2017 | Elwood Staffing's Company & Talent Report

Elwood Staffing’s

2017 A curated collection of our lively commentary on employment law, hiring trends, wages, and more. Oh, and a little bit about us.

TABLE OF CONTENTS 1 TALENT 6 WHAT’S THE REAL STORY?

Job seeker sentiment suggests the BLS needs to remove its rose-colored glasses.

8 WE BELIEVE IN A THING CALLED LOVE Data show rekindled employment relationships are a smart bet. Is your rehire policy a recruiting detriment?

11 NO STRINGS ATTACHED

Find out why one company’s bold retention strategy has everyone talking.

12 THE POWER OF PRAISE AND PRIZE

Get your employees to do what you want—without discipline.

2 HIRING 16 IT SHOULDN’T BE COMPLICATED

Don’t let lengthy hiring timelines hurt your business.

18 LET’S GET PERSONAL

Use technology to increase the personal touch candidates crave.

20 MONEYBALL

Use data to recruit and make smart hires.

Company & Talent Report 2017

3 LAW

24 CO-EMPLOYMENT IS NOT A FOUR-LETTER WORD! Believe it or not, there are benefits to being a co-employer.

26 ONLY IN YOUR STATE

What’s new in labor and employment law in your state.

28 AROUND THE NATION Your guide to important employment legislation.

4 MONEY

34 EMPTY POCKETS, OPEN JOBS

It pays to plan ahead for wage increases.

36 SICK AND TIRED

Time away from work is so important.

38 STATE MINIMUM WAGE CHANGES

5 ELWOOD 42 2016 FINANCIAL PERFORMANCE

A glance at Elwood’s financial strength and organizational stability.

46 NEW FOR YOUR NIGHTSTAND

Reading essentials for supervisors, hiring managers, and company leaders.

48 A YEAR IN REVIEW 1

A LETTER FROM

THE CEO

2

Company & Talent Report 2017

Dear friends, This marks the third issue of our annual Company & Talent Report, and we’re excited to see reader support and interest grow stronger every year.

If you’re familiar with prior years’ reports, you’ve likely already noticed the revamped look and feel. Our goal is to make the content more digestible. This means bite-sized articles, more visual content, and headlines that allow you to quickly scan and determine what’s relevant or interesting to you.

Much like this report, Elwood Staffing continues to evolve to bring greater value to our diverse group of business partners and job seekers. Over the last year, we expanded our data-collection methods and sources to increase and diversify the information we collect; we made three sizeable competitor acquisitions; we developed and launched a proprietary online ordering, tracking and reporting system; we hosted our first workforce intelligence summit for client companies; we expanded our national service footprint with the addition of 22 offices; and, of special significance to the Elwood family, we

welcomed a third-generation Elwood into the business.

For those who may not know, Elwood Staffing was founded by my father, David L. Elwood, Ph.D., in 1980; he remains active in the company today as chairman emeritus. My two brothers also serve on Elwood’s executive team: John Elwood serves as president of Elwood Staffing, and Mike Elwood serves as president of the Elwood Professional division. And, most recently, my oldest son, Chase Elwood, decided to wet his feet in the family business. With three generations of Elwoods working together to continue our family patriarch’s legacy, we’re presented with countless opportunities and one unique challenge: preserving the ethos of the business as it evolves to remain competitive and relevant.

One element we’re passionately committed to safeguarding is the Elwood corporate culture. My father worked hard to establish and maintain a culture that embodies five behaviors: superior customer service, family

values, extraordinary work ethic, integrity under all circumstances, and a commitment to delivering results that garner success. This culture—described by our employees as having a family feel—is the overwhelming reason our employees come to work each day and the reason they continue to call Elwood Staffing their home. We consider our employees an extension of the Elwood family, and we take care of them as such.

The future is bright at Elwood Staffing—for our employees, for our client companies, and for our associates.

As a leader and owner of this company, I truly believe in what we do and the people we employ. You can expect from us a commitment to continuing success and an ongoing determination to use our resources, talent, and ambition to make Elwood Staffing something even greater than it is today.

Thanks for your continued support of Elwood Staffing.

Mark S. Elwood, Chairman and CEO

3

1 TALENT

TALENT

WHAT’S THE REAL STORY? JOB SEEKER SENTIMENT SUGGESTS THE BLS NEEDS TO REMOVE ITS ROSE-COLORED GLASSES.

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Company & Talent Report 2017

THE NATIONAL LABOR MARKET OUTLOOK Despite optimistic reports, the state of the American economy disheartens millions of Americans. This sentiment was further fueled by last year’s general elections. Candidate discourse on the topic centered on skepticism about the rosy picture painted by the Bureau of Labor Statistics’ (BLS) well-intentioned statistics, and many labor market participants agreed. Disenfranchised workers and job seekers say the importance of measuring jobs growth pales in comparison to the importance of measuring the quality of jobs, their pay, and how that pay stacks up against cost of living. They believe popular metrics hide a devastating story of underemployment and the struggle to earn a living wage.

ELWOOD’S RESPONSE In an effort to evaluate the sentiment of job seekers so we can gain a better understanding of the story buried under national employment statistics, Elwood created the Applicant Sentiment Index™ (ASI) in late 2015. As part of our standard application process, we ask every applicant to answer a set of five questions anonymously. The questions measure favorable or unfavorable sentiment toward three parts of the job seeker’s local employment landscape: quality and quantity of jobs, wages, and willingness to commute.

JOB SEEKER SENTIMENT By and large, national results of the survey support the quantity vs. quality debate.

QUANTITY OF JOBS As evidenced by the strong upward trend and year-over-year increase, job seekers know openings are plentiful.

This is particularly encouraging because it demonstrates job seeker sentiment matches the statistics published by the BLS. QUALITY OF JOBS Despite greater availability of jobs, job seekers have not reported heightened optimism over the quality of these jobs.

Optimism in job quality lags, and this metric ended 2016 lower than it started.

QUALITY OF WAGES VS. WILLINGNESS TO COMMUTE 30+ MINUTES Interestingly, the trend lines for quality of wages and willingness to commute are inverses of one another. In times when people feel good about wages, they are less willing to drive and vice versa. This presents opportunity for employers to expand recruiting activities in the first quarter, especially for companies that operate in remote locations and offer strong wages because this is the time when willingness to commute peaks.

It’s important to note, though, even at peak times, only 43% of job seekers are willing to commute more than 30 minutes each way.

METHODOLOGY To measure change in sentiment for each item, we established a baseline value of 100 in the last month of 2015.

Each chart displays the growth or decline in the percentage of respondents who have an optimistic outlook.

Responses are considered optimistic if the respondent indicates no change or growth.

Total responses collected equal 104,174.

Reported monthly data (~8,000 responses per month) have a margin of error of +/- 1.09% at the 95% confidence level for population N, conservatively defined as the population within the national labor force that would consider contingent employment.

QUANTITY OF JOBS 102

100

96

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4

5

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7

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9

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9

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11

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9

10

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QUALITY OF JOBS 100

98

96

1

2

3

4

5

6

7

8

QUALITY OF WAGES 102

100

96

1

2

3

4

5

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WAGE QUALITY VS. WILLINGNESS TO COMMUTE 30+ MINUTES 110

100

94

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2

3

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5

6

WILLINGNESS

7

8

9

10

11

12

13

WAGE

7

TALENT

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Company & Talent Report 2017

WE BELIEVE

IN A THING

CALLED

LOVE

DATA SHOW REKINDLED EMPLOYMENT RELATIONSHIPS ARE A SMART BET. IS YOUR REHIRE POLICY A RECRUITING DETRIMENT?

Call us romantics, but we believe in the power of rekindled love. And according to studies, we’re not alone. Data show upward of 70% of rekindled romances work out for the best. “[Success is] not a fantasy,” says Dr. Nancy Kalish, the pioneer of lost-love studies.

