Starbucks announced this morning that it will offer an incredibly generous tuition reimbursement plan for its partners (employees) who work an average of 20 or more hours per week in one of their more than 8,500 company operated stores.
Starbucks partnered with Arizona State University (ASU), which offers more than 40 undergraduate degree programs online including electrical engineering, global logistics management, health sciences, information technology, nursing, operations management, organizational leadership, software engineering, criminal justice and criminology and technological entrepreneurship and management. Starbucks partners have no obligation to stay with Starbucks past graduation.
For eligible partners who are admitted to ASU as a junior or senior, Starbucks will provide full tuition reimbursement to allow them to complete their degrees. Those admitted as freshman or sophomores will receive a partial tuition scholarship and need-based financial aid for two years of full time study.
Starbucks has broken the mold before when it comes to how they treat their employees. Partners working an average of 20 or more hours per week receive access to a wide range of benefits that in most companies (and particularly, many retailers) would only be available to those working full time (40 hours). To add the tuition plan to the benefits package really changes the game when it comes to attracting and retaining quality people in general and veterans in particular.
Many veterans who transition directly to college out of the military soon find out that the Post 9/11 GI Bill, while very generous, does not cover all of the non-study related expenses like housing, childcare and transportation. So, many student veterans find that they need at least a part time job while in school to cover those additional expenses. Starbucks’ tuition reimbursement program applies to employees who work an average of 20 hours a week, making this the perfect blend (pun intended) of hours committed to work and school.
ASU is already considered to be a “military friendly” school in that it offers the Yellow Ribbon program, which covers the gap between in-state and out-of-state tuition, it has the Pat Tillman Veterans Center to support student veterans, and it offers the Tillman Military Scholars program which helps to cover other financial gaps experienced by student veterans (a non-traditional student body) such as housing and childcare expenses. There are lots of colleges that offer online degrees, but not all are as supportive of the needs of their student veteran population, so Starbucks selected a perfect partner in ASU.
The Post 9/11 GI Bill benefit is transferrable to military spouses or children, so if the veteran is hired by Starbucks and, through the ASU tuition reimbursement program, does not need to use their entire GI Bill benefit, they can transfer the unused portion to the spouse or child. Double win for that military family!
The Post 9/11 GI Bill benefit can be used for undergraduate or graduate programs. So, if the veteran hired by Starbucks completes their undergraduate degree through the ASU tuition reimbursement program, they will have benefit left over to use toward a graduate degree later.
Since there are still too many employers that are less enthusiastic to hire veterans who do not have a bachelor’s degree, I wonder what those employers would be willing to do to fix that situation. Starbucks’ program is not specifically for veterans, but because it exists it can significantly improve their ability to attract veterans and military spouses. Are other employers willing to offer scholarships, internships, work/study arrangements to support student veterans and military spouses?
What do you think? What challenges and benefits do you see with this model (in general) and its potential for veteran recruiting specifically? Post your comments below!
Every now and then I get a question about whether and when it is OK for an employer to ask a veteran about his/her military service and the type of discharge he/she received. This blog will focus on EMPLOYING a veteran (as opposed to re-employing a National Guard or Reserve member after a period of military leave; the standards are slightly different.)
In a nutshell:
You CAN ask someone whether they have served in the US military
You CAN ask for the dates of their employment in the military
You CAN ask if they are willing to self-identify as one of several protected classes of veteran
You CAN ask about the type of discharge received HOWEVER you had better have a good business reason for doing so, otherwise it is advisable NOT to ask for type of discharge.
State and Federal Equal Employment Opportunity (EEO) laws do not prohibit you from asking about the type of discharge. However, asking a veteran to reveal the nature (“characterization of service” in military parlance) of their discharge is considered private information, similar to asking someone “what kind of a disability do you have?”
So, in terms of hiring a veteran, in what instances would it be appropriate to ask about the characterization of service?
One example: if the position requires the employee to obtain a security clearance.
Another example: There are a number of companies making significant commitments to hire veterans. As this is essentially creating a “veteran preference” (similar to what government agencies offer), the employer can set the criteria for this preference within legal limitations. The employer has a justified business reason for offering this preference to a specific demographic (in this case, veterans) as this demographic has documented challenges with finding employment. So, the employer can set the criteria for this veteran preference as an honorable discharge or a favorable discharge.
What are the types of discharges? Here is a table to help you see the differences:
Types of Military Discharges
Administrative
Discharge Name
Considered
Notes
Honorable
Favorable
The gold standard is the honorable discharge, which the majority of veterans will receive. It means they have met or exceeded the standards for professional and personal conduct in the military.
General Under Honorable Conditions
Favorable
This discharge means the veteran did not meet all of the administrative criteria for exemplary service. The military has different standards of conduct that do not apply in the civilian world. For example, in the military a person can be let go because he/she:
Is overweight
Has had an extra-marital affair
Has fraternized (i.e., an officer and an enlisted member “hooking up”)
Can’t manage personal finances
And, prior to 2011’s full repeal of “Don’t Ask, Don’t Tell”, if they were determined to be gay or lesbian
Any of the above situations (and others) would be/could have been considered not fully meeting the military’s standards of personal conduct, but would not prevent a civilian from obtaining employment.
