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5 Reasons Traditional Authentication Methods Need to Be Replaced

Posted: 15 Jan 2020 09:00 AM PST

More and more websites are saturating the World Wide Web and requesting users to create an account and sign in to use their services. 

You might even have your own website that requires just that! 

By asking users to log in, you'll be able to track their usage more effectively, which will allow you to devise a more accurate re-marketing strategy that is both relevant and appropriately targeted to them.

The sign-up process should be simple, involving the collection of basic information such as their email, name, phone number, and address. Users will then be asked to create a password that adheres to the website's password policy, followed by the authentication of their account to prevent bots from spamming the system. After that, it's time for them to log in for the first time and access your services.

Depending on your website, you probably require one of the following traditional authentication methods for a successful log-in:

Password-based authentication

This is the most basic and convenient method for users to log in. They simply need to provide the password they created when they set up an account to gain access to their information. The secrecy of the password is the only thing that protects the data from unauthorized access.

To reduce the risk of fraud, many businesses now have password policies in place. Users are required to choose a password that has a certain length of characters, letters and numbers, upper and lower case, special characters, and no words from the dictionary. The longer and more complex the password, the more secure the account will be.

Knowledge-based authentication (KBA)

This type of authentication comes in two forms, static and dynamic. Static KBAs are your typical security questions such as, "What is your mother's maiden name?" Users tend to pick questions with secret answers in order to protect their accounts from unauthorized access.

Dynamic KBA is a higher level of authentication for which the user has not provided answers. The questions are generated based on compiled data and could be something like, "What was the total amount of your most recent credit card purchase?"

Out-of-band authentication

This is a type of two-factor authentication (2FA) requiring users to provide a second set of identification credentials in addition to their username and password. This usually comes in the form of an access code sent to the accounts associated email or phone number. Some businesses opt to use a token system that uses a physical device made specifically for this purpose, and the user is given a "token" that generates an access code for the user to complete 2FA (not to be confused with Token-Based Authentication). Since this code can only be accessed through a separate communication channel or device, of which only the user has access, it is much harder for hackers to break into the account – they would have to have access to the user's email, phone or token device as well.

Token-based authentication

This type of authentication grants users a "token" after the user signs in on the client (browser or mobile device). Their credentials are sent to an Authorization Server which verifies them and generates an Access Token containing these credentials and a token expiry time. This allows users to access restricted resources from the Resource Server for a set period of time, rather than having to log in each time.

If your business is a financial institute, your framework must also adhere to various Anti-Money Laundering (AML) regulations and Know Your Customer (KYC) requirements. This protects your customers from identity theft, fraud, money laundering, and terrorist financing.

Why do these methods need to be replaced?

The internet is continually evolving and these traditional authentication methods don't provide the security they once did. While the above-mentioned authentication methods have served well to protect users from fraud, here are some flaws that pierce this net of security:

Convenience over complexity

Password-based authentication is only as effective as the password's complexity. The most secure passwords are obscure combinations of letters, numbers, and symbols, and are different for every account the user owns. However, most people prefer the convenience of remembering a single password over creating truly unique and complex passwords that are difficult to guess. As a result, it's extremely easy to gain access to multiple accounts once a hacker obtains one password – especially when there is no need for further identity verification.

Security depends on secrecy

The results from the LastPass Sharing Survey revealed that 95% of people share up to six passwords with others, even though they know the inherent risks. This increases the chances of user passwords getting into the wrong hands, regardless of if the user knows or not, rendering password-based authentication useless. The same principle applies to KBA (static is more vulnerable) – if users share their security answer, or if their security answer is a well-known fact, access to those accounts will be extremely easy.

If there's a will, there's a way

While an out-of-band 2FA is a great way to increase the security of user accounts, it isn't bullet-proof. Hackers could try to change the email or phone number associated with the account to receive the access code. Unfortunately, whether they're successful or not depends entirely on how strictly the customer service representative adheres to the identity verification protocols. Another issue is that people are logged in permanently on their phone for convenience. If they lose their phone, whoever picks it up will have access to all their accounts. Even for those that are logged out, they could easily get the access code sent directly to them to complete 2FA.

Can be easily compromised

Token-based authentication adds a layer of security since it relies on the user having a token generated with a secret crypto-algorithm (also known as the key) to access restricted resources. However, in most cases, only one key is used to generate these tokens, meaning if it is leaked to a hacker, he or she will easily have access to the entire database of resources.

Information overload

Regardless of which authentication method you use, it's a double-edged sword. A sudden surge of users is great for business, as it means the company is growing. However, as the user base grows, it also becomes difficult to manage everyone's credentials and detect security breaches as they happen. In other words, your database becomes a liability. It can also be costly and complex to maintain a server room as well as hire an expert to handle it.