We partner with over 6,000 companies each year, so a lot of HR policies cross our desk. One that pops up frequently is a blanket no-rehire policy, rendering every ex-employee

ineligible for rehire regardless of his or her reason for separation. To find out if romantic relationships prove a solid metaphor for hiring initiatives, we dug into our database and looked specifically at assignment outcomes for all associates rehired by a client in 2016, “boomerang” employees. We define a boomerang employee as anyone who worked at least 16 hours at the client company followed by at least a sevenday break before rehire.

9

Assignment Outcomes by Worker Category Assignment Outcomes by Worker Category

Here’s what we found: · FIGURE 1. On the whole, folks who have worked for you are a better bet when compared to brand new recruits because they have more successful outcomes and fewer quits or terminations, indicating a blanket no-rehire policy can be detrimental to overcoming recruiting and turnover challenges.

FIGURE 1

27% Assignment Category 33% Outcomes by Worker 27% 33%

Sometimes you just know when you’re with the wrong person, but sometimes you find out it was the right person at the wrong time. Why let a policy stand in the way of a successful employment relationship?

20% 27% 20%

29%

53% 53%

First FirstTimers Timers

53% Boomerangs Boomerangs

29% 29%

20% 38% 38%

· FIGURE 2. Not surprisingly, the reason the first assignment ends is typically a very good predictor of future assignment outcomes. Thus, we believe a better alternative to a no-rehire policy is a policy that takes into consideration the reason for separation.

38%

Successful Successful

Involuntary Involuntary

Successful

Involuntary

Voluntary

BoomerangAssignment AssignmentOutcomes Outcomes Boomerang PriorAssignment AssignmentOutcome Outcome bybyPrior

FIGURE 2

BOOMERANG ASSIGNMENT OUTCOMES

Voluntary Voluntary

Boomerangs

First Timers

BOOMERANG ASSIGNMENT BOOMERANG OUTCOMES ASSIGNMENT OUTCOMES

Employees who successfully complete their first assignment go on to have more successes than failures, so it’s not a bad idea to give them a second shot. But employees who quit or were fired are more apt to rinse and repeat, so it may be a good idea to put some protective measures in place for this group. We found three interesting sub-trends to help you out: · Consider the reason for a voluntary departure. Employees who quit for personal reasons (like a move or additional schooling) are more likely to be successful the second time, compared to employees who quit without notice or for another job (31% vs.

27% future success rate). · Consider the reason for an involuntary departure. Employees who are fired for performance are more likely to be successful the second time, compared to employees who are fired for behavior (31% vs. 26% future success rate), but don’t wait too long to rehire after you fire (FIGURE 3). The shorter the length of time between assignments after an involuntary departure, the higher the likelihood of a successful second round. This is especially important to consider, as many companies that allow boomerang assignments have a mandatory waiting period, but depending on length, that waiting period may actually be more harm than help.

33%

18% 18% 32% 32% Boomerang Assignment Outcomes 48% 15% 15% by Prior Assignment Outcome 48%

18%

41% 41% 32%

67% 15% 67%

22% 22% 48% 30% 30%

27% 27%

41%

Successful Involuntary Voluntary 22% Successful Involuntary OUTCOME Voluntary 67% PRIOR ASSIGNMENT PRIOR ASSIGNMENT OUTCOME Successful Successful

Involuntary 27% Involuntary

Voluntary 30% Voluntary

Successful Involuntary Voluntary PRIOR ASSIGNMENT OUTCOME

FIGURE 3

Successful Involuntary Voluntary Boomerang Assignment Success Rates Following Involuntary Assignment Ending Boomerang Assignment Success Rates Following Involuntary Assignment Ending

35%

35%

35%

35%

26%

26% 26% 22% 26% Rates Boomerang Assignment Success Following Involuntary Assignment Ending 22%

35%

35% 26%

Less than a month Less than a month

26%

One to Four to Six to three six twelve months months months One to Four to Six to threeTIME BEFORE six REHIRE twelve months months months

TIME BEFORE REHIRE 10

22% One to two years One to two years

Company & Talent Report 2017

NO

STRINGS ATTACHED FIND OUT WHY ONE COMPANY’S BOLD RETENTION STRATEGY HAS EVERYONE TALKING.

O

nline lingerie retailer Adore Me made headlines last year when it hosted a party for and presented a $10,000 check to a separating employee—a 23-yearold, three-year employee leaving on a personal Eat Pray Love adventure through Central and South America.

Make no mistake, this was not a “pay to quit” scenario; this was strictly a gift— one the company offers at its discretion to any departing employee.

WAIT, WHAT? In today’s market where good talent is lapped up quickly, Adore Me is loving on its employees by letting them go.

CEO Morgan Hermand-Waiche says of the benefit, “It’s just a way to say thank you. Maybe one day they will come back; maybe they will tell their friends about it, and it will get us some

great leads.” He notes the gift, which is never guaranteed and fluctuates in value, is offered to top performers, and he believes it is akin to any other forward-thinking retention strategy, like in-house yoga studios, personal transportation, or a free cafeteria. He believes dangling a big, fat check in front of every employee is a motivator to perform well—and to stick around because it’s indicative of the strong employee-centric focus within the organization.

We bring this up to highlight the dichotomy between organizational views on hiring and retention strategies.

If you really love someone, it’s OK to let them go. And, while you don’t have to offer a $10,000 check or throw a party, you should leave the doors open in case they return.

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TALENT REINFORCEMENT & ROBOTS?

Reinforcement theory manipulates more than just living beings. Scientists at UC Berkeley recently discovered reinforcement theory to be an effective way of teaching robots how to complete daily tasks. Instead of writing specific programming for each task, researchers teach robots to efficiently complete new exercises by scoring the robot’s basic movements and rewarding correct moves. This research barely scrapes the surface of what scientists hope to teach robots. Imagine a facility—your facility!—redefined by artificial intelligence. With this kind of research, making your machines and your people work smarter is no longer just a pipe dream.

THE POWER OF PRAISE AND PRIZE GET YOUR EMPLOYEES TO DO WHAT YOU WANT—WITHOUT DISCIPLINE. When problems arise in the workplace and action is necessary, companies are typically quick to discipline. The common line of thought here is that in order to enforce a set of rules and regulations, one must employ corrective action to gain the desired behavior. But is this the best way?

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Does instilling fear in our workforce create a positive work environment where everyone strives to follow the rules, or does it actually hinder employee morale, subsequently increasing turnover?

Sounds a bit like the study of human behavior, doesn’t it? That’s because it is!

And it’s why we combined our research with that of a well-known psychologist to shed light on how companies can modify employee behaviors (enforce policy) without negatively impacting pride, morale, and motivation.

Company & Talent Report 2017

THE SCIENCE OF THE MATTER Employing the work of behaviorist B.F. Skinner, there is, in fact, a way to enforce policy without infringing on positive employee culture—enter, reinforcement theory.

Reinforcement theory posits that people engage in behaviors that have pleasant outcomes and avoid those behaviors that result in unpleasant outcomes. Simply put, an individual’s behavior is a function of its consequences. We can benefit from Skinner’s work by swapping the progressive punishment model currently used in most workplace settings for a model that better aligns with reinforcement theory. When we shift from punishing and doling out negative consequences to rewarding and praising, not only does it increase employee self-worth, it also begins to alleviate a variety of issues prominent in industrial settings, from absenteeism and tardiness to increasing production on the floor and remedying unsafe work behaviors.

You might question the idea of rewarding employees for performing the jobs they were hired to do. Isn’t the reward a weekly paycheck? While the majority might say yes, it’s not that simple. Our society has been molded to receive rewards for everyday activities—like the price cut we receive for carrying our preferred card when we buy groceries—so it’s no surprise this carries over into the workplace.

PUTTING THE SCIENCE TO WORK There are many different ways to employ reinforcement practices, and one way produces long-lasting results: intermittent reinforcement. While learning a new behavior— take, for example, abiding by an attendance policy—it is necessary to employ continuous reinforcement until the behavior becomes habit, that is to continually reward individuals each time they complete an attendance goal.

