August 20, 2012
State Unemployment Funds Could Have Been Better Managed Says Report
Blog - UST
Blogs
August 15, 2012
Connecticut Ready to Collect Special UI Assessment Fees
In December 2007 when the Great Recession officially began, it’s doubtful that anyone could have predicted that over the next several years almost 35 states would face insolvent unemployment insurance (UI) trust funds.
For Connecticut, and its pool of steadily increasing jobless workers, it took just over two years.
And now, three years after reaching insolvency, the price of the state’s debt is being leveraged on all employers remaining in the tax rated state system.
Although the principal balance of the $632 million loan isn’t yet due, employers are already being called on to cover the interest payments for the debt. For nonprofits remaining within the state UI system, their organization can expect to add approximately $1.70 per thousand dollars of taxable payroll, or about $25.50 per full time employee to their 2012 UI taxes.
As required by law, all employers within the state tax system will be billed directly for this assessment on or about August 1, which must be paid by August 31. Paid outside of the normal state UI system, this additional fee will add on to the gross overpayment of more than $162 million made by Connecticut in the past three years.
For nonprofits still in the state system, there are other options, such as leaving the state to join a Trust, like the Unemployment Services Trust (UST), that can help save more money and gain greater predictive control over yearly budgeting.
By reimbursing the state dollar-for-dollar the claims of only their own former employees, nonprofits that join UST are able to stop overpaying in the state tax system and do more with their money. In fact, Connecticut nonprofits with 10 or more employees can expect to save an average of $10,484 a year after joining UST.
For Connecticut, and its pool of steadily increasing jobless workers, it took just over two years.
And now, three years after reaching insolvency, the price of the state’s debt is being leveraged on all employers remaining in the tax rated state system.
Although the principal balance of the $632 million loan isn’t yet due, employers are already being called on to cover the interest payments for the debt. For nonprofits remaining within the state UI system, their organization can expect to add approximately $1.70 per thousand dollars of taxable payroll, or about $25.50 per full time employee to their 2012 UI taxes.
As required by law, all employers within the state tax system will be billed directly for this assessment on or about August 1, which must be paid by August 31. Paid outside of the normal state UI system, this additional fee will add on to the gross overpayment of more than $162 million made by Connecticut in the past three years.
For nonprofits still in the state system, there are other options, such as leaving the state to join a Trust, like the Unemployment Services Trust (UST), that can help save more money and gain greater predictive control over yearly budgeting.
By reimbursing the state dollar-for-dollar the claims of only their own former employees, nonprofits that join UST are able to stop overpaying in the state tax system and do more with their money. In fact, Connecticut nonprofits with 10 or more employees can expect to save an average of $10,484 a year after joining UST.
August 09, 2012
Colorado Nonprofits Helping Pay $600M in Unemployment Deficits
Colorado has turned to old school forms of cash generation as they prepare to manage a bond sale. Designed to lower unemployment costs and help the state’s unemployment insurance system meet its financial obligations, the sale will generate more than $640 million through the Colorado Housing and Finance Authority.
Currently the Colorado Unemployment Insurance Trust Fund has a negative balance of more than $600 million after the recessions of 2002 and 2008.
In a joint announcement by Democratic Gov. John Hickenlooper and Republican state Treasurer Walker Stapleton, the men explained that the bond sale will eliminate additional UI solvency surcharges that Colorado employers have paid since 2004. In the short term, Colorado employers still within the state system will see savings starting next year of up to $120 per worker.
Businesses will repay the bond over time though and can expect fewer savings with each year.
For nonprofit agencies still in the state system, there are other options, such as leaving the state to join a Trust, like the Unemployment Services Trust (UST), that can help save more money and gain greater predictive control over yearly budgeting.
In fact, Colorado nonprofits that leave the state system and join UST save an average of $6,300 a year.
To learn more about your opt out alternatives, visit http://www.chooseust.org/501c3-unemployment-alternatives/ or sign up for an upcoming webinar “Exclusive Nonprofit Savings”.
Read the original MSN Money article here.
Currently the Colorado Unemployment Insurance Trust Fund has a negative balance of more than $600 million after the recessions of 2002 and 2008.
In a joint announcement by Democratic Gov. John Hickenlooper and Republican state Treasurer Walker Stapleton, the men explained that the bond sale will eliminate additional UI solvency surcharges that Colorado employers have paid since 2004. In the short term, Colorado employers still within the state system will see savings starting next year of up to $120 per worker.
Businesses will repay the bond over time though and can expect fewer savings with each year.
For nonprofit agencies still in the state system, there are other options, such as leaving the state to join a Trust, like the Unemployment Services Trust (UST), that can help save more money and gain greater predictive control over yearly budgeting.
In fact, Colorado nonprofits that leave the state system and join UST save an average of $6,300 a year.
To learn more about your opt out alternatives, visit http://www.chooseust.org/501c3-unemployment-alternatives/ or sign up for an upcoming webinar “Exclusive Nonprofit Savings”.
Read the original MSN Money article here.
August 06, 2012
Seeking CPAs: Key Questions to Ask Before Issuing a Request for Proposal
Written by Barry Omahen, CPA, Managing Partner, and Stephanie Kretschmer, Marketing Manager, Lindquist LLP
If your organization is considering having an audit for the first time or changing auditors, it is wise to exercise due diligence when obtaining bids for services. With the continued focus on transparency and accountability by government agencies, donors, parent organizations and the general public, the selection of a qualified certified public accountant (CPA) has become increasingly important.
Quality audit and accounting services help nonprofit organizations safeguard their assets; improve internal controls and efficiency; complete timely and accurate returns to comply with federal and state regulatory filing requirements; and stay on top of regulatory requirements, accounting standards and industry best practices.
Before you request bids, your organization needs to answer a few key questions:
Gone are the days of calling a couple of CPAs to say, “Give me a bid,” and reaching an agreement with a handshake. Today’s organizations need to be conscientious about their selection of a CPA. Conducting a diligent and thorough selection process not only satisfies key stakeholders, but ultimately helps protect the organization.
Barry Omahen, CPA, is the Managing Partner of Lindquist LLP, a certified public accounting firm specializing in audits of not-for-profit organizations and their related employee benefit plans. Barry’s chief responsibilities include supervising Lindquist LLP’s day-to-day operations and the firm’s quality control review process. Email Barry at bomahen@lindquistcpa.com.
Stephanie Kretschmer, Marketing Manager, helps the professionals in Lindquist LLP’s four West Coast offices attract and retain clients. She oversees firm communications and has responded to hundreds of requests for proposal in her career. Email Stephanie at skretschmer@lindquistcpa.com.
To learn more from Lindquist's nonprofit-focused CPAs, watch the recorded webinar: "Beyond the Numbers- How to Review your Organization's Form 990."
If your organization is considering having an audit for the first time or changing auditors, it is wise to exercise due diligence when obtaining bids for services. With the continued focus on transparency and accountability by government agencies, donors, parent organizations and the general public, the selection of a qualified certified public accountant (CPA) has become increasingly important.
Quality audit and accounting services help nonprofit organizations safeguard their assets; improve internal controls and efficiency; complete timely and accurate returns to comply with federal and state regulatory filing requirements; and stay on top of regulatory requirements, accounting standards and industry best practices.
Before you request bids, your organization needs to answer a few key questions:
- Who is going to be responsible for the selection process? Will it be an individual (Executive Director, Director of Finance or Controller) or a group (Board of Directors or Audit Committee) Does your organization have an Audit Committee and, if not, would it make sense to create one?
- What services do we need? Define your organization’s needs and create a list of required services. Getting clarity on exactly which services are needed will help ensure that you are comparing apples to apples at decision time.
- When do we need these services? Consider your year-end deadlines, filing deadlines and scheduled meetings of the Board of Directors. How quickly after year-end do you close your books? When do you want the financial statements presented? You will need to communicate any timing expectations to prospective bidders.
- Upon which criteria are we going to base this decision? Consider: prior experience with not-for-profits; organization, location, size and structure of the firm/individual; understanding of the work to be performed, including ability/plan to complete services according to the organization’s timeframes; experience of references; price; industry knowledge and approach to communications. Some organizations develop a weighting system to help ensure they are objective when making the decision.
- What is our process and time frame for making a decision? Determine whether you are going to allow candidates to come onsite to meet with accounting staff or wait until you have received proposals and identified finalists for the decision-makers to interview—or both. Outline when you are going to issue a request for proposal, how long candidates have to ask questions or request an onsite visit, when candidates need to submit a proposal, when you expect to interview finalists, and when you expect to reach a decision.
Gone are the days of calling a couple of CPAs to say, “Give me a bid,” and reaching an agreement with a handshake. Today’s organizations need to be conscientious about their selection of a CPA. Conducting a diligent and thorough selection process not only satisfies key stakeholders, but ultimately helps protect the organization.
