By the KMA Team
The end of the year is typically a demanding time for HR professionals as they work to ensure compliance, improve employee satisfaction, and prepare for the coming year. Here are some best practices from the KMA consulting team.
1. Review Compliance and Legal Updates
Audit policies and handbooks: Ensure your employee handbook reflects changes in laws, such as paid leave policies, or anti-discrimination laws. Consult an employment attorney for more complicated updates.
Verify labor law posters: Employers must display updated federal, state, and local labor law posters. Check requirements for remote employees as well.
Tax compliance: Ensure employee Social Security numbers, withholdings, and benefit deductions are accurate. Coordinate with your payroll provider for proper year-end reporting.
State-specific laws: For example, in Maine, ensure your policies align with the upcoming Paid Family and Medical Leave Act and inform employees of their rights.
2. Conduct a Benefits Review
Open enrollment wrap-up: Double-check employee elections for health, dental, vision, and other benefits to avoid errors. Confirm that all forms have been processed.
FSA deadlines: Notify employees about deadlines for using their Flexible Spending Account balances and any applicable rollover limits.
Wellness programs: Review participation data and feedback. Plan enhancements for next year, like new wellness challenges, gym reimbursements, or mental health resources.
3. Performance Management and Goal Setting
Year-end reviews: Use performance reviews to evaluate employees’ achievements, address challenges, and discuss long-term career goals. Include self-assessments to encourage engagement.
Set 2025 goals: Collaborate with leadership to align individual and team objectives with business goals. Use SMART (Specific, Measurable, Achievable, Relevant, Time-bound) criteria for effective goal setting.
4. Compensation Adjustments
Salary benchmarking: Conduct a market analysis to ensure your salaries remain competitive. Consider local and national industry trends to attract and retain top talent.
Bonuses and merit increases: Clearly communicate criteria for bonuses and raises to avoid confusion. Set expectations for future salary adjustments based on performance.
5. Employee Engagement and Appreciation
Recognize achievements: Host an appreciation event (in-person or virtual) to acknowledge individual and team contributions. Provide personalized notes or gift cards to reinforce positive morale.
Plan holiday schedules: Offer flexible options for holiday time off and communicate these well in advance to accommodate employee needs.
6. Strategic Workforce Planning
Analyze workforce metrics: Use data from the past year (turnover rates, time-to-hire, onboarding initiatives) to identify areas for improvement.
Anticipate hiring needs: Forecast upcoming vacancies based on retirements, promotions, or business expansion. Develop a proactive recruitment strategy, including employer branding efforts.
7. Organize and Archive Records
Purge old records: Follow your document retention policy and federal guidelines. Shred all sensitive documents.
Digital backups: Ensure employee files, I-9 forms, and other records are stored securely in compliance with privacy regulations. Test your backup systems for functionality.
8. Prepare for Year-End Payroll
Double-check deductions: Audit payroll deductions for benefits, garnishments, or taxes to correct errors before finalizing W-2s.
Bonuses and taxes: Confirm tax withholding rates for year-end bonuses to avoid surprises.
Employee changes: Verify and update contact information to ensure W-2s and other year-end documents are mailed correctly.
9. Training and Development
Plan training programs: Identify skill gaps or compliance needs (leadership development, manager training, etc.). Budget for new programs or software tools.
Mandatory training updates: Ensure all required trainings, such as harassment prevention, safety, or cybersecurity, are completed and documented for 2025 compliance.
10. Communicate Effectively
Share a year-end wrap-up: Send a company-wide communication celebrating milestones and achievements, such as revenue growth, new client wins, or successful initiatives.
Transparent updates: Inform employees about changes to benefits, payroll, or policies for 2025. Use email, internal communications channels, and/or team meetings to deliver clear and consistent messages.
As always, reach out to the pros at KMA for help getting through all your HR end of year to-dos!