By Alex Yohn
Jul 15, 2016
The possibility of losing your group health insurance through job separation is a scary reality. Many individuals and families have had to face this steadily the past ten years and signs continue to remain constant in 2016. Medical bankruptcy accounts for over 60% of chapter 7 cases filed in the United States. No medical coverage or not enough coverage can instantly impact your current and future financial well-being.
The American Journal of Medicine, Vol xx, No x, Month 2009
Employers Understanding the Law:
When employment has been terminated, voluntarily or involuntarily, COBRA (Consolidated Omnibus Budget Reconciliation Act) requires that an employer who offers group health, with 20 or more employees, extend the offer for an employee’s health insurance coverage to remain in tact for a maximum of 18 months. The former employee is responsible for up to 102% of the cost; 100% of the policy cost and 2% for administration fees. When an individual retires, is legally divorced/separated or death of the employee takes place, an employer is required to extend the offer for COBRA up to 36 months in these circumstances. The Congressional Research Service has found that less than 10% of employees will apply for COBRA when it is offered to them.
COBRA compliance responsibilities cover major medical benefits only. The employer is under no legal obligation to offer continued coverage for life insurance, disability or any other current supplemental plan the employee has received as a benefit. These additional benefits are now the responsibility of the former employee to seek out on their own, if they chose to replace the coverage.
Not as Appealing as 20 Years Ago:
There was a time that COBRA was much more expensive than invoking your “life event” (specific trigger requirements to purchase health insurance outside of open enrollment) and buying insurance on the individual market (now known as “on or off the exchange”.) With the constant rising costs of healthcare, standardized pricing “structures”, and the enactment of the ACA (Affordable Care Act), COBRA popularity has been further decreased as an appealing option to an individual or family. While it is true that group rates are based on the overall health of the group and typically come with a more robust network and less out of pocket expenses, the change in income has more individuals considering their choices than ever before. If the recent job loss places your income in the range of 100%-400% above poverty level, there is a possibility of being eligible for a federal subsidy to offset this expense with an on-exchange health insurance plan (Obamacare). Decisions in a household on how to proceed are now being made on current health conditions, cost for benefit, and whether an individual/family can remain afloat with the payment without the government’s assistance.
“COBRA was a transitional type of coverage while you’re between jobs, but now we have a subsidized form of coverage available, exchange plans with subsidies,” says Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.
Current & /Future Impact on Your Organization:
Not being compliant with COBRA regulations brings hefty fines. Employers are subject to $100 a day, per beneficiary, for each day that is in violation. For a family of 4, that is $400 a day in possibly penalties for you as an employer. A mistake found in as little as 5 days could still present $2000 worth of fines. When a “life event” takes place for an employee, a plan administrator (third party firm or insurance point of contact) must be notified immediately by the employer. The plan administrator has 14 days to issue the election notice and start the offering process for continued major medical coverage. These violations can shift your projected financial growth. For one such employer in 2014, the fines for non-compliance resulted in a $83,000 fine. Take a moment to consider what financial impact this preventable expense might cost your organization’s future.
As the future of the ACA evolves, there’s speculation as to whether COBRA will be a necessity of the future. Will we see a single payer system in the US come to fruition where jobs are no longer married to health benefits? Watch for an upcoming piece on how the ACA has already impacted small business owners, the choices they make, and the requirements that have come to be.
images by:
Jakob Owens
By Alex Yohn
Jul 13, 2016
This is the second in a multi-part series about wellness programs in small businesses. This article looks at how to implement a successful workplace wellness program that your leaders support and which meets employees’ needs.
Wellness programs play a significant role in keeping health care affordable for small-business owners and their employees. However, in spite of the benefits of offering a wellness program, many small businesses become stymied and overwhelmed when they consider everything that’s involved in getting a program up and running. Many times they stop before they’ve even started. In a survey of more than 1,000 small business owners conducted by the National Small Business Association (NSBA) in 2012, only 22% offered health and wellness programs.
