Show Me the Money

December 14, 2010 By Leave a Comment

Do you remember that line from Jerry McGuire? Cuba Gooding’s character was motivating Tom Cruise to get him more money for playing football with his current team. Cuba had Tom Cruise screaming into the phone “SHOW ME THE MONEY” among other things.

Photoxpress 4738949 e1292364070150 320x130 Show Me the Money

Have you heard this from your employees? Well, maybe not yet but more than likely they are whispering “show me the money” when you aren’t looking.  Many businesses have had wage freezes for the last two years, however during this time living expenses have increased – in essence – your employees are earning less since their paycheck doesn’t buy as much as it used to.

It’s not your fault – the economy is down and possibly your business is as well. However, when business turns around and you have returned to previous sales level (or even better – surpasses them) – your employees won’t be whispering any more. In fact they will start screaming “SHOW ME THE MONEY”.

Don’t be caught off guard, prepare yourself now and put a plan in place. Here are a few steps to keep you on the right track:

  • Determine your pay strategy (should line up with your market strategy)  - do you want to be below market, at market or above market levels
  • Decide if you want to compensate for the wage freezes or not
  • Decide when you will implement
  • Can you also reinstate some benefits?

Determine your pay strategy: This is also a good opportunity to determine your overall compensation strategy if you have not done so in the past.  As mentioned before your pay strategy needs to match your market strategy. If your marketing strategy is to be the high-end provider of a product or service – your compensation plan should also be above market.  If you are the low-cost alternative – your compensation plan will also be cost effective. There will be a disconnect with your employees if you offer a premier product/service but pay your employees below market average.

To Compensate or Not for the wage freeze: This is a tough question only you can answer.  You will need to take into consideration how many years of wage freeze there is to compensate for, what was the cost of living increase for those years, and can you afford it. To tell the truth most companies do not make up for it and start giving increases again based when they are able to.

Decide when you will implement: If you are planning your increase ahead of time before you are actually able to give the increase – you need to determine your triggering events. In other words what needs to happen in the business in order for you to be able to give increases.  The events can range from a 10% increase in sales, a 5% increase in EBITDA or a decrease of 10% in expenses. These events will be specific to your business and once you have determined what they are – share with your employees. They will be more than happy to help you reach the goal in order to get an increase!

Reinstate benefits:  In some companies, benefits were also a casualty of these economic times. Are there any benefits you can either reinstate totally or at least partially? Maybe you can provide an extra day off with pay as a “Thank You” for sticking with us this year.

Want further assistance in determining a compensation plan? Contact us at info@focushr.biz

Filed Under: