to cut a 3D image. Although it can be expensive, continuous employee training, especially with CNC machinery should be in place and up-to-date. One reason manufacturers report a shortage of skills is because managers are frugal in areas where they can’t afford to be. Stay ahead of the game by being mindful of areas where your workers need growth and devote the money to enhance their skills. The cost of frequent trainings will balance out in a reduced amount of manufacturing mistakes.

Second, accountability cannot be underestimated. Many employees go too long without sitting down with their boss and getting feedback on their performance. Regular one-on-ones are an opportunity to keep employees motivated, while challenging them in areas where they need growth. Employees can use this time to ask questions or discuss problems outside the workplace; doing so creates a more positive environment in which they know management cares.

The manufacturing field is vital to the nation and its continued economic growth. By addressing these talent issues, the industry can get the necessary lift to keep producing at a high level. Although they are losing many members of the workforce who helped them reach this point, manufacturers can mold the savvy, social-media-minded millennials into workers who reach heights their parents never could.


by Aaron Santelmann

Author Bio: A young and enthusiastic writer and researcher, Aaron is an instrumental member of Paycom’s lead generation and reporting team. Aaron is an engaging writer who maintains a strong presence on Paycom’s blog where he focuses on politics, government and compliance, tax guidelines and other employer regulations that impact businesses across the country. Outside of work, Aaron enjoys reading, exercising and spending time with his family.

2017 Social Security Wage Base Increases to $127,200.

2017 Social Security Wage Base Increases

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The Social Security Wage Base increases to $127,200

With the largest hike in U.S. history set to take effect on January 1, 2017, the new Social Security wage base will increase from $118,500 to $127,200. This $8,700 increase marks the first wage base increase in two years and the highest percentage increase since 1983. Employees with wages equal to or larger than $127,200 will notice an additional $539.40 allocated toward Social Security on their 2017 tax returns.

The maximum Social Security tax any employee will pay is $7,886.40. Employers still are responsible for the remaining $7,886.40.

FICA Tax Rate Remains Unchanged

The Federal Insurance Contributions Act tax (FICA tax) for 2017, which is the combined total of the Social Security tax rate of 6.2 percent and the Medicare tax rate of 1.45 percent, will remain at 7.65 percent. The FICA tax is applied to all wages earned. An additional 0.9 percent Medicare tax will continue to be applied to all wages paid in excess of $200,000. As in 2016, paying the additional 0.9 percent Medicare tax will remain the responsibility of the employer on behalf of the wage earner.

Make sure your payroll provider has accounted for the 2017 withholdings increase and consider the best way to share this federal tax update with your employees.

What this Means for the Self-Employed

The 2017 social security wage base for self-employed individuals will also be $127,200 and the maximum social security tax for a self-employed individual will be $15,772.80. The combined social security tax rate of 12.4 percent and Medicare tax rate of 2.9 percent brings the self-employment tax rate total to 15.3 percent, but it is important to remember there is no Medicare tax limit on self-employment income.


by Amy Double

Author Bio: Amy, a tenured professional in sales and marketing with over 10 years of experience, is dedicated to creating content focused on helping organizations achieve their business goals. As an experienced writer, Amy is committed to researching and blogging about topics that affect businesses across multiple industries, including manufacturing, hospitality and more. Outside of work, Amy enjoys reading, entertaining and spending time with family.


How to Train your Workforce Using 1 Item in Your Pocket

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Everyone needs training, whether it’s basic, new-hire, how-to-get-started training or professional development. Training employees provides your company with a competitive edge in business for a number of reasons, not the least of which is that you end up with knowledgeable, capable employees who are as invested in the company as you are with them.

And guess what? You’re already training your employees, whether or not you realize it. From employee orientation on day one to continuing education, you’re training your business on the essentials. The thing is, you could be training in a simpler way.

Streamlining your company’s training and learning program doesn’t have to be time-consuming or intimidating. Take Paycom Learning, for instance. If you have a camera-equipped phone or a PowerPoint slideshow, you have the materials you need to create a training! In a couple of easy steps, you can save your company time and money by creating easy, everyday trainings.

Record Your Training

Nearly two-thirds of Americans have smartphones. Simply take that phone out of your pocket and record a video (or an audio message) of the training. For example, one of the first things a new hire needs to learn is how to utilize the features of his or her desk phone. You also may want to train your restaurant hosts on how to properly welcome guests. A two-minute video with a rundown of various details is an easy way to knock out basic getting-started tasks.

Upload Training to Paycom Learning

When you are finished recording, just upload the file to Paycom Learning and assign it to employees. They’ll be able to access the training via Employee Self-Service, from wherever there is an internet connection. Employees love easily accessible information; 75 percent of millennial workers are eager to utilize online learning. Podcasts are an easy way for employees to access training at their convenience, such as on their daily commute to work.

Measure Results

If you want to ensure your employees are retaining the information, considering adding a quiz. You also can monitor who has completed assigned training and easily review results.

