When he was a consultant Jim Whitehurst, CEO Red Hat, discovered something amazing,
“One of the most surprising aspects of that work was that people would open up to me, an outsider, about all the elephants in the room — but they were too polite or embarrassed to call out the obvious issues or blame their peers inside their own organizations. My fellow consultants and I would sometimes joke that just about every individual inside a company could immediately tell you what was going wrong and what needed fixing. But whenever everybody convened for a meeting to point out those very issues, you wouldn’t hear a peep about anything that could be perceived as negative. To our amazement, they were more open to hearing feedback from us, the outsiders, than from their own colleagues.”
Though this phenomena is good for consultants, shouldn’t companies be having candid conversations on their own? Wouldn’t the ability to share open and honest feedback throughout the organization improve their chances of addressing their issues, and more quickly?
The gap for most companies is that they have not made the practices of open dialogue and providing constant feedback as part of the company’s DNA. As Jim experienced when he began at Red Hat, “Because Red Hat sprang from the world of open source software — a community whose members pride themselves on delivering open and honest feedback — having candid, and what others might call difficult, conversations is the norm. We debate, we argue, and we complain. We let the sparks fly. The benefits of operating this way are immense because we are able to tackle the elephant in the room head on, but this kind of culture is hard to build and maintain, especially as companies grow.”
Jim likens the practice of sharing regular feedback across the company to a flywheel, “It’s hard at first to get it moving. You’ll need to do some substantial pushing and monitoring to get the wheel spinning. But before you know it, you’ll find that the wheel begins to turn all on its own using its own momentum.”
As a long term consultant myself I often needed to get a really stiff flywheel started and discovered a tool, in addition to Jim’s advice, that has really helped to build and keep that momentum going. Here are 4 concurrent steps to get your feedback loop spinning.
The first three steps are from Jim’s advice. As he says, “this is the foundational work that gets everyone pushing in the same direction that creates a safe environment where everyone feels comfortable having difficult conversations.” Step four is the pivotal step that I added since creating a foundation of mutual trust and respect makes the first three steps easier to start and keep going. Most important, as Jim reminds us, “As a leader, you must role model these behaviors, and encourage them at every level of your organization”
Follow these steps, get the flywheel moving and lead the way to encouraging difficult conversations inside your organization. Otherwise, as Jim surmises, “those elephants in the office are bound to trip you up sooner or later.”
Leanne Abraham is President and Snr. Advisor for Premierehire, an Executive Search and Staffing company that helps companies build strong teams and culture through effective recruiting, onboarding and retention. Premierehire’s SmartStart program, which includes Stop Guessing, helps new hires, managers and leaders be intentional about creating good relationships and effective workplace dynamics.
On Monday, April 30, 2018, the California Supreme Court issued a landmark decision that reinterpreted and ultimately rejected the Borello test for determining whether workers should be classified as either employees or independent contractors for the purposes of the California wage orders.
The Court embraced a standard presuming that all workers are employees instead of contractors, and placed the burden on any entity classifying an individual as an independent contractor of establishing that such classification is proper under the newly adopted “ABC test”, outlined below.
The Court framed its decision by broadly characterizing the misclassification of independent contractors as harmful and unfair to workers, honest competitors, and the public as a whole.
In a previous case, a worker is an employee if he or she is “employed” by an “employer,” and “employ” is defined as: “ (a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship.” If any of these standards are met, the worker is an employee and not an independent contractor.
The Court, however, conceded that the “suffer or permit to work” standard is a “term of art” that cannot be interpreted literally because it would obviously encompass workers who are traditional independent contractors (e.g. plumbers) and would more or less eviscerate the commonly understood distinction between employees and independent contractors. Consequently, the Court limited the scope of “suffer or permit to work” by adopting the “ABC test.”
The ABC Test
Under the ABC test, a worker will be deemed to have been “suffered or permitted to work,” and thus, an employee for wage order purposes, unless the putative employer proves:
(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Note that each of these requirements need to be met in order for the presumption that a worker is an employee to be rebutted, and for a court to recognize that a worker has been properly classified as an independent contractor.
Indeed, many businesses, particularly those operating in the “gig economy,” are fundamentally premised on the use of independent contractors. In light of this case, any businesses operating in California that treat workers as independent contractors should confer with their legal counsel to review the relationship under the “ABC test” and determine whether workers should be reclassified.