But the lack of wellness programs in small businesses doesn’t mean these business owners aren’t concerned about employee health. In fact, it’s the opposite. According to the NSBA’s survey, nearly half (48 percent) of the businesses with two to nine employees said their employees take very few sick days; unfortunately, 57 percent of that same group said that’s because their employees work when they are sick. Of those surveyed, 37% of startups indicated that they experience an immediate decrease in productivity when employees are out sick.
Even more than large businesses, small businesses may be more at risk when the health and wellness of their employees suffers. Top well-being concerns facing workers in these small businesses were related to a variety of issues:
- 42% high stress levels
- 15% don’t know/unsure
- 13% psychological well-being
- 11% weight management
- 11% alcohol or other drug habit
- 9 % smoking
Source: National Small Business Association
As the data about well-being concerns illustrates, employees face a variety of health issues; just as each business is different, so are the needs of its employees. With this in mind, companies that are interested in offering a wellness program should take a customized approach to meet the unique needs of their staff and their business.
Here are five steps that will help you implement a wellness program for your small business:
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Gain commitment from the management team.
A wellness program’s success relies on a visible and demonstrated commitment from the management team. Leaders in an organization should champion and communicate about wellness initiatives from the very beginning.
“We believe that committing to corporate wellness is simply the right thing to do for our employees, and they have responded in big numbers,” said Cathy Pace, president & CEO of Allegacy Federal Credit Union in North Carolina.
“It’s an expectation that our employees remain dedicated to our mission and our members, and in return, we believe it is our duty to provide them with the tools, resources and environment that promotes a healthy life both physically and financially,” said Pace.
If your organizational culture centers around supporting your people, wellness programs are a natural fit. When leaders demonstrate their commitment and provide the resources to put a wellness program in place, it goes a long way to building employee engagement.
2. Assess employee interests and needs.
After you’ve gained support from the leadership team, you need to identify what employees are interested in, and what they need when it comes to wellness.
“A great way to gauge your people’s interest and readiness for any wellness program is to simply ask them,” said Tim Baker, CHRL, an independent Human Resources Consultant in Toronto, Canada.
You can approach gathering employee input in a variety of ways. You might choose to conduct an assessment that examines data such as absenteeism rates, medical claims, or prescription usage. Other options to consider involve facilitated focus groups, informal conversations, and surveys that will help inform decisions about what type of program you want to offer.
“Create a survey that presents a list of possible wellness programs. Allow employees to choose the ones that interest them. Be sure to leave an open-ended option for their input,” said Baker. Pick a few of these proven employee wellness ideas and start asking your folks which they like best.
To accommodate the majority, Baker also recommends asking for information regarding when, where, and how employees want to participate in the program.
3. Establish a committee.
After you’ve gathered input from your employee base, establish a committee to lead the effort in developing and implementing the program. Be sure that the committee includes someone from human resources, a member of the executive management team, and a leader from the finance group. In addition to these key members, the committee should also include two or three employees who have a personal passion around wellness, or who have expressed their intention to use the program to its fullest.
This committee holds responsibility for understanding—and representing—the desires and interests of the employees, as well as the company. Without a keen awareness of what’s relevant to the workforce when it comes to wellness, the committee risks developing a program with which employees won’t engage. This workbook from the Worksite Wellness Toolkit provides templates and resources that will help set your wellness committee up for success.
While you may think you know what your employees want, without asking them and without the help of a committee, you’re less likely to hit the mark. Honest Tea, an organic tea company based in Maryland, found that out the hard way after they implemented a wellness program for their 40 employees.
As reported in a workplace health promotion guide published by the Transamerica Center for Health Studies, Honest Tea’s initial wellness program involved offering yoga and meditation classes twice a week. But they found that not many employees participated in the classes. That’s when the company decided to survey employees about their wellness program preferences.
The survey revealed that employees preferred to work out rather than do mild yoga. Based on the feedback they received, Honest Tea revamped their program. Instead of yoga, they offered more intense activities such as boot-camp workouts and rock climbing. Employee participation at these wellness events now exceeds 50%, illustrating the value of first finding out what interests your employees and then building a program to meet those needs.
4. Create a long-term strategy to achieve your program goals.
As with any initiative, you need to determine the goals of the wellness program and draft a long-term strategy to meet them. Your wellness committee, in partnership with the executive team, should confirm that the goals and long-term strategy align with your company’s mission and vision. This alignment is a critical piece in ensuring the longevity of the program.