Other than honorable (also known as OTH)
Typically unfavorable, but depends on your employment criteria
The veteran may have been dismissed for infractions such as fighting/physical altercations, DUI, drug use or possession (not a comprehensive list, but some of the most common reasons)A person with an OTH discharge will not be able to obtain a security clearance.
Uncharacterized
N/A
This is an entry level separation generally given when the person has spent less than 180 days in the military. Disability may or may not be a factor.
Punitive
Discharge Name
Considered
Notes
Bad conduct (also known as BCD)
Unfavorable
For either of these, the discharge comes as a result of a court-martial and often after a period of confinement. The veteran would have been part of a case involving desertion, security violations, embezzlement, use of violence, murder, sexual assault, etc.A person with a BDC or dishonorable discharge will not be able to obtain a security clearance.
Dishonorable
Unfavorable
My advice: if you are going to set criteria for a veteran preference, consider making it a “favorable” discharge (which encompasses both honorable and general under honorable conditions) rather than only honorable.
If you are thinking, “Well, I won’t ask the question directly, but I will, as part of background screening, verify the type of discharge”, know that you do have to obtain the veteran’s permission to verify the nature of the discharge. This is not something you would do indiscriminately, just as you would not conduct extensive financial background checks on someone who is not being considered for a job that has significant financial responsibilities. A veteran’s military service record is not considered public information, so you must have a valid reason to ask for it and you must have the veteran’s permission to obtain information from it.
If you are going to ask about the characterization of service, I would indicate on whatever form (electronic or paper) you are currently using to ask for permission to conduct background screening that one of the screening elements will be whether the applicant has an honorable discharge (or favorable discharge) from the US Military.
If your company uses a 3rd party vendor to conduct its employee background screening, confirm that they offer military service record verification. Many screening companies will confirm whether someone has served in the military, but verifying the characterization of service is a different process, which involves asking to see a veteran’s DD-214 (“Certificate of Release or Discharge from Active Duty”). Presuming your vendor does offer this type of verification, what you want them to confirm is “does this applicant have an ‘honorable/favorable’ discharge” (depending on the criteria you set)? This should be a YES or NO answer – the less you know about the specific type of discharge, the better.
If you conduct your background screening in house, your screeners need to know how to read a DD-214. I have written a paper that describes HOW to read a DD-214, what to look for, what to ignore and which copy of the DD-214 to ask for to obtain the info you seek. Click here to request a copy of “How to Read a DD-214”. Know that neither an employer nor a background screening company can obtain a copy of the veteran’s DD-214 without the veteran’s written permission.
I hardly ever have time to blog twice in one week, but this one just can’t wait! Buried deep on page 106 of a 111 pageRegulatory Agenda (thank God for CTL F), the Department of Labor has actually put a written mark on the wall as to when its Office of Federal Contracts Compliance Programs (OFCCP) plans to publish its much anticipated revision to the affirmative action provisions of the Vietnam Era Veteran’s Readjustment Assistance Act of 1974. The notice of proposed rulemaking can be found in a document entitled “Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Protected Veterans”. Federal contractors have been waiting and grinding their teeth since July of 2011 when the public comment period on the proposed changes ended. If you are new to recruiting veterans, you can get caught up as to what the proposed changes are by reading some earlier blogs posted here. Just click on the tag for “OFCCP”.
The last 18 months or so have been no picnic for the OFCCP field agents who have been constantly harangued by contractors in public forums where veteran recruiting topics are discussed.
There has been much doom and gloom hovering over Washington as the deadline for the “fiscal cliff” neared and our leaders fought over tax revenue and deductions. One thing that Congress was able to accomplish with the tax extender bill passed on Jan 1st is that the work opportunity tax credits (WOTC) for hiring veterans were provisioned to be extended an additional year (through December 31, 2013). President Obama has said he will sign this measure. This is good news for employers who have a focus on recruiting military veterans.
Sometimes I get an employer who says “Oh, we aren’t hiring the veteran just to get the tax credit, so I am not interested in this info.” One the one hand: good – you shouldn’t hire someone just because you get a tax credit. You hire them because they have skills you need and they will improve your company through their work effort. However, if Human Resources truly wants to be seen as business partner to the organization, it should not ignore the opportunity to show how strategic hiring efforts can improve the company’s bottom line by saving it money while still bringing in great talent.
I have clients who make a real effort to hire from the various WOTC categories, and they can demonstrate that they have saved their company $1,000,000 in taxes over the course of a year. Using straight line math and the minimum credit of $2,400, that is just 417 WOTC-qualified hires in a year. You could save the organization the same amount with just 105 hires if they all happened to be veterans with disabilities who have been unemployed for at least 6 months ($9,600 WOTC credit). I guarantee your CFO will sit up and pay attention if you start throwing out tax savings like that. And, you can use your plan for tax credit savings to justify your military recruiting efforts and budgets! Tell your leadership “I saved the company $1,000,000 in taxes last year through my strategic efforts to recruit talented veterans, many of whom qualify for the WOTC. So, this year I am requesting a military recruiting budget of $XXX,XXX and a staff of XX to help me grow this program.”