Alternative authentication method: IDaaS

In order to keep your security up to par and protect your users from identity fraud, you should try using identity as a service (IDaaS). This is a cloud-based authentication infrastructure hosted by a third-party service provider that also manages all the user credentials. With IDaaS, companies can quickly register and authenticate new users and grant them single sign-in capabilities. This means that if your company offers multiple services, your users would only need one account to gain access to all of them – eliminating the need to remember multiple passwords.

Companies who opt to use IDaaS greatly benefit in the following ways:

  • Single sign-in is convenient for users
  • Multi-factor and biometric authentication enhances security to prevent identity fraud
  • Savings from minimal implementation costs
  • An efficient credential management system can handle a large volume of accounts

Just like the internet, IDaaS is also continually evolving to keep up with the security demands which are required to keep user information safe. Switching to an IDaaS provider will help your company future-proof its security solutions. Your company will also be viewed as more trustworthy as you've actively taken steps to protect your customers from potential harm.

The Smart Way to Consider a Candidate’s Social Media

Posted: 15 Jan 2020 08:00 AM PST

Imagine. You've built a great team and you couldn't be prouder. The team is knocking it out of the park and your business is growing. You create a new position, and after a few months of looking for someone to fill it, you find the perfect person. He has a rare combination of skill sets you weren't sure you could find. He's enthusiastic about the opportunity, and his background check and onboarding go smoothly. He dives in from the very first day.

However, after a few weeks, something feels off. You look forward to your weekly sync with your direct reports, but two in a row feel tense. You pull aside a leader who has been with you for a couple of years. What's going on? He's reluctant to talk about it because it feels like gossip, but he's heard that your new hire is sidestepping and undermining women he's supposed to work with closely. They are feeling frustrated, and one project in particular is taking way too long, as teams are not collaborating as they usually do.

You begin talking to other team members and your HR partner to try to understand what's going on. But on Monday morning, another employee comes to you with news. Feeling vaguely unsettled about her new colleague, she idly Googled him over the weekend. She was not at all prepared for what she found: ugly misogynistic and homophobic posts.

You feel sick. How did this happen? How did you hire someone so entirely opposite of everything you stand for, and the culture you've built? What can you do?

However, you also realize you've dodged a bullet; this could have been much worse. This was the person you were grooming to take on some important client relationships – and eventually become a face of your business for the media. A guy like this poisons corporate culture. The noticeable malaise your team has been feeling could have spiraled into months, or even years, of dysfunction.

Naturally, the thought occurs: why didn't you do a simple Google search yourself? Clearly, you would have seen warning signals. Yet, you vaguely remember reading that making hiring decisions based on social media can be illegal, so you've never gone there. What could you have done? [Looking for help with a background check? Check out our reviews and best picks of background check services.]

What you need to know about social screening

Well, honestly, it's a good thing you didn't do a maverick social media check yourself. That is a landmine for legal issues. And in a recent survey Sterling sponsored with HR.com, we learned that just over half (52%) of the HR professionals who responded believe that this area is only going to be more litigated in the future. "Protected class" information – including information pertaining to a person's race, religion, sexual orientation, national origin, age and disability – are illegal to use in making a hiring decision. It's information you want to avoid online. Moreover, whatever information you are looking at, it's nearly impossible for even the most well-intentioned of us to remain fully neutral; we introduce bias and inconsistency when we try to do such a search ourselves.

At the same time, it can be irresponsible not to search. According to the Pew Research Center, 72% of Americans use social media, and that number spikes to 90% for ages 18-29. And while most people are using social media for very different reasons, hate speech has been flourishing online. As Jonathan A. Greenblatt, CEO of the Anti-Defamation League, told The New York Times, "Social media companies have... enabled extremists to move their message from the margins to the mainstream.... In the past, they couldn't find audiences for their poison. Now, with a click or a post or a tweet, they can spread their ideas with a velocity we've never seen before."

There is a new solution to this hiring dilemma. Social media screening can be done legally and ethically, and it's rapidly getting smarter and easier to use.

What is social media screening?

AI-based social media screening analyzes publicly available online content – including social media, message boards, blogs, news articles, and comment sections – for red flags identified by the employer, such as sexism, bigotry, or violence. The technology powers a search that is far faster – and more comprehensive – than a human search. Thousands of articles and posts can be reviewed and results provided in a matter of hours. Technology is better equipped to uncover those objectionable comments made 100 posts ago that even a very patient human is likely to miss. Perhaps most importantly, AI-powered social media screening can help to ensure that the search operates within consistent boundaries.

What to consider in a social media screening solution

Of course, not all social media screening solutions are created equal, and you need to find one you can trust. Here are the most important features of a responsible social media screening program.

Compliance. Look for a solution that is compliant with the FCRA, EEOC and GDPR. As I mentioned, this is an area where you need to know what you are doing or you can quickly find yourself in hot water. Be sure to obtain a candidate's consent to the search and make sure your provider has a candidate dispute process if there is an issue.