Use the employee feedback you received, as well as other data that’s available to determine the wellness area(s) on which your program will focus.
“Randomly offering programs without data-based evidence can be a waste of an organization’s resources and budget,” said Baker. “Instead of guessing what your people need or want, listen to what they are saying. Even if they aren’t saying it out loud.”
As you determine your goals and strategy, contemplate what type of wellness program will have the most impact for your employees, and where you’ll be able to gain the most traction and interest in the program.
“For us, starting with physical activity was a great way to draw the attention of our staff and engage them in an area in which we always need encouragement,” said Garrick Throckmorton, assistant vice president, organization development at Allegacy Federal Credit Union.
Once you’ve determined the areas of focus for your wellness initiative:
- Select solutions to meet the identified need(s (e.g., nutrition classes, smoking cessation incentives, gym memberships)
- Find providers, partners, or tools (e.g., local hospitals, health coaches, membership clubs, activity tracking tools)
- Invite a few employees to take part in a pilot program
- Gather feedback from pilot participants
- Make necessary adjustments before program launch
5. Invite all employees to participate in the wellness program.
After you’ve conducted a pilot and made any necessary adjustments, you’ll be ready to launch the program to the entire employee population. Use a communication plan to make sure that there’s a healthy amount of excitement and awareness about your company’s new health and wellness program. Schedule an all-employee meeting, post flyers, and send e-mails that explain the ways employees can participate.
Once you’ve launched your wellness program:
- Put a mechanism in place to gather feedback
- Stay focused on the long-term strategy
- Monitor employee results
It takes time to develop new habits. Like employees, small businesses need to approach wellness for the long-term. It takes effort and time to get started, so make sure that you’re gathering feedback and monitoring employee results so that you can use what you learn to celebrate the program’s success as well as implement new offerings as needed.
The most effective wellness programs create a culture of health, while meeting both employee needs and company goals. These programs are most effective when they’re customized for your business and are designed based on employee feedback and input.
“Offering targeted wellness solutions can have a positive impact on performance, productivity and ultimately the business’ bottom line. The cost of offering these programs can greatly outweigh the cost of employee turnover when employees’ needs go unaddressed,” said Baker.
With an implementation plan in place, it’s clear that businesses of all sizes can create and sustain successful, comprehensive workplace health and wellness programs that deliver results—for employees as well as the bottom line.
images by:
Kalen Emsley
By Alex Yohn
Jul 11, 2016
Craig Bryant, Founder and CEO of Kin, and Emily Powers, Director of Operations and Finance at Fresh Tilled Soil, have joined forces to uncover the mysteries of the modern workplace. The following is the sixth chapter of an eight-part series featuring some of the greatest debates, struggles, and solutions surrounding how we work.
The realization that happy employees are more productive has its roots in the early American industrial era of the 1900’s. Around the time when monotonous factory lines and substandard work conditions birthed workers’ unions, employers started to understand that maybe, just maybe, treating employees well might actually be good for business too.
Fast forward ninety or so years. Companies of all sizes have departments devoted to employee operations and engagement. There’s a multi-billion dollar HR technology industry helping employers stay competitive and engaged with their global workforce. Yet here we are, working in a time where 80% of polled workers don’t see the value in their performance reviews. So what gives?
How we got to “blah.”
An employee review itself doesn’t create employee satisfaction – there’s much more to employee engagement than the occasional block of time spent discussing the topic with managers. However, used ineffectively, the employee review process can have the opposite of the intended effect by reducing positive sentiment toward someone’s job. The most common way to do that is with the traditional, annual performance review.
Meeting once a year with an employee to discuss an entire year of work is a burden for managers and an ineffective manner of keeping employees in tune with the needs of their company. Organizations make matters worse by scheduling their reviews during the most emotionally taxing time of year, the winter holiday season. To boot, they also include compensation reviews into the same talk.