Do I have your attention now? Good! So, if you are new to using WOTC to hire veterans, let’s recap:
When the President signed the Vow to Hire Heroes Act back in November 2011 there weretwo new veteran categories added to the WOTC. Essentially, if an employer hired a veteran who had been unemployed for at least 4 weeks there was a new tax credit for hiring him/her. Plus, if the veteran had a disability AND had been unemployed for at least 6 months, the tax credit for hiring him/her doubled.
Click on the link below to see a simple chart that breaks down all the work opportunity tax credits for hiring veterans
These new veteran categories of WOTC had additional unique features that had not been available previously:
There is no time limit associated to when the veteran left the service. Previous versions of veteran-related WOTC’s stipulated that the veteran had to have been separated/retired from the service within the last 5 years in order to qualify. This is not a stipulation for this latest version, so if you are considering hiring a veteran who left the service 10+ years ago and who has recently been unemployed more than 4 weeks, you can receive a tax credit for the hire.
Qualified tax exempt (i.e., 501 ( c ) ) organizations may now claim a WOTC by hiring veterans. This eligibility does not apply to hires made from the other WOTC categories, only the veteran categories. So, qualified tax-exempt organizations – STEP UP! Take advantage of this while you can. Instructions on how to do this are included at the end of the blog.
There is no limit to the number of qualified veterans you can hire and claim the credit. So, hire 1, 10 or 100! The IRS allows a for-profit company to carry the credit back 1 year or forward 20 years, so this could be a particularly attractive option for businesses who may want to time the use of these tax credits to periods of unusually high revenue. For qualified tax-exempt organizations the credit is limited to the amount of employer social security tax owed on wages paid to all employees for the period in which the credit is claimed.
So what is the process to claim the tax credit? Depending on how you found the veteran applicant there are a total of two forms that require completion in order to attain certification.
If you found the veteran through your state workforce agency (SWA), you will need to complete the employer’s portion of the:
Conditional Certification, Work Opportunity Tax Credit, ETA Form 9062, and the
If you found the veteran on a commercial job board or at a military job fair, or if he or she applied directly to your company, you will need to complete the employer’s portion of the:
If you found the veteran through your SWA, his or her veterans’ status may already be conditionally certified by the SWA. Either the SWA or the applicant should provide you with a copy of the Conditional Certification, Work Opportunity Tax Credit, ETA Form 9062. All you need to do is complete the employer portion of the form, which asks for:
Your company name,
The position/job title the applicant is being hired to fill,
The employment start date, and
The starting wage.
Both the Form 9062 and the Form 8850 must be sent back to the SWA no later than 28 days after the applicant starts work. If all information can be verified, you will receive a WOTC Employer Certification Form for that veteran.
If you found the veteran on a commercial job board or at a military job fair, or if he or she applied directly to your company, you can still request certification of his or her status by completing the Individual Characteristics Form (ICF) Work Opportunity Tax Credit Form 9061, collecting a copy of the required documentation (listed on the form) from the veteran, and providing it and the Form 8850 to your SWA for verification.
With the Form 9061, you must first determine if the applicant is willing to provide the required information. Prospective employees are not required to provide information of this sort to an employer – their participation must be voluntary. A simple way to do this is to make this a routine document that is presented to all applicants.
If your company accepts paper applications, attach a cover sheet with an invitation to self identify and state that status disclosure is completely voluntary and does not adversely affect hiring decisions.
If all of your applications go through an online Applicant Tracking System (ATS), depending on your ATS vendor, you have easy flexibility to add check boxes that ask for this information as part of the application process.
If the veteran self identified at the point of application, and you are now prepared to offer the job, add a step to your hiring process that requires the veteran to complete blocks 6-8 and 12-19 of Form 9061. As with the earlier situation, both the Form 9061 and the Form 8850 must be sent back to the SWA no later than 28 days after the applicant starts work.
If all information can be verified, you will receive a WOTC Employer Certification Form for each veteran hired. Those certification forms serve as documented proof that will back up the claim you make on the IRS Form 5884 when your company files its taxes.
There are some military placement companies and military job boards already collecting this information as a service to the employer. If you are considering using a placement company and/or a job board as part of your military hiring strategy you should inquire if it collects this information for you.
There are also 3rd party vendors who will handle all of this paperwork (for all WOTC categories, not just the veteran ones) on your behalf in exchange for a percentage of the credit as a fee-for-service. This can be a helpful option, particularly for large, nation-wide employers.
INSTRUCTIONS FOR QUALIFIED TAX-EXEMPT ORGANIZATIONS:
The IRS updated its website in August 2012 to include information on how for-profits and qualified tax-exempt organizations claim the credit. Bottom line: the process to obtain the Conditional Certification, Work Opportunity Tax Credit, ETA Form 9062 is the same whether you are a for-profit company or a qualified tax-exempt organization. How you claim the credit differs for qualified tax-exempt organizations.After the required certification is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C , Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. This is a new IRS form that was created specifically for qualified tax-exempt orgs to take the credit.
The amount you can claim also differs slightly from the for-profit credits (see chart link above). The IRS has a great WOTC FAQ section for qualified tax exempt organizations.
So, what do you think? Will the extended tax credits incentivize you to recruit veterans? Take the poll below and view the results of other readers:
I’ve written in previous blogs that employers and HR professionals in the manufacturing and cyber security industries should incorporate transitioning military veterans as part of workforce planning. Now I am prodding the mechanical and automotive industry to do the same.