Once a behavior is learned, gradually decrease these rewards and only reward on an occasional basis. Unlike its counterparts, intermittent reinforcement is more enduring because there isn’t a constant expectation for reward, but when the reward is given, it is appreciated, and in some cases, employees work harder to attain the goal not knowing if the bar for reward has been raised.

So how can you put this to work? We’ve crafted a simple guideline to show how you can make reinforcement a habit in your facility.

FLEXIBILITY, A MAN’S BEST FRIEND

The attendance policy at our client’s facility—a dog food manufacturing plant—was strict, generating a sense of fear and insecurity in associates.

At its worst, the company’s turnover rate was 250%, due mainly to attendance violations. In the spirit of negative reinforcement theory, the on-site manager adjusted the attendance policy so employees who gave adequate notice or found a shift replacement did not receive points for missing work—in other words, a negative stimulus was removed when employees followed protocol. After the program was implemented, turnover dropped to just 4%.

Don’t get us wrong; rewards aren’t limited to tangible or monetary gifts. Reinforcing desirable behaviors can be as simple as praising your employees for a job well done (lucky for us, it doesn’t cost a single dime to tell employees they did a good job) or as sophisticated as a step-based rewards program; the choice is yours. Our suggestion is to create a program for your facility that is composed of a combination of strategies, both non-monetary and monetary. In fact, Elwood has interviewed over 10,000 associates about their work experiences, and communication is the No. 1 employment experience influencer in the workplace; employees say they want constant feedback, both positive and constructive. In other words, it pays to be rewarding—in praise and in prize.

1. Target one attribute at a time.

Trying to change attendance, safety, and production behaviors all at once would be too overwhelming.

Once one desired behavior has been achieved, move on to the next.

2. Set clear task expectations and evaluation standards.

When employees understand what is required of them, you take frustration out of the equation, making the desired behavior more likely to occur.

3. Choose your reward system.

Decide whether positive (introducing positive stimulus) or negative (removing negative stimulus) reinforcement—or a combination—is right for your facility. As tempting as it is, do not resort to punishment as your first line of defense.

4. Work with employees to come up with the rewards.

Identify personalized motivators that are tempting enough for employees to want to change their behavior.

As you monitor progress, you may identify employees who are unwilling—not unable—to make necessary changes. If after solid effort and appropriate discussion you continue to see poor performance and negativity, it may be time to part ways.

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2 HIRING

HIRING

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Company & Talent Report 2017

IT SHOULDN’T BE COMPLICATED DON’T LET LENGTHY HIRING TIMELINES HURT YOUR BUSINESS. We know it to be true, and now there’s some data to prove it. According to research from Glassdoor, the average time it takes a company to fill a position has nearly doubled since 2010—from 12.6 days to 22.9 days—and it’s not only due to today’s smaller candidate pool. Many companies have steadily increased the number of steps in their hiring process, despite the dwindling pool of available workers. And while it’s natural to want to vet every employee to the fullest extent, our data show it’s not always necessary. Not only does it greatly affect your ability to move quickly and hire an employee before he or she finds another job, but the extra steps don’t always guarantee a better fit.

Let’s talk about this a little more. · You can’t spend weeks gathering resumes. Though the average number of days it takes to hire has crept up to 22.9, that number is much lower for entry-level and lowskill positions. Many of the jobs you compete against for talent, like shift leaders, waiters, and bartenders, are filled in under seven days, meaning the workers you want have no reason to wait for you to look through the pile of resumes or muddle through a long hiring process; they can apply and start work elsewhere in the meantime. Does your HR department have a formal hiring timeline that ensures hiring managers complete tasks in a timely manner? · Your background check eats up precious time—and often has little return. Background check results can take anywhere from one to more than seven days to be returned, depending on the number of courts and states involved. In analyzing

a year of assignment data for our workers, we’ve found three things to be true: Employees in facilities that don’t require background checks stay on their assignments longer, they are hired by our customers more often, and they are fired less frequently. This tells us background checks aren’t “weeding out” bad workers because workers who have passed their facility’s check quit sooner, quit more frequently, and are less likely to successfully work their way onto a company’s permanent payroll—hardly the traits of a better workforce. That said, we absolutely acknowledge background checks are important in some situations, so our recommendation is to require checks only for positions where a specific criminal history may be detrimental to business proceedings (such as checking for a history of financial crime or theft when you hire a new accountant). · Is your drug screen appropriate? The Quest Diagnostics Drug Test Index™ shows 4% of screened workers in the U.S. workforce tested positive for drugs in 2016. Drug screens offer some insight into a candidate’s history of drug use and can help ward off undesirable behaviors; but like everything in life, there are trade-offs. Some screens, like a rapid urine test, can be performed in your facility and reveal results in minutes, while others, like a hair follicle screening, can take days or weeks to get results but offer the benefits and consistency of certified lab analysis. When both time and safety are important, it pays to examine your needs to ensure you’re making the right choice for your business.

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HIRING

USE TECHNOLOGY TO INCREASE THE PERSONAL TOUCH CANDIDATES CRAVE.

T

echnology is a wonderful thing, until it gets in the way of dealing with your primary audience: people. CareerBuilder recently released results of two surveys—one of job seekers and the other of hiring managers—and the results highlight an alarming problem: Technology-led recruitment automation is gaining popularity, yet it can be totally counter to the environment job seekers crave. Survey results show 69% of companies increased recruitment automation last year and 72% of hiring managers will do so this year, while 81% of job seekers say they want the contact information for the hiring manager and 72% say all they want is to speak directly with a recruiter when applying for a job.

If you’re struggling to balance the demands of internal hiring initiatives against a desire to keep things personal, read on for a few tried-and-true ways to remain accessible to job seekers while still using technology to your advantage. These are all tactics we use daily.

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· Post the contact information for the applicable hiring manager or recruiter on every job post.

At the very least, this makes you appear accessible; and, at the very best, you are actually accessible when someone needs you. · Be text-friendly. Text messaging is the dominant form of communication for Americans under age 50. So while job seekers can be taught to act differently during a job search, why run this race uphill if you don’t have to? To keep recruiters’ personal cell phone information private, use a service (we like TextUs) to turn your business’s phone number into a text-enabled number, which is operated through a desktop program. (This allows your recruiter to text using a real keyboard!)

Company & Talent Report 2017

LET’S GET PERSONAL

· Be social in the right circles.

Pushing jobs out on your company Facebook or Twitter pages is a start, but your posts will only reach the people who currently follow your page. You’re missing out on thousands of active job seekers! Almost every town or county in the U.S. has community-led Facebook pages, called “job boards” or “garage sales.” These pages provide an unprecedented opportunity to promote open positions to hundreds or thousands of hungry job seekers, while simultaneously providing an outlet for job seekers to ask questions and engage personally with hiring managers.

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HIRING

MONEYBALL

USE DATA TO RECRUIT AND MAKE SMART HIRES.

The Oakland A’s built an empire using data to recruit and make smart hires. You should, too. Or you could always just watch the movie and leave the rest up to us.

THERE IS A RIGHT TIME

We see a marked increase in website traffic (hungry job seekers) during the first quarter. Coupled with data from our Applicant Sentiment Index™ that show an increased willingness to commute during the first quarter, that time offers prime opportunity for you to pick up new employees more easily than other times of the year—they’re more plentiful and more willing to drive.

Elwood Staffing Website Traffic November 2014 – December 2016

January 2015

April 2015

July 2015

October 2015

January 2016

April 2016

July 2016

October 2016

EVERYONE HATES MONDAYS

No matter the season, you must strategically time your job posts so you get the most bang for your buck.

20%

Formerly the most popular day to job hunt, Monday has declined in popularity over the past two years.

Wednesdays draw the most traffic, followed by Tuesday and Thursday.

Saturday and Sunday remain the least popular days to search for a job.