Barry Omahen, CPA, is the Managing Partner of Lindquist LLP, a certified public accounting firm specializing in audits of not-for-profit organizations and their related employee benefit plans. Barry’s chief responsibilities include supervising Lindquist LLP’s day-to-day operations and the firm’s quality control review process. Email Barry at bomahen@lindquistcpa.com.
Stephanie Kretschmer, Marketing Manager, helps the professionals in Lindquist LLP’s four West Coast offices attract and retain clients. She oversees firm communications and has responded to hundreds of requests for proposal in her career. Email Stephanie at skretschmer@lindquistcpa.com.
To learn more from Lindquist's nonprofit-focused CPAs, watch the recorded webinar: "Beyond the Numbers- How to Review your Organization's Form 990."
August 01, 2012
UST has Upgraded the Hearings Process for All Members
We are pleased to announce that TALX Corporation, the third party unemployment claims administrator for UST, has changed its hearings process from “attend per request” to “attend all” for all UST members.
After reviewing data about improved win rates and how the education provided during the process of working with a hearing representative helps further reduce UI costs, the Trustees of UST elected to add this enhanced level of service on June 4th.
A part of the Appellate division, hearing representatives at TALX have an average of 12 years unemployment claims experience and receive a significant amount of training on the nuances of individual state laws and requirements. As such, utilizing a hearing representative provides UST’s members with substantial leverage while planning and preparing for a claims hearing.
Available as a consultant before a claims hearing, and as a representative during the hearing, the hearing representative will assist UST members in:
Although members can elect to not have a hearing representative work with them throughout the claims process, data has consistently shown that while employers who represent themselves have a 57.4% win rate, employers who use a TALX hearing representative throughout the claims hearing process increase their win rate to 72.3%.
While in the past it was necessary for members to request a hearing representative, this upgraded service is now the UST standard and is a benefit of your UST partnership at no additional charge.
For questions or further information about these changes, please contact your TALX Account Manager Garry Koch at gkoch@talx.com or at (614) 658-3007.
After reviewing data about improved win rates and how the education provided during the process of working with a hearing representative helps further reduce UI costs, the Trustees of UST elected to add this enhanced level of service on June 4th.
A part of the Appellate division, hearing representatives at TALX have an average of 12 years unemployment claims experience and receive a significant amount of training on the nuances of individual state laws and requirements. As such, utilizing a hearing representative provides UST’s members with substantial leverage while planning and preparing for a claims hearing.
Available as a consultant before a claims hearing, and as a representative during the hearing, the hearing representative will assist UST members in:
- Determining proper witnesses
- Gathering and submitting documents to the right stakeholders
- Explaining the hearings process
- Reviewing with members the type of judge has been assigned to each hearing
- Preparing members for what to expect during the hearing
- Addressing direct questions to witnesses
- Objecting to the Claimant’s cross examination of witnesses
- Cross examining the Claimant
- Making closing statements to the judge on behalf of UST members
Although members can elect to not have a hearing representative work with them throughout the claims process, data has consistently shown that while employers who represent themselves have a 57.4% win rate, employers who use a TALX hearing representative throughout the claims hearing process increase their win rate to 72.3%.
While in the past it was necessary for members to request a hearing representative, this upgraded service is now the UST standard and is a benefit of your UST partnership at no additional charge.
For questions or further information about these changes, please contact your TALX Account Manager Garry Koch at gkoch@talx.com or at (614) 658-3007.
July 27, 2012
10 Tips to Minimizing your Unemployment Costs: Tip 10
Tip 10: Work with an Unemployment Trust.
Working with an unemployment trust like UST can provide you with a partner that works with you at every stage of the unemployment process. Whether you need help with unemployment claims, appeals, hearings, charge audits, best practices, unemployment reports or client education, a trust can help cut down on costs and administrative burden.
For example, UST helps nonprofits to:
1) Evaluate whether they should opt out of the state unemployment tax system
2) File the paperwork with the state to become a "reimbursing" employer
3) Set up an account reserve just for unemployment costs
4) Provide web reporting with the tools that help you stay abreast of unemployment activity
Unemployment trusts like UST can also offer guidance, preparation and representation at hearings to help you win a claims appeal for improper charges.
By working with the Trust's claims monitor, especially at the initial level of the claim, an unemployment trust can help you avoid penalties, loss of appeal rights, and it can keep you from being charged for benefits improperly collected. Working with a trust can make the difference in saving your agency thousands of dollars in claims costs each year.
Trusts are best for nonprofits with 10 or more full time employees who have somewhat stable employment. Those with seasonable employees or volatile unemployment claims are best staying in the state unemployment tax system. Read more about your options as a nonprofit.
To find out if your agency would benefit from opting out of the state unemployment tax system and working with UST, request a Savings Evaluation today.
Working with an unemployment trust like UST can provide you with a partner that works with you at every stage of the unemployment process. Whether you need help with unemployment claims, appeals, hearings, charge audits, best practices, unemployment reports or client education, a trust can help cut down on costs and administrative burden.
For example, UST helps nonprofits to:
1) Evaluate whether they should opt out of the state unemployment tax system
2) File the paperwork with the state to become a "reimbursing" employer
3) Set up an account reserve just for unemployment costs
4) Provide web reporting with the tools that help you stay abreast of unemployment activity
Unemployment trusts like UST can also offer guidance, preparation and representation at hearings to help you win a claims appeal for improper charges.
By working with the Trust's claims monitor, especially at the initial level of the claim, an unemployment trust can help you avoid penalties, loss of appeal rights, and it can keep you from being charged for benefits improperly collected. Working with a trust can make the difference in saving your agency thousands of dollars in claims costs each year.
Trusts are best for nonprofits with 10 or more full time employees who have somewhat stable employment. Those with seasonable employees or volatile unemployment claims are best staying in the state unemployment tax system. Read more about your options as a nonprofit.
To find out if your agency would benefit from opting out of the state unemployment tax system and working with UST, request a Savings Evaluation today.
July 26, 2012
10 Days to Minimizing your Unemployment Costs: Tip 9
Tip 9: Consider re-employment strategies!
Helping transitioning employees find another job rapidly after a staff reduction, position elimination, or other involuntary, non-misconduct separation can help your nonprofit control the duration of non-protestable unemployment claims.
Because these claims typically result in the longest duration and highest total benefit payout, they can be the most costly for your organization.
An unemployment claims monitor or Trust can help you by providing one-on-one job coaching, e-learning, and other key outplacement elements
Helping transitioning employees find another job rapidly after a staff reduction, position elimination, or other involuntary, non-misconduct separation can help your nonprofit control the duration of non-protestable unemployment claims.
Because these claims typically result in the longest duration and highest total benefit payout, they can be the most costly for your organization.
An unemployment claims monitor or Trust can help you by providing one-on-one job coaching, e-learning, and other key outplacement elements
July 25, 2012
10 Days to Minimizing your Unemployment Costs: Tip 8
Tip 8: Weigh the consequences of partial employment, systematic layoffs, and independent contractors before you use them!
It should be self-evident, but too often employers act impulsively and don’t review all of their options before laying employees off, which ultimately raises their UI tax rates, or their cash on hand if they are a reimbursing employer. Layoffs can cost thousands of dollars in unemployment benefits.
Know when employees are eligible for partial weeks of unemployment, how a systematic layoff will affect your contribution rate, and whether independent contractors are a good idea for your agency.
In the case of layoffs, helping severed employees find jobs benefits the employer and employee.
Independent contractors may file for unemployment, and the employer needs to be able to prove he or she is not an employee of your company.
If you work with an unemployment trust or claims administrator, they can provide you with a listing of state-specific guidance that can highlight how helping severed employees find a new job will benefit both them and your nonprofit, as well as helping you properly document that independent contractors are not an employee.
It should be self-evident, but too often employers act impulsively and don’t review all of their options before laying employees off, which ultimately raises their UI tax rates, or their cash on hand if they are a reimbursing employer. Layoffs can cost thousands of dollars in unemployment benefits.
Know when employees are eligible for partial weeks of unemployment, how a systematic layoff will affect your contribution rate, and whether independent contractors are a good idea for your agency.
In the case of layoffs, helping severed employees find jobs benefits the employer and employee.
Independent contractors may file for unemployment, and the employer needs to be able to prove he or she is not an employee of your company.
If you work with an unemployment trust or claims administrator, they can provide you with a listing of state-specific guidance that can highlight how helping severed employees find a new job will benefit both them and your nonprofit, as well as helping you properly document that independent contractors are not an employee.
July 24, 2012
10 Days to Minimizing your Unemployment Costs: Tip 7
Tip 7: Appeal benefit collections when it is warranted.
An appeal is your request to the state to assign a hearing officer to review the facts of a particular case because you believe the eligibility rules have not been properly applied. Appeals aren’t something you should do by default though.
Appeal only if you adamantly disagree with a decision allowing the claimant benefits, and be prepared to present the facts and evidence that show why your former employee should not be allowed to collect.