USA Today recently published an article entitled “Serious Shortage of Skilled Auto Mechanics Looming” in which it described the dual problem facing this industry: master mechanics are nearing retirement age and young people are not pursuing training in the automotive trades.
The demand for skilled mechanics is expected to increase 17% between 2010 and 2020. Today’s technicians need to know more than how to turn a wrench and swap out parts. With hybrids, electric cars and advanced clean diesel engines growing in popularity and most new cars having complex electronics and computer-controlled systems installed, you have to have an aptitude for technology as well.
Once again, I think drawing from the pool of transitioning military for these types of jobs could be an excellent way to develop a pipeline of talent. Each military service has all types of mechanics and technicians who have been extensively trained and can troubleshoot and repair vehicles, trucks, tanks, missile systems, complicated electronics, security devices, engines, and marine and aviation equipment.
At a workshop I did recently the mother of an enlisted soldier shared a story about her son’s transition from the military. He had been a tank system technician, and returned home seeking to find a job as a mechanic. When he stopped in to his local automotive repair shop to inquire if jobs were available, the owner started laughing when the soldier described his military experience. He took the young man by the shoulder and pointed to the maintenance bays and staging area. “Do you see any tanks out there, son? Well, just as soon as I get one, I’ll give you a call.”
What I really want civilians to understand about the military is that we not only have skills that the military has taught us, but we also have an aptitude to learn quickly. The reason that young man became a tank mechanic is not because his daddy taught him how to repair tanks under a shade tree in his back yard when he was a young boy. The Army offered him the opportunity to learn tank repair because the results of his Armed Services Vocational Aptitude Battery (ASVAB) revealed that he has a high aptitude for mechanical maintenance and general technical work. He was likely offered several career options as a repair technician for an array of the Army’s inventory of vehicles, systems and equipment – regardless of what he chose, the military would have trained him to perform the work.
In this case, the military taught him how to perform maintenance on the suspension, steering, hydraulic, auxiliary power, fire extinguisher/suppression and gas particulate systems of a tank. So, yes, a Toyota Prius is not built the same as a M1 Abrams tank, but with some fast-track classroom and on-the-job training, I guarantee that military member could learn how to troubleshoot and repair a Prius in a shorter amount of time than it would take to train the average civilian off the street. This is what I mean when I say “military veterans are trainable“.
Money is available to companies that desire to develop on-the-job training programs for veterans. You can take advantage of your state’s Workforce Investment Act funding for job training, or you can structure the program in such a way that it is approved for the service member to use his/her GI Bill benefit to pay your company to be trained to take a position.
If you have questions on how to find money to create OJT programs, or any question on how to recruit or retain veterans, I encourage you to attend an upcoming “Ask the Military Recruiting Expert” session. It is free and is offered twice a month, via web seminar.
When I talk to companies about developing military recruitment and retention programs they are often surprised when I ask if veteran-owned small businesses (VOSB) and service-disabled veteran-owned small businesses (SDVOSB) are included in their supplier diversity programs.
This can be a differentiator when it comes to marketing your company to prospective military applicants. I advise my clients to promote the fact that their company actively seeks to do business with VOSB’s as a way to attract veterans to their workforce.
In recent years, the Census Bureau has begun collecting data on veteran-owned businesses. In 2007 veterans owned 2.4 million non-farm U.S. businesses and accounted for 9% of all non-farm businesses in the United States.
32.5% of VOSB’s operate in the professional, scientific, and technical services industries (NAICS 54) and the construction industry (NAICS 23).
41.1 % are in wholesale trade (NAICS 42) and retail trade (NAICS 44-45)
The bonus for companies that are focused primarily on minority and women-owned businesses is that many veterans also qualify under one or more of those demographic categories as well.
The most common reason I hear as to why VOSB’s and SDVOSB’s are not part of the supplier diversity program is because employers don’t know how to verify that a business is, in fact, what it claims to be. Minority-owned businesses and women-owned businesses have certifying bodies (for instance, the WBENC for woman-owned businesses) that will audit the company and obtain verifiable proof that the company is majority owned by a woman or a minority. So, supplier diversity specialists know to look for those certifications.
So, how can a company confirm veteran status or service-disabled veteran status? The most direct way is through the Center for Veterans Enterprise (CVE), a part of the Department of Veterans Affairs. The CVE certifies VOSBs and SDVOSBs. The veteran-owned companies listed within their database provide every type of product and service you can imagine, and have gone through the certification process in order to be able to do business with the Federal Government. However, just because they are focused on pursuing government work doesn’t mean they wouldn’t be happy to do business with your company as well.
Two additional ways to find VOSB’s/SDVOSB’s, some of which may not be registered with the CVE because they are not focused on selling to the government, are:
The National Veteran Owned Business Association (NAVOBA) has a “Buy Veteran” website, which lets you search by keyword and location for a particular type of business. More than 47,000 VOSB’s are listed in that database.
The annual National Veteran Small Business Conference and Expo. The 2012 conference will be held in Detroit, MI on June 26-29. More than 5,000 people attended/exhibited at the 2011 conference and 6,000 are expected for this year’s event. On average, about fifty-seven percent of exhibitors are SDVOSB’s and 16% are VOSB’s. The other 27% are made up of Federal government agencies and corporations. In addition to the big defense contracting firms you might expect to see exhibiting, corporations like Merck, UPS and Johnson and Johnson also set up booths.