Likewise, the corporate feedback cycle has taken too long to adapt to the more frequent, informal check-ins that have proven highly effective in recent years. As Emily Powers wrote in her last piece, employers are learning that the Millennial workforce needs constant support and feedback to stay productive. It’s not enough to get together once a quarter … jobs can change on a dime, and so can employee sentiment. Feedback shouldn’t wait.
So, death to the employee review? Not quite. The employee feedback cycle is a business critical tool both sides of the table need to be successful. Unfortunately for the time-crunched however, an effective feedback process is not a single event jammed into the end of the year before heading off for a snowboarding trip.
Getting to “ah ha.”
The right mix of feedback is different for every company, but there are commonalities at all organizations that will help dial in the recipe to keep effective communication flowing, starting with timing.
Cadence, tact, and timing.
From business performance discussions down to everyday team member chats, continuous communication is mission critical. I can also personally attest to the fact though, that dropping in on an employee unannounced, what one former coworker referred to as “a managerial drive-by”, can be ruinous to focus and productivity. Organizations need to skirt the line between too much and too little – aiming for interactions that are valuable and genuine. Our (distributed) company does formal, quarterly reviews, coupled with more casual, albeit explicit, check-ins. In tandem with our daily team scrums and regular project communications, we get enough signals from everyone to keep the ship moving forward without being overly burdensome.
Iterate to better feedback.
The feedback cycle needs to adapt to how people and organizations inevitably change. Similar to how we evolve our software products based on customer insights, being iterative with the employee feedback experience helps improve its effectiveness. That means companies should gather feedback on the review process, like perceived value and suggestions for improvement, and incorporate it into what is an essential workplace product.
Take money out of the equation.
Most people are uncomfortable talking about money, and they’re equally as poor at estimating their monetary value at a company. Transparent pay scales, like the one used at Buffer, help companies turn the emotional topic of compensation into a more objective concept for employees. It also helps keep financial discussions out of the more regular employee reviews that should be focused on individual progress and objectives. Admittedly, making everyone’s compensation public knowledge is pretty progressive, so companies that aren’t comfortable going that far can at least schedule compensation discussions independent of other reviews, such as on employment anniversaries.
Managing is a job, not just a responsibility.
Managers shouldn’t be spread too thin. The right number of direct reports helps ensure managers have enough time for the time-consuming, but incredibly valuable job of mentoring employees. While some people and roles require more attention than others, a common guideline is to limit the number of direct reports to seven.
Feedback is a two-way street.
We work in a multi-dimensional world, and basing an employee’s future on a one-way source of feedback is inherently one-dimensional. Many employees fail not because of their own shortcomings, rather due to those of a peer, manager, or the company owners. Opening the feedback cycle to flow outward from employees requires more time, maturity, and transparency, but ultimately it delivers the knowledge the entire organization needs to genuinely improve.
Computers don’t give pats on the back.
No amount of wonderful technology will ever replace the simple gesture of reaching out, saying hello, and asking how someone is doing. Technology should improve the feedback experience by organizing it, but it will never replace the genuine value of human interaction.
Employee goals are the company’s goals.
A major contributor to an employee’s fulfillment is understanding how their contributions affect the overall performance of the company. Using tools like OKR’s is a powerful way to align everyone’s sense of mission with that of the company. It also makes more clear work of review meetings themselves – objectives become the primary agenda for discussion.
It’s not always up to the employer.
Employers can help employees be the best they can be at work but it’s not always possible (or ethical) to help them be happy outside of work. Geographic location, relationships, and other aspects of an employee’s private life are all beyond the traditional reach of an employer, but that doesn’t mean they don’t affect an employee’s performance at work. In a blog post about about my own company’s journey to becoming a distributed team, I shared the fact that one way we realized we could facilitate fulfillment outside of work was to enable our team to work and live wherever they’re happiest. Other examples of how a company might express the importance of non-work life is ensuring through ample (and required!) time off, wellness programs and stipends, and supporting local civic events and organizations.
Communicate or detonate.