15%

10%

5% Q4 2014

Q1 2015 Monday

Q2 2015 Tuesday

Q3 2015 Wednesday

Q4 2015

Q1 2016

Thursday

Friday

Q2 2016

Saturday

PUSH NEW JOBS ON TUESDAY SO THEY’RE FRESH WHEN MOST JOB SEEKERS ARE LOOKING 20

Q3 2016

Q4 2016

Sunday

Company & Talent Report 2017

THANKS, TINDER

Dating websites aren’t the only match-makers to become an integral part of relationship-seekers’ smartphones; people seeking employment are increasingly abandoning their desktops in favor of their fingertips, too. Job search portals and applications must be mobile-optimized in today’s world.

2016

OVER HALF

DESKTOP

MOBILE

55%

2015

MOBILE

55% 45%

) OF ( OUR WEBSITE VISITORS COME TO US ON A MOBILE DEVICE. THIS IS UP FROM 51% A YEAR AGO.

DESKTOP

51% 49%

ANDROID 69.1%

ANDROID 68.6%

iOS 29.1% OTHER 1.8%

iOS 29.4% OTHER 2.0%

LOCK THEM IN EARLY

Applicant defaults are inevitable, so understanding when and why people leave is critical to successful recruiting. We’ve studied every step of our application, revamped and reordered pages, and reinvented the way we engage and interact with every applicant—whether they hit submit or not. If your applicants are anything like the hundreds of thousands who apply with us each year, then ...

Less than

50%

of all applicants finish the application

15%

of all applicants drop off after completing the first page

33%

of all applicants have dropped off within 5 minutes of starting the application

33%

of drop-offs occur on the last page where we request sensitive information

COLLECT VERY BASIC CONTACT INFORMATION FIRST AND SENSITIVE INFORMATION LAST, AND RE-ENGAGE ANYONE WHO DEFAULTS ALONG THE WAY 21

3 LAW

LAW 24

4

Company & Talent Report 2017

4

CO-EMPLOYMENT IS NOT A

FOUR-LETTER WORD! BELIEVE IT OR NOT, THERE ARE BENEFITS TO BEING A CO-EMPLOYER.

(It’s actually a 12-letter word.)

And, more specifically, it’s a love triangle: a situation where two or more employers have an employment relationship with a single employee. In the context of a staffing relationship, coemployment cannot be avoided—not through handshakes, or contracts, or rules and regulations. (And don’t believe anyone who tells you differently!) Understanding what it is and the obligations of the respective employers, you can reduce any adverse consequences of being a co-employer.

For example: · Under the Occupational Safety and Health Administration’s guidelines, the host employer (i.e., client of the staffing service) is responsible to ensure every temporary worker is properly trained and has a safe working environment. · Under anti-discrimination laws, a host employer cannot engage in discriminatory conduct and must provide a discriminatory-free work environment to temporary workers.

· The Family and Medical Leave Act has specific regulations related to the responsibilities of the staffing company and host employer.

In addition to the responsibilities and obligations, there are some areas of law where there is a benefit to being a co-employer. Under the workers’ compensation laws of nearly every state, the host employer is considered the special employer of the temporary workers. Because the host employer is considered the employer of the temporary worker, the host employer enjoys the immunity from civil litigation afforded by state workers’ compensation laws, and an injured temporary worker’s exclusive remedy is filing a workers’ compensation claim, which the staffing firm covers. If the host employer was not the special employer of the temporary worker, workers’ compensation would not apply, and the host employer could be sued by an injured temporary worker.

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LAW

ONLY IN YOUR STATE

WHAT’S NEW IN LABOR AND EMPLOYMENT LAW IN YOUR STATE.

COLORADO: Take the locks off your filing cabinet. Effective 1/1/17, current

and former employees have the right to inspect and copy their own personnel files (annually for current employees and once after employment ends for former employees). Employees can be required to pay the reasonable cost of copying the documents.

CALIFORNIA:

There’s only one Golden Rule? Not in the Golden State. · The California Supreme Court, in Augustus v. ABM Security Services, Inc., handed down an employee-friendly decision at the end of December 2016 and held: (1) employees must be relieved of all duty for their paid, ten-minute rest period and (2) if employees are “on call” during a rest period, the rest period simply doesn’t count. This holding is expected to result in a new wave of class action litigation in 2017. · For contracts entered into, modified, or extended on or after 1/1/17, choice of venue provisions in agreements between an employer and an employee cannot require an employee who primarily resides and works in California to adjudicate claims outside of the state of California (if the claims arose in California or otherwise deprive the employee of California law). · Effective 7/1/17, employers with 25 or more employees must provide employees with written notice of their rights under the domestic violence protections under California law. · Effective 1/1/17, employers are prohibited from asking applicants about or taking into consideration any juvenile criminal convictions.

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ARIZONA: Temperatures are rising in Arizona! Effective

7/1/17, Arizonan employees accrue one hour of sick leave for every 30 hours worked and can accrue either 24 or 40 sick hours per year (depending on the size of the employer). Leave can be used for the employee, a family member, any other individual related by blood, or any individual whose relationship is the equivalent of a family relationship.

Company & Talent Report 2017

NEW YORK: It’s pay day! Effective 3/7/17, new conditions go into effect for ILLINOIS: Competition heats up in the Prairie State.

Effective 1/1/17, non-compete agreements with low-wage employees are prohibited.

“Low-wage employees” are any employees earning less than $13.00 per hour.

employers paying non-exempt employee wages by direct deposit or debit card. Employers must: (1) secure the employee’s prior written consent; and (2) provide notice to employees identifying other available methods of paying wages, that the employer cannot compel the employee to accept wages by direct deposit/debit card, expressly inform the employee that the employee will not be charged for any fees necessary for the employee to access the wages in full, and provide a list of locations where the employee can access/withdraw the wages at no charge.

VERMONT: As the average length of job applications soar, Vermont cuts a question. Effective 1/1/17, a “ban the box” law went into effect whereby employers are restricted in their ability to inquire about an employee’s criminal conviction history on the initial application.

ARKANSAS: Arkansas had its first dance with Mary Jane. Effective 11/6/16, Arkansas legalized medical marijuana and prohibits discrimination against qualifying patients or designated caregivers; however, the new law does not require employers to accommodate workplace use of medical marijuana or permit working under the influence.

GEORGIA: You’re not the boss of me!

TENNESSEE: E-Verify is no longer voluntary for many

in the Volunteer State. Effective 1/1/17, employers with 50 or more employees must use the federal E-Verify program to verify new employee work authorizations.

Effective 1/1/17, a new law clarifies that a franchiser is not the employer of the franchisee or the franchisee’s employees.

FLORIDA: Purple Haze all in my brain...

Effective 1/1/17, a state constitutional amendment went into effect expanding permitted medical marijuana use to individuals with various debilitating medical conditions but does not require employers to accommodate on-site medical marijuana use.

27

LAW

AROUND THE NATION

YOUR GUIDE TO IMPORTANT EMPLOYMENT LEGISLATION.

NO WALLS IN THE WORKPLACE.

Effective 1/18/17: Revised employment verification regulations prohibiting certain unfair immigration-related employment practices are in effect.

These regulations make clear that an employer can be guilty of prohibited discrimination on the basis of citizenship status or national origin regardless of the employer’s motives (no longer require that ill will or animus be shown). The comments to the regulation make clear that employers cannot request specific employment eligibility verification documents from employees and that if an employer wants to be helpful, they should provide all workers with the List of Acceptable Documents for I9 purposes and explain to them that they may present either: (1) one List A document; or (2) one List B document and one List C document.

28

WE’RE WAITINGGGGG ...

In November of 2016, a federal judge temporarily halted the Department of Labor’s new overtime rules, which would have raised the salary threshold for exempt status from $23,660 to $47,476, from going into effect.

The stalled rules also provided for a formulaic adjustment to the minimum salary requirement every three years.

