Compli’s Compliance & HR Policy Blog

With 2011 in our rear view mirror, now is a great time to reflect and look back at last year and set goals for the future improvement of your business. If you are a human resource manager, chances are you’ve been asked to provide management with turnover estimates at one point or another in your career.   And by waiving your magic wand you can estimate turnover by taking the total number of employee departures in a given period and dividing that by the average number of employees in the company.  Simple, right?

But to truly communicate to management how turnover is affecting the business, you need to frame your measurements and provide context to the results.   This can be accomplished by:

• comparing to industry benchmarks,
• comparing to previous turnover rates,
• dissecting reasons for turnover; or
• identifying turnover trends by job function, departments, employment status, etc.

Why is measuring and understanding root cause for turnover important?

• According to the NADA, automotive dealerships average 50-65% turnover year to year.
• NADA also suggests that it costs between $25,000 to $40,000 to replace and train new salespeople.
• Dealerships are most vulnerable to employee litigation as a result of RIFs and involuntary termination.
• Lack of sales training can result in a decrease in sales, which is a key contributor to high turnover rates.
• Many sources vary on their estimates, but conservatively, SHRM, the Society for Human Resource Management, suggests that the time and lost productivity due to employee turnover is 125% of the employee’s annual compensation figure. The cost is significantly higher (200% to 250% of annual compensation) for managerial and sales positions.

Fortunately, there are tools available to help shine a light on the topic. If you are a customer, contact support@compli.com and ask them how to make use of your turnover dashboard in Complí.

As many of our friends in the trucking and transportation world are aware, The Department of Transportation recently finalized a rule prohibiting an estimated eight and a half million truck drivers and one million bus drivers from using hand-held cell phones while operating commercial vehicles.  After the rule appears in the federal register it will be active 30 days from its publication date (likely January 3rd).

The impact on our transportation customers is enormous. Recently an estimated 60% of truck drivers have admitted to using cell phones while on the road.

What This All Means:

• Drivers who violate the restriction will face federal civil penalties of up to $2,750 for each offense and will be disqualified from operating a commercial motor vehicle.
• Carriers that allow their drivers to use hand-held cell phones while driving will face a maximum penalty of $11,000.
• Carriers will receive a very heavy and lasting impact on their Unsafe Driving BASIC if violations occur under their authority.
• Having a written policy in place is not sufficient enforcement for a carrier, and if a violation occurs, the carrier will still be held accountable for an employee’s actions.
• Mobile devices can be used, but it must be in a hands-free mode only using a speaker or hands-free headset.
• Drivers can still use Citizen Band (CB) Radios.
• Drivers can still use dispatching and fleet management devices, however these do fall under previously issued texting rules.

Without tools to actively enforce compliance with the rule, the FMCSA and the entire trucking industry should temper their expectations regarding how many drivers will voluntarily comply (or even know about the rule).   There are many practical and easy ways to reduce your liability and to protect your business.  Remember to communicate and set the right expectation of zero tolerance.   Update your company’s policies and procedures and have all employees re-sign them.  Send out information and notices to educate your teams.  Most importantly, make it a priority.

Further Reading

• Zoom Safer Blog
• Official Ruling

The topic of social media in the workplace is a popular one these days, particularly among HR and management circles.  Although much is being said about implementing social media policies and guidelines for employees, the discussion of using social media sites as a means for screening new hire applicants is less explored.  Recently, SHRM released survey results indicating that only 18% of companies use social media for screening purposes.  Of those companies that do not, the majority cite several legal risks as the main reason for apprehension.  The risks outlined include:

Risk #1:  Possible Violations of Privacy Rights

Although information surfaced via a social media search is easily attainable, it is reasonable to assume that much of the information attained is not intended for public consumption.   Despite being published for the public to see, a correspondence between friends could arguably be a private conversation.  In addition, many social websites contain privacy policies within their terms of service that limit use for any commercial purpose.

Risk #2:  Opening Up Potential Discriminatory Hiring Practices

By using social media to research candidates, employers are getting more information than they would be getting in a normal job application, including: race, religion, disability, sexual orientation and other protected categories.  Using protected category information as a basis for hiring is of course unlawful.  Additionally, there is a recent provision in the White House Job bill that will  create a cause of action if an employer does not hire someone who is unemployed (a new protected class).  Lack of employment is often easy to discern from Facebook, Linked In and other social media.

Risk # 3:  Defensibility – Lack of Job Relatedness

The EEOC guidelines specifically state that employers should only consider information that predicts the applicants ability to perform the requirements of the job position.  If a hiring manager uncovers unfavorable information about an applicant that doesn’t directly correlate to potential job performance, it may be more difficult to prove that information was not considered as part of the hiring decision.

