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When Will You Be Ready to Retire?

The following guest post is submitted by our board member, former SHRM CEO Sue Meisinger.  Most of us want to retire some day, and hope to do so with enough income to live comfortably.   The information in the chart at the end of this post is from Gallup’s annual Economy and Personal Finance survey.  Note that retirement savings accounts rank 3rd behind social security and pensions as a major source of income for current retirees.  As fewer and fewer retirees have pensions and entitlement programs like social security continue to be political footballs, those employee savings plans are going to become an increasingly important driver of well being in retirement.

Read on for Sue’s take on the role employers should play in helping their workers to plan for retirement.

Years ago a young relative came to me, having a meltdown because she hadn’t found a job after looking for a whole three weeks.  I tried to calm her down, pointing out she’d just returned to the country after finishing her Masters at Oxford, but admit I burst out laughing when she cried out “and I haven’t even started to save for retirement!”  She was 23.

While I laughed, I was also proud.  She was smart enough to understand the power of compounding.  She knew that starting early to save for retirement would make a big difference over time.

There’s lots of data suggesting that most employees aren’t going to be as prepared.  According to research from the Employee Benefit Research Institute, while more than half of workers expressed some level of confidence that they would have enough money in retirement (13 percent are very confident and 38 percent are somewhat confident), 28 percent are not at all confident and 21 percent are not too confident.

More and more employers are offering defined contribution plans, such as 401(k)s, where employees are responsible for making contributions and managing their own retirement fund.  But employers also have a responsibility to help employees prepare for retirement.

The FINRA (Financial Industry Regulatory Authority) Foundation has outlined the 10 best practices for employers to help build long term financial security for employees.

I think the most important practice is to provide new employees with basic retirement plan information and to ensure that they understand the information provided.  Employees are much more likely to participate in a plan and make informed decisions when they actually understand how the plan works and what decisions the employee needs to make and why.  Don’t assume that, if an employee has contributed to a 401(k) plan in the past, they understand what that means.

The second most important practice, and one made much easier with today’s payroll technology and changes to pension law, is to use automatic enrollment to boost participation in an employer’s retirement plan.  As noted in the FINRA Foundation publication, automatically enrolling new hires in retirement savings plans “has been shown to substantially increase participation in and contributions to 401(k) and other types of defined contribution plans.”

In a dynamic economy, with great job mobility, defined contribution plans provide employees with an important, portable, tool to save for retirement.  But employers need to do their part to help educate employees how to make best use of this tool.

gallup info on retirement income

How Mobile Is Your HR Technology? How Mobile Should It Be?

mobile phone userWorkforce Institute board members Sharlyn Lauby and John Hollon joined me for a discussion of how quickly mobile technology is transforming HR.  John is Vice President for Editorial at ERE Media, the go-to source for information and conferences in the human resources and recruiting industries; and Sharlyn is the HR Bartender and President of ITM Group Inc., a training company focused on developing programs to retain and engage talent in the workplace.

Increasingly, HR leaders are grappling with the proliferation of mobile devices and the need for mobile applications for their employees.  And as John notes in our conversation, Gartner has recently predicted that more than 50% of organizations will require their employees to bring their own devices to work by 2017.

According to Gartner, ”BYOD drives innovation for CIOs and the business by increasing the number of mobile application users in the workforce. Rolling out applications throughout the workforce presents myriad new opportunities beyond traditional mobile email and communications. Applications such as time sheets, punch lists, site check-in/check-out, and employee self-service HR applications are just a few examples.”  

Is your organization moving in this direction?  How prepared are you for the practical (device support, security) and policy (overtime, privacy) implications of more mobile devices in your environment?  If you’d like to hear our discussion of the questions below, you can listen in on our discussion here:

  • Mobile HR has been a hot topic for several years now – what are you both seeing in terms of actual adoption? Has implementation lived up to hype?
  • What are the major challenges employers face in devising a mobile HR strategy?
  • What advice would you give to employers on getting started?
  • Tablet versus smart phone – do you think one opportunity is bigger than the other for employers?
  • What impact does the Bring Your Own Device phenomenon or BYOD have on HR? What implications does it have in terms of policy?
  • What changes do you think we’ll see over the next 3-5 years?

 

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Is Teenage Labor a Good Thing?

WS - Group Honor RollToday’s guest post is courtesy of our board member David Creelman.  I spoke to David recently about the different types of internship programs we support at Kronos, including our sponsorship of several local high school students through the Cristo Rey Network.  This program has been a win for us, despite our initial concerns that managing a high schooler in the workplace might require more investment than return.  Our concerns were misplaced.  Our high school interns are doing a great job for us.  Read on to learn more about this program.

Would it make sense to have high school students spend four days a week at school and one day working? That’s what happens at Cristo Rey Network, based in Chicago, IL. Cristo Rey has 26 high schools in 25 cities across the U.S. serving mainly low income youth. Their Corporate Work Study program puts students in the workforce one day a week which helps fund their education and build skills. Legally, it is set up as an employee leasing program so that the students are employees of the school not the corporate client.

So that’s cool. Is it a good idea?

Or let’s be more precise: would it be good for your company to participate?

The first question is whether students can afford to take 20% of their time away from school. On the one hand, there never seems enough time to cover all the things we think high schoolers should learn. On the other hand, when I look back on my high school experience it feels like I could have taken 50% of the time off, and not been the worse for wear.

The next questions are whether the time at work is good for the student, and whether having a student is good for the employer. I group these questions together because I suspect they fit hand in glove. Create a value-adding job and both parties benefit; create a make-work job and no one wins.

That the idea can work has been proven by Cristo Rey. And my own stance is that the biggest single weakness in our education system (and this definitely includes universities) is that kids spend 20 years doing nothing but being educated, and then are simply dumped into the workforce. Braiding together the worlds of work and education would, to my mind, benefit both.

If the idea intrigues you, the place to start is probably having HR sit down with whoever runs social responsibility. At that point it becomes a question of how to find which managers have the skills and enthusiasm to find or create value-adding tasks for high schoolers.

So what’s on your mind? What is it that most worries you or most excites you about the prospect of teenage labor?