If you work with a claims administrator or unemployment trust, you should be prepared during an appeal to give all documentation and preparation to a hearings representative who will help your organization determine who should be contacted for the hearing, and how their testimony will work with your case.
An appeal is your request to the state to assign a hearing officer to review the facts of a particular case because you believe the eligibility rules have not been properly applied. Appeals aren’t something you should do by default though.
Appeal only if you adamantly disagree with a decision allowing the claimant benefits, and be prepared to present the facts and evidence that show why your former employee should not be allowed to collect.
If you work with a claims administrator or unemployment trust, you should be prepared during an appeal to give all documentation and preparation to a hearings representative who will help your organization determine who should be contacted for the hearing, and how their testimony will work with your case.
July 23, 2012
10 Days to Minimizing your Unemployment Costs: Tip 6
Tip 6: Be prepared for hearings.
All unemployment benefits hearings require first-hand testimony as to the facts and events under consideration. By proactively documenting all employee actions and disciplines, you collect the information you will need for a hearing. By having all documents readily available during the hearing, you avoid relying on hearsay evidence which is generally not persuasive enough to win your hearing, and may not even be considered, depending on the case.
If you work with a claims administrator or a trust like UST, you may have access to your own hearing representative. Working with a hearing representative will also help you prepare for the case by providing you with someone who is not only on your side, but has many years of experience in working through claims hearings.
All unemployment benefits hearings require first-hand testimony as to the facts and events under consideration. By proactively documenting all employee actions and disciplines, you collect the information you will need for a hearing. By having all documents readily available during the hearing, you avoid relying on hearsay evidence which is generally not persuasive enough to win your hearing, and may not even be considered, depending on the case.
If you work with a claims administrator or a trust like UST, you may have access to your own hearing representative. Working with a hearing representative will also help you prepare for the case by providing you with someone who is not only on your side, but has many years of experience in working through claims hearings.
July 22, 2012
10 Days to Minimizing your Unemployment Costs: Tip 5
Tip 5: Know the difference between voluntary resignations, discharges, and lack of work claims.
In almost every state, a voluntary resignation, especially for non-compelling reasons, usually disqualifies the employee from receiving unemployment benefits.
But there are significant exceptions because some states may allow benefits for a quit with “good cause.”
Here are some good things to remember:
And never, ever forget, lack of work claims are the very reason unemployment insurance exists. They provide benefits to employees who, through no fault of their own, are separated from work. But to get any award, claimants must be able to work, available for work, and actively looking for work.
In almost every state, a voluntary resignation, especially for non-compelling reasons, usually disqualifies the employee from receiving unemployment benefits.
But there are significant exceptions because some states may allow benefits for a quit with “good cause.”
Here are some good things to remember:
- In a voluntary quit, the burden of proof rests with your former employee.
- A discharge for misconduct is legally defined as willful misconduct connected with your work that resulted in a tendency for damage to your nonprofit interests.
- A discharge in which you initiate the termination puts the burden of proof on your nonprofit. Make sure you have the right documentation on hand for at least 18 months.
- Always avoid the words “unsatisfactory performance” in cases where the employee is able to perform the job, but is negligent of performing their duties. This term has a legal definition of an employee who is unable to perform the job, and will likely result in benefits awarded to the claimant.
- In discharges due to misconduct, be prepared to provide documentation of the final incident that led to the discharge.
And never, ever forget, lack of work claims are the very reason unemployment insurance exists. They provide benefits to employees who, through no fault of their own, are separated from work. But to get any award, claimants must be able to work, available for work, and actively looking for work.
July 19, 2012
10 Days to Minimizing your Unemployment Costs: Tip 4
Tip 4: Track unemployment costs and budget appropriately.
Track claims, monitor potential liability and review past history to forecast budgets for unemployment taxes. Be familiar with the base period and benefit year in your state and review tax information to ensure budgets are adequate. By better understanding how your unemployment tax costs are affected by layoffs, you can plan for the future and make sure you have the cash on hand for fluctuations in staffing that may affect your future costs.
If you are a reimbursing employer, meaning you have opted out of the state unemployment tax system to reimburse the state for your own UI claims, you should very carefully manage unemployment claims and make sure you aren't paying for any that are unwarranted. Also, you can catch errors by the state if you know how much you should be paying. If you work with a trust like UST, your claims representative should be doing this for you and will be able to walk you through any questions.
Track claims, monitor potential liability and review past history to forecast budgets for unemployment taxes. Be familiar with the base period and benefit year in your state and review tax information to ensure budgets are adequate. By better understanding how your unemployment tax costs are affected by layoffs, you can plan for the future and make sure you have the cash on hand for fluctuations in staffing that may affect your future costs.
If you are a reimbursing employer, meaning you have opted out of the state unemployment tax system to reimburse the state for your own UI claims, you should very carefully manage unemployment claims and make sure you aren't paying for any that are unwarranted. Also, you can catch errors by the state if you know how much you should be paying. If you work with a trust like UST, your claims representative should be doing this for you and will be able to walk you through any questions.
July 17, 2012
10 Days to Minimizing your Unemployment Costs: Tip 3
Even if your nonprofit doesn’t have a dedicated human resources team, it’s important that your human resources practices are up to snuff. Best practices include:
There are online performance assessment tools that you can use to help screen employees before hire, and assess after hire. For example, UST members have access to pan, an online aggregation of hundreds of assessments from more than 50 of the industry’s top test publishers. These online assessments include employee acquisition, evaluation, and development solutions to help reduce costs in the hiring and recruiting process for UST members, as well as decrease turnover and its related costs.
- Performing detailed reference checks before hiring new employees.
- Consistently using (and documenting) progressive discipline.
- Enforcing all rules and policies uniformly. Even the smallest deviations undermine your credibility as a fair nonprofit employer.
- Follow an employee’s progress from the moment they are hired.
- Perform thorough talent assessments before hiring or promoting employees to alleviate problems down the road.
There are online performance assessment tools that you can use to help screen employees before hire, and assess after hire. For example, UST members have access to pan, an online aggregation of hundreds of assessments from more than 50 of the industry’s top test publishers. These online assessments include employee acquisition, evaluation, and development solutions to help reduce costs in the hiring and recruiting process for UST members, as well as decrease turnover and its related costs.
July 16, 2012
10 Days to Minimizing your Unemployment Costs: Tip 2
Tip 2: Compose effective written warnings.
Every manager, HR generalist, and employee from here to Timbuktu knows that warnings are an act of progressive discipline. But what many of these same people fail to remember is that warnings are an act of progressive discipline that effectively ensure an employee understands what is expected of them.
In the case of an employee discharge, state unemployment agencies look for warnings to determine if your former employee was discharged for misconduct. Effectively clear, and non-judgmental, warnings help you meet this burden of proof with concrete evidence, when written to include:
Every manager, HR generalist, and employee from here to Timbuktu knows that warnings are an act of progressive discipline. But what many of these same people fail to remember is that warnings are an act of progressive discipline that effectively ensure an employee understands what is expected of them.
In the case of an employee discharge, state unemployment agencies look for warnings to determine if your former employee was discharged for misconduct. Effectively clear, and non-judgmental, warnings help you meet this burden of proof with concrete evidence, when written to include:
- The violation
- The action that must take place for the situation to improve
- The consequences to the employee if this standard is not met
- The employee’s action plan and comments
- The signature of the employee, a witness, and the issuer
July 15, 2012
10 Days to Minimizing your Unemployment Costs: Tip 1
But, you can directly impact your bottom line with a few strategic approaches to reducing your unemployment costs.
Tip 1: Document Everything.
Effective documentation is absolutely crucial to reducing your unemployment costs because, as the employer, you will often carry the “burden of proof” with the state.
Although good documentation can also help in matters related to the EEOC and employment litigation, documentation for discharges and voluntary quit situations is different. Namely you want to be extremely careful of the language you use in documenting a voluntary separation or discharge because the state has specific legal definitions of terms such as “unsatisfactory” work. And you will want to be careful that you are protesting claims that do not constitute good cause in a voluntary quit. These could include quits to attend school, get married, change careers, staying at home with children, or job abandonment.
Also, make sure that your organization is keeping good records. Whenever you provide policies and documentation to employees, be sure to obtain a signed acknowledgement of policies and changes to policies, and keep the receipt for at least 18 months.
Tip 1: Document Everything.
Effective documentation is absolutely crucial to reducing your unemployment costs because, as the employer, you will often carry the “burden of proof” with the state.
Although good documentation can also help in matters related to the EEOC and employment litigation, documentation for discharges and voluntary quit situations is different. Namely you want to be extremely careful of the language you use in documenting a voluntary separation or discharge because the state has specific legal definitions of terms such as “unsatisfactory” work. And you will want to be careful that you are protesting claims that do not constitute good cause in a voluntary quit. These could include quits to attend school, get married, change careers, staying at home with children, or job abandonment.