Really large corporations should also encourage their 1st tier suppliers to both hire military and contract with VOSB’s, much like the federal government does with its prime contractors. VOSB’s generally don’t have to be told to hire more military – oftentimes the majority of their employees are veterans.
Supplier diversity professionals can utilize the knowledge of their company’s current veteran-employees to help them with this task. If your company has a veteran affinity/networking/resource group (ERG), tap them to assist with locating and vetting VOSB databases and expos.
For more info on how to use your Veteran ERG’s I invite you to register for an upcoming live webinar entitled “Veteran ERGs: Deriving Real Business Value from a Veteran Employee Resource Group”. I am hosting live 90-minute sessions on Feb 6th and Feb 28th. The session will be recorded as a computer-based training module in the Spring and available for purchase 24/7 after that.
However, beyond the amount, there are three other more significant things you need to know:
The credits expire at the end of this year! Employers may take the credit for any qualified veterans hired between November 22, 2011 and December 31, 2012.
There is no time limit associated to when the veteran left the service. Previous versions of veteran-related WOTC’s stipulated that the veteran had to have been separated/retired from the service within the last 5 years in order to qualify. This is not a stipulation for this latest version, so if you are considering hiring a veteran who left the service 10+ years ago and who has been unemployed more than 4 weeks, you can receive a tax credit for the hire.
Qualified tax exempt (i.e., 501 ( c ) ) organizations may now claim a WOTC by hiring veterans. This eligibility does not apply to hires made from the other WOTC categories, only the veteran categories. So, non-profits – STEP UP! Take advantage of this while you can.
There is no limit to the number of qualified veterans you can hire and claim the credit. So, hire 1, 10 or 100! The IRS allows a company to carry the credit back 1 year or forward 20 years, so this could be a particularly attractive option for small businesses and non-profits.
So what is the process to claim the tax credit? Depending on how you found the veteran applicant there are a total of two forms that require completion in order to attain certification.
If you found the veteran through your state workforce agency (SWA), you will need to complete the employer’s portion of the:
Conditional Certification, Work Opportunity Tax Credit, ETA Form 9062, and the
If you found the veteran on a commercial job board or at a military job fair, or if he or she applied directly to your company, you will need to complete the employer’s portion of the:
If you found the veteran through your SWA, his or her veterans’ status may already be conditionally certified by the SWA. Either the SWA or the applicant should provide you with a copy of the Conditional Certification, Work Opportunity Tax Credit, ETA Form 9062. All you need to do is complete the employer portion of the form, which asks for:
Your company name,
The position/job title the applicant is being hired to fill,
The employment start date, and
The starting wage.
Both the Form 9062 and the Form 8850 must be sent back to the SWA no later than 28 days after the applicant starts work. If all information can be verified, you will receive a WOTC Employer Certification Form for that veteran.
If you found the veteran on a commercial job board or at a military job fair, or if he or she applied directly to your company, you can still request certification of his or her status by completing the Individual Characteristics Form (ICF) Work Opportunity Tax Credit Form 9061, collecting a copy of the required documentation (listed on the form) from the veteran, and providing it and the Form 8850 to your SWA for verification.
With the Form 9061, you must first determine if the applicant is willing to provide the required information. Prospective employees are not required to provide information of this sort to an employer – their participation must be voluntary. A simple way to do this is to make this a routine document that is presented to all applicants.
If your company accepts paper applications, attach a cover sheet with an invitation to self identify and state that status disclosure is completely voluntary and does not adversely affect hiring decisions.
If all of your applications go through an online Applicant Tracking System (ATS), depending on your ATS vendor, you have easy flexibility to add check boxes that ask for this information as part of the application process.
If the veteran self identified at the point of application, and you are now prepared to offer the job, add a step to your hiring process that requires the veteran to complete blocks 6-8 and 12-19 of Form 9061. As with the earlier situation, both the Form 9061 and the Form 8850 must be sent back to the SWA no later than 28 days after the applicant starts work.
If all information can be verified, you will receive a WOTC Employer Certification Form for each veteran hired. Those certification forms serve as documented proof that will back up the claim you make on the IRS Form 5884 when your company files its taxes.
There are some military placement companies and military job boards already collecting this information as a service to the employer. If you are considering using a placement company and/or a job board as part of your military hiring strategy you should inquire if it collects this information for you.
There are also 3rd party vendors who will handle all of this paperwork (for all WOTC categories, not just the veteran ones) on your behalf in exchange for a percentage of the credit as a fee-for-service. This can be a helpful option, particularly for large, nation-wide employers.
The state workforce agencies have been given interim instructions on the Forms 9061 and 9058, as those forms have not yet been updated to reflect the new veteran categories. So, continue to use the current forms and write at the top of the form the new veteran category to which you are applying for credit.