A Solution for your 1099 Independent Contractors
If you determine a contractor should be a W2 employee BUT there are reasons you do not want to bring them onto your payroll (e.g. you want to try them out first, a part time or short term employee would be too much administrative work, or there is a head count freeze) then you can payroll them through a staffing service like Premierehire until you are ready.
An earlier blog provides a summary of the potential fines for misclassification as well as links to helpful government websites that can provide more detail on California & federal guidelines for 1099 contractors.
Another good summary article on this topic can be found at Ogletree Deakins.
The attendees at the March NCHR-SD monthly professional development meeting had the privilege of hearing the transformational stories of the Scripps Health turnaround and learning Chris Van Gorder’s 10 Principles of Front-Line Leadership – an authentic, back-to-the-basics approach that can strengthen relationships, improve trust and build a strong corporate culture that will sustain an organization in bad times, good times and times of extreme change.His 10 principles are ....
As 2018 is well underway many of you will have informed your managers and adapted your procedures to be in compliance. Congratulations! But for those of you who have not yet got to it, here is a snapshot of the top things you need to do now. You can get more a more comprehensive review of many other legal changes including sick pay, harassment, and rest breaks in last month’s newsletter. NBC also has an expanded summary of the new laws outlined below (see link below).
Most small business owners are not aware of the tremendous benefits of leveraging the services and expertise of a staffing company. Many owners have a vague recollection of working with a temp in their corporate life in a larger company but are unaware of how staffing companies can help their smaller enterprises.
Business owners who have discovered the many advantages of using a staffing agency are reaping the benefits of costs savings, better access to top talent, less administrative work, workforce flexibility, and a better-engaged workforce.
At a recent workshop, local Employment Law attorneys, Lou Storrow and Chris Olmsted, presented a summary of new legislation and compliance requirements coming January 1, 2018 that may require you to adjust your HR processes and policies. Even though you may not have time to adapt to legislative changes, employee complaints may result in legal fees, penalties, and payouts. It is important to also be aware that the Labor Commissioner has stepped up enforcement efforts and can now conduct an investigation without an employee complaint. 2016 amendments to PAGA1 also gave the Labor Commissioner more time and funds to investigate. With increased DLSE funding investigative staff are projected to grow from the current 82 to 141 by 2018/19.
Now that I’ve made you a bit more aware of the risks of non-compliance (sorry for the negative news) let me outline some of the most relevant changes you need to be aware of.
Job postings are a 'cross your fingers' and hope that your high potential top player is thinking of doing something new AND he/she happens to have some spare time to search through job postings. It does sometimes happen, but in today’s very low unemployment job market that same ‘A’ player has already been engaged by one or more recruiters. If one of the openings is a good fit and the recruiter is good at what they do, then their client will get the top person before this person even notices any job ads. So what can you do to get the top players?
Posted by: Leanne Abraham
Understanding the IRS and state regulations, as well as the case law, to determine if a contractor should be classified as an employee may be confusing but do not avoid it or put it off. Make sure you have the right classification before a contractor starts work or it could cost you down the road. The penalties, fines and legal costs could run into the six figures or more depending on how many workers are involved.
Simple Questions - Personalized Answers - Life Changing Conversations
Solve some of your biggest relationship challenges before they begin. Build a low conflict culture that takes a constructive approach to the change and conflict that is inevitable in any organization.
Stop Guessing is a world class program for relationship building, team building, on-boarding and self-awareness.
Last month at the NCHRSD lunch and learn, a group of expert panelists led a discussion on what employers need to be thinking about and planning for regarding California’ new recreational use of marijuana. Of course, California has long legalized marijuana for medical use, but how does the new law of recreational use impact employers? Keep in mind that the cultivation, possession, or sale of marijuana is still illegal under federal law. During the luncheon, we came to some important conclusions which I have outlined for you.
You as the hiring manager or business owner hold the key to significantly increase the probability of a successful hire by ensuring that the process outlined below happens before someone posts the same old job ad or modifies a similar one from the internet. Taking time now could save you weeks, lots of money or, at the very least, many hours in screening resumes and interviews.