Customization. You'll want to be able to define what matters to your company and the role. Setting these guardrails for your search also make it more consistent and straightforward. You only have decisions to make if a candidate's online behavior triggers one of the red flags you have established. Wendy Halson, vice president of customer success at Fama, an AI-based social media and web screening solution, tells us, "When implementing a new social media screening program, it should closely reflect your organization's mission and values. By aligning your screening criteria with your documented code of conduct and anti-discrimination policies, you are upholding the culture that you've worked hard to create."

Comprehensiveness of the search. The quality of the technology matters here. You want a smart AI-powered search that covers all types of publicly available content and has the tools in place for accurate identification. (You do not want to be pulling records for the wrong candidate.)

Integration. Today you can find social media screening solutions that integrate into your ATS, HRIS and other tools to make the process more streamlined. This makes it easy to enroll your workforce for ongoing screening, which is being adopted by an increasing number of businesses in place of a one-time, pre-employment check. If you have monitoring running, you will be alerted if an issue arises in an employee's online behavior – and have the opportunity to address the issue before teammates, clients and the press see it.

Why it matters

Look, you can do scrappy (and likely shoddy) searches yourself. Or you can skip this step altogether. But understand you may be missing relevant information. Fama has found that 12 to 15% of the time, social media search results uncover information that affect an employment decision. Increasingly AI-based social media screening with a trusted provider is going to be a no-brainer solution. And, honestly, you owe it to your team to avoid toxic hires that can so quickly torpedo the culture you've worked so hard to build.

How to Increase Customer Loyalty With a Membership Site

Posted: 15 Jan 2020 08:00 AM PST

Bringing in new customers to your business costs up to 25 times more than keeping the customers you have happy. It's essential for any business to focus on ways to persuade customers to work with them over the long-term.

You can retain your customers by nurturing customer loyalty. The goal of building customer loyalty is to not only have customers buy from you, but also to support your business in other ways. 

Loyal customers will help your business by buying from you often. They also trust your company and are willing to tell others about it. Customers who identify with your business values are more likely to support your brand. They'll follow you on social media, engage with your content, and share that content with their peers. Loyal customers will act as your brand advocates and build good news around your business. 

It's clear that building customer loyalty benefits your business and it's smart to foster it from day one. But how do you nurture customers into feeling invested in your brand?

A practical way to build loyalty is to set up a membership platform for your customers. A membership platform is an exclusive space where you can bring together content and customers.

Belonging to a membership site can create loyalty the same way being part of a group does. Think back to a time where you belonged to a group in your school, college, or community. Being part of a sports team, a club, or any other group kindles a feeling of loyalty. You're invested in your group and want to promote its interest while being involved in its activities.

Membership sites can create this same feeling by creating a space where customers can share content and experiences. It's a powerful way for a business to get customers invested in a brand. Let's take a deeper look into different ways you can leverage membership sites to foster customer loyalty. 

Build an online brand community

Brands like LEGO and Apple have thriving online brand communities. People discuss topics and share ideas, and even participate in shaping products. A brand community grows from customers sharing in the values of your business. Your products, services, and content also shape the building of a brand community.

An online brand community based on a membership site creates many benefits for a business.

  • It becomes a helpful resource base for product or domain information. You can develop your membership site into a hub for discussing industry information. 
  • An online community can give people a place to voice their ideas and share information. You'll create a space where your customers can be creative, which will foster loyalty
  • Customers can answer each others' questions and pose queries of their own. By sharing information and experiences people will interact with each other and the brand. When you have users giving each other helpful answers you free up time to work on problems that need real solutions
  • Online communities produce user-generated content. You can use such content for content marketing. User-generated content featured in ads, as testimonials, and on your site will build social proof.

Online communities create a sense of belonging to a group that's centered around your brand. It's a way to link people's identities to the values your business espouses. Your membership site can develop loyalty by enabling peer interactions and hosting content.

Offer access to content

Membership sites make it easier for you to leverage content and boost customer loyalty. People will value their membership with a company or a site that provides access to exclusive information. Content like industry reports, market projections, and even "how-to" content that's not available anywhere else can make your membership site attractive to customers.  

People are more willing to sign up and stay connected to your brand when they know they are getting valuable content. Such content can take different forms. You can start a blog that only members can access. It's a good idea to also offer content like videos, newsletters, and emails. Exclusive content can include promotions and offers for members. You can launch email campaigns that give your members information about discounts. Around 60% of consumers sign up to an email list just to access deals and promotions.  

You can also build an online course only for your customers. For example, if you have an SEO tool, then you can create an online course in SEO exclusively to train your customers. Your clients can learn to use your product better and will need less customer support for minor issues.

Use exclusive content to drive up engagement, traffic, and boost loyalty. 

Create exclusive experiences

Another way you can leverage your membership site to boost customer loyalty is to offer exclusive experiences from your site. You can showcase and promote events on a membership platform. Live events, webinars, product demonstrations are popular ways to engage with customers in a real way. 