UPDATE (Jan 3, 2011):
I’ve received a number of inquiries from non-profits on HOW they are to take the credit, as most do not file income taxes. For everyone’s benefit, here is what I have determined (and thanks to Ken Brice from Employer Incentives for directing me to the IRS’s page on this question):
Non-profits, charities, and other tax-exempt organizations are generally required to file Form 990 or Form 990-EZ with the Internal Revenue Service each year to maintain their tax-exempt status. Form 990 is an “information return” and is required to be filed under the provisions of Internal Revenue Code Section 6033.
So for those orgs, the IRS says (http://www.irs.gov/formspubs/article/0,,id=177948,00.html): “This new law provides an expanded work opportunity tax credit to businesses that hire eligible unemployed veterans and for the first time also makes part of the credit available to tax-exempt organizations. Businesses claim the credit as part of the general business credit and tax-exempt organizations claim it against their payroll tax liability. The credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2013. More information will be posted soon.”
Non-profits that engage in for-profit business enterprises may be subject to corporate income taxes on its unrelated business income. To be considered unrelated business income, the income must be generated by a business that is “regularly” carried on and that is “unrelated” to the exempt function of the non-profit. Unrelated business income is defined and explained in the Definitions section of the Instructions for Form 990-T.
For example, one of my non-profit clients provides job training and employment services to persons with disabilities. It generates business income to fund its mission through the manufacture of frames and battery terminal lugs and the services of custom framing, chair caning, and the sorting of commingled recyclables. So, as it has more than $1,000 in gross income from an unrelated business, it must file Form 990-T. Non-profits are that not otherwise required to file Form 990 (such as religious organizations) are required to file Form 990-T if they have unrelated business income.
On Form 990-T the WOTC is claimed on Part 4, Line 40c. The org must also attach Form 3800 (General Business Credit), where, in Part III Line 4b you claim the total amount of credit as determined from the Forms 5884 (Work Opportunity Credit) you submitted to your SWA. The WOTC Employer Certification Forms you’ve received for each qualified hire are your documentation that you retain as proof that you have earned the credit.
A Washington Post opinion piece from November argued that tax credits don’t incentivize employers to hire. Now that you know a lot more about the new tax credits for hiring veterans, please take a moment to answer the poll below (all responses are anonymous) and let me know what you think.
Several news items this week got me to thinking about the importance of having goals in order to accomplish results. A goal is a desired result and a SMART goal is one that is Specific, Measurable, Achievable, Realistic and Timely. In other words, SMART goals require more thought and detail, and are more likely to be accomplished than ones that are vague.
As human resource practitioners, we may be asked to develop diversity recruitment strategies and/or affirmative action plans in order to increase employment opportunities for various diverse demographic categories, such as women, minorities, veterans or people with disabilities. However, it is one thing to say “we want to improve our recruitment and retention of military veterans” (a vague goal) and quite another to put SMART goals in place for how that desired outcome will be achieved. At the end of the blog I’ll give some examples of SMART goals to replace the vague one mentioned above.
The first goal-related news item that caught my eye was a recent Washington Post article highlighting the significant increase in military veterans hired to work in the federal government. Veterans, including those with disabilities, represent 28.5% of all people hired to work in the federal government in the last fiscal year (FY 2011: Oct 2010 – Sep 2011), which is an increase of 2.9% over the previous fiscal year (FY 2010). How does that translate into real numbers? In FY 2010, the number of veterans hired was 72, 133, so FY 2011 should be a bit more than 74,000 hired.
The Office of Personnel Management (OPM) issues an annual report on Employment Of Veterans in the Federal Executive Branch which details by agency the total number of employees and the total number of veterans. So how does that break out by agency? As you might expect, the Departments of Defense, Veterans Affairs, Homeland Security, and Transportation rank the highest in terms of overall numbers of veterans in their workforces. However, there are still a number of agencies that employ a comparatively smaller number of service members. At Agency for International Development, National Science Foundation, Environmental Protection Agency and Departments of Education and Health and Human Services, veterans make up less than 9% of total hires. OPM is working with those agencies to help them set goals for the next few years
The second goal-related story this week is that the Office of Federal Contracts Compliance Programs (OFCCP) recently issued a Notice for Proposed Rule Making (NPRM) that proposes introducing a utilization goal for individuals with disabilities to assist in measuring the effectiveness of contractors’ affirmative action efforts. It proposes a national hiring goal of 7% or a range of 4-10% in lieu of adopting a national goal.
Lastly, JP Morgan Chase has a video that has been getting a lot of airplay lately. It is designed to direct attention to its “100,000 Jobs Mission”, which is a consortium of companies that have banded together with a goal of collectively hiring 100,000 service members by 2020. Even if the consortium stayed at its current size of 17 companies, straight line math has each company hiring about 589 veterans every year for 10 years, which, for the larger companies on that list, represents less than 10% of their total hires for a given year.
In all three items, HR professionals are going to have to determine how they are going to enable their organization to achieve that goal. With the cooperation and engagement of their hiring managers, they are going to have to determine the tactics that will help them find and attract and, in some cases, “grow” the skills (through on the job training or other partnerships with higher education institutions) they require from military members in order to help them enter the workforce at an appropriate level.
So, what are some SMART goals that could be set in place for 2012? Let’s create a scenario where your desired outcome (goal) is to hire 50 veterans by the end of 2012, a number which represents 5% of all hires you plan to make in 2012. Here is a planning process I have used to help me focus on setting SMART goals.