Things could change as the case progresses through the judicial system, so keep a close eye out for updates.

THE IRS IS SAVING BUSINESSES MONEY THIS YEAR?

Yes—at least when it comes to some forms of mileage reimbursements. In a few cases, the 2017 Internal Revenue Service (IRS) mileage reimbursement rates are lower than 2016 rates: 53.5 cents per mile for business miles (down from 54 cents); 17 cents per mile for medical or moving purposes (down from 19 cents); and 14 cents per mile in service of charitable organizations.

Company & Talent Report 2017

TEMPORARY WORKER INITIATIVE UPDATES Temporary worker safety is a shared responsibility between staffing companies and their clients. In April 2013, the Occupational Safety and Health Administration (OSHA) launched the Temporary Worker Initiative to prevent workplace injuries and illnesses among temporary workers.

The initiative was implemented based on the premise temporary workers are entitled to the same workplace safety protections as the client employees working in the same location and that such objective was not being met.

Furthering the initiative in 2016, OSHA published guidance on safety and health training, hazard communication, blood-borne pathogens, and powered industrial truck training in the context of temporary help services. Prior guidance includes: protecting temporary workers, injury and illness

record-keeping requirements, personal protective equipment, and whistleblower protection rights.

Familiarize yourself with all the Temporary Worker Initiative rules/regulations because staffing companies and their clients need to come to an agreement about how all aspects of temporary worker safety will be handled. However, any such agreement does not supersede each party’s safety obligations with respect to temporary workers. In other words, you cannot contract away your safety obligation, and each party should regularly verify the other party is meeting the safetyrelated obligations assumed under any agreement.

For more information see: https://www.osha.gov/temp_workers/index.html.

INCREASED PENALTIES FROM OSHA In response to legislation passed by Congress in November 2015 directing federal agencies to adjust their penalties to account for inflation, OSHA increased its penalties in August 2016 (the 2016 penalties) and January 2017. The 2016 penalties apply to any citation issued after August 1, 2016, but on or before January 13, 2017, if the event resulting in the citation occurred after November 2, 2015. The latest penalties apply to any citation issued after January 13, 2017, for violations occurring after November 2, 2015.

Type of Violation

1990 - 2016 Maximum Penalty

2016 Maximum Penalty

2017 Maximum Penalty

Serious; Other-Than-Serious; and Posting Requirements

$7,000 per violation

$12,471 per violation

$12,675 per violation

Failure to Abate

$7,000 per day beyond the abatement date

$12,471 per day beyond the abatement date

$12,675 per day beyond the abatement date

Willful or Repeated

$70,000 per violation

$124,709 per violation

$126,729 per violation

29

INJURY REPORTING RULE In May 2016, OSHA published a new rule regarding injury reporting. Following a series of events, implementation was delayed until December 1, 2016. Though the rule is currently in effect, there is still a legal challenge pending against it, so keep watch.

The new rule is summarized as follows: Electronic Reporting Requirements The table below outlines the new reporting requirements. One important factor to note is temporary workers need to be included in a business’s employee headcount to determine whether electronic filing is required.

Submission Year

Establishments with 250+ employees

2017 (for 2016 logs) 2018 (for 2017 logs)

Form 300A Forms 300A, 300, 301

Establishments in designated high risk industries with 20 – 249 employees Form 300A Form 300A

2019 and thereafter (for the prior calendar year’s logs)

Forms 300A, 300, 301

Form 300A

Submission Deadline July 1, 2017 July 1, 2018 March 2

BUT WHAT ABOUT…?

Safety Incentive Programs While the new rule does not prohibit safety incentive programs, employers must not use them in a way that penalizes workers for reporting worker-related injuries or illnesses.

Incentive programs should encourage safe work practices and promote worker participation in safety-related activities.

Employers should consider programs that reward: · Worker participation in safety program activities and evaluations · Worker completion of safety and health training · Reporting and responding to hazards and close calls/near misses · Safety walk-throughs and identification of hazards · Conformance to planned preventive maintenance schedules · Compliance with legitimate workplace safety rules

30

Post-accident Drug Testing The rule does not prohibit post-accident drug testing. Employers may conduct post-accident drug testing where there is reasonable possibility employee drug use could have contributed to the injury or illness or where the testing is done pursuant to a federal or state law, including workers’ compensation drug-free work place policies, whether voluntary or mandatory. Employees may also be tested if required by a workers’ compensation policy.

It is important to note that when there is a workplace accident, all employees who may have contributed to the accident should be drug-tested, not just the injured worker. If only the injured worker is tested, it may be considered unlawful.

Company & Talent Report 2017

Injury Reporting The injury reporting rule is broken into three pieces.

1. Reasonable Reporting An employer's procedure for reporting work-related injuries and illnesses must be reasonable and must not deter or discourage employees from reporting.

Employers should review their reporting procedures for elements that might deter or discourage a reasonable employee from accurately reporting a workplace injury or illness.

Considerations include: ¡ Does the procedure account for work-related injuries and illnesses that build up over time, have latency periods (i.e., time between exposure and appearance of symptoms), or do not initially appear serious enough to the employee to require reporting to the employer? A procedure that requires immediate reporting without accounting for these circumstances would not be reasonable.

¡ Does the procedure make reporting so difficult or complicated that a reasonable employee would be discouraged from reporting an injury or illness?

A procedure that requires an employee to travel a significant distance to report or to report the same injury or illness multiple times to multiple levels of management would not be reasonable.

2. Informing Employees Employers must inform employees of their right to report workrelated injuries and illnesses free from retaliation.

This requirement can be met by posting the current version of the OSHA poster. Employers are advised to update their employee handbooks with any new reporting requirements adopted in light of the rule.

3. Non-Retaliation An employer may not retaliate against employees for reporting work-related injuries or illnesses.

The rule does not prohibit disciplinary programs. However, employers must not use disciplinary

action or the threat of disciplinary action to retaliate against an employee for reporting an injury or illness.

The rule prohibits disciplining employees simply because they report work-related injuries or illnesses without regard to the circumstances of the injuries or illnesses, such as automatically suspending workers who report an injury or assigning them points that have future employment consequences. The rule also prohibits disciplining an employee who reports a work-related injury or illness under the pretext the employee violated a work rule. An example of pretextual discipline is when an employer disciplines an employee for violating a work rule after that employee reports a workrelated injury yet fails to enforce the same work rule against other employees who violate it and do not report an injury or illness.

Additional guidance and explanation can be found at: https://www.osha.gov/ recordkeeping/modernization_ guidance.html.

31

4 MONEY

MONEY

EMPTY POCKETS,

OPEN JOBS IT PAYS TO PLAN AHEAD FOR WAGE INCREASES.

34

Company & Talent Report 2017

“We just don’t have the money.” It’s a phrase we’ve all uttered at some point in time and one we all work hard to avoid, which is why budgeting is such an important topic to us. We spend a lot of time consulting with companies about labor costs (often because finding talent at their current pay rate is already an issue), and the phrase we frequently hear is, “We didn’t build a wage raise into the budget last year. We just don’t have the money.”

If this sounds familiar, read on.

A RISING TIDE LIFTS ALL SHIPS After years of relative wage stagnation, both our proprietary data and data published by the Bureau of Labor Statistics (BLS) show wages are again on the rise. This means your current

employees aren’t the only ones who expect to be paid more than they were paid last year; the new workers you recruit also expect to see increased starting rates.

at 2.9% (projected) across all positions, but your adjustments may need to be a little higher or lower depending on which industries you compete against for talent.

Each year we survey over 1,300 employers—employers just like you— to determine how many are actively raising their starting wages and by how much. What we’ve found is, across all positions and all geographies, between 30-40% of companies raised their starting wages in the past year, and most raised it by $0.50-0.74 per hour.