Best Practices to Consider

If your company does decide to use social media for hiring perhaps consider the following best practices:

1. Establish a policy for hiring managers, recruiters and HR to adhere to.  Document precisely how managers can use social media for hiring, and outline in detail the do’s and don’ts for them to follow.
2. Follow the EEOC and FRCA guidelines without exception.  Don’t forget to check state laws as well.  This one’s a no brainer.
3. When in doubt, consult with an expert.  Labor lawyers specialize in specific federal and state matters.  Compli, in partnership with Fisher and Phillips, even offers a free Employment Law e-Counsel service to customers.
4. Consider what information you are looking to attain.  If you are looking for potential clues to drug or alcohol use or criminal behavior, order background screenings instead.  Background checks through a licensed party are typically the most legally defensible means of collecting information about potential hires.

Further Reading:

• How to Use Social Media in Hiring Practices w/ Lon Leneve President, CEO of Compli: Dealer Digest Daily
• EEOC Federal Laws Prohibiting Job Discrimination (Q and A)
• SHRM Survey Findings: The Use of Social Networking Websites and Online Search Engines in Screening Job Candidates
• Social Media In The Workplace — Are You Protected Webinar w/ Compli and Chris Hoffman, Partner at Fisher and Phillips, LLP

Did you know that Labor Day was first celebrated in 1882?  It was actually a rally in support of the eight hour work day (as opposed to 16) and other more suitable working conditions.

The American workforce has come a long way since then with the enforcement of fair labor standards and expanded benefits and flexibility for workers.  But in the spirit of continuous improvement we ask, what else can be done to improve?

Some questions to ponder before the weekend:

• Are more tools available for employees to solicit feedback?
• Can managers be trained to identify needs or create improved working environments?
• Can efficiency be improved by way of technology?
• Can industry best practices be leveraged?

I was lucky enough to hear Clarence Belnavis from Fisher & Phillips speak recently at a seminar and he said many interesting things, but one thing in particular really stood out.  Ambiguity kills.  He was talking about pay plans when this comment came up and it’s implied meaning couldn’t be more clear and appropriate: Don’t leave yourself open to problems by not being prepared, articulate, decisive and defined.

Again, this was in reference to pay plans, but the advice in general is very sound and should be considered when approaching any policies and procedures that you wish to distribute and administrate successfully throughout your organization.  A clear and decisive policy can help you steer clear of the murky grey area that creates a lack of comprehension and understanding among your employees, and can help protect your organization from unnecessary risk.

Compli has a long history of providing guidance from our excellent partners, and we just happen to have a webinar archived on the exact topic the Mr. Belnavis was discussing.  Our Pay Plans: Best Practices, Rules & Misconceptions Webinar has copious amounts of information on pay plans as well as a fairly comprehensive overview of the federal wage and hour laws.  To view it please click on the link above.

Join Compli and leading automotive attorney, Eric L. Chase, of Bressler, Amery & Ross P.C., as we discuss the most timely and critical issues for the rest of 2011.  By attending this Webinar, dealerships will learn what trends to expect and plan for in the coming months.

Agenda will include:

• Aggressive Factory Initiatives and Pressures to Expect
• Consumerism Trends
• Economic and Financial Trends and the Impact on Dealers
• Franchise Laws and How to Protect Your Dealership
• Actions and Strategies for Dealers to Deploy in Response to Franchisor Initiatives and Programs
• And More.

I will also post a secondary link when the webinar archive becomes available later in the week.

To view the Webinar recording and download the slides, click here: http://www.compli.com/event/top-legal-trends-update-what-expect-rest-2011

By:  Max Arbow, Compli Product Manager

According to a new article released in Transport Topics: FMCSA Panel Seeks Database to Find, Track Safety Violators, a proposed recommendation by the FMCSA advisory committee suggests that the agency set up a database to identify and track trucking company officials, supervisors and other key persons of influence who exhibit patterns of safety violations.

This would make it more difficult for a safety or fleet manager showing patterns of mismanagement to leave a carrier and bring those patterns to another carrier along with them.  This proposed blacklist could be yet another call out to the industry that safety requires an effort by all participants and that the “A” in “CSA” really would represent accountability by all.

According to the article, the committee said the list of individuals who should be screened should include owners, directors, chief executive officers, chief financial officers, safety directors, vehicle maintenance supervisors, driver supervisors and “any person, however designated, exercising controlling influence over the operations of a motor carrier.”

The goal, as it appears, is to alleviate any near-sightedness that might compromise safety in the industry.  What we don’t know is how individuals will be audited and enforced, or how influential this database would be to weed out the bad apples or even prevent hiring these employees in the first place.

What is clear is that safety and compliance cannot be accomplished by just one individual, but one’s bad habits may wreak havoc on a carriers best intentions to operate a safe, compliant and efficient fleet.   A transparent company-wide effort is what is needed to protect a carrier and ensure its best safety intentions are carried out.   Fleet safety and accident prevention is not just for drivers, but for all employees, no matter what job they fulfill.

Here is a not-so-bold prediction; paper will become obsolete sometime in the near future.  There is no specific date I can point to that will herald the demise of paper and cause us all to reflect on the last time we held a book in our hands, or rustle through a newspaper to get to the sport’s section, but the day is coming and to ignore it is not only silly, but fiscally dangerous.  Please, no running or hysterics on the way to the digital domain, there will be time and room for everyone.