A company’s employee feedback process is like a city’s transit infrastructure. At its best, it delivers people on time to do their jobs and helps them lead fulfilling lives. At its worst, it’s mired in potholes and congestion. Unlike municipal transit infrastructure though (at least in the US), the way we’ve worked has changed dramatically in recent years and there’s no reason workplace feedback cycles shouldn’t keep pace. By diverging from the traditional script of performance reviews, employers are taking a step toward a workplace where eyes and ears are the tools, open and ready for a conversation at any time.
images by:
Jean-Frederic Fortier
By Alex Yohn
Jul 7, 2016
For the first time in a decade, a memorandum was signed in 2014 by President Obama for the Department of Labor to update current regulations on the Fair Labor Standards Act (FLSA). On May 16, 2016 the final order was released.
While the industries with the greatest impact are retail and restaurants, it is all employers’ responsibility to understand what and how FLSA impacts their business. The updates will impact over 12 million salaried individuals who currently do not qualify for overtime compensation and earning less than $913 a week.
4.2 million workers who are currently exempt, 5.7 million white collar salaried workers, and 3.2 million salaried blue collar workers are impacted by this FSLA update.
What to Do First
If you haven’t already begun, start educating yourself on understanding the current law and the upcoming changes. You will need to determine what, if any, action you need to take prior to the December 1, 2016 effective date. You can locate and read a copy of the final order here. (Great for an evening you’re having trouble sleeping!)
- Stay calm. Although the law has it’s final order, you have 6 months to prepare.
- Review all employee job descriptions and duties (duties test).
- Review all employee salaries (non exempt and exempt).
- Review all employee hours worked. If you are using a time tracking software, pull a minimum of one year worth of data.
- Review company finances: budgeted vs. actual costs on expenses, and projected and current revenue levels.
- Attend a webinar or class led by a reputable source (SHRM, a labor law firm, an HR consultancy firm).
Who the Law Updates Apply to:
The FLSA updates have set a minimum threshold for salaried workers not earning overtime to $47,476.00, with salary increases at a minimum of every three years. The changes apply to blue collar workers (administrative, executive or professional) who pass the duties test.
The Department of Labor (DOL) has identified the duties test as the following:
- Professional Exemption: There are several different kinds of exempt “professional” employees. These include learned professionals, creative professionals, teachers, and employees practicing law or medicine. Under the Final Rule, exempt professional employees must receive at least $913 a week (the equivalent of $47,476 a year) on a salary or fee basis (compared to $455 a week under the old rule), and must primarily perform work that either requires advanced knowledge in a field of science or learning, usually obtained through a degree, or that requires invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.
- Administrative Exemption: To qualify for the administrative exemption, an employee must receive at least $913 a week (the equivalent of $47,476 a year) on a salary or fee basis, and the employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers. Additionally, the employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.
- Executive Exemption: To qualify for the executive exemption, an employee must receive compensation on a salary basis of no less than $913 per week (the equivalent of $47,476 a year), and have the primary duty of managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise. Additionally, the employee must customarily and regularly direct the work of at least two other full-time employees or their equivalent. For example, one full-time and two half-time employees are equivalent to two full-time employees. The employee has the authority to hire or fire other employees or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees, must be given particular weight.
How to Proceed:
For those with employees affected by this update, you do have a few options to review to determine how you’d like to move forward while ensuring you’re compliant.
- Raise current salaries to maintain the exemption.
- Pay current salaries levels with overtime after 40 hours.
- Reorganize workloads, adjust schedules or spread work hours across more employees.
- Adjust wages: non exempt employees wage freeze.
- Evaluate current and future benefits costs and possible cuts that can be made.
- Grow revenue or decrease operating expenses.
How to Share with your Team:
Transparency is a key factor for a small business to keep their team engaged, loyal, and happy. Start by preparing a communications plan and deliver a training session on any wage and hours policy updates. Explain in great detail to all employees (not just those impacted) why you selected the specific action to comply and how it impacts both them and the business, now and in the future. Take the extra time necessary to allow the employees to ask questions and be sensitive to their behavior if non favorable decisions had to be made by the company.