(In most cases, this equated to about a 4.5% hike over the existing starting wage.) If you do the math, it works out to be an increased annual cost of $1,040-1,540 per new hire. Similarly, BLS data show wage growth for 2016

PLAN FOR TOMORROW, TODAY For companies with a handful (or hundreds) of new hires, it’s no wonder coming up with the money to increase starting wages is nearly impossible if not built into the budget. Companies are increasingly paying more for workers each year, both new hires and existing employees, and the increases are the largest reported by the BLS since the first quarter of 2009. To remain competitive, your compensation strategy should be an early topic of discussion during your annual budgeting process.

A successful strategy starts today.

IT’LL COST HOW MUCH? By position and industry, our survey results show…

Figure 1: Administrative Workers MEDIAN HOURLY WAGE

% THAT INCREASED WAGE

MEDIAN INCREASE

Office and Administrative Support

$13.00 - $13.49

38%

$0.50 - $0.74

Receptionist

$12.00 - $12.49

27%

$0.25 - $0.49

Customer Service Representative

$14.00 - $14.49

36%

$0.50 - $0.74

Data Entry Clerk

$12.00 - $12.49

28%

$0.50 - $0.74

Accounting/Bookkeeping Clerk

$15.00 - $15.49

35%

$0.75 - $0.99

Payroll and Timekeeping Clerk

$15.00 - $15.49

30%

$0.50 - $0.74

Figure 2: Production Workers MANUFACTURING MEDIAN HOURLY WAGE

LOGS. & DIST. MEDIAN HOURLY WAGE

MANUFACTURING % THAT INCREASED

LOGS. & DIST. % THAT INCREASED

MANUFACTURING MEDIAN INCREASE

LOGS. & DIST. MEDIAN INCREASE

Packer/Hand Packing

$11.00 - $11.49

$11.00 - $11.49

42%

33%

$0.50 - $0.74

$0.50 - $0.74

Material Handler

$11.50 - $11.99

$11.00 - $11.49

44%

40%

$0.50 - $0.74

$0.50 - $0.74

Shipping/Receiving Clerk

$12.00 - $12.49

$11.50 - $11.99

42%

45%

$0.50 - $0.74

$0.50 - $0.74

Forklift Driver

$12.00 - $12.49

$11.50 - $11.99

38%

41%

$0.50 - $0.74

$0.50 - $0.74

Testers/Inspectors

$12.50 - $12.99

$11.50 - $11.99

36%

37%

$0.50 - $0.74

$0.50 - $0.74

Assembler/ Fabricator

$11.00 - $11.49

$11.50 - $11.99

40%

33%

$0.50 - $0.74

$0.50 - $0.74

General Labor

$11.00 - $11.49

$10.50 - $10.99

42%

32%

$0.50 - $0.74

$0.25 - $0.49

General Maintenance

$15.50 - $15.99

$13.00 - $13.49

38%

26%

$0.50 - $0.74

$0.50 - $0.74

35

MONEY

SICK AND TIRED TIME AWAY FROM WORK IS SO IMPORTANT.

PEACE? FREEDOM? FAMILY? What is it that everyone in the whole world wants? If you guessed one of the three listed, you’d be wrong. According to Gallup, holding a good job is the most important thing people across the world desire today. Gallup even goes so far as to say the race to provide good jobs will make or break civilizations over the next few decades.

W

e share this information to help set the framework for why we believe crafting a compelling employment experience is vital to organizational survival: A company cannot succeed if it can’t offer a good job because a good job is so intimately tied to one’s life evaluation. Folks will look elsewhere in search of a better experience.

Many of our reports focus on improving the job factors that make people excited to show up for work. But now we want to focus on something quite the opposite: providing employees ample time away.

36

Company & Talent Report 2017

HOW MUCH TIME OFF IS REQUIRED OR EXPECTED? Without many legal guidelines to follow, determining how much time away from work is enough can be challenging. Each year, we survey over 1,000 employers about the wages and benefits they offer to new workers (those in their first year of service as a permanent employee), and we ask a few questions that focus specifically on time off.

Based on our survey data, here’s what employers like you currently offer to first-year workers: ALL INDUSTRIES

MANUFACTURING INDUSTRY

LOGISTICS & DISTRIBUTION INDUSTRY

NATIONWIDE

NATIONWIDE

MIDWEST

SOUTH

WEST

NATIONWIDE

MIDWEST

SOUTH

WEST

UNPAID Time Off

57%

61%

64%

58%

58%

56%

59%

43%

56%

PTO (including holidays)

90%

92%

91%

90%

93%

91%

94%

78%

94%

PTO (excluding holidays)

78%

79%

72%

78%

88%

86%

82%

78%

91%

7 days

6 days

5 days

5 days

10 days

10 days

10 days

10 days

10 days

Median Days of Non-Holiday PTO PTO: Paid Time Off

WHY IS TIME OFF SO IMPORTANT? Countless studies of employed professionals find correlations between more time off and higher productivity, longer tenure, and improved performance evaluations. One such study of blue collar workers focused on the change in psychological (occupational burnout) and behavioral (absenteeism) stressors after periods of time away from one’s job. The study found both burnout levels and instances of absenteeism decreased after time away and remained below pre-vacation levels for a period of about four weeks. Additionally, a recent study

by Deloitte Consulting finds, when salary or other financial benefits are removed from the equation, work-life balance is the most important job factor to millennials, the largest cohort in today’s workforce.

SO WHAT’S OUR RECOMMENDATION? If we have to boil it down into one sentence, our recommendation is simple: Offer time off, offer it immediately, and make it competitive.

To give some color to that statement, we advise employers to make the following available on the first day of permanent employment and to build into the budget an identical or similar policy for contingent workers:

· At least two days of unscheduled (emergency) paid or unpaid time off without points accrual · Five days of paid time off (a combination of personal and/or sick days, as determined by company policy); or where applicable, a combination of personal days and the minimum number of sick days mandated by local law such that the total sums to at least five days · Paid time off (or holiday pay, if facility shutdown is not feasible) on the “big six” American holidays: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day We recommend making the benefit available immediately for a couple of reasons: For starters, surprises happen, whether we like it or not, and vacations are often booked long before a job offer comes along. Despite our natural inclination to make employees “earn” free pay through service time, it pays to be generous.

To win the respect and loyalty of your employees, you have to make yourself a little bit vulnerable. Sure, you’ll lose out every so often, but you stand to gain a lot more when you give your employees some room to rest.

37

MONEY

STATE MINIMUM WAGE CHANGES EFFECTIVE JANUARY 1, 2017

ALASKA:

FLORIDA:

ARIZONA:

HAWAII:

ARKANSAS:

MAINE:

$9.80 per hour.

$10.00 per hour. The minimum wage is also scheduled to increase to $10.50 per hour on January 1, 2018.

$8.50 per hour.

CALIFORNIA:

$10.50 per hour. The minimum wage is also scheduled to increase to $11.00 per hour on January 1, 2018.

$9.25 per hour. The minimum wage is also scheduled to increase to $10.10 per hour on January 1, 2018.

$9.00 per hour. The minimum wage is also scheduled to increase to $10.00 per hour on January 1, 2018.

MASSACHUSETTS: $11.00 per hour.

COLORADO:

MICHIGAN:

CONNECTICUT:

MISSOURI:

$9.30 per hour. The minimum wage is also scheduled to increase to $10.20 per hour on January 1, 2018.

$10.10 per hour.

38

$8.10 per hour.

$8.90 per hour. The minimum wage is also scheduled to increase to $9.25 on January 1, 2018.

$7.70 per hour.

Company & Talent Report 2017

EFFECTIVE JULY 1, 2017

MONTANA: $8.15 per hour.

NEW JERSEY: $8.44 per hour.

OHIO:

$8.15 per hour (gross receipts of $297,000 or more); $7.25 per hour (gross receipts under $297,000).

SOUTH DAKOTA: $8.65 per hour.

VERMONT:

WASHINGTON, D.C.: $12.50 per hour. The minimum wage is also scheduled to increase to $13.25 per hour on July 1, 2018.

