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Posted June 03, 2016 by

How new OT laws affect compensation for recent grads, employers

New OT laws - compensation

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Note: This is the third article in a series of articles focusing on the new overtime laws. Read the first two articles in this series – how the new overtime laws will affect interns and recent grads and how the new overtime laws will affect employers.

The DOL’s increase to the FLSA’s minimum compensation limits is a game changer for many companies, says Joe Kager, Managing Consultant and founder of the POE Group, a Tampa, Florida-based management consulting firm that advises companies on becoming great places to work by developing reward systems that attract, motivate, and retain employees.

Employers who have assigned an exempt status for jobs with compensation above the current minimum ($23,660), but below the new minimum of $47,475, will need to consider a variety of factors before the December 1, 2016, implementation date.

Effect on food service and hospitality management jobs

This will affect many lower level food service and hospitality management positions classified as exempt under the FLSA, says Kager. If the positions are to remain exempt, employers will need to raise compensation to the new minimum. This alternative may be appropriate for jobs that will be required to work substantial overtime. If a compensation increase to the new minimum is not feasible, employers will reclassify the positions as non-exempt and be required to pay overtime for hours worked over 40 in a week.

Deciding the appropriate action will entail a comparison of the two alternatives based on historic hours worked. This could have an additional effect on employees.

“There may be psychological issues to consider if employees have their positions changed from exempt to non-exempt, requiring good communication about the change,” says Kager. “This could be considered by some employees as a demotion.”

How employers will classify recent college grads

Kager says the Poe Group has advised clients to classify new college graduates as non-exempt, assuming they will not initially exercise discretion and independent judgement required in the administrative exemption test. Most college graduates hired into professional positions under the FLSA exemption, whose compensation is generally above the $47,475 minimum, says Kager.

Dan Walter, President and CEO of Performensation, a management consulting firm that engages with leaders to create human capital strategy, compensation, and reward programs that drive firm performance, says he expects employers are going to be reactive to these new regulations.

Walter discussed the short and long-term impact of how the new overtime laws will affect recent college grads and employers.

Short-term impact of new overtime laws

“It is likely that there will be little, if any, change in the amount of jobs available for college students and recent grads in the near term,” says Walter.

Therefore, the short-term impact on companies, regardless of size, is that they will be required to do one or more of these things:

  • Raise pay: If they can afford to do so, employers will increase wages to people above the threshold in order to maintain exemption status.
  • Manage hours: Many companies won’t be able to effectively manage the time. The past trend is that nonexempt workers feel like they aren’t worth as much from the professional recognition standpoint. They may choose to leave their current position and be reclassified as non-exempt to a different company with the hope of feeling more valued.
  • Hire more: Some savvy companies will hire more nonexempt workers so fewer people will work overtime. This will likely occur in larger companies, who are disciplined and more experienced in forecasting and financial modeling. These companies will spend the time and money to make sure that the changes take place and are administered effectively.

“Companies will find that in some groups it will be more cost effective to hire additional staff instead of paying for the overtime,” says Walter. “College recruiting will likely fill these newly created jobs.”

Long-term impact of new overtime laws

The combined impact of the economy and regulation will cause downward pressure on the creation of new entry level jobs due to companies redesigning roles, technology automation of non-exempt duties, and potential offshoring where possible.

“This will occur despite the demographic shift in the workplace,” says Walter. “The retirement of the Baby Boomer generation will likely lead to a downward shift in consumer goods demand with a moderate uptick in services.

The long-term impact of the new overtime laws will focus around these changes, says Walter:

  • Redesign jobs: There will be a move to redesign jobs to meet the 40 hours per week and reassign certain duties of those jobs onto someone else that is exempt.
  • Automation: Companies will be pushed more to the automation of certain duties to offset overtime costs. There will be an increase in companies using technology to automate lower-waged jobs.
  • Increase in offshoring: The effects will continue to add additional pressure to offshoring where possible. Moving jobs out of the United States will cut company costs.

Walter provided analysis. “Now that the nonexempt employee population has increased significantly, it will be more critical that companies manage overtime expense and therefore the hours worked by these employees will need to be closely monitored. The employees with pay that is not near the threshold will have their hours restricted more. Conversely, those employees that are near the threshold will likely receive a pay increase to meet the new threshold and therefore their work hours will likely remain unchanged.”