Also, make sure that your organization is keeping good records. Whenever you provide policies and documentation to employees, be sure to obtain a signed acknowledgement of policies and changes to policies, and keep the receipt for at least 18 months.
July 11, 2012
State UI Overpayments Are Marched into the Spotlight
We’ve said it before and we’ll say it again: Unemployment overpayments are a HUGE problem for nonprofits still paying into the state unemployment insurance system. Nonprofits aren’t the only ones who now know they’re losing money due to poor governmental oversight.
On Monday, CNN Money published an in-depth review of government overpayments within the UI system and their findings. Although the findings do recognize the value of UI benefits to those receiving them properly, improper payments are simultaneously distressing for those who oversee limited budgets and work on shoestrings.
Digging through reports from the U.S. Department of Labor, the Campaign to Cut Waste, and individual state records, CNN found that an estimated $14 billion in benefits were paid out improperly during fiscal 2011. That’s more than 10 percent of all the jobless benefits paid out last year.
But some states did far worse than the national average. For instance, in Indiana, which has become known for bad spending habits, more UI payments made were made in error, or improperly, than were made correctly. Indiana actually made more improper payments than proper payments…to the tune of at least $1,743,109,894 over the last three years.
The blame doesn’t only fall on one or two states though. Unemployment Insurance has the second highest rate for improper payments of any federal program.
But, finally, something is being done. Sort of. A little bit.
The U.S. government and many states are trying to recoup their losses and avoid future overpayments.
CNN found that the majority of the UI benefits improperly collected go to check cashers who either aren’t actively searching for a job, were fired or quit voluntarily, and those who continue to file claims even after they’ve returned to work.
Although people do deliberately defraud the system and use fake documents or identities to collect benefits, the current focus is on establishing preventative methods to recover the money that has been lost.
The crackdown won’t help your nonprofit though.
Despite nearly half of all improper payments being deemed “recoverable,” the money will be returned to the federal government. There is no indication that the money will be returned to the employers who were overcharged, or that they’re tax rates will be positively affected by the discovery of errors.
Only a quarter of the estimated actual recoverable payments have been recovered so far. For the most part, when the government discovers someone was overpaid, it often issues a letter asking the claimant to return the extra funds. But the repayment can be waived in many states if the UI beneficiary can show that they’re in financial distress and didn’t actively intend for the error to occur.
On Monday, CNN Money published an in-depth review of government overpayments within the UI system and their findings. Although the findings do recognize the value of UI benefits to those receiving them properly, improper payments are simultaneously distressing for those who oversee limited budgets and work on shoestrings.
Digging through reports from the U.S. Department of Labor, the Campaign to Cut Waste, and individual state records, CNN found that an estimated $14 billion in benefits were paid out improperly during fiscal 2011. That’s more than 10 percent of all the jobless benefits paid out last year.
But some states did far worse than the national average. For instance, in Indiana, which has become known for bad spending habits, more UI payments made were made in error, or improperly, than were made correctly. Indiana actually made more improper payments than proper payments…to the tune of at least $1,743,109,894 over the last three years.
The blame doesn’t only fall on one or two states though. Unemployment Insurance has the second highest rate for improper payments of any federal program.
But, finally, something is being done. Sort of. A little bit.
The U.S. government and many states are trying to recoup their losses and avoid future overpayments.
CNN found that the majority of the UI benefits improperly collected go to check cashers who either aren’t actively searching for a job, were fired or quit voluntarily, and those who continue to file claims even after they’ve returned to work.
Although people do deliberately defraud the system and use fake documents or identities to collect benefits, the current focus is on establishing preventative methods to recover the money that has been lost.
The crackdown won’t help your nonprofit though.
Despite nearly half of all improper payments being deemed “recoverable,” the money will be returned to the federal government. There is no indication that the money will be returned to the employers who were overcharged, or that they’re tax rates will be positively affected by the discovery of errors.
Only a quarter of the estimated actual recoverable payments have been recovered so far. For the most part, when the government discovers someone was overpaid, it often issues a letter asking the claimant to return the extra funds. But the repayment can be waived in many states if the UI beneficiary can show that they’re in financial distress and didn’t actively intend for the error to occur.
July 09, 2012
More States Cut From Unemployment Benefits
At the end of May more than 200,000 people in eight states had their federal extended unemployment benefits end. They join more than 180,000 jobless workers in 19 other states who had already seen their benefits end in 2012.
Extended benefits are being cut across the country as average unemployment rates drop. To stay on extended benefits, the average unemployment rate for the past three months must be at least 110 percent of one of the rates from a comparable three-month period in one of the last three years. For each of the states affected, their average unemployment rate is currently lower than at any of the same three month periods in the last three years.
While the drop in unemployment rates will be a positive change for the overall economy, for the hundreds of thousands of job seekers who have already exhausted their state and federal unemployment benefits, the cuts don’t bode well.
So what do the nearly 400,000 job seekers who have been cut from extended unemployment benefits mean to the nonprofit sector?
Putting more strain on at-capacity nonprofits, the newest round of cuts will mean that more job-seekers will be turning to nonprofits for job re-training and employment support.
The newest round of unemployment cuts also means that state and nonprofit programs that lend aid to the needy will be the last place for the long-term unemployed to turn.
Extended benefits are being cut across the country as average unemployment rates drop. To stay on extended benefits, the average unemployment rate for the past three months must be at least 110 percent of one of the rates from a comparable three-month period in one of the last three years. For each of the states affected, their average unemployment rate is currently lower than at any of the same three month periods in the last three years.
While the drop in unemployment rates will be a positive change for the overall economy, for the hundreds of thousands of job seekers who have already exhausted their state and federal unemployment benefits, the cuts don’t bode well.
So what do the nearly 400,000 job seekers who have been cut from extended unemployment benefits mean to the nonprofit sector?
Putting more strain on at-capacity nonprofits, the newest round of cuts will mean that more job-seekers will be turning to nonprofits for job re-training and employment support.
The newest round of unemployment cuts also means that state and nonprofit programs that lend aid to the needy will be the last place for the long-term unemployed to turn.
July 04, 2012
Federal Red Tape May Be Slowing Down Innovative UI Job Programs
Earlier this year Congress approved a deal to allow up to 10 states to develop demonstration projects which would allow businesses to hire unemployed workers and essentially pay their salaries with money from the unemployment insurance fund.
Though the system has gotten off to a rocky start, many hope it will soon pick up.
As part of the program, the 10 states which are picked to participate would be allowed to use UI funds to subsidize employer-provided training or to pay employers that hire unemployment insurance beneficiaries. Although atypical, some lawmakers see the UI job program as a quick way to increase the number of those going back to work.
According to an article published in Stateline Daily, George Wentworth of the National Employment Law Project believes that the program’s intent is to ensure that the program participants “get good jobs with good wages and that there is a good chance they can retain the job permanently.”
However, a good intent and the lack of state applicants may show that the innovative program is a far cry from the easy fix that some lawmakers see it as. New Hampshire has already indicated that it probably won’t bother to apply because the considerations for inclusion are too difficult.
Other states have similarly indicated that they will wait to see what the federal government and their fellow states do before considering an application for the waiver.
For 501(c)(3) agencies that can opt out of the state UI system but have not yet done so, the program’s possibilities are problematic though. Repurposing funds from their taxes to pay for the salaries of for-profit agencies, the waiver program could undercut the operating budgets of many nonprofits.
Now, more than ever, it is important that nonprofits with more than 10 full-time employees explore their options for leaving the state UI system to self-reimburse for unemployment claims. To learn more about how UST can help your nonprofit stop subsidizing the salaries and unemployment benefits of other for-profit companies.
Read more about the current holding pattern at Stateline.
Though the system has gotten off to a rocky start, many hope it will soon pick up.
As part of the program, the 10 states which are picked to participate would be allowed to use UI funds to subsidize employer-provided training or to pay employers that hire unemployment insurance beneficiaries. Although atypical, some lawmakers see the UI job program as a quick way to increase the number of those going back to work.
According to an article published in Stateline Daily, George Wentworth of the National Employment Law Project believes that the program’s intent is to ensure that the program participants “get good jobs with good wages and that there is a good chance they can retain the job permanently.”
However, a good intent and the lack of state applicants may show that the innovative program is a far cry from the easy fix that some lawmakers see it as. New Hampshire has already indicated that it probably won’t bother to apply because the considerations for inclusion are too difficult.
Other states have similarly indicated that they will wait to see what the federal government and their fellow states do before considering an application for the waiver.
For 501(c)(3) agencies that can opt out of the state UI system but have not yet done so, the program’s possibilities are problematic though. Repurposing funds from their taxes to pay for the salaries of for-profit agencies, the waiver program could undercut the operating budgets of many nonprofits.
Now, more than ever, it is important that nonprofits with more than 10 full-time employees explore their options for leaving the state UI system to self-reimburse for unemployment claims. To learn more about how UST can help your nonprofit stop subsidizing the salaries and unemployment benefits of other for-profit companies.