MARYLAND:

$9.25 per hour. The minimum wage is also scheduled to increase to $10.10 per hour on July 1, 2018.

OREGON:

$10.25 per hour standard rate. The Portland metro rate will increase to $11.25 per hour; and the non-urban counties rate will increase to $10.00. The minimum wage is also scheduled to increase to $10.75 per hour standard rate on July 1, 2018; the Portland metro rate will increase to $12.00 per hour; and the non-urban counties rate will increase to $10.50.

$10.00 per hour. The minimum wage is also scheduled to increase to $10.50 per hour on January 1, 2018.

WASHINGTON:

$11.00 per hour. The minimum wage is also scheduled to increase to $11.50 per hour on January 1, 2018.

39

5 ELWOOD

ELWOOD

42

Company & Talent Report 2017

2016

FINANCIAL PERFORMANCE A GLANCE AT ELWOOD’S FINANCIAL STRENGTH AND ORGANIZATIONAL STABILITY.

As a successful staffing partner, we must meet the staffing needs of our clients and associates while operating in a manner that ensures ongoing financial viability. We achieve this objective by properly managing risk exposure, continually implementing efficiency improvements, and complying with all regulatory requirements.

The result is a strong balance sheet and the necessary liquidity to support the growing needs of our clients.

Revenue $ in millions $890

REVENUE

$809

$852 $804

Revenue for 2016 increased 6% to $852 million.

Growth was fueled by a combination of organic expansion and strategic acquisitions. Growth in the Northeast complemented our already strong presence in the West, Midwest, and Southeast. The mix of industries we serve continues to broaden, and the addition of clients in the food and pharmaceutical industries kept pace with strong demand in the manufacturing and logistics segments.

2013

2014

2015

2016

43

Revenue by Geography

Revenue by Industry

Southwest 11%

Aerospace 3% Energy 5%

Midwest 30%

Northeast 8%

Construction & Other 3%

Food & Pharmaceutical 10%

Manufacturing 53% West 25% Logistics 26%

Southeast 26%

OPERATING COSTS

A tight labor market continues to be a key driver in operating costs. Competition for qualified applicants elevated recruiting and retention costs and kept total operating costs as a percentage of revenue close to a four-year high. Economies of scale and ongoing investments in technology to enhance productivity drove efficiencies in facilities management and branch operations, keeping total operating costs in balance.Â

Operating Costs % of Revenue 10.0%

10.4% 9.7%

Operating Costs by Category 10.2%

Facilities 7.9%

Other 4.4%

Operations 9.2%

Recruiting & Selling 13.4%

2013

44

2014

2015

2016

Labor 65.1%

Company & Talent Report 2017

ASSETS AND LIQUIDITY

Total assets as of December 2016 were $178 million and total liabilities were $71 million. Liquidity, as measured by current ratio, continues to be strong and was 3.0 at year end. Elwood employs a conservative approach to managing assets and debt, which preserves our ability to meet financial obligations and allows us to make investments that expand and enhance our service to clients and associates.

Total Assets $ in millions

Current Ratio $178

$158 $142

4.3

$150 3.2

3.0

2.2

2013

2014

2015

2016

2013

2014

2015

2016

COMPLIANCE

Elwood is committed to operating in full compliance with all laws. To ensure we are complying with financial requirements, we engage the services of independent experts. The CPA firm of Blue & Co., LLC annually audits our financial statements, and the accounting and business advisory firm of Grant Thornton LLP prepares our income tax returns.

Notes: Results for 2013 are shown pro forma to include the February 2013 acquisition of SOS Staffing Services, Inc. 45

ELWOOD

NEW

FOR YOUR NIGHTSTAND

The Supervisors’ Guide to Improving Employee Engagement & Retention | 9 Simple Ways to Keep Your Employees Happy On The Job In today’s world, where 70% of workers are not engaged and 17% are actively trying to do damage to their employers creating a culture that focuses on continually improving the employment experience is critical. This short pocket guide is designed for line-level supervisors, and it provides engagement and retention strategies—with a strong focus on inclusion and social connections—that any supervisor can implement without upper management or budget committee approval. The storybook covers the following topics: Introductions & First Impressions · Orientations · Team Introductions Training · Performance Feedback · Communication · Creating Buy-in Developing Mentors · Outlining Growth Opportunities

The Decision Makers’ Definitive Guide to Employee Engagement and Retention Leading a company is tough. Leading one in the right direction is even tougher. And the challenges just multiply as headcount increases. Backed by a little math and a little psychology, this book shares seven of the most critical components of employment satisfaction and delivers the tips and tricks upper-level management and C-suite executives need to make any company an attractive place to work. The piece is based upon the underlying principles of Abraham Maslow’s hierarchy of needs, offering an explanation of why certain factors affect one’s employment experience and chances of longevity more than others. The book covers the following topics: Safety as a Top Priority of the Company · Opportunities for Advancement Confidence in the Executive Leadership of the Company · Communication Feelings of Value and Shared Goals · Training · Treatment and Inclusion

Dollars and Sense | 2016 – 2017 Starting Wages and Benefits Guide Published annually, our starting wages and benefits guide contains survey responses from more than 1,300 employers across the nation and reports on starting wages and benefits for workers in small and large companies operating in the manufacturing, logistics & distribution, and other industries. In the report, you will find information about: Starting Wage Ranges · Shift Differentials · Raises & Bonuses Career Progression Programs & Other Perks · White Papers Health, Retirement, & Ancillary Benefits · Year-Over-Year Trends by Industry

46

Company & Talent Report 2017

READING ESSENTIALS FOR SUPERVISORS, HIRING MANAGERS, AND COMPANY LEADERS. APPLICANT SENTIMENT INDEX As part of our standard application process, we ask every applicant to answer a set of five questions anonymously so we can measure favorable or unfavorable sentiment toward three parts of the job seeker’s local employment landscape: quality and quantity of jobs, quality of wages, and willingness to commute. The sheer number of responses—over 100,000 each year—and the stability of the questions over time allow us to track shifts in workers’ mindsets to predict and prepare for market changes at the national, state, and local levels.

WORKFORCE LANDSCAPE SUMMARIES Each quarter, we compile manufacturing and distribution sector information into compelling, industry-focused reports. These reports include proprietary studies, national trends, and employment law updates.

COMPANY AND TALENT REPORTS Like the contents of this book, we’ve always used our annual report to provide a glimpse into Elwood’s strengths, organizational stability, engagement in the industry, and commitment to continuing success.

WHITE PAPERS A collection of studies and reports to help you navigate the world of contingent staffing. · One School of Thought: Education Requirements & Hiring · What Are You Getting Out of a Background Check: Peace of Mind or Performance? · Relationship Status: It’s (Not) Complicated · Closing the Skills Gap · Together, We’re Better Safe Than Sorry · Background Checks: Friend, Foe, or “Frenemy”? · The Seven Wonders of the Work(place): Climbing Maslow’s Pyramid · Do You Give a Tweet About Your Online Presence? · Becoming an Employer of Choice · Can You Afford to Pay Minimum Wage? · Flexibility: The Art of Bending Without Breaking · Employee Retention: When Traditional Benefits Aren’t Enough · Employee Engagement: The Antidote to Turnover Find these resources and more at www.elwoodstaffing.com/brc 47

ELWOOD

1

WE ENDED THE SUMMER WITH A BANG—or, rather, the crack of a baseball bat—at our inaugural client summit hosted at the beautifully renovated Westin in downtown Indianapolis. The event brought together top human resources, purchasing, and company leaders from our manufacturing and distribution clients across the country and included presentations, interactive workshops, good food, great company, and one very rainy baseball game.

The general sessions and roundtable discussions covered a variety of employment-related topics, including co-employment, OSHA updates, engagement and retention strategies, labor market trends, and generational differences in today’s workforce. Leaders from both Elwood and client companies shared their knowledge, expertise, and feedback with one another.

We plan to host the event again in Indianapolis. If you would like to learn more about the event, please email elwoodsummit@elwoodstaffing.com.