Effects on management trainees

Walter uses a manager trainee as a simple example of this: If the manager trainee is near the threshold, he will find that the employer will increase their pay to meet the exemption. Therefore, employees that fall into this type of category will work the same amount of hours as in the past. However, for those manager trainees significantly below the threshold, they will find their hours reduced to manage the amount of overtime work.

New overtime laws and small businesses

The new law on overtime – anyone earning under $47,476 will be eligible for overtime – sounds great on paper, because it translates into a substantial raise for those working long hours, and that’s always a plus for the employee, says Vicky Oliver, a multi-best-selling author of five books, including 301 Smart Answers to Tough Interview Questions (Sourcebooks 2005), named in the top 10 list of “Best Books for HR Interview Prep,” and 301 Smart Answers to Tough Business Etiquette Questions.

But if the new law becomes cost-prohibitive for small businesses, look for some unanticipated side effects, such as businesses possibly “demoting” full-time staff positions to that of a part-time or freelance role in an effort to avoid the overtime rule.

“Small businesses are responsible for the majority of new jobs,” says Oliver, a sought-after speaker and seminar presenter. “As always, it will be interesting to see how this particular rule shakes out. Some employers may find that reducing hours to side-step paying overtime will require creating new part-time or full-time positions.”

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Posted May 06, 2016 by

Working for a startup after college

Startup business people working at modern office courtesy of Shutterstock.com

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Everyone is nervous heading into their last year of college (except for those going to grad school, that is). It’s time recent graduates prove to themselves, and probably to their parents, that all of this was worth it; they can get entry-level jobs, get out on their own, support themselves, and start on a career path. It is probably their family’s hope that grads will conduct their job search seriously, and look at companies/organizations that promise a bright future. They’ve attended their first job fair, passed out their resumes, spoken with corporate recruiters, and some seemed interested. But something doesn’t “feel” right in their gut. There’s no excitement about all of this.

As recent graduates reflect on why they lack excitement, their minds go to the concept of a “corporate” environment with everyone playing their roles, a pretty large bureaucracy, policies, set work hours; “a single cog in a very large machine you will be,” as Yoda would say. Then there’s the office politics grads studied about in those business courses. Somehow, it doesn’t seem right. They’re thinking about their future success, which doesn’t include what the “big boys” offer. Recent grads need to look elsewhere.

Graduates need to consider working for a startup. Now their parents and some of their friends might think they’re a bit nuts. There’s no job security, as 50% of all startups fail within five years, and then where will they be? Mom may be wringing her hands. However, this isn’t their parents’ world anymore, and there are large advantages to taking this path right now in their lives when they have no obligations other than to themselves.

Flexibility and continuous learning

Most start-ups do not have “pigeon-hole” jobs. They will demand everyone pitch in when and where it is needed. Graduates may have a “job title,” but that will not mean a great deal. They’ll have a skill others may not, but they will be required to learn everyone’s job and everyone will be required to learn some of their job. This environment means continuous learning.

What’s the other great thing? Grads will be forced out of their “comfort zone” into exciting challenges; things can change on a dime, and they will need to change with them. If graduates really enjoy risks and challenges, they’ll love it.

Discover new talents

With all of the emphasis on pitching in, group decision-making, and problem-solving, recent grads may find they have creative talents and current skills they never knew or nurtured. They will be far more well-rounded in what they know and what they can do.

Learn how to budget

Pay is generally not the best for those who join startups. In fact, no one joins a startup for the salary. Graduates will often have to continue living like poor students, but they know how to do it. They’ll stretch those dollars, shop at thrift stores, and eat Ramen noodles sometimes. So what? Grads will also learn how to budget and be frugal.

Business people cheering with arms raised courtesy of Shutterstock.com

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Work with passionate people

Enthusiasm is contagious, and that is one of the great things about startups. Everyone comes to work excited about the day and their projects. Everyone shares in each other’s successes (and pumps each other up when there are failures). Grads, too, will be excited about getting up every morning and getting to work; many people in the corporate world would love to have that feeling.

Learn entrepreneurship

Forecasters predict small businesses will be more a wave of the future than large corporations. Why? First, corporations continue to expand globally and set up headquarters in other countries. Second, people no longer trust large corporations like they used to. These giants have taken big tumbles in recent years and no longer provide job security to their employees. It is the small business that is trending now. Working for a startup gives employees valuable experience in becoming small business owners at some point, if they should choose to head in that direction.

Push through failure

Most startups have their failures. The good ones with resilient employees move forward, learning from the failure but never losing the enthusiasm for what they are doing. It’s good to experience failure when young; it is a wonderful teacher. If that startup goes “belly up,” think of all the lessons employees have learned in the meantime.

Potentially invest or be given a stake

A lot of startups value their original people, and founders will give those people a stake in the company. Many people became millionaires because they started out with Steve Jobs, Bill Gates, or Mark Zuckerberg. Having a stake in a company at a young age is a great thing.

Love the Culture

Flexible hours are a big plus. Value is not based upon the number of hours worked. It is based on what employees produce. They may work several 18 hour-long days, only to sleep in late for several days after that and only put in four hours or so.

Dress is a big factor for many job seekers. If they love a jeans and flip-flop environment, taking their dogs to work, letting their hair grow, or sporting a tattoo, they will find the startup environment is where they want to be.

Choosing the right startup

Startups come in all different stages of development. Choosing one should be based on job seekers’ level of risk tolerance, their investigation of the founder(s), and their passions for the product(s) or services being developed. Nothing is carved in stone; if one idea doesn’t work out, there are many others to try.

Need career advice as a recent graduate? Go to our blog and follow us on Facebook, LinkedIn, Twitter, and YouTube.

Rick Riddle, guest writer

Rick Riddle, guest writer

Rick Riddle is passionate about the self-development process and wants to share his experience with more people via his articles. He believes self-sufficiency and discipline lead to great results. Follow him on Twitter.

Posted May 05, 2016 by

Internships with small companies offer benefits

Interns Wanted / Internship concept courtesy of Shutterstock.com

Aysezgicmeli/Shutterstock.com

Many students place a higher value on “prestigious” internships at places like Goldman Sachs for finance, CNN for media, and Facebook for technology. While there is definitely value in interning for these firms, most of that value is derived from the perception of other people. I would encourage students to look smaller. I think experience working for small businesses and organizations can be the BIGGEST hidden gem in your college career. This played out in my own recruiting process. One of the best internships I had was with a small investment firm in Charlotte, North Carolina. The office consisted of only 15 people, and the internship was unpaid. However, I think I learned three years of skills and knowledge in my three months with the company. I have also seen this take place for other students I have interviewed on my podcast “Interns on Fire.” More often than not, students have a better experience interning for smaller organizations and here is why:

1. More responsibility: Since these companies are smaller, they lack the bureaucratic red tape that prevents interns from doing meaningful work. These companies are often competing against larger companies with 10% of the workforce. This translates to more meaningful work for interns.

2. More diversity: For many of the same reasons mentioned earlier, employees for these companies wear multiple hats. They have to coordinate events, answer customer calls, process orders, and manage key strategic initiatives. Since they work across different divisions, interns are more likely to do the same. Therefore, they will not be siloed into just one role or with just one task for their entire internships. Interns will likely get the opportunity to work across many different areas.

3. Better culture: Typically, smaller firms have better cultures and camaraderie. Because they are smaller, they tend to focus more on hiring people who are good culture fits. Hiring one bad egg does a lot more harm to a small organization than it does for a Fortune 500 company. Working for a smaller organization will give interns greater access to potential mentors and friends.

4. Ability to make an impact: Given that many small organizations have so much to accomplish with so few resources, they are often spread thin. In many cases, there have already identified a few valuable projects they just haven’t had the chance to work on yet. This leaves the door wide open for interns to come in and make an impact.

Don’t be afraid to go smaller. It can be the catalyst you need to jumpstart your college career. An internship with the right organization can be a game changer.

Interested in searching for internships? Check out our blog and follow us on Facebook, LinkedIn, Twitter, and YouTube.

Carl Schlotman IV, guest writer

Carl Schlotman IV, guest writer

Carl Schlotman IV was born and raised in Cincinnati, Ohio. Carl completed six internships in his collegiate career with world-class financial institutions such as: Bank of America, Merrill Lynch, and Goldman Sachs. After gaining experience with his internships and accepting a full-time offer with Wells Fargo Securities in Investment Banking upon graduation, Carl seeks to give back to younger students. He published his first book, Cash in Your Diploma, in April 2014.

Carl has spoken at several universities around the country to share his strategies and tactics for getting the job you want in the field of your choice, making the salary you desire. He also hosts a podcast highlighting the best student interns across the country, “Interns On Fire.”

Posted February 10, 2015 by

Having Fun with an Engineering Degree

Portrait of an engineer at work

Portrait of an engineer at work. Photo courtesy of Shutterstock.

When you finish your engineering degree, you have many chances to have fun when you get out of school. You do not need to do anything other than a job that makes you excited. When you are going out into the workforce, you can work with commercial playground equipment as you make life fun for the kids in your community.

The Community Developments

You will be able to create playground equipment with an innovative company such as Kompan that is for the playgrounds and parks all around your community. You can work for the city or county when you are installing these projects, or you can work for the school system to install these playgrounds. There are beautiful new commercial playground equipment items that you can use to keep kids safe, and you can find just the right place to install these sets. (more…)

Posted September 19, 2014 by

Do Entrepreneurs Learn How to Run a Business in College?

If you are going to college to learn about entrepreneurship, you may be wondering if school can teach you how to become a successful business owner.  The following post includes an infographic that can give you a better idea of whether or not this is the case. (more…)

Posted September 04, 2014 by

Looking for a Career Boosting Entry Level Job? 5 Reasons to Consider Employment at a Startup

Getting an entry level job at a small company can give you the chance to boost your career.  In the following post, learn five reasons to work for a startup.

Many graduates dream of landing a great entry-level job with a big company. A large company can often offers new grads the opportunity to handle multiple roles and get a headstart for developing a well-rounded career. For a time, global banks and big consulting firms were the most sought-after employers

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Posted July 18, 2014 by

Do You Want to Find an Internship in Public Relations? 5 New Opportunities to Consider

For anyone looking to find an internship in public relations, or PR, the following post shares five new opportunities.

Featured: Featured Are you a gal or guy interested in the busy lifestyle of the PR world? We’ve put together a list of the top 5 PR internships on our site this week. Apply NOW!1. Step Up (Inspiring Women to inspire Girls): this women’s network is looking for an intern to help

More here –

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Posted December 30, 2013 by

Interested in Jobs for Communication Majors? 6 Social Media Jobs to Watch in 2014

There is no denying the impact that social media is having on personal and professional networking.  For college students interested in jobs for communication majors, the following post shares six social media jobs to look out for in 2014.

Social media has transformed the way people socialize, network and stay in touch. We’ve seen large social networks like MySpace and Friendster come and go, and other ones like Facebook, Twitter, Foursquare and LinkedIn completely transform and redefine our online trends. One thing is abundantly clear: social media is now necessary for

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Posted November 01, 2013 by

Small Businesses Competing for the Best Talent: @bdholtzman at #truCollegeRecruiter

Minneapolis, MN – [November 1, 2013] – CollegeRecruiter.com, the leading niche job board for college students searching for internships and recent graduates hunting for entry-level jobs and other career opportunities, is pleased to announce that Barbie Holtzman of New York Department of Labor will lead a discussion track on How Small Businesses Can Compete With Big Businesses for the Best Talent at #truCollegeRecruiter New York City and that tickets are now available at www.truCollegeRecruiter.com for our fourth, fifth, and sixth recruiting events for hiring managers, recruiters, and other human resource leaders. (more…)

Posted August 14, 2013 by

Small Businesses Say Biggest Challenge is Finding Skilled Employees

Among the various challenges they face, a majority of small businesses say their biggest challenge is finding skilled workers.  Learn more in the following post.

When it comes to running a successful business, finding a highly skilled team of employees is crucial. But it isn’t always easy. In a recent survey by Robert Half, six in 10 (60 percent) small business owners said the biggest challenge in hiring or managing staff is finding skilled professionals for the job. About one in five (19 percent) cited maintaining employee morale and productivity as the chief concern. (more…)