Read more about the current holding pattern at Stateline.
June 26, 2012
In-House Employee Development
In almost every nonprofit setting, it’s pretty safe to say that leadership requires the most out of every employee to create the greatest possible impact on the governing mission. Whether this means that case workers take emergency calls from clients more than they are schedule to, or that an administrative assistant wears multiple hats as the social media coordinator, office manager, event planner, and even an intake specialist, continually changes. But, despite the great pressure nonprofits place on each employee to give their absolute best, employee development is often overlooked.
A recent Bridgespan Group survey has revealed that most nonprofits rank their ability to provide development and growth opportunities to employees as their fourth greatest management weakness overall even.*
The same survey went on to explain that a lack of employee development has become the “Achilles heel” of the nonprofit community. Because only 30 percent of nonprofits have created or sustained an agency-wide plan for employee development—and only 23 percent of those track its progress—the large majority of organizations don’t have a clear understanding of what skills they need for each position as their mission evolves. Many more don’t even have an idea of where that talent would come from.
To help you develop a plan to address future leadership gaps, Bridgespan put together a list of 52 free ways that nonprofit agencies can improve their internal employee development. Some of the easiet and most impactful employee development initiatives that they list include:
On its own, on-the-job development isn’t enough though. To foster truly effective options for employee and organization development, get your board involved with individual employees through the agency. And have each person who is involved with your development program—whether that is a board member or a developing leader—regularly assess what works best at getting employees ready so that you are more likely and more able to advance them within your agency.
*Rounding out the top 3 are communication of priorities, coordination across organization boundaries, and performance assessment and consequences.
A recent Bridgespan Group survey has revealed that most nonprofits rank their ability to provide development and growth opportunities to employees as their fourth greatest management weakness overall even.*
The same survey went on to explain that a lack of employee development has become the “Achilles heel” of the nonprofit community. Because only 30 percent of nonprofits have created or sustained an agency-wide plan for employee development—and only 23 percent of those track its progress—the large majority of organizations don’t have a clear understanding of what skills they need for each position as their mission evolves. Many more don’t even have an idea of where that talent would come from.
To help you develop a plan to address future leadership gaps, Bridgespan put together a list of 52 free ways that nonprofit agencies can improve their internal employee development. Some of the easiet and most impactful employee development initiatives that they list include:
- To prepare employees for positions of team leadership and management, have key employees lead monthly meetings
- Allow potential future leaders to manage junior staff such as interns or volunteers
- Organize and execute team building activities at monthly meetings
- Allow key employees to represent the organization in professional or community networks
- Ask employees you want to develop to participate in drafting portions of grants or business contracts to improve their business capabilities
- Have staff participate in developing key budgets
- Ask staff to organize initiatives throughout the organization or in the community
On its own, on-the-job development isn’t enough though. To foster truly effective options for employee and organization development, get your board involved with individual employees through the agency. And have each person who is involved with your development program—whether that is a board member or a developing leader—regularly assess what works best at getting employees ready so that you are more likely and more able to advance them within your agency.
*Rounding out the top 3 are communication of priorities, coordination across organization boundaries, and performance assessment and consequences.
June 20, 2012
Pennsylvania Takes on UI Solvency with New Legislation
On June 12th, Pennsylvania Governor Tom Corbett signed comprehensive UI trust fund solvency legislation that included a range of measures to address the deficit in the state’s UI Trust Fund account. Tackling the issue through a combination of bond authority, special tax assessments, benefit cuts and integrity measures, the new laws amended the former Unemployment Compensation law to:
Following a pattern set out by several other states in which UI trust fund accounts are deeply in deficit, the new law seeks to align annual benefit payouts with taxes received from employers over time. The new law will also manage the large outstanding Title XII debt to the federal government through bonds. This should minimize the cost of interest due on the loans, and the FUTA credit reduction penalties that would have resulted from outstanding payments.
To learn more about how UST can help your nonprofit in Pennsylvania, or any other state, save money by streamlining UI costs and better managing improper and fraudulent claims, visit www.ChooseUST.org/request-a-savings-quote for a savings evaluation today!
- Change partial benefit credits from 40 percent to 30 percent of the weekly benefit rate
- Stipulate that earnings for requalification of benefits must be in “employment”
- Increase the taxable wage base and decrease the State Adjustment Factor
- Change Interest Factor to bond debt repayment mechanism
- Increase trigger solvency percentage to 250 percent
- Enact various administrative changes, including allowing the collection of back payments through Treasury Offset Program
- Change financial eligibility requirements in base year earnings
- Permit the PA Economic Development Financing Authority to issue bonds for payment of federal loans to Unemployment Compensation Trust Fund
- Change maximum benefit cap to maintain annual maximum benefit at $573 through 2019
- Create an amnesty program for collection of unpaid contributions or compensation overpayment
Following a pattern set out by several other states in which UI trust fund accounts are deeply in deficit, the new law seeks to align annual benefit payouts with taxes received from employers over time. The new law will also manage the large outstanding Title XII debt to the federal government through bonds. This should minimize the cost of interest due on the loans, and the FUTA credit reduction penalties that would have resulted from outstanding payments.
To learn more about how UST can help your nonprofit in Pennsylvania, or any other state, save money by streamlining UI costs and better managing improper and fraudulent claims, visit www.ChooseUST.org/request-a-savings-quote for a savings evaluation today!
June 06, 2012
In-House Employee Development
In almost every nonprofit setting, it’s pretty safe to say that leadership requires the most out of every employee to create the greatest possible impact on the governing mission. Whether this means that case workers take emergency calls from clients more than they are schedule to, or that an administrative assistant wears multiple hats as the social media coordinator, office manager, event planner, and even an intake specialist, continually changes. But, despite the great pressure nonprofits place on each employee to give their absolute best, employee development is often overlooked.
A recent Bridgespan Group survey has revealed that most nonprofits rank their ability to provide development and growth opportunities to employees as their fourth greatest management weakness overall even.*
The same survey went on to explain that a lack of employee development has become the “Achilles heel” of the nonprofit community. Because only 30 percent of nonprofits have created or sustained an agency-wide plan for employee development—and only 23 percent of those track its progress—the large majority of organizations don’t have a clear understanding of what skills they need for each position as their mission evolves. Many more don’t even have an idea of where that talent would come from.
To help you develop a plan to address future leadership gaps, Bridgespan put together a list of 52 free ways that nonprofit agencies can improve their internal employee development. Some of the easiest and most impactful employee development initiatives that they list include:
On its own, on-the-job development isn’t enough though. To foster truly effective options for employee and organization development, get your board involved with individual employees through the agency. And have each person who is involved with your development program—whether that is a board member or a developing leader—regularly assess what works best at getting employees ready so that you are more likely and more able to advance them within your agency.
*Rounding out the top 3 are communication of priorities, coordination across organization boundaries, and performance assessment and consequences.
A recent Bridgespan Group survey has revealed that most nonprofits rank their ability to provide development and growth opportunities to employees as their fourth greatest management weakness overall even.*
The same survey went on to explain that a lack of employee development has become the “Achilles heel” of the nonprofit community. Because only 30 percent of nonprofits have created or sustained an agency-wide plan for employee development—and only 23 percent of those track its progress—the large majority of organizations don’t have a clear understanding of what skills they need for each position as their mission evolves. Many more don’t even have an idea of where that talent would come from.
To help you develop a plan to address future leadership gaps, Bridgespan put together a list of 52 free ways that nonprofit agencies can improve their internal employee development. Some of the easiest and most impactful employee development initiatives that they list include:
- To prepare employees for positions of team leadership and management, have key employees lead monthly meetings
- Allow potential future leaders to manage junior staff such as interns or volunteers
- Organize and execute team building activities at monthly meetings
- Allow key employees to represent the organization in professional or community networks
- Ask employees you want to develop to participate in drafting portions of grants or business contracts to improve their business capabilities
- Have staff participate in developing key budgets
- Ask staff to organize initiatives throughout the organization or in the community
On its own, on-the-job development isn’t enough though. To foster truly effective options for employee and organization development, get your board involved with individual employees through the agency. And have each person who is involved with your development program—whether that is a board member or a developing leader—regularly assess what works best at getting employees ready so that you are more likely and more able to advance them within your agency.
*Rounding out the top 3 are communication of priorities, coordination across organization boundaries, and performance assessment and consequences.
May 20, 2012
Creating an Open Door Policy
When your best employees leave your agency, the turnover can easily leave you in the lurch, but is there a way for you to give them the option of coming back if their new position doesn’t work out as well as they’d hoped?
Many human resources professionals enthusiastically say yes.
Now, more than ever, when employee pools are glutted with workers it is difficult for employees who have left a nonprofit- even if they know they were highly valued- to ask for a job back, even if it’s only been a few weeks and they know that no one has been hired or promoted to replace them.