Four Ways to Utilize Training

If you’re wondering how training applies to your company, here are four ways companies can utilize training:

  1. Practical, on-the-job training: Who is the expert in certain areas of your business? Record him or her demonstrating how to work the company alarm system, emergency procedures, email set-up and other trainings that otherwise would happen in person.
  2. Compliance training: What training is needed to comply with industry regulations? For example, how to properly wash your hands for food service or the procedures for reporting an on-site accident. Ensure that all employees are correctly and consistently trained.
  3. New-hire training: How many new hires do you have annually and how much time does it take to train them on the same standard tasks? Cut down on the time it takes to get them up-to-speed by simply recording one training and uploading it to Paycom Learning.
  4. Communicating important messages: How do you track who has seen an important companywide memo? Instead of mass-emailing employees, record important messages such as quarterly financial updates or the company’s vision statement, and post them to Paycom Learning. You then can generate reports on who has or hasn’t viewed the message.

When it comes to training, you’re already doing it, but don’t overcomplicate it. Training is easy when you use Paycom Learning.

Holly Faurot

by Holly Faurot

Author Bio: Faurot, vice president of client relations, has served in a number of roles during her tenure at Paycom, including regional vice president, sales training manager and sales consultant. A born leader and a 2012 honoree in Oklahoma’s 30 Under 30 awards, she has helped a number of individuals and clients achieve success through her energetic spirit. The product of a dairy farm in Kenefic, Okla., Faurot was taught at a young age the importance of working hard, being honest and having a desire to help others.

master compliance

3 Ways Your HR Team Can Master Compliance

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Complex rules, weighty administrative responsibilities, zero margin for error: When it comes to complying with employment legislation, the burden for U.S. businesses — both large and small — is substantial.

Small and medium-sized businesses in particular must manage their resources wisely, and can find it increasingly difficult to allocate the staff – and the time – to manage all of their company’s obligations for complying with today’s labor legislation. Larger businesses, with thousands of workers employed across state lines, face the challenge of ensuring HR teams are following the right rules. It’s no wonder managing compliance can feel overwhelming.

But it doesn’t have to be. Implementing a few best practices can make it easier to master the growing compliance burden and protect your company.

Here are three best practices to help you master compliance.

1. Automate Your Compliance Processes
Not only are government agencies producing a ton of rules and regulations, but businesses also have to deal with the mounting complexity of those regulations. The Affordable Care Act (ACA) is a perfect example. It’s one of the most complex pieces of federal legislation ever conceived, and despite many HR leaders’ best efforts, the nuanced nature of government regulations, like ACA, makes manually tracking and storing information time consuming and precarious.

Enter automation.

Automation improves a business’s efficiency and takes some of the guesswork out of complex processes. Specifically, the right system should be able to automate tasks like tracking garnishment payments and sending required COBRA correspondence. Through automation, businesses gain something truly valuable — peace of mind.

2. Proactively Find Areas of Risk
The risk of noncompliance is real and felt most notably in steep costs. Take the Fair Labor Standards Act as an example.

Not only do businesses have to contend with rising penalties associated with noncompliance, but class-action and wage-and-hour lawsuits add a painful one-two punch. These blows can leave marks. In fact, according to a report from Seyfarth.com, there has been a staggering 115 percent increase in value of the top 10 wage-and-hour class-action settlements since 2014.

But wait, there’s more: Litigation lawyers with splashy ads and the ubiquity of online information actually encourage employees to file claims against their employers. Additionally, the U.S. Department of Labor’s Wage and Hour Division has increased the number of investigations by 35 percent in the last six years. These investigations are launched independently of employee complaints.

With the odds seemingly stacked against businesses, foresight and planning is crucial. Businesses that have the ability to quickly audit their workforce by gathering easily accessible and accurate data can proactively manage their risk of noncompliance and find opportunities for improvement.

3. Be the Ultimate Resource for Your C-Suite
Big regs can mean big changes for businesses. Take, for example, recent changes to overtime regulations. On its face, overtime expansion looks like a simple question of time and labor. The solution may seem simple as well: Cut a few hours here or reassign a few duties there in order to avoid increased labor costs. However, because the salary threshold essentially has doubled, controlling overtime costs can require many changes to how a large percentage of a company’s workforce is paid and scheduled.

That’s why it’s so important to provide your C-suite with the data and information it needs to make the best decisions for your company.

Experienced executives rely on key event alerts; intuitive, automatic reporting; and legislation overviews to keep them at the top of their game. Additionally, those types of tools give HR leaders crucial time to prepare solutions and points of reference when presenting recommendations in the boardroom.

Just as the Industrial Revolution’s spinning jenny replaced the laborious job of hand-spinning wool and cotton, HR technology can drastically improve a business’s efficiency and output. Automation features like push reporting allow companies to schedule reports for things like expiring employment authorization documents and ACA status changes.

We know when it comes to leading your company through intensifying government regulations, you don’t simply want to make it — you want to master it. With these tips and the right HR technology, you can be well-positioned to do just that.

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.

Katy Fabrie

by Katy Fabrie

Author Bio: Katy Fabrie is a Marketing Specialist at Paycom where she assists with executing integrated marketing campaigns. With extensive experience in both writing and research, Katy enjoys crafting content that helps HR professionals develop strategies to reach their goals. Katy has created both digital and printed content for a myriad of local and national companies, and she enjoys continually expanding her HR knowledge base. Outside of work, Katy enjoys reading, running and spending time with her husband, Colby, and dog, Fox.

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