Attendance at the summit is complimentary for all clients, and we will offer discounted room rates.

48

Company & Talent Report 2017

A YEAR IN REVIEW

2 6 4 35 HOW DO YOU MEASURE A YEAR? In workforce training initiatives, like us? Last year, we provided workforce readiness education to nearly 130,000 job seekers, in both English and Spanish, for a combined total of over 1.3 million minutes of learning time. Additionally, supervisors at our client companies racked up over 1,000 hours of customized leadership training, and our own internal team completed just under 40,000 learning modules!

STRICTLY ORGANIC IS OVERRATED. Elwood’s growth strategy is a combination of organic growth and acquisition. As such, Elwood broadened its market presence through the acquisitions of fellow industry players Berks & Beyond and White Staffing Management in 2016 and Swanson Staffing in early 2017. The addition of Berks & Beyond enhanced Elwood’s footprint by 15 offices throughout southeastern Pennsylvania; White Staffing Management added additional service locations in Bowling Green and Hopkinsville, Kentucky, and Gallatin and La Vergne, Tennessee; and Swanson Staffing brought on locations in Fort Wayne, La Porte, and Elkhart, Indiana, and Sarasota, Florida.

CAN A PAIR OF JEANS CHANGE YOUR LIFE? Probably not, but it could change your business. Many employees rank a casual dress code at the top of their careabouts. It’s an easy change that makes a big impact on morale. Don’t believe us? Stop by any of our offices any day of the week—we’ll be wearing denim.

ELWOOD PROFESSIONAL IS POSTING SOME IMPRESSIVE STATS. The team bests industry averages on turnaround time while delivering on the promise that every candidate is motivated to accept the original offer for at least one reason other than compensation. Here’s what their clients experience:

· Candidate Submittals (within first five days): 3 · Interview-To-Submittal Ratio: 50% · Offer Acceptance Rate: 93% · Placement Success Rate (three years or nominal term of the contract): 90%

KEEPING UP WITH OUR CONTINUED COMMITMENT to industry leadership we sent 13 executive and field leaders to the American Staffing Association’s (ASA) annual conference, Staffing World, in San Diego, California, in October for continuing education and networking opportunities.

Here are a few highlights: · Our president, John Elwood, was asked to return to ASA’s board of directors for a tenth term. · Our occupational safety manager was a guest speaker at the event for the second year in a row, and she shared her knowledge of OSHA standards by giving a walking tour of the conference facility to session attendees. · The group attended more than 50 learning workshops and met one-onone with our largest vendor partners to keep abreast of industry knowledge and service offerings. · Elwood now boasts 455 Certified Staffing Professionals (CSP), the most of any company in the world.

The CSP designation certifies staffing professionals’ expertise to work with both employees and clients within the bounds of federal and state laws and regulations.

49

ELWOOD Elwood Staffing® recruits and screens top industrial and administrative talent and matches them with our clients’ opportunities, creating mutually beneficial relationships that move companies and people forward.

With a focus on placing skilled trades professionals, Elwood Tradesmen® supports clients throughout the U.S. for projects in a wide variety of industries with helpers, apprentices, journeymen, and master craftsmen.

Specializing in search and contract placement, Elwood Professional matches highly skilled engineering, information technology, and business management professionals with mid-level, VP, and executive openings.

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SERVICE FOOTPRINT & SERVICE LINES

Company & Talent Report 2017

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ELWOOD

EXECUTIVE LEADERSHIP Mark S. Elwood

J. Michael Stockard Jr.

John K. Morrison

Chairman and CEO

Executive Vice President

Mark joined the company in the fall of 1987 and has served in many capacities such as sales consultant, vice president, and president prior to being named chief executive officer in 2003 and chairman in 2016. He likes to maintain a healthy balance of duties, focusing on operational and financial performance and strategic initiatives while cultivating relationships by visiting branch offices around the country and spending time with existing and prospective customers.

Mike is responsible for working with the company’s sales force on new business development. He is also responsible for maintaining and growing some of Elwood’s strategic clients. Mike served as president of TRI Staffing for three years before it was acquired

by Elwood Staffing in 2006.

Senior Vice President and Legal Counsel

John A. Elwood President John oversees the executive management members of the Legal, Risk Management, Human Resources, and Field Operations Departments, and he is very passionate about learning and development. He is past chairman of the board of the American Staffing Association, of which he has been a board member since 2008. He joined the company in 1996 and was appointed president in 2003.

Michael D. Elwood President, Elwood Professional Mike is responsible for Elwood Professional, the company’s high-end search and placement division. His team serves the engineering, IT, and professional-level hiring needs of the company’s national client base. Mike previously worked on Wall Street and in the technology industry. He joined the company as the chief operating officer in 2004 and was appointed president of Elwood Professional in 2012.

Steven J. Hunnicutt, CPA, CGMA Chief Financial Officer Steve’s primary areas of responsibility include overseeing accounting, finance, treasury, and tax functions. He initially joined Elwood Staffing in 2000 as controller and moved into the chief financial officer role in 2002. Prior to joining Elwood Staffing, Steve worked in public accounting and as an analyst for a Fortune 500 automotive parts supplier.

Lia R. Elliott General Counsel Lia is responsible for providing legal advice to the organization, strategically identifying legal risk, structuring proactive policies and procedures, negotiating and finalizing large commercial transactions, and managing Elwood Staffing’s Legal Department. Prior to joining Elwood Staffing in 2007, Lia practiced law with a civil law firm, focusing on the employment and labor law sector.

David S. Meyercord Senior Vice President Dave leads the company’s Workforce Solutions group, a department dedicated to the growth and development of large, multimarket accounts.

He and his team support field staff with sales, implementation, service delivery, account management, and best practices for Elwood’s largest and most complex clients. Dave has been with Elwood Staffing since 2011.

Kevin L. Hardy Senior Vice President Kevin is responsible for branch performance and customer relations. He directs client strategy meetings, proposal development, and field operations, and works with management to build client relationships. Kevin was with SOS Employment Group for 13 years before it was acquired by Elwood Staffing in 2013.

John has management oversight of the Human Resources, Risk Management, Safety, and Unemployment Claims Departments. Additionally, he manages the company’s insurance programs and provides legal support and advice to the company primarily in the areas of wage and hour, employee relations, the Affordable Care Act, insurance, and risk. John was general counsel of SOS Employment Group for 18 years before it was acquired by Elwood Staffing in 2013.

Nickolas J. Seger, CPA, CGMA Vice President of Operations Nick leads the company’s operational team. With oversight of field and risk operations, learning and development, and internal/external reporting, he works closely with the branch network and internal sales team to ensure best practices are in place and followed across the organization. Nick joined the company in 2005.

Victor J. Meyer, CPA, CGMA Vice President of Finance Vic’s primary focus is budgeting and financial reporting, both on a consolidated basis and at a more detailed level to measure branch performance.

He joined the company in 2014 after working in both corporate finance and public accounting.

Brett A. Flora Vice President of Technology Brett is responsible for shaping, managing, and maintaining the company’s information technology environment. He and his team actively develop and implement plans to improve the organization’s communication, access to information, and organizational efficiency. Brett spent 20 years in IT operations and management in private, public, and international companies prior to joining Elwood Staffing in 2013.

John A. Niedermeyer Vice President of Strategic Services John drives organizational health through learning and development, change management, and strategic support of service operations. John was with SOS Employment Group for 20 years before it was acquired by Elwood Staffing in 2013.

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The information herein is intended only for general purposes. Nothing contained or expressed herein is intended to or shall be construed as legal advice, and no attorney-client relationship is formed. If you have questions about any law, statute, regulation, or requirement expressly or implicitly referenced, contact legal counsel of your choice.

All information is proprietary and confidential.

CORPORATE HEADQUARTERS 4111 Central Avenue Columbus, IN 47203 812.372.6200 www.elwoodstaffing.com