By extending an informal verbal invitation to the employee in their exit interview – during which you can learn some of the most valuable feedback about how your organization treats employees and how that affects employee retention – you can create an open door policy that shelters your employee (and you!) if their new position doesn’t work out.
While not every employee should be offered your agency’s open door policy, employees who have excelled and successfully propelled your agency forward are an asset you worked hard to develop, and they should be treated as such. Because it takes time and resources to develop a new employee, which can hurt your overall mission if the match doesn’t work out, it is always easiest to keep the employees you have.
When extending the invitation, make sure to keep certain criteria in mind:
Does this employee have a proven track record of productivity?
Are they dependable?
Will it be hard for you to fill their position after they leave?
Have they developed strong working relationships with other people throughout your nonprofit?
Would their return be welcome?
For employees who leave a job and then find that their new position isn’t nearly as satisfying as their old position, an open door policy and a personal invitation to come back if it doesn’t work out creates a strong sense of community that, even if they don’t come back to your agency, they will reflect back on your agency in the way they talk about you.
Read more about how one organization’s open door policy has benefited them here.
Many human resources professionals enthusiastically say yes.
Now, more than ever, when employee pools are glutted with workers it is difficult for employees who have left a nonprofit- even if they know they were highly valued- to ask for a job back, even if it’s only been a few weeks and they know that no one has been hired or promoted to replace them.
By extending an informal verbal invitation to the employee in their exit interview – during which you can learn some of the most valuable feedback about how your organization treats employees and how that affects employee retention – you can create an open door policy that shelters your employee (and you!) if their new position doesn’t work out.
While not every employee should be offered your agency’s open door policy, employees who have excelled and successfully propelled your agency forward are an asset you worked hard to develop, and they should be treated as such. Because it takes time and resources to develop a new employee, which can hurt your overall mission if the match doesn’t work out, it is always easiest to keep the employees you have.
When extending the invitation, make sure to keep certain criteria in mind:
Does this employee have a proven track record of productivity?
Are they dependable?
Will it be hard for you to fill their position after they leave?
Have they developed strong working relationships with other people throughout your nonprofit?
Would their return be welcome?
For employees who leave a job and then find that their new position isn’t nearly as satisfying as their old position, an open door policy and a personal invitation to come back if it doesn’t work out creates a strong sense of community that, even if they don’t come back to your agency, they will reflect back on your agency in the way they talk about you.
Read more about how one organization’s open door policy has benefited them here.
May 14, 2012
SIDES Program Standardizes Separation Data Needed to Defend against Fraudulent Unemployment Claims
In mid-2011, a new unemployment claims processing system, called the State Information Data Exchange System (SIDES), was introduced. A secure, web based, electronic transmission system enabling two-way data exchange with state unemployment agencies, the finalized program has established a uniform means, between states, employers and employer representatives, for gathering separation information for unemployment claims. Creating this standard expectation of information for all participating states is important because it helps eliminate questions about what details are needed to submit a complete and effective response on a contestable unemployment claim.
Knowing exactly what separation details will be needed in response to the state and having the increased lead time needed to gather that information enables nonprofits to win more claims at the initial level of protest. This is especially important to nonprofit employers where winning claims up-front helps lower claim costs by eliminating benefit payments to former employees while waiting for an unemployment hearing to be scheduled.
Electronic receipt of claims notifications through SIDES also helps reduce follow up time, as a complete response is provided as part of each “first response.”
Ultimately, the program reduces improper payments, since the states are provided with all of the details needed to make the correct ruling in the initial determination. As a result, participation in SIDES saves both time and money.
For nonprofit employers, reducing the high costs associated with unproductive former employees helps increase the funds available to help others and attain organizational goals.
Some of the biggest benefits to nonprofits include:
UST’s claims monitor, TALX, has been involved with SIDES from its inception and is one of only two forward-looking unemployment cost control organizations utilizing the program to help 501(c)(3) members reap the benefits of this improved claims process.The program has been successful, thus far, and TALX is now live with SIDES in 10 states (AZ, CO, GA, IA, OH, RI, SC, TX, UT, WI). An additional 10 states are expected to go live by the end of August, with 21 more going live by the end of the year. There are 9 states that have not yet made a commitment to participating in SIDES.
If you are a UST member, please contact your TALX representative to learn more about SIDES.
Knowing exactly what separation details will be needed in response to the state and having the increased lead time needed to gather that information enables nonprofits to win more claims at the initial level of protest. This is especially important to nonprofit employers where winning claims up-front helps lower claim costs by eliminating benefit payments to former employees while waiting for an unemployment hearing to be scheduled.
Electronic receipt of claims notifications through SIDES also helps reduce follow up time, as a complete response is provided as part of each “first response.”
Ultimately, the program reduces improper payments, since the states are provided with all of the details needed to make the correct ruling in the initial determination. As a result, participation in SIDES saves both time and money.
For nonprofit employers, reducing the high costs associated with unproductive former employees helps increase the funds available to help others and attain organizational goals.
Some of the biggest benefits to nonprofits include:
- A standard claim response format for participating states
- More lead time to prepare and submit employee separation details
- Lead time on claim availability to nonprofits increased by an average of 3 days
- Reduced benefit overpayments and inappropriate charges
- Employee information is secured through a reduction of paper documents
UST’s claims monitor, TALX, has been involved with SIDES from its inception and is one of only two forward-looking unemployment cost control organizations utilizing the program to help 501(c)(3) members reap the benefits of this improved claims process.The program has been successful, thus far, and TALX is now live with SIDES in 10 states (AZ, CO, GA, IA, OH, RI, SC, TX, UT, WI). An additional 10 states are expected to go live by the end of August, with 21 more going live by the end of the year. There are 9 states that have not yet made a commitment to participating in SIDES.
If you are a UST member, please contact your TALX representative to learn more about SIDES.
April 30, 2012
Hiring the Perfect Candidate: Checking References
Hiring the perfect candidate sometimes seems like it has 1,001 steps. Between sorting through all of the resumes, doing phone interviews, conducting in-person interviews, and letting those passed over down in a way that makes them more likely to apply again later, it’s easy to forget that hidden in there is one of the most important steps to making sure you do get the right person for the job.
In this day and age, the reference check has become much more than a mere formality. Shedding light on what a candidate is really like, calling references and verifying former positions and educational history helps enlighten the hiring team as to what the best, and sometimes worst, parts of working with a particular candidate are.
Underestimating the amount of information you can glean from conducting reference checks is done all too often though. Because it takes significant time and energy to call every reference, it might be easier for some agencies to look at having a third party professional recruiter talk to the references.
If this isn’t a strong option, the key to conducting the most successful reference checks lies in asking, and listening, to carefully developed questions that speak to what you most want, and need, to learn about a candidate. Making the process feel like a conversation- one where you’re up front and open about what the opportunity is and what information you’re looking to learn about the candidate- can lead to valuable revelations that help cement your decision and show you where you can best support and develop a new hire.
When developing your reference check questions, you should look for both hard data, such as questions about the candidates skill set, and qualitative data which will help you better understand the candidate’s communication and management style as well as their strengths and areas for improvement.
Some sample questions might include:
Speaking with a broad list of references- personal, professional, and developmental- will help you put together the best possible picture of what a candidate would look like in your organization. Since few candidates will put down anyone that would give a less-than-stellar review of them and their abilities, drill down deep into how the reference talks about the candidate and their level of enthusiasm about your candidate for the most telling information.
Thankfully, after all of the reference checks are done, if the candidate still matches your expectations, you can finally make your offer.
Read more about checking candidates’ references.
In this day and age, the reference check has become much more than a mere formality. Shedding light on what a candidate is really like, calling references and verifying former positions and educational history helps enlighten the hiring team as to what the best, and sometimes worst, parts of working with a particular candidate are.
Underestimating the amount of information you can glean from conducting reference checks is done all too often though. Because it takes significant time and energy to call every reference, it might be easier for some agencies to look at having a third party professional recruiter talk to the references.
If this isn’t a strong option, the key to conducting the most successful reference checks lies in asking, and listening, to carefully developed questions that speak to what you most want, and need, to learn about a candidate. Making the process feel like a conversation- one where you’re up front and open about what the opportunity is and what information you’re looking to learn about the candidate- can lead to valuable revelations that help cement your decision and show you where you can best support and develop a new hire.
When developing your reference check questions, you should look for both hard data, such as questions about the candidates skill set, and qualitative data which will help you better understand the candidate’s communication and management style as well as their strengths and areas for improvement.
Some sample questions might include:
- Please tell me a little bit about yourself and your relationship with XX.
- What are the personal qualities that most stand out to you about XX?
- How has XX impacted your organization/department/campaigns?
- Can you tell me about XX’s leadership skills?
- How does XX deal with conflict? Does XX tend to be successful in dealing with conflict?
- If you did an appraisal of XX, where would you highlight areas for professional development?
- Have any particular experiences with XX stood out to you?
