September 2023 TogetHR Times

The Rise of “Employer Hostage” Situations: Understanding the Balance of Power

by Kim Keene

The balance of power between employers and employees has always been a dynamic and delicate dance. Historically, employers often held the upper hand, with vast pools of candidates ready and willing to step into roles as needed. However, in recent times, a new phenomenon has emerged. In certain sectors and under specific conditions, employees are now in a position where they can “hold their employers hostage”.

Understanding the “Employer Hostage” Phenomenon

The term “employer hostage” might seem dramatic, but it encapsulates a situation where employees leverage their unique skills, experience, or the current labor market conditions to place demands on their employers. This can range from increased compensation and benefits to more flexible working conditions.

Factors Leading to this Shift in Power:

  • Skills Shortage: In industries like tech, where specialized skills are in high demand, employees with these niche skill sets recognize their value and leverage it to their advantage.
  • Economic Trends: Economic fluctuations, combined with global events, can lead to a shortage of available talent. For instance, post-pandemic realities have shifted many industries, causing labor shortages in specific sectors.
  • Increased Employee Empowerment: The digital age has empowered employees with more information about their worth, their rights, and the competitive landscape. Websites like Glassdoor and LinkedIn provide insights into company cultures and compensation, equipping employees with negotiation tools.

Implications for Businesses:

  • Increased Costs: Employers may have to offer higher salaries, better benefits, or more perks to retain top talent or attract new hires.
  • Organizational Challenges: Employees holding disproportionate power can disrupt team dynamics and lead to managerial challenges.
  • Innovation and Growth Stagnation: Companies constantly in a loop of negotiation or trying to appease a select group of employees might find it challenging to focus on innovation and growth.

Strategies for Employers:

  • Invest in Training and Development: By upskilling your current workforce, you reduce the dependency on a few. This also boosts morale and shows commitment to employee growth.
  • Foster a Positive Work Culture: A happy and engaged employee is less likely to use their position as leverage. Cultivating an environment of mutual respect can lead to more collaborative relationships.
  • Adopt a Proactive HR Strategy: Stay updated with industry trends, understand the evolving demands of the workforce, and be ready to adapt. This includes offering competitive compensation packages and ensuring that job roles and expectations are clearly defined.
  • Open Communication Channels: Allow employees to voice concerns, provide feedback, and feel heard. When employees believe they can discuss their needs openly, it reduces the chances of them resorting to hardball tactics.

In Conclusion

The “employer hostage” scenario is a wake-up call for businesses to re-evaluate their relationships with employees. It’s a reminder that in a rapidly evolving world, the traditional dynamics of the workplace are also shifting. Companies that stay ahead of these trends, listen actively, and adapt proactively will not only survive but thrive in this new landscape.


How do your Benefit Packages Rate in our Everchanging World of Work?

by Christine Muller

Here are some upcoming trends in Employee Benefits you may want to consider adding to your overall benefit package:

Flexible Work Environment- due to post-pandemic landscape!  

  • Follow a hybrid 3:2 model (3 days in office, 2 at home)
  • Frontload workweeks to make most of energy levels (12 hours on Monday, 10 hours on Tuesday, 8 on Wednesday, 6 on Thursday and 4 on Friday) to bank 40 hours for the week.
  • Working remotely!

Mental Health

  • Duvet days (no-strings-attached time off without notice)
  • Mindfulness apps
  • Life coaching
  • Counseling
  • Bereavement leave
  • Mental health training (including for leaders)
  • Mental health calculators
  • Addiction support
  • Yoga classes

Physical Well-Being – along with access to health insurance – we are seeing a surge in healthcare technologies such as telemedicine services, remote diagnostics, wearable devices, and apps prompting well being during the day.  On- line gym memberships in lieu of on-site gyms.  Access to a nutritionist or dietician are also other good options!

Work-Life Balance – don’t forget the Pets!  Offer pet insurance if possible.   Some companies have implemented “pawternity” leave options!

Menopause Support

  • Menopause Leave
  • Flexible working patterns
  • Provisions of fans

Social Benefits – workplace connections matter, and it’s up to employers to build them in a diverse workforce!

  • Walk and talk meetings
  • Coffee and lunch roulettes
  • Virtual team-building classes
  • Social impact initiatives like volunteering

Crisis Benefits-the best employee benefit schemes continuously evolve by responding to current events and providing employees with support they need in the moment.

Financial Wellness (training or learning opportunities)-consider this as a critical factor in employee retention!  It can be challenging to stay afloat during recessions and the cost-of-living crisis.   Financial insecurity can do more than cause sleepless nights.   Constant anxiety about the state of financial affairs can trigger debilitating mental and physical health issues which can have a negative flow to your business, it can affect productivity, performance, and absences.

Employee Development-upskilling and reskilling employees.  

  • Microlearning
  • Implementing 360 feedback cycles
  • Encourage employees to take ownership of their career development journey



Small Business Compliance: Are You Sticking to the Law?

by Christina Carmona

Regulations and red tape can sometimes rip the fun from running a business – regardless of the size of the entity. Just like a large corporation, small businesses risk fines, penalties, and negative tax implications if they do not stick to the necessary rules. 

Good small business compliance starts with developing a process that includes closely monitoring federal and state rules and regulations. Evaluate the current status of your small business compliance with these questions below:

  • Are you up-to-date on changes in employment law?
  • Is the accounting team monitoring sales and use tax issues?
  • Does the company have a compliance officer or committee, or does the compliance buck ultimately stop with the owner?

While certain industries are more heavily regulated than others, there are some general small business compliance issues that apply to businesses of any size. We’ve listed several of these issues below.

Employment Compliance

According to the Equal Employment Opportunity Commission (EEOC), racial and sexual discrimination are two of the most prevalent forms of workplace discrimination. Given that a 100-employee company can expect employment practices claim at least once every three years, it behooves all companies to cling to the letter of the law.

Takeaway: Address the biggest causes of non-compliance head-on by providing employee discrimination training — and documenting that the training occurred. Additionally, clearly spell out policies in an employee handbook. Then have all employees sign a document to acknowledge that they understand and will adhere to those directives. Finally, plan for periodic updates of that acknowledgment by your employees.

Employee Benefit Plan Compliance

The DOL requires businesses to properly manage employee benefit plans. The DOL expects plan sponsors to properly apply plan provisions, conduct tests, file proper reporting, and provide employees with required notices and documents. In some cases, businesses may need to submit audited employee benefit plan financial statements.

Takeaway: Because of the compliance complexity, many companies utilize third parties to administer their benefit plans. However, even if a company outsources the duties of managing a plan, it still retains the ultimate fiduciary duty of executing the benefit plan in full compliance with the law.

Tax Compliance

Tax compliance is easier said than done. Consider that there are roughly 10,000 state sales tax jurisdictions in the United States — and thousands of changes made by state legislatures each year. Complicating matters are Internet sales tax issues, as well as states increasingly subjecting new services and items to sales and use tax. Some states are even reversing exemptions that have traditionally been granted. States are typically aggressive in sales and use tax audits, so businesses of all sizes should watch out for areas of exposure.

Takeaway: Understanding sales tax nexus is one of the most important parts of tax compliance, yet many organizations lack this knowledge. A study by Thomson Reuters’ Sabrix Tax Services division found that 95% of companies surveyed underestimated their nexus footprint, and 85% of participating companies underestimated the number of states in which they needed to register by more than 50%.

Corporate Compliance

A company that is registered as a C-corporation or an S-corporation must act like a corporation in order to enjoy the protection of a corporation. A business’ so-called “corporate veil” can be pierced if it violates rules regarding items such as holding annual director and shareholder meetings, adopting and maintaining updated bylaws, issuing stock to shareholders, and recording all stock transfers.

Takeaway: Small business owners and management teams should keep – and maybe even be “glued” to – corporate minutes. The goal is to maintain accurate documentation of the board’s actions to substantiate their discussions and decisions.

Make the time to learn about the compliance challenges your business faces. After all, red tape that is not properly handled can create sticky situations that may impact your bottom line. 



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