If I want to hire 50 veterans, I am going to have to interview 250 qualified veterans. In order to find 250 qualified veterans to interview, I am going to have to get my opportunities in front of at least 2,500 veterans (NOTE: your own planning ratios may vary, based on your level of experience with finding and interviewing military members and the kinds of roles you are trying to fill). What steps do I need to take to achieve those numbers?
Are you looking for specific occupations (such as engineers or truck drivers) or intangible skills (such as organizational skills, project management, or supervisory experience)?
Are those skill sets found in the enlisted grades, warrant officer grades or officer grades?
What grade range (i.e., E-5 through E-7) should you target to find military members who have the right experience, qualifications and salary expectations for the role you are proposing?
A clear explanation of the military profile you seek
An opportunity for the military member to connect with your team to ask questions
A schedule of physical or virtual “open house” events veterans can attend to meet with recruiters and hiring managers to ask questions and/or interview
So, once you have gone through the process above, you can set some SMART goals in order to reach 2,500 military members in order to ultimately find 50 to hire. Here are a few examples:
In 2012 we are going to:
Conduct 4 physical open house events in 4 cities and 6 virtual open house events. We will use all available free local resources to help us market these events to veterans. We will provide the free resources with a clear description of the roles and the military profile we seek to fill those roles so they can assist us with finding appropriate people to attend our events. Our goal is to attract a total of 100 veterans to each event and make at least 3 hires from each event. (1,000 veterans reached to obtain 30 veterans hired)
Attend 4 physical military career fairs and 2 virtual military career fairs. The vendors of those fairs will market the event to a broad military audience. In order to encourage more of the types of veterans we seek to hire to participate in these events, beginning 3 weeks in advance of an event we will use our Facebook, LinkedIn and Twitter resources to broadcast our attendance at these events and provide a link to our customized military information page so that the military person can see the profiles we seek for our open roles. Our goal is to attract a total of 50 veterans to our booth and make at least 2 hires from each event. (300 veterans reached to obtain 12 veterans hired)
We will provide a phone number (or general email address) on our designated information page that veterans can use to contact our recruiting team with questions. Each recruiter involved in this effort will have a designated day (or block of hours, or whatever time frame makes sense for the size of the recruiting team) that he/she will check for messages and respond to inquiries. Our goal is to ideally have a 10 minute conversation with the veteran to answer questions and guide them to appropriate roles. If a phone call is not possible, then we will provide a detailed email reply within 5 business days. (Note: get interns or co-op students to assist you with this effort – find some student veterans to assist you since they already “speak military”!) Our goal is to have interaction (phone call or email exchange) with 5 veterans a day, 50 weeks a year, and make at least 8 hires from this effort. (1,250 veterans reached to obtain 8 veterans hired)
You’ll notice these goals and approaches are very “high touch” – it’s because the high touch approach works very well when recruiting military. If you think those ideas sound too complicated or time intensive to do, have you calculated the time and money you’ve spent attending random career fairs and the number of hires you have to show for it? You have to be much more strategic in your efforts if you want to succeed at hiring military.
Join me in January when I kick off the New Year by focusing on two of my clients that are using the same approaches above with significantly higher success rates than I illustrate. I will write a blog on each company and have a follow-on webinar where a company representative will be available to answer your questions.
Student veterans have been on my mind quite a bit over the last few weeks. This is partially because I am moderating an employer panel at the Student Veterans of America (SVA) National Conference in Las Vegas this week, and I’ve been thinking about what questions I’d like to pose to the employers so that the audience hears the information that will be critical for them to connect successfully with companies. But it is also partially because I still see a disconnect between many companies campus recruiting efforts and military recruiting efforts.
The disconnect is that the two efforts are seen as completely separate endeavors. A significant number of veterans are taking advantage of the Post 9/11 G.I. Bill and heading to college to start or complete a bachelor’s degree or pursue an advanced degree. Who is reaching out to them with your company’s internship and co-op opportunities? It is not enough to just show up on campus and hope that the student veterans attend your event. You need to make an effort to reach out to them and let them know you are coming, that you want to speak with student veterans, and the kinds of opportunities you’ll be able to discuss.
You have to remember that the typical student veteran is a non-traditional student – older, likely married, and with a minimum of 4 solid years of work experience. They are not the 17-18 year old with a helicopter parent whispering in their ear every day and nagging them to look for internships and summer jobs. Many have told me that they did not know what an internship was before someone sat them down and explained how it could be used to line up a job after graduation.
Employers looking to hire military can provide a service and create a recruiting link by establishing a relationship with student veterans groups. The SVA has over 500 chapters across the US, and are adding dozens more every year. Open up a dialog with them by making it known that you are a company that values and supports military service. Be clear that you want to hire former service members, and that you embrace the opportunity to promote your company brand to this constituency. Then do just that – come to campus for career day, or sit on a career panel, or host an “open house” just for the veterans.
Another thing to keep in mind: if your list of “preferred colleges” does not have an SVA chapter, you have to change your tactics. You have to “fish” where the “fish” are, not in the pond you prefer to frequent. For example, DeVry University has well over 10,000 veterans and military spouses across 90+ campuses and online pursuing degrees – have you connected with them?