While this ruling will help millions of Americans, anyone with general business acumen can see the impact this will place on small businesses. Tough decisions are going to have to be made for many; whether that is reclassifying exempt vs. nonexempt, cutting hours, reviewing benefit packages or future hiring needs, the economy as a whole will lose as much as it gains.
images by:
Jakob Owens
By Alex Yohn
Jul 6, 2016
We’ve just added a new Reporting feature! Now, you can visualize your data right inside the app, as well as export a particular set of data. We’ve started with four of our most requested time-off reports: approved requests, pending requests, an overview of balances, and carryover.
If you’re an HR Manager, you can find the new Reporting feature under the Company tab. Here you can select a date range, the report type, and filter the reports by specific policies. Additionally, you can filter your data based on employee job titles, locations, work groups, and statuses. Sweet!
Now, let’s go over the types of time-off reports so you can start checking out your data.
Time-Off Approved
This report shows you all approved time-off requests based on any date range. This report also includes a chart showing the total time taken by employees during that date range, organized from most to least.
Time-Off Pending
Here, you’ll see all pending time-off requests based on the date range selected. Pending requests are those that haven’t been responded to by a Manager.
Time-Off Balances
This report gives you a comprehensive overview of an employee’s balance as of the date selected. It includes time accrued, left to accrue, available, taken, approved and pending, as well as any manual adjustments that have been made to a balance.
Time-Off Carryover
This report displays the amount of carryover and the date the carryover was applied for each employee, for the period that includes the date selected.
As a sidenote, Kin’s data exports (under Manage Account) are still available should you want all of your time off data in a single spreadsheet. And, in the future, we plan to also include reports on employee data like, birthdays and anniversaries, start dates, salary, etc.
Have feedback on the types of reports Kin should create? Send us a note and tell us all about it!
By Alex Yohn
Jul 6, 2016
Craig Bryant, Founder and CEO of Kin, and Emily Powers, Director of Operations and Finance at Fresh Tilled Soil, have joined forces to uncover the mysteries of the modern workplace. The following is the fifth chapter of an eight-part series featuring some of the greatest debates, struggles, and solutions surrounding how we work.
“Organizational structure” is potentially one of the most nap-inducing terms within the lexicon of operations nerds. To put it simply: Organizational structure dictates how work gets done in your company – who reports to whom, who is responsible for what, and how information flows. Organizational structure enables us to put 400 people in a building and actually accomplish something.
In this installment of the Ways We Work series, I’ll share a brief (but fascinating, I promise) history of organizational structures, bringing us to today’s reality, a world in which employers must balance the demands of customers and shareholders, with those of their tenacious Millennial workforce.
Historically speaking, the US has progressed through five main phases of organizational structure. Phase one includes the period immediately following the Civil War, where the country experienced a boom of entrepreneurs forming their own companies (hmm, sounds strangely familiar). With the majority of these companies being start-ups, structure was really non-existent as founders and early employees wore every hat to get businesses off the ground.
Phases two and three occurred once many of these start-ups matured into highly successful corporations (think, railroads). In these phases, the field of management itself began taking shape, as the professional manager was born – tasked with organizing and bringing structure to the chaos of these growing enterprises. Organizations grew relatively hierarchical, siloed, and tall, with very clear reporting structures within every department. Centralization and chain of command were the dominant forces.
Organizations grew relatively hierarchical, siloed, and tall, with very clear reporting structures within every department
The period post WWI brought about phase four and a new type of organizational structure, where companies moved away from the rigid and hierarchical to a more decentralized structure. It was discovered that decision-making and organizational change were extremely difficult within the gigantic, lumbering hierarchies of prior decades. In the post-industrial economy, organizations needed to be able to make decisions and react quickly, and decentralizing into smaller, more autonomous units was the key to success.
In today’s globalized, technified, sprint-paced world, a company’s ability to bob and weave like Floyd Mayweather has a critical impact on its survival. The concept of decentralization has been taken to a whole new level. Long gone are the days of behemoth, sloth-paced, structures made clunky by mile-long chains of command. Today’s organizations need to be flexible and nimble enough to keep up with the demands of markets, customers and competitors – and to then upend everything again tomorrow. What does this mean for organizational structure? It means dividing into even smaller units with greater autonomy, and the reduction of traditional “management”, resulting in much flatter organizations capable of making decisions quickly.