You can set up an event registration form on your membership site for people to get information about upcoming events. You can augment your marketing by using a drip-email campaign to send automated emails with relevant information.

Creating events and email campaigns will help build a relationship with customers. By offering an exclusive event, you generate excitement and make your brand more memorable. 

Disney Movie Insider is a great example of a company offering exclusive experiences to its members. The website gives its insiders a chance to win a private screening of upcoming movies; it also has other rewards that are only for its members. 

You can also answer questions and provide supporting material on a membership site platform. People will be more interested in being a member on your site to access experiences and get information.  

Start a loyalty program

A loyalty program is a form of membership where customers are rewarded for the purchases they make. You can give users points, badges and other awards that customers can redeem.

Sephora is an example of a company that gives its customers rewards for buying from its stores. Customers accumulate points that they can redeem for products or a discount.

Loyalty programs give customers a definite benefit for buying from a brand. They are motivated to make more frequent purchases and won't find it beneficial to move to your competition.

Build loyalty with membership sites

To build customer loyalty, you need to build a connection with your audience. Membership sites are platforms that let you build customer loyalty with content and peer interactions. They have features that enable you to protect your content and build forums. You can easily set up your own membership site with a plugin if you have a WordPress site.

Membership sites also give you insights into your members' activities which will help you improve your processes. You can automate repetitive user activities such as managing new subscriptions or cancellations. Automation lets you provide consistently good quality services that customers can rely on.  

Membership sites are a way of showing customers that you're willing to extra steps to engage with them. Providing your audience with content and giving them a space to speak their minds shows that you value their opinions. You'll be able to drive traffic, boost conversions, and make money online for your business. Now that you've looked at the benefits, go ahead and build your own membership site to grow a loyal customer base. 

Why You Should Consider Investing in a Co-Working Space

Posted: 15 Jan 2020 07:00 AM PST

Countless businesses are struggling under the weight of hefty rent payments, with many startup owners and budding entrepreneurs refusing to foray into the commercial arena precisely because they worry they can't afford a place to work. Over the past few years, however, co-working spaces have become a common and effective response to these concerns, to such an extent that many business owners who never imagined sharing office space are now seriously mulling the prospect of investing in one.

Here's why you should consider investing in a co-working space, why they produce such great returns, and how co-working as an industry is likely to change as time goes on.

Co-working enables you to cut costs

By far the most important reason that co-working arrangements have taken off in the past few years is that they enable you to radically cut the costs associated with doing business, especially when it comes to rent. Rather than paying for an expensive office, you're sharing a large office with multiple other companies, startups, or freelancers who split the bill with you, thereby allowing you to rent a downtown location you may otherwise never be able to afford. It's not just rent payments, either, but also other costs that are reduced by co-working; shared internet services, kitchens, coffee makers, and furniture can all go a long way towards saving you money in the long run.

If you're renting a traditional office space, there's a good chance you're paying too much. As a matter of fact, one analysis found that startups, in particular, saw huge savings by relying on co-working arrangements, largely because the average real estate lease for a co-working setup is much more affordable than those of traditional offices. The overall effectiveness of co-working can depend on where you are, specifically, but most major metropolitan areas now have such steep rates of rent that co-working is fast becoming an attractive option wherever you roam.

It's not just the financial savings that make co-working spaces such an attractive investment option, either. There are plenty of reasons to believe that co-working is great because it bolsters the mental health and wellbeing of your average employee, too, which is particularly important for startups who need to concern themselves with overworking a stretched-thin workforce that could succumb to burnout. Some argue that the mental health benefits of co-working spaces are actually their greatest feature, though the extent to which you'll benefit from this arrangement depends upon the pre-existing healthcare and mental care options you offer your workforce.  

Outside of mentally stimulating your tired workforce, co-working spaces can also help your employees collaborate with other professionals whom they'd otherwise never come into contact with. For startups with a focus on creativity and the spontaneous conception of new, groundbreaking ideas, this is particularly important.

Co-working spaces enable your employees to thrive

The collaborative environment fostered by co-working arrangements permits your employees to thrive and grow to new heights while saving your money when it comes to rent. The Harvard Business Review recently took a deep dive into why co-working arrangements make people thrive so much, and what they found was relatively unsurprising – offering workers greater freedom and control over their lives, not to mention livelier working spaces that aren't as mundane or soul-crushing as traditional cubicles, can go a long way towards stimulating their creative faculties and helping them achieve more than ever before.

Co-working arrangements are a particularly solid investment for business owners who are trying to instill a sense of meaning in their workforce, largely because independent freelancers and corporate professionals alike noted that co-working spaces made them feel more accomplished and meaningful on a daily basis. Perhaps this is because so many other people are exposed to your hard work, giving you incentives to push yourself to new limits while rewarding you with the limelight whenever others notice your stellar results. The sense of community that's garnered by being a member of a co-working arrangement can't hurt, either, so startups that are trying to bolster team cohesion should consider investing in a shared working space to expedite the process.