A few ideas for you to try:
If you are within a 3 hour drive of the campus, invite the veterans to your location for a special “welcome veterans” event. Provide a tour of your company. Arrange for a meet-and-greet with some of your veteran-employees who can share their experience with transitioning to civilian employment and who can explain how their military skills are being utilized in a corporate job.
If your office is not near a campus, you can still send a contingent of veteran employees and a recruiter to campus for a special afternoon/evening, perhaps at a local restaurant or a catered event at a local hotel.
An organization I follow, the Greater Philadelphia Veterans Network (GPVN) is running a “Take a Vet to Work Day” program for its members. You could replicate that idea in your area, or participate in GPVA’s if you are in the Philadelphia area.
Earlier this year, the Department of Labor’s Office of Federal Contracts Compliance Programs (OFCCP) announced a proposal to revise regulations implementing the affirmative action provisions of the Vietnam Era Veteran’s Readjustment Assistance Act of 1974. The notice of proposed rulemaking can be found in a document entitled “Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Protected Veterans”. As you might imagine, there was considerable wailing and gnashing of teeth regarding the proposed changes, most centered on how the changes will significantly add to the already considerable administrative burden companies undertake to demonstrate compliance. If you’d like to read the comments submitted by various associations, employers, law firms and concerned individuals, go to www.Regulations.gov and type in key word “RIN 1250-AA00” (without quotes).
I want to take a moment and wail and gnash my teeth, too. However, you may be surprised to know that my frustration is not with the OFCCP – it is with the affirmative action / equal opportunity compliance (AA/EO) professionals and the corporate legal folks.
Let’s address the AA/EO folks first. The reason the OFCCP makes you jump through hoops regarding the number of qualified veterans applying to and being hired by your company is because you are receiving tax payer dollars, in the form of a government contract; as such, the government wants to ensure your company provides affirmative action and equal opportunity in its hiring and retention practices. Veterans and persons with disabilities are just two of the groups of workers on which OFCCP focuses.
The Vietnam Era Veteran’s Readjustment Assistance Act of 1974 states: “Any contract in the amount of $25,000 (amended to $100,00 in 2003) or more entered into by any department or agency for the procurement of personal property and non-personal services (including construction) for the United States, shall contain a provision requiring that the party contracting with the United States shall take affirmative action to employ and advance in employment qualified special disabled veterans, veterans of the Vietnam era and any other veterans who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized.”
So, the Act directs a contractor to take “affirmative action to employ”. The Act also requires an employer to submit an annual report (the VETS-100/A) on the number of veterans (as described above) employed and the number of new veterans hired in the last report period. The vast majority of military members who have served since 9/11 will fall into the third category, and a good percentage will fall into the first category, so you might think that this would be a particularly easy group of people to find and hire. And yet, we continue to have a significant unemployment rate for post-9/11 veterans.
(Note: if you would like a list of the campaign badges and service medals that qualify a service member for category #3 and a paper on how to confirm this information on a DD-214 / Transcript of Military Service, please email me.)
My frustration is that AA/EO professionals seem to be singularly focused on the administrative aspect of this requirement. Their primary concern is proving positions were listed in the state employment database, which is an action considered to be the bare minimum step to take towards affirmative action. The AA/EO pro’s seem to be far less interested in taking any other steps toward “affirmative action to employ”. This drives me nuts, as producing an audit trail that proves the bare minimum effort to be compliant was done is not the same thing as taking “affirmative action to employ”.
I participate in several OFCCP-related groups on LinkedIn , and when I see AA/EO folks posting questions about audits and tracking and outreach to veterans, I chime in with proven tactics for both finding and attracting military service members. My suggestions go well beyond the “post and pray” method of trying to find a targeted demographic. These tactics, if executed, have been proven to result in a greater number of veterans applying and being hired. And, I almost always get a virtual slap down for my suggestions and a “we’re just interested in knowing where to post the jobs” retort.
Look, I know AA/EO pros are not recruiters/sourcers. It is not your job to go out and actually execute the tactics I am suggesting. However – you are supposed to be a critical component of the HR team, so if you come across info that will help your team take “affirmative action to employ” , I would think you would be interested in hearing it and sharing it with those who will execute the ideas.
And, since AA/EO pro’s are the one’s getting beaten about the head and shoulders during the OFCCP audit, I would think, as a matter of pure self interest, you would want the team to collectively do things will allow you to show real hiring progress and not just administrative compliance. Wouldn’t that make an audit a more pleasant experience?
My second frustration is with the corporate legal folks. They have a job to protect the organization from lawsuits on many fronts, including hiring. My frustration comes from the zealousness with which some of them dismiss ideas that are proven to attract military veterans. “Hold an open house? Can’t show favoritism!” “Ask the veteran to self-identify when applying? Smacks of a hiring preference!” Many techniques that would definitely be taking “affirmative action to employ” veterans, and tactics that are proven to work, are summarily dismissed under the premise of protecting the company.
No wonder human resource professionals are frustrated! They are being told to improve recruitment of military members, there are solid business reasons for hiring veterans, and yet they are being hamstringed in their efforts to connect with this population.
I’d like to hear from AA/EO pro’s on this. How do you view your role in the affirmative action process? What is holding you back from moving beyond the administrative work? Please add your comments below.