In today’s globalized, technified, sprint-paced world, a company’s ability to bob and weave like Floyd Mayweather has a critical impact on its survival
These days, many have heard the magical tales of organizations like game-developer Valve, who operate without any formalized structure whatsoever. Want to make a hire? Go ahead, no need to ask anyone. I’m exaggerating, but it’s not far from the truth. In their employee handbook, Valve states, “…Valve is flat. It’s our shorthand way of saying that we don’t have any management, and nobody ‘reports to’ anybody else. We do have a founder/president, but even he isn’t your manager. This company is yours to steer…” Many companies are following Valve’s lead, completely eliminating management structure to create entirely flat organizations.
One of those companies was Fresh Tilled Soil. For about the first nine years of its existence, Fresh operated as an entirely flat organization. There were no managers, directors, or bosses. Teams collaborated to get work done and that was that. However, by the time the team began approaching 25 to 30 people, we started hearing fascinating feedback. We’d hear, “you know, I really wish I had more clear guidelines around X” or “I’d like to have more structure around Y.” The message was clear: The team needed a more rigid support structure around their performance and progression within the company, and accountability needed to be placed front and center. Within six months, we recognized practice area leaders as Directors, developed a highly sophisticated professional growth model, and established clear systems for performance evaluation and feedback. So far, the feedback we’ve heard from our majority Millennial team has been positive all around. The team is increasingly grateful for clearer expectations, firmer direction, and more frequent feedback.
The team needed a more rigid support structure around their performance and progression within the company, and accountability needed to be placed front and center
In his book, Work Rules, Laszlo Bock, SVP of People Ops at Google shared a similar tale. Google’s founders deeply rejected management of any kind (and still do). Early on, they made the decision to eliminate all positions of power from the organization. Very quickly though, they realized they’d made a big mistake. Without the oversight of a central leader, teams and departments began to fall apart. Critical administrative work wasn’t get done and teams began lacking the direction, guidance, and feedback they needed to be successful. Sure enough, management was put back into place.
So why do Fresh Tilled Soil and Google (Kin too!) share this common historical experience whereby the team virtually begs for a more rigid organizational structure? I’d like to argue that the answer lies in the perfect storm of two key variables. First, our country is experiencing an entrepreneurial boom. Entrepreneurs are breaking free from the corporate rat race (and rigid hierarchy) to pursue their true passions and build companies on their terms – which usually involves rejecting any semblance of their former boss-filled corporate lives. They don’t want to report to anyone and they believe this is best for their employees as well. This is where variable number two comes in, and the final ingredient in this perfect storm: the character of the Millennial generation.
Entrepreneurs are breaking free from the corporate rat race (and rigid hierarchy) to pursue their true passions and build companies on their terms
The Millennial generation is loosely defined as those born between 1980 and 2000. Take your pick of derogatory generalizations made about this (my) generation in today’s workforce: Entitled, narcissistic, overconfident, overly demanding of employers…the list goes on. Regardless of the level of truth to these generalizations, here’s what we do know. Millennials, very generally-speaking, were raised by highly attentive baby boomers who taught them they could achieve anything they want. Some have gone so far as to call this coddled group “trophy kids” because of their experience receiving unbridled support, recognition and reward as children.
Take your pick of derogatory generalizations made about this (my) generation in today’s workforce
Now that Millennials are all grown up, they expect the same level of attention, clarity, guidance, recognition, and reward in their workplace. Note to the HR department: this does not make us evil. What it does mean is that organizations need to ensure they have exceedingly clear structure and systems surrounding job performance and professional development. For Millennials, an annual or even semi-annual review is not nearly enough. They need to know exactly what’s expected of them now and where they are heading in the future, with feedback on progress shared at very frequent and regular intervals.
Now you begin to see the friction here – we have a boom of entrepreneurs who believe less structure is more, and a Millennial generation crying out for structure and guidance. Believe me, all is not lost. Today, successful organizations are able to combine the needs of both parties, crafting an organizational structure that is a eutopic blend of the flatness necessary to grant their teams freedom and empowerment to make decisions, and the structure necessary to keep their Millennials feeling supported and motivated. It’s a tightrope walk my friends, but entirely possible. Good luck out there.