Speaking with a broad list of references- personal, professional, and developmental- will help you put together the best possible picture of what a candidate would look like in your organization. Since few candidates will put down anyone that would give a less-than-stellar review of them and their abilities, drill down deep into how the reference talks about the candidate and their level of enthusiasm about your candidate for the most telling information.
Thankfully, after all of the reference checks are done, if the candidate still matches your expectations, you can finally make your offer.
Read more about checking candidates’ references.
April 26, 2012
Nonprofits Lead the Pack in Job Retraining
Perhaps thanks to a tough economy in which job-seekers are often unqualified for the few jobs that are actually available, nonprofits are gaining recognition for being ahead of the pack in their move to retrain employees for new positions. Actively teaching job seekers skills that will help them move into new industries, across many sectors of the economy, nonprofits with job retraining programs are helping to lower unemployment related costs.
Placing even more workers than many government-funded programs, as found in this article by The NonProfit Times, the ongoing trend is more than promising to the unemployed.
Instead of being set back by the economy and their lack of government funding, many nonprofits are helping more and more workers, both with and without successful employment histories, find gainful employment by offering high-class workforce readiness programs, new employment training, mock interviews, and resume coaching. Teaching out-of-work job seekers to translate and hone their already established skills into skills for their new positions, the programs are highly successful in getting applicants placed in long-term jobs.
Providing courses and training to applicants of all ages and most backgrounds, the push to re-employ America is strengthening the economy and lowering unemployment insurance taxes for employers
April 23, 2012
The Hidden Costs of High Turnover
Since the recession began, companies laid off millions of employees believing that their bottom line wouldn’t survive if they kept any more than the most skeletal staff onboard. And, as people lost their jobs, nonprofits lost large chunks of their funding.
Things seem to be changing though. Recently economic-focused news outlets, like Bloomberg Businessweek, have been reporting an upswing in hiring trends, lower jobless claims and that companies are re-hiring for many of the positions they previously cut.
Creating hope that the recession may be breathing its last breaths, these reports are also changing the ways employees interact at nonprofits.
Now, even though more people are volunteering with charitable and nonprofit agencies through social media and word-of-mouth, the lack of funding for employee paychecks is causing high turnovers as these employees are offered better paying jobs elsewhere.
For instance, The Chronicle of Philanthropy has found that there is an exceptionally high turnover rate for fundraisers that is costing charities lots- and lots- of money. Finding that most fundraisers are only staying at their jobs for an average of 16 months and are being recruited after only a few months, the direct and indirect costs of finding a replacement are estimated to be $127,650 per fundraiser.
Because demand for fundraisers, and many other nonprofit employees, vastly outstrips the supply of good candidates, the president of Cygnus Applied Research, Penelope Burk, says that she has found that “only 1 out of 3 fundraisers experience[s] even a day without a job.”
In conducting research for a study that is expected to be released this fall, Burk suggests that keeping fundraisers happy can save organizations thousands of dollars. She also suggests that agencies work at promoting their internal talent and offering training opportunities that can make inside people better qualified for assuming new positions.
Just one example of where high turnover is hurting nonprofits, the move to re-train the unemployed for new positions is also affecting nonprofits as many job seekers are requesting courses and training in fields like computers and nursing where they can expect a stable salary.
Operating on already tight budgets, the high rate of turnover at many nonprofits is making it even harder to survive, but by looking for ways to increase employee happiness- whether that means offering more time out of the office or the ability to work from home- more agencies can compete for the best possible candidates.
To find out if job seekers can be re-trained to work for your organization, contact your local unemployment agency or career center.
Things seem to be changing though. Recently economic-focused news outlets, like Bloomberg Businessweek, have been reporting an upswing in hiring trends, lower jobless claims and that companies are re-hiring for many of the positions they previously cut.
Creating hope that the recession may be breathing its last breaths, these reports are also changing the ways employees interact at nonprofits.
Now, even though more people are volunteering with charitable and nonprofit agencies through social media and word-of-mouth, the lack of funding for employee paychecks is causing high turnovers as these employees are offered better paying jobs elsewhere.
For instance, The Chronicle of Philanthropy has found that there is an exceptionally high turnover rate for fundraisers that is costing charities lots- and lots- of money. Finding that most fundraisers are only staying at their jobs for an average of 16 months and are being recruited after only a few months, the direct and indirect costs of finding a replacement are estimated to be $127,650 per fundraiser.
Because demand for fundraisers, and many other nonprofit employees, vastly outstrips the supply of good candidates, the president of Cygnus Applied Research, Penelope Burk, says that she has found that “only 1 out of 3 fundraisers experience[s] even a day without a job.”
In conducting research for a study that is expected to be released this fall, Burk suggests that keeping fundraisers happy can save organizations thousands of dollars. She also suggests that agencies work at promoting their internal talent and offering training opportunities that can make inside people better qualified for assuming new positions.
Just one example of where high turnover is hurting nonprofits, the move to re-train the unemployed for new positions is also affecting nonprofits as many job seekers are requesting courses and training in fields like computers and nursing where they can expect a stable salary.
Operating on already tight budgets, the high rate of turnover at many nonprofits is making it even harder to survive, but by looking for ways to increase employee happiness- whether that means offering more time out of the office or the ability to work from home- more agencies can compete for the best possible candidates.
To find out if job seekers can be re-trained to work for your organization, contact your local unemployment agency or career center.
April 19, 2012
Developing Well-Written Objectives for Each Position Leads to Greater Success for Your Agency
Writing great, to-the-point objectives for all of the jobs at a nonprofit organization is hard. Nearly impossible if you don’t have the right tools or a good understanding of what the positions must do. But, developing these goals is completely necessary for the success of any agency, and for the success of your employees.
Laying out, in writing, what is and isn’t important and how goals are measured gives employees something tangible to look at when they need reassurance or guidance. It means they can align themselves with your team, your department, and your organization without having to learn the hard way what they’re trying to achieve and what they need to do to achieve it.
Developing well-written objectives also helps employees and their managers evaluate performance and react appropriately to organizational changes.
By using the following 7 steps, suggested by The NonProfit Times, you can put together objectives that “leave no doubt to your intentions” for each position.
Even when working with well-written objectives, be ready to be flexible in how each employee and their manager approaches them. While organizational understanding of the importance of these objectives is important, it’s just as important to be ready to roll with the punches that come day to day and to re-evaluate your objectives as needed.
Tweet us @USTTrust: What steps do you take when developing, or re-developing, employee objectives?
Laying out, in writing, what is and isn’t important and how goals are measured gives employees something tangible to look at when they need reassurance or guidance. It means they can align themselves with your team, your department, and your organization without having to learn the hard way what they’re trying to achieve and what they need to do to achieve it.
Developing well-written objectives also helps employees and their managers evaluate performance and react appropriately to organizational changes.
By using the following 7 steps, suggested by The NonProfit Times, you can put together objectives that “leave no doubt to your intentions” for each position.
- Use action verbs that clearly state what is to be done and what the expected results are.
- Have results that you, and your employees themselves, can measure. Make them quantifiable, observable, or verifiable.
- Make sure to include activities and results that are actually in the employee’s control.
- Assure that targets are realistic, but also challenging.
- Ask yourself if these objectives support your organizational goal for this role.
- If possible, involve assignments that help contribute to job responsibilities and address a developmental need.
- Develop timelines and milestones by which progress can be assessed.
Even when working with well-written objectives, be ready to be flexible in how each employee and their manager approaches them. While organizational understanding of the importance of these objectives is important, it’s just as important to be ready to roll with the punches that come day to day and to re-evaluate your objectives as needed.
Tweet us @USTTrust: What steps do you take when developing, or re-developing, employee objectives?
April 16, 2012
1 in 4 Nonprofits are Unaware of Unemployment Insurance Savings Option Available Exclusively to 501(c)(3) Agencies
22% of nonprofits are unaware of a critical piece of federal legislation that allows them to opt out of their state tax-rated unemployment system and pay only for their own unemployment claims, found the Division of Nonprofit Research at UST in its most comprehensive market research study to-date.
This option, which has been available exclusively to 501(c)(3) organizations since 1972, allows nonprofits to stop over paying into their state tax-rated system and offers substantial long-term savings for those employers who choose to become direct, or self-, reimbursing agencies.
“Our state has increased its costs to most employers so I’m shocked that not all nonprofits are looking at this option,” said one study participant who has already opted out of their state unemployment insurance system.
By opting out of the state tax-rated system, which typically causes employers to pay $2.00 in taxes for every $1.00 in actual benefits that is paid to their former employees, most nonprofits are able to save money and do significantly more with their budget.
“It wasn’t until after my first full year with UST that I started to believe it was not too good to be true. We received our audit and a refund and I thought ‘Wow, we really have a credit here,’” wrote another study participant.
Offering valuable savings in both the short and long-term, opting out of the state system does have several drawbacks for agencies that elect to become direct reimbursing without joining a trust like UST or other program.