Some cities are better than others when it comes to co-working, too, so certain companies may benefit more than others when it comes to moving to a shared location. Those in boisterous urban areas like New York City, London, or Hong Kong can benefit even more from the collaborative and free-spirited environments of co-working than their competitors in smaller cities, for instance, because the larger population of those cities permits a greater pool of talented workers with diverse skill sets. Co-working space in Hong Kong is blowing up right now precisely because it enables the people there to outcompete their nearby competitors through the power of collaboration and community.

Count the perks

Before picking out a co-working location to invest in, you should understand that counting the perks of membership is important. Some co-working arrangements offer much better amenities than others; free coffee may be common, for instance, but a fully-functional kitchen is a rare amenity that can radically bolster office morale. Comfortable furniture, high-speed internet, and similarly suitable conditions for a modern professional also can't be discounted, so don't shackle yourself to a co-working space that lacks basic features offered by others.

A well-designed work environment is a huge part of what makes talented employees want to work in the first place, so locating an investment opportunity that makes those who inhabit the office incredibly happy is highly recommended. You may be thinking about the savings you can garner from co-working more than anything else, but you really should be viewing it as a morale-bolstering and efficiency-boosting arrangement more than anything else. Before investing in a co-working space, don't be afraid to quiz the workers who currently call it home to solicit their opinions.

Finally, don't discount the perk of networking that most co-working spaces provide. Startups that are trying to expand their talent pools and individual investors interested in meeting savvy new professionals can benefit tremendously from co-working arrangements precisely because they put you into contact with so many diverse people from all walks of life. Two companies that manage radically different assets or function in entirely different industries may nevertheless build off of one another's expertise and share human capital whenever the need arises with the help of clever leadership.

Knowing how to properly network in a co-working space is essential, however, as it's a little more complicated than walking up to someone and introducing yourself. You and they are, after all, trying to get some work done.

Co-working will only grow larger

The final reason to invest in co-working arrangements now is that they're only set to grow in the near future. Co-working is fast becoming one of the most common office arrangements in most major cities around the world, and forward-thinking companies, in particular, are eagerly embracing this model. Those who are interested in real estate investments should thus realize that this is the way of the future, and it's worth getting in on it early before the market becomes flooded. Over time, we'll increasingly see businesses of all shapes and sizes flock to co-working arrangements, which will continuously prove themselves to be the future of work as we know it.

Should You Let Employees Choose Their Own Job Titles?

Posted: 15 Jan 2020 06:00 AM PST

  • Job titles are important because they have massive social implications. Some employees might accept a job that pays a little less but has a more impressive title.
  • Inflated job titles designed to reward loyal employees may become problematic when the business grows and it's time to bring staff on board who actually fit those titles.
  • Creative job titles are fun but may cause confusion in terms of seniority, and they may also make it more difficult for employees when applying for jobs at other companies.

Job titles are important, not just during the job search or recruitment process, but also for day-to-day business. The way jobs are titled impacts employee morale and inspires either a sense of responsibility and pride or feelings of inadequacy and lack of importance. However, it's a delicate balancing act. If you over-title your employees, it may result in overblown egos and poor viability in the broader job market, which isn't a good long-term play.

When it comes to selecting job titles, thinking through all of your options can help you make a strategic decision that elevates and supports the type of business you want to run.

Should you let employees choose their own job titles?

Allowing employees to choose their own job titles is a controversial practice, but some business owners feel it engenders a sense of autonomy and pride, and enhances company culture. Especially creative titles can also improve employee morale and promote team cohesion.

Before turning over job title creation to your employees, ask yourself these questions:

Do your employees want to choose their own job titles?

If you search around online, you'll see that quite a lot of people are overwhelmed by the task of choosing their own job titles. It might not be a selling point for employees to choose their job titles themselves, but rather an additional task, from the perspective of your employees. 

How will you help your employees choose job titles?

If you're going to allow employees to select their own job titles, consider providing them with some guidelines and support. It may be helpful to meet with your human resources representative, as well as department managers, for their input and concerns. Creating a guide, or at least outlining some basic do's and don'ts, may save you trouble down the line.

Downsides to letting employees choose their own job titles

Asking employees to select their own job titles can result in over-titling. That is, overblown titles when compared to the tasks performed. This happens chronically in small businesses, even those that don't let employees choose their job titles. Here's how it happens so you can avoid it:

A company has extremely limited staff starting out and can only offer limited salaries, so, naturally, there's lots of turnover. Gradually, a few loyal employees take on more responsibilities, and the owners feel indebted to them. To show them that they are appreciated, loyal employees are given raises and/or new titles frequently, often more frequently than they would in a more established company. Suddenly, someone who helps manage an Excel spreadsheet or two is the CFO, the person who manages employee scheduling is the COO, and the most tech-savvy person in the room becomes the CTO by default. The problem with this is that CFO, COO, and CTO are real positions that require (at a minimum) years of professional expertise, and, in many cases, specialized degrees or training; so in reality, the company doesn't have a CFO, COO, or CTO, but on paper (and in salaries), those positions are filled.