Don’t get me wrong, paper is not going to disappear. To suggest that one day we will wake up and not have any sticky notes on the refrigerator reminding us to feed the dog is ludicrous  Almost as ludicrous as ignoring the fact that regional and national newspapers are losing non-digital readership at an alarming rate as consumers trend toward the immediacy of the Internet for their news.  On another note, if you need a sticky note to remember to feed your dog, you probably shouldn’t own pets.

What I am suggesting is that we are rapidly approaching a generation that will have grown up entirely on digitally distributed entertainment, news, advertisements and even friendships.  Continuing down traditional means of content delivery means dwindling profits and consumer evacuation.  Adaptation is a must, whether we like it or not.  Nostalgia for days gone by is always tempting, but the days of flyers in the Sunday paper will be taking their place alongside the dodo and the dinosaurs before we know it; instead of taking a trip down memory lane start planning for the future.

Have a strategy.  If you are unaware of how social media, internet sales, and digital advertising work, educate yourself.  Invest time and resources, not only by familiarizing yourself with the digital domain, but by also understanding how you want to represent your brand in these new, and evolving spaces.  Prepare and protect your organization now, don’t wait for the inevitable.  As the flow of commerce moves steadily towards the digital realm, make sure you don’t get left behind shuffling paper!

Employers are subject to new regulations seemingly every day, making it difficult to know what they should pay attention to and more importantly how to address these new regulations in their workforce.  The Genetic Information Nondiscrimination Act is one of those new regulations.  Fortunately, the excellent folks over at Fisher  & Phillips are doing a webinar on that very subject.  Follow the link below to register for their free webinar on this timely topic.

Let Us Introduce You to GINA

By:  Robert Miller – Co-Founder, Compli

The automotive industry is a perennial favorite for lawmakers and dealerships experience more than their fair share of policy creation and redrafting procedures ranging in recent years from updates to their FMLA and Adverse Action procedures to implementation of OFAC, 8300, GLBA and Red Flags Programs.   Interestingly though this year, the most important policy your dealership will write (if it hasn’t already done so) is not mandated by new legislation – it’s driven by a significant change in your business:  the rise of social media.

You’ve probably seen some of the statistics and they are remarkable.   Social media represents a sea change in the way customers perceive and interact with dealerships through sites like facebook, Twitter, Digg, LinkedIn, Yelp and a plethora of others.  Here is a snapshot:

• 72% of online 18-29 year olds use social networking sites (Pew Research)
• Social networking site usage grew 88% among Internet users ages 55-64 between April 2009 and May 2010 (Pew Research)
• There are more than 500 million Facebook users who spend 700 billion minutes each month on the site (Facebook)
• At last count there are 200 million twitter accounts (Twitter)
• LinkedIn boasts over 50 million professionals worldwide (LinkedIn)

As these statistics demonstrate, social networking represents tremendous opportunity for revenue growth and brand recognition.  Unfortunately, as with many things, social media can also be a double edged sword with very real exposure for misuse and potentially devastating negative effects as well.  The high stakes on both sides of the equation are compounded given the viral nature of the internet.

Anything with this much potential for either positive or negative consequences should be weighed carefully and distilled into a working policy that is clearly communicated to all employees.  Unfortunately, as with many best practices, your social media policy will not be a one size fits all undertaking.  Some dealers will want to employ fairly rigid social networking parameters to preclude potential exposure while others will lean more toward embracing the potential benefits of social media and will incorporate a more liberal set of guidelines.  Irrespective of which side of this spectrum you may fall, all dealerships will need to balance the potential good with the bad that the social networking opportunity represents.

That being said, here are some general considerations that dealerships may find helpful as they draft their social media policy:

• Integrate with other key policies and contracts – examples include: code of conduct; confidentiality statements; use of technology and the internet policies; and non-disclosure and non-compete/non- solicitation agreements.
• Balance the individual right of employees to communicate and express themselves on their own time with the public nature of social media and conduct that could potentially damage the dealership’s reputation in the community.
• Reinforce that there should not be an expectation of privacy when using online social media and that the company may access social networking sites without providing notice and that employees are personally responsible for their activity.
• Identify who should and who should not publish and comment via social media during work hours and for business purposes.  Establish when and from whom permission should be sought prior to engaging in work related social media activities.
• Provide specific guidance and/or examples:  avoid sharing confidential information; adjusting privacy settings on sites; avoiding work related references in personal communications; communicating in an authentic way with work related networking and posting; being honest and respecting co-workers and customers; and thinking about the consequences of social networking activity.
• Verify with your sales team and social media experts that your draft policy is indeed consistent with your actual practices.  They should participate in the policy creation.
• Expect to revise and adapt your policy on an ongoing basis.  As we have seen, this is a rapidly expanding frontier and it will require ongoing consideration.

As with all key policies, dealerships will need to invest resources to communicate, train, enforce and monitor this program with diligence.  The good news is that a well drafted policy that is consistent with a solid overall social media strategy should result in a net positive for progressive dealers able to capitalize successfully on this new medium.