Since the Affordable Care Act (ACA) has been implemented, we have more insight into the factors that affect workforce planning budgets. Today finance leaders have to consider the ACA's employer shared responsibility provisions and focus on maximizing productivity and revenue — which means retaining top talent.
Has a Shift to a More Part-Time Workforce Happened?
According to a study from the ADP Research Institute®, 38 percent of employers said they were planning to adjust employee hours in response to the ACA employer shared responsibility provisions. However, we're not seeing this expected increase in the part-time workforce or a reduction in the full-time workforce. There was almost no change in the distribution of hours worked in the third quarters of 2013 and 2014, according to the ADP Research Institute®. In fact, ADP's Workforce Vitality Index shows the number of full-time workers has grown faster than the number of part-time workers. Despite the ACA, employers are still opting to hire and employ full-time workers. This is a good example of the complexities that go into workforce planning decisions — no single factor exists in a vacuum.
Why Aren't Employers Cutting Hours?
There are factors that affect workforce planning budgets independent of the requirement that large organizations offer health insurance to their full-time workforce. The ACA was signed into law soon after the economy began to recover from the 2008 recession, and the Standard & Poor's 500 Index has increased by 84 percent since March 2010. That kind of economic growth means organizations are growing their workforce. Large organizations focus on recruiting and retaining the best talent, and offering full-time work is a proven way to attract high-quality employees. Attracting and retaining talent, keeping up with consumer demand and meeting day-to-day staffing needs appear to have mitigated the ACA's anticipated impact on workforce planning, and the result has been very little change in the hours worked by the U.S. labor force.
What Staffing Factors Should CHROs and CFOs Consider?
The ACA can't be the primary focus when CHROs and CFOs are establishing staffing budgets. Staffing and workforce planning must be adequate so the organization thrives. Consider your organization's needs, customer demands, the service level you aim to provide and the cost of hiring and training new workers if your retention suffers.
When these factors are weighed against the ACA's employer mandate, it's clear a predominantly full-time workforce is still the preferred option for most organizations. This means HCM is now more important than ever. Invest in your staff, and it should pay big dividends over time.
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