As the business grows, the owners are likely to realize they need a real CFO, COO, and CTO, and at that point, the situation is fraught; the business owner either has to hire more people to do the real C-suite work without the title (a hard sell), have them tag-team it with existing employees and share the title (which is likely to make the newer hire angry, since they will have far more expertise but be titled the same), or demote the longtime loyal employees.

Avoiding this trap is easy: Do not over-title your employees or allow them to over-title themselves. It doesn't help them or you in the long term – a "CFO" who has no real business or math acumen is never going to find a job as a CFO elsewhere, because they aren't really a CFO. It's better to give bonuses and other perks (flex time, additional days off, free gym membership) to loyal employees than to temporarily stroke their egos through overblown titles.

How creative should I be with employee job titles?

It depends on your business. Highly creative industries or those who interact with children are more likely to have creative job titles. For example, Disney character performers at theme parks are called "cast members," which is a little more appealing than "staff." Getting a little creative can be a good thing in a case like this, but it's important to think about the full picture. The potential downsides to creative job titles may include a less-clear business structure and hierarchy.

It's intuitive, for example, that a senior analyst is more experienced than a junior analyst, but the titles data guru and data wizard (while entertaining) are not clear in terms of seniority. An outside consultant or new hire will not inherently know which person is the more senior analyst and will find themselves in the uncomfortable position of asking. For a tiny company, this might not be problematic, but it's good to think about long-term implications.

If you want your business to eventually employ more people and grow, and possibly even expand to other locations or markets, simplicity may be more sustainable than creativity when it comes to job titles. Overly quirky job titles also cause problems for employees who apply for jobs at other companies; when there are stacks of resumes for a hiring manager to weed through for one job, it might not be advantageous to have a job title that requires ample explanation.

Why do job titles matter?

Job titles matter for a few reasons. First, employees care about what their job title is because it has massive social implications. When people ask, "What do you do?" they don't want to know about your hobbies, they want to know what your job is. Some employees may even be willing to choose a job that pays a little less but has a more impressive title over a job that pays a little more but has a less impressive title.  

Another reason job titles matter is for attracting the right talent. Most job hunters do their searching online via social media or job sites, and a job title can either attract them to your job post or ensure they never see it at all. Because of this, it is best to title your open jobs in the clearest, best-practice way possible.

Both over and under specificity can be problematic; for example, an experienced project manager may be unlikely to apply to a job titled simply "manager," because "manager" can mean many things in different industries. However, they may also be unlikely to apply to a job titled "AI software project management specialist," even if the job tasks described are relatively general project management skills. Thus, it's best to select job titles that are broadly understood, descriptive enough to be found, but not so specific that many qualified applicants will be too intimidated to apply.

How to choose job titles that match job responsibilities in your business

As with anything, it's smart to define a process for creating job titles in your business so there is a level of consistency that can be scaled with ease. If you are uncertain about how to title a job, it may be beneficial to start with the job description instead. Outlining the tasks that you expect the employee to perform (and the types of tools they will be required to use) first may give you greater clarity on the scope of the job.

Additionally, you can use your written job description to work backward toward a job title. By searching the types of job titles you think apply to your open position and comparing the descriptions posted to your own, you can inch closer to finding the ideal job title for the role you're trying to fill. It is best, however, to only compare your job description to those posted by established, reputable companies, not an unknown startup.

This method can also help you determine the amount of experience you want your new hire to have; you might begin the process thinking someone with about 10 years of experience and a master's degree is the ideal fit and end it convinced that a bachelor's and five years' work experience is ample. And, of course, this could add up to massive savings in terms of salary. 

Another option is to reach out to a recruiter and ask them for their advice. Recruiters deal with job descriptions and job posts every day, and they may be willing to consult with you to not only help you come up with job titles but also find qualified candidates.  

How to optimize job titles and job descriptions

There's no single route to creating job titles and job descriptions that succeed in attracting quality applicants, but regardless of how you go about the process, it's smart to keep notes. In addition to noting the way you chose the job title and wrote the job description, note the overall quality level of applicants to the job. If you're getting plenty of resumes with the right level of work experience and cover letters that reflect a solid understanding of the job and company culture, your method was effective and should be replicated for future job openings.

If you're not getting the volume or quality of job seekers you require to fill the position, you might need to revise your entire job posting, including the job title and description. Job boards use search technology to help job seekers find jobs that match their expertise, so using terms in the way they are broadly understood is key. This is part of why best-practice job titling is a good idea for small businesses that have less name recognition than bigger corporations that are using the same job boards. 

Another reason you might not be getting as many bites as you'd like could have to do with compensation and company culture. It's well documented that modern workers want excellent work-life balance in addition to competitive pay. Offering flexible schedules and the ability to work remotely might sweeten the deal for job seekers, even without increasing the pay.

Additionally, it's worth looking at the tone and general feel of your job posting. Posts that include lots of absolutes (words like "only," "never" and "must"), instructions in all caps, too many job responsibilities that span too many areas of expertise, typos and misspellings, and a generally negative tone turn off qualified job seekers. Remember, your post on job boards is meant to attract talent to your business, not admonish unqualified applicants or react against negative experiences with previous employees.

Bottom line

The main takeaways here are that it's better to be mainstream with job titles and choose them with care, be clear about tasks and job descriptions, and think outside the box when it comes to offering nonmonetary perks.

Keeping track of how you do things (and how effective or ineffective your methods are) will help you gradually hone a great system for creating job titles and job postings, and not only attract but retain the talent you need to propel your business to the next level.

Free Payroll Services: How Do They Compare to Paid Services?

Posted: 15 Jan 2020 05:00 AM PST

  • Free payroll apps offer tools that automatically calculate taxes, wage garnishments, and Social Security and benefit deductions, but you will need to enter data into the system yourself.
  • Paying for a payroll service gives you access to quality customer support. The service may also have nicer features, such as quality assurance checks.
  • Before choosing a payroll service, it's important to vet the company by asking for references and speaking with several of its clients.

Processing payroll is not a task for the faint of heart. It can be daunting, which is why some business owners outsource the work. But with so many free and paid services and apps to choose from, it's challenging to find the best payroll solution for your business. When choosing between a free payroll service and one you must pay for, keep in mind that an expensive option isn't necessarily better, but free alternatives might not be your best option either.

Understanding your business's needs and which payroll features you want are key to choosing the right service. However, if cost is king and you feel like you need a free payroll service, it's important to be aware of what features you'll get and which ones you'll miss out on. 

What is the difference between a payroll app and a payroll service?

Before you can decide whether free or paid payroll works for you, you must first understand the difference between a payroll service and payroll app. This is key to understanding what features they offer. It's easy to lump the two together, and there are some similarities, but each has its own advantages and disadvantages.

What is a payroll application?

A payroll application is just payroll software. It only automates certain payroll functions. For example, a payroll application typically allows you to set payment processing for employees, calculate wages, implement pay schedules, enter data, and file taxes, benefits and retirement information. It's online, so it has the obvious advantage of being accessible from anywhere that has an internet connection.

The accessibility and convenience of payroll apps gives employers and employees autonomy and flexibility. For instance, if an employee forgets to file a request for paid time off while they're at work, they can take care of it on the commute home by connecting to the system on their smartphone.

Payroll apps eliminate the need for a payroll company, processor or any service you use outside of your company to help process your company's financial information. This helps keep employee information secure and allows payroll errors to be handled immediately. 

However, this freedom can be a double-edged sword, because we're human and sometimes forget to fill out a form or enter the wrong numbers.  

What is a payroll service? 

On the other hand, payroll services are third-party companies that process payroll on your behalf. This takes the load of completing tedious payroll operations off of you, saving you time and giving you peace of mind that all the right forms are filled out and filed correctly. Payroll services manage all payroll processing and sometimes human resource functions as well. They also manage tax filings, which can be a pain to do yourself. 

One of the biggest differences between payroll software and services is the cost. Using a third-party company to manage your business's payroll is not often free and usually not cheap. Payroll apps are less expensive because the responsibility to enter data correctly falls on you, and they may not have all the same features as a payroll service.

 

Editor's note: Need a payroll service for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.

 

What are the benefits of free payroll services and apps?

The obvious advantage of free payroll services is that you don't have to spend any money. When looking for a free service, especially to manage information as sensitive as your company's financial data, you need to do your homework.

"Always ask for a reference and speak with three to five companies that are doing business with them," said Rick Fish, a payroll professional certified by the American Payroll Association. 

If you're just starting out, a free payroll service or app can be a good tool to use. Any assistance with payroll administration is helpful at this stage, freeing up time for you to focus on other tasks that help you grow your business. 

Free payroll services or apps have tools that automatically calculate taxes, wage garnishments, and Social Security and benefit deductions. This feature ensures that your company's information is analyzed accurately and that you're in compliance with new tax laws, helping you avoid violations and fines.

This service also offers the choice of direct deposit or paper checks, tax form generation, and access to electronic paystubs. Its integration options allow you to merge other accounting or business software with your payroll, which means you don't have to worry about keeping two separate systems in sync. 

What may be missing from free payroll services and apps?

While saving money is great, you should be prepared to sacrifice a few things when using a free payroll service, said Alexia Matak, sales and marketing director of Payroll Experts. A free option typically gives you just the basic features, so free payroll may not have everything you want or need for your company.

Customer support

One feature that free services don't often include is customer support.

"If you are fine with having more of a '1-800' call center atmosphere and you could forgo the local presence of a dedicated point of contact, then you'll be OK," Matak said.

Personable customer service may seem like something you can do without if you feel confident using the payroll app, but let's say you make a mistake or enter information incorrectly. If you aren't a paying customer, the service provider may not step in to help you resolve the issue as quickly as you would like.  

The use of free payroll services may compromise the accuracy and punctuality of your payroll tax filing as well. According to the Internal Revenue Service, 40% of small businesses are hit with fines that average $845 a year for incorrect payroll tax filings. Do not be a statistic! To avoid this problem, make sure you know who is responsible for filing your taxes. Matak encourages business owners to ask questions and be wary of payroll service companies that require you to enter your employees' wage information yourself. You should look for a company that handles that task for you.

Security

If you're interested in a free payroll service, you may also have to compromise on your security. While payroll companies that charge for their services invest money and resources into multiple servers and data security systems, free payroll software may be glitchy and may not be secure against data breaches and online hackers.

Also, while full-service systems typically back up the system for you automatically, a free payroll service may require you to do a bit more work to keep your data secure, so you may have to back it up yourself. Each pay period creates a cascade of payroll information that you are legally obligated to keep for a certain amount of time, and losing it to computer failure would be disastrous.

Quality assurance checks

Withholding errors are also common. Some systems aren't advanced or efficient enough to tell the difference between regular and additional voluntary withholding amounts. You can find these safeguards and system checks in paid services, with alerts and accuracy assurance consultants who review your information for errors. Glitches can lead to fines for under-withholding, and other costly blunders like overpaying and underpaying employees can also lead to angry staff. Reporting of paid time off and sick days may also be affected.

What are the benefits of paying for payroll services and apps?

A staple rule of buying something is that you get what you pay for. Payroll features vary, and you may discover options you didn't know you needed. Sometimes paying for services comes with the benefit of more features to choose from. This gives you the flexibility to customize the service, because the base plan isn't your only option. In some cases, this can even save you money. 

Payroll protection

Paying for higher security is a smart investment to protect your company's sensitive information. When you use payroll software, your information is accessible to anyone with access to the online platform. This can lead to theft or embezzlement. Paying for a software or service with encryption technology and routine data backups will save you headaches and likely keep your company from falling victim to fraud and financial harm. Some payroll companies don't charge for this service, while others make it very expensive. 

Streamlined service

In addition to heightened security, paying for services can provide access to functions that make your payroll processing experience even easier. Additional features include contract generation, contractor services, labor law compliance, access to health benefits, workers' compensation payments and bookkeeping services. Depending on your type of business, some of these services may be just what you need. 

Lower costs than for in-house HR

Depending on your company's size and complexity, a payroll processing service may replace your need to hire a human resource specialist. Instead of hiring another employee and paying their salary and benefits, you would simply pay the payroll company for its services, which is likely much less expensive.

What are the common issues of paying for payroll services and apps?

Just as you'd create a shopping list to keep you grounded in the grocery store, make one for the features you need and want for your payroll operations. Nothing is worse than realizing after several months of paying for a service that you were tricked into buying a bunch of bells and whistles you've never even used. 

Some payroll services bundle their features into preconfigured plans, so sometimes you end up paying for amenities you don't need. It's important to look through each payroll service's plans closely to see exactly what each one offers. All-inclusive deals can be cost-effective, but not when they include a lot of features that are not useful for your kind of business.

Some companies may charge you for pay frequency, which is how often you pay your employees. Other companies charge a monthly base fee regardless of how many times you pay your employees, but you should double-check this. 

Payroll service expenses can increase quickly if you're not careful. Some companies may charge an extra fee for tax assistance because they don't provide payroll tax operations off the bat, hitting you with an expensive surprise at the end of the year. 

Surprise fees for check signing, paper check printing, envelope stuffing, direct deposit and new employee reporting can also sneak into your bill. With any service, stepping outside of your set features can lead to additional costs. To avoid extra charges, think about features you may not know you are using, like payroll adjustment services. 

How do you look for a good payroll service or application?

Whether you are looking for a free or paid payroll service or application, dependability should be the first thing you look for. Here are a few additional factors you should consider to determine if your payroll service is a quality choice.

First, when picking a payroll service – whether it's free or paid – do your research. Ask questions, ask for references, check online reviews, and call the company's customer support line. Take advantage of a free trial if one is available so you can see if the payroll app is easy to use and has the features you need. 

Make sure the service or application you choose will pay your employees and payroll taxes on time. The last thing you want is to be fined because your software is glitchy or your payroll service missed a deadline. Find out if your payroll service has an online portal that you can check to see whether the data you entered is what is getting processed. It is also important to understand who is liable if a mistake is made and how long it takes to address an error. Usually, Matak said, the client is held responsible.

Ask the company whether annual fees change after a year, how often you'll get reports and if there is an extra fee for filing in more than one state. Also inquire about the availability and schedules of customer service representatives to make sure you can get help when you need it.
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