Automate Hiring, Get Cash Back: Increase Employee Quality/Retention And Generate Tax Credits

Bret Hooppaw, Luihn Food Systems' director of operations, had an "Aha!" moment when his 19-year-old daughter said she'd applied online for a summer job. When he asked, "Why don't you just go over there and apply in person?" her response was, "Nobody does it that way anymore, Dad."

That's when Hooppaw, who helps oversee 90 KFC and Taco Bell locations, realized instant communication technologies are second nature to the Millennial generation--those who make up most of today's frontline employees--who will be his managers 5 years from now and who will be the organization's leaders in the next 5 to 10 years. "I knew I had to find a way to meet them on their ground," he said.

Anthony Robinson, COO for Genesh, faced a different challenge. "On my rounds of our 40 Burger King and 14 Denny's locations, I noticed how little time our managers spent interviewing job applicants before selecting employees. It was out of synch with our conviction that our people are our most important assets. When I asked them why, their answers were all much the same, and completely understandable given the demands of their jobs: 'There's never enough time.'"

The solution for both Hooppaw and Robinson was a robust, real-time, automated hiring system.

Hooppaw partnered with Kronos to better connect with his stores. Job applicants complete a prescreening skills assessment on a website and managers can get real-time results daily. According to Hooppaw, "Now sorting through applications is a process instead of a chore, and where we would have had 5 applicants for a job before and maybe one would be good, now we can choose from 100 where 5 may be great."

Hooppaw facilitated the introduction of the new system through a series of conference calls about 18 months ago. By January of this year, all locations were participating and, after a few months, usage was second nature and managers loved the time it saved. Test stores in the rollout saw a 40 percent increase in applicants--and the latest reports show a 20 to 25 percent system-wide drop in employee turnover.

In Robinson's case, he partnered with Job App Network and chose both a prescreening website and an interactive voice response (IVR) phone system both in English and Spanish. "The up-front assessment helps us start with a better quality of applicant and helps us ask better interview questions. As a result, employee turnover is down more than 20 percent and is trending even better."

Results like these are typical, so I was astounded to learn in a recent survey that more than 40 percent of participating business owners and managers were not using any type of automated employee hiring system, and that only 25 percent were filing for and collecting Work Opportunity Tax Credits (WOTCs). I cannot even begin to estimate the amount of money these organizations are leaving on the table because of this.

Both the Luihn and Genesh organizations are taking advantage of their systems' ability to collect the information needed to populate the forms required to apply for WOTCs.

In Robinson's case, restaurant managers used to collect the information manually and the effort was "pretty much hit and miss." Now compliance is up significantly and the credits alone are more than paying for the hiring system.

Hooppaw's HR department reports the system is doing a much better job of getting WOTCs and that it has greatly reduced their legal exposure because all applicants are being handled in the exact same way.

To give you an idea of what you may be missing in tax credits, a recent study estimates a new healthcare worker who qualifies for one of the federal tax credit programs nets an average of $2,744 in total credits for the employer. And this credit reduces taxes dollar-for-dollar. (If your business does not generate taxable income and owes no current taxes, the credit can be carried back one year or forward 20 years. If your business is a partnership, LLC, or subchapter S corporation, these benefits flow through to your personal tax returns).

Even if you aren't ready to invest in a full-blown automated hiring system, a reputable employment tax credit company can administer every aspect and usually charge only a portion of the money earned through the tax credits generated.

If you decide not to look into these opportunities and leave your money on the table, listen closely as you get up and walk away. As humorist Richard Armour so aptly put it, "That money talks, I'll not deny. I heard it once, it said good-bye."

Mel Kleiman is an internationally recognized consultant, author, and professional speaker on strategies for hiring and retaining the best hourly employees and their managers. He is president of Humetrics, a developer of training processes and tools for recruiting, selecting, and retaining the best hourly workforce. He also has authored five books, including the bestselling Hire Tough, Manage Easy. You can reach him at (713) 771-4401 or mel@melkleiman.com.