“I’m always looking to save money and get more services for my clients,” said one nonprofit HR consultant, “I push the idea of UST for giving them an added resource. [With UST] They’ll have somebody on their side who can help them.”
To read the online press release about the Division’s findings, go here.
All information and quoted materials were pulled from a study conducted at UST, which was released at the end of the 1st quarter of 2012. The study surveyed almost 300 nonprofit agencies to identify key data about how nonprofits understand and utilize their unemployment tax options
This option, which has been available exclusively to 501(c)(3) organizations since 1972, allows nonprofits to stop over paying into their state tax-rated system and offers substantial long-term savings for those employers who choose to become direct, or self-, reimbursing agencies.
“Our state has increased its costs to most employers so I’m shocked that not all nonprofits are looking at this option,” said one study participant who has already opted out of their state unemployment insurance system.
By opting out of the state tax-rated system, which typically causes employers to pay $2.00 in taxes for every $1.00 in actual benefits that is paid to their former employees, most nonprofits are able to save money and do significantly more with their budget.
“It wasn’t until after my first full year with UST that I started to believe it was not too good to be true. We received our audit and a refund and I thought ‘Wow, we really have a credit here,’” wrote another study participant.
Offering valuable savings in both the short and long-term, opting out of the state system does have several drawbacks for agencies that elect to become direct reimbursing without joining a trust like UST or other program.
- Cash flow volatility when unexpected claims arise
- State overpayments made in error
- Difficulty in monitoring for fraudulent claims
“I’m always looking to save money and get more services for my clients,” said one nonprofit HR consultant, “I push the idea of UST for giving them an added resource. [With UST] They’ll have somebody on their side who can help them.”
To read the online press release about the Division’s findings, go here.
All information and quoted materials were pulled from a study conducted at UST, which was released at the end of the 1st quarter of 2012. The study surveyed almost 300 nonprofit agencies to identify key data about how nonprofits understand and utilize their unemployment tax options
April 08, 2012
Stepping Up Social Media and Improving Infographics Help Nonprofits
Social media has taken over millions of nonprofits. It provides a cheap, easy way for agencies working on a limited budget to reach their target audience and build new contacts. And, it can be one of the most effective ways for nonprofits to spread word about what they do and how they do it.
Recent reports show that despite shrinking budgets, and extensive staffing challenges across the board, nonprofits are still finding value in growing their social networks. According to one blogger, recent studies have found that:
Statistics compiled by Katya’s Non-profit Marketing Blog
But still, social media presents some distinctive challenges for nonprofit organizations.
Because social media provides captive audiences with thousands of attention-grabbing options, nonprofits have to find quick, easy ways to distribute their information and to keep fans engaged. Using interesting infographics goes a long way to keeping your audience aware and involved with a nonprofit mission though.
Innovative and easy to digest, infographics combine key
facts, compelling stories, and interesting imagery that work to start conversations both online and off. “Good visualizations can also help charities better understand their own data and use those insights to improve their programs,” said Jake Porway, founder of Data without Borders, in an article published by The Chronicle of Philanthropy.
By sharing simple messages that can be understood with little or no prior knowledge of the subject matter, nonprofits are finding that they can easily improve their operations and increase their reach.
For more examples of well received infographics and tips on how to make your own, read the full article on The Chronicle of Philanthropy.
Recent reports show that despite shrinking budgets, and extensive staffing challenges across the board, nonprofits are still finding value in growing their social networks. According to one blogger, recent studies have found that:
- 98% of nonprofit agencies have a Facebook page with an average community size of over 8000 fans.
- Average Facebook and Twitter communities grew by 30 and 81% respectively.
- Average value of a Facebook “like” is $214.81 over the 12 months following acquisition.
- 73% allocate half of a full-time employee to managing their social networking activities.
- 43% budget $0 for their social networking activities.
- The top 3 factors most nonprofits are using to gauge the success of their social media are: strategy, prioritization, and dedicated staff.
Statistics compiled by Katya’s Non-profit Marketing Blog
But still, social media presents some distinctive challenges for nonprofit organizations.
Because social media provides captive audiences with thousands of attention-grabbing options, nonprofits have to find quick, easy ways to distribute their information and to keep fans engaged. Using interesting infographics goes a long way to keeping your audience aware and involved with a nonprofit mission though.
Innovative and easy to digest, infographics combine key
facts, compelling stories, and interesting imagery that work to start conversations both online and off. “Good visualizations can also help charities better understand their own data and use those insights to improve their programs,” said Jake Porway, founder of Data without Borders, in an article published by The Chronicle of Philanthropy.
By sharing simple messages that can be understood with little or no prior knowledge of the subject matter, nonprofits are finding that they can easily improve their operations and increase their reach.
For more examples of well received infographics and tips on how to make your own, read the full article on The Chronicle of Philanthropy.
April 05, 2012
Hiring Toolkits Help Nonprofit Agencies Find the Best Employees Around
Bridgestar, an initiative of The Bridgespan Group, has created a Hiring Toolkit to help nonprofits better enhance their internal effectiveness and more quickly fill new and recently opened employee positions.
After a study conducted by Nonprofit HR Solutions reported that43% of nonprofits are expecting to add to their staff in 2012, as reported in our March 26th post, it is becoming increasingly important that nonprofit hiring teams are thoughtful and proactive in developing their own hiring toolkit.
Hiring toolkits help nonprofit hiring teams draft the strongest job descriptions, write the most compelling job ad, and outline how to select the best candidate. But, most importantly, they strengthen agencies abilities to compete with for-profit companies who are offering similar positions at typically higher pay rates.
Because the findings of the Nonprofit HR Solutions study “suggest that the nonprofit sector should be more focused on retention practices than it is currently,” it is even more vital that hiring teams know exactly who and what they are looking for when reading through stacks of resumes and applications.
Bridgestar suggests that hiring teams create a system for reviewing resumes to improve the chances of including “the most relevant candidates” and “uncovering those hidden gems.” To do this, they’ve offered 4 reviewing steps:
Step 1: Agree on your resume review process and how each team member is going to be involved before looking at any application packets.
Step 2: Organize the cover letters and resumes you receive in order of receipt to speed the reviewing process. Let the candidates know that you have received their resume and will be beginning your review process shortly.
Step 3: Review each resume packet thoughtfully and objectively. Knowing what core criteria are most important for you, and where you are willing to bring a candidate up to speed helps process resumes; similarly providing the review team with key questions to keep in mind when reading each resume helps sort through applicants who aren’t adequately qualified or don’t fit your mission.
Step 4: Make the interview decision and let applicants who are not selected down easy. For applicants the hiring team wants to speak with further, discuss what more should be learned about them in phone, and eventually, in-person interviews.
As the nonprofit job market grows stronger and more job opportunities are being created across all sectors, agencies must be more competitive in selecting and retaining qualified applicants. Read more about Bridgestar’s suggestions for Processing Applications and Screening Resumes.
— 30 Items per Page
According to the analysis, had each of the states forced to borrow from federal funds enacted more responsible financing of their funds leading up to the Great Recession, fewer states would have had to slash the safety net created for jobless workers through unemployment insurance benefits. The report further details how excessive tax giveaways and breaks for many employers left many states with depleted unemployment trust funds that were unprepared for even a modest downturn.
Citing evidence from 1995 to 2005 in which 31 states reduced employer contribution rates by at least 1/5, the report reveals that while employer tax rates fell to a historic low in the decade leading up to the recession, the combined balance in all state trust funds was half the amount experts recommend.
Funds were so abominably low, Michigan and New York even had to begin borrowing from federal funds before the recession had even officially begun.
The trend continues today. As of yet, few states have made significant changes to the structure of their unemployment insurance funds which would prevent another mass borrowing or would allow them to reinstate a fully funded unemployment trust fund in the next few years. Only Alabama has done enough to predictively repay the federal loan within the next few years.
For employers that have paid increasingly high unemployment taxes the news can come as a shock.
Although tax rates for employers within the state unemployment insurance system have increased substantially since 2009, the higher payments have done little to cover the increased benefits payments and the high level of interest being charged on federal loans, much less build up the level of reserves available.
To combat the continued depletion of funds, many states have even shifted the blame onto those found jobless by reducing benefits and eligibility across the board. Not surprisingly, each cut has severely jeopardized the capacity of unemployment funds to insure families and stabilize the economy during swift downturns, which has led to further increases in tax payments made by employers in the state system.
Thankfully, nonprofits with 10 or more employees have the exclusive ability to opt out of the state UI tax system and reimburse the state only for the benefits paid out to their former employees. This protects the benefits paid out to nonprofit employees, while simultaneously reducing the operational costs of unemployment, which allows nonprofits to do more for their mission.
For a complimentary overview of how UST could help your nonprofit reduce unemployment expenses and lower improper payment rates, please sign up for an upcoming webinar, or fill out a Savings Evaluation today.