As the economy continues to weaken, employers will need to hone their human resource management tools. While the downturn has created an employer’s market, many companies fail to recognize the opportunity it provides to improve the quality of their team and their business. Some of the best employees in the economy are finding themselves out of a job and facing meager opportunities. Meanwhile, some of the companies fortunate to have sidestepped the need to reduce their staff are left with a great opportunity to improve the quality of their staff. While that concept may initially put off a business owner with personal loyalties to their staff, in the end, the competitiveness and quality of the business dictates its survival and, thus, the benefit of the whole team.

 The idea of revamping an employee pool has many more variables than loyalty. Discrimination laws, for one, ignite their own set of fears. However, discrimination laws are primarily designed to protect workers and potential workers from prejudicial actions by employers and to provide for protection of a fair and non-hostile workplace. As long as a business can justify that replacing staff with more qualified people is purely a business or performance issue and that the action does not violate the rights of the replaced worker, there is nothing wrong with improving the quality of a workforce. The question is how to design and execute such a strategy.

The first step in refreshing a workforce is to properly assess the existing force. Assessments, such as skills, identification, background and job description, are best performed before a candidate becomes a worker. However, there is a way to overcome that issue by using assessments as part of the staff refresh initiative. Professional Employer Organizations (PEOs) are payroll, benefit, risk management and human resource outsourcing vehicles used by many companies. PEOs allow companies to achieve high quality employment management while helping them to achieve compliance with employment laws and regulations. The back office component of administering employees is performed by the PEO, as is the human resource function.

When a company engages a PEO, the company, in effect, gets a ‘restart’ as an employer. The PEO can require new assessments and employee screens, which may form the basis for the business case that a refreshed workforce is necessary. Before the PEO relationship commences, the PEO can help a company develop a handbook or employee acknowledgement that establishes the employee’s responsibility to notify the employer of any changes that have occurred since their initial application that might affect their suitability as an employee. These include criminal or civil convictions, legal status or changes in their certifications or skill sets. The PEO relationship also includes an employee handbook that defines the employee/employer relationship and the responsibility of the employee to comply with the company’s policies, standards or procedures.

Employee screening has become a basic hiring tool and helps to mitigate the employer’s responsibility to hire qualified and safe candidates. Recognizing these issues, companies are increasingly integrating screening into their business practices.  In answer to this demand, some PEOs have partnered with screening companies and integrate the screening products with their own offerings. For example, Florida based PEO DecisionHR has integrated with screening industry leader* First Advantage Corporation to deliver comprehensive screening, recruiting, applicant tracking and ongoing retention solutions.

The next step in refreshing a workforce is to identify and solicit quality candidates. The critical component of this step is the job description. A comprehensive job description describes the skills, certifications, training and experience needed to perform the job and also outlines the tasks, duties and responsibilities associated with the position. The job description becomes the basis for the interview of a candidate, as well as a standard of performance measurement.

There are several ways to identify and qualify job candidates. Recruitment firms, job boards and talent acquisition solutions, such as Applicant Tracking Systems (ATS), are used as are internal recommendations and promotions. Another tool used is the pool of temporary or temp-to-perm workers. Using a temp provides a ‘test drive’ without the commitment for both the employer as well as the worker. As more and more quality workers are displaced in today’s economy, the temp pool will deepen with quality workers looking for a permanent position. Therefore, temp pools provide an excellent resource for potential permanent employees. In addition, using properly screened and qualified temps allows the business to train employees before they are hired and the former workers are displaced.

Besides refreshing your workforce, this is also an opportunity to refresh your benefits and lower their costs. As many companies are discovering, in an employee-favored job market, benefit programs are typically rich in order to attract and retain employees. In today’s employer-favored job market, candidates are less focused on benefits and mainly concerned with the immediacy of finding a job. Keep in mind, though, that you generally cannot eliminate benefits without some backlash from the existing employees that you want to keep. You can, however, lower or eliminate benefit programs for newly hired employees.

By creating a new legal class of employees (i.e. all employees hired after January 1, 2009), you can design a go forward benefit program that places more of the cost on the new employees. For example, if you have historically paid 75% of an employee’s health insurance, you could grandfather existing employees at 75% and lower the new class of employees to 50%. Alternatively, you might introduce changes to the company’s benefit program, including higher co-pays, HSA plans, 100% employee-paid dependent coverage, etc. As natural attrition occurs in the existing workforce, additional benefit savings can be obtained as these workers are replaced with workers who fall under the new benefit plan. Temporary employees typically are not eligible for benefits so this new policy will likely not cause them much concern. So, refreshing your workforce might just provide you with better employees at a lower cost.

Finally, refreshing your workforce may give your business an opportunity to refresh its culture, improving both the quality of the worker and the workplace. As the workforce is upgraded, new policies can be implemented. If you use a PEO to help facilitate the changes, employees can help to design new handbooks and procedures, including flex time, direct deposit, job descriptions and employee evaluation models. Business owners can consider refreshing their workforce as a means to stay competitive and improve the quality of the business’ product offerings. New outsource partnerships can offset operating costs and improve efficiencies at the same time.

The economic downturn provides an excellent opportunity to refresh your business. Improve the quality of your workforce by taking advantage of the swelling pool of displaced workers and at the same time trim your overall employment costs by addressing the benefit programs you offer. A lean, high quality workforce will be vital to retaining competitive advantage. By culling underperforming workers, your business will be better positioned when the tide comes back in.

About the Author – Peter VanSon is the CEO of DecisionHR USA, Inc., a large Professional Employer Organization in Florida, doing business in 22 states. He is a CPA with thirty years of business experience. He can be contacted at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

* First Advantage was voted the Top Outsourced Screening Services Provider by HRO Today magazine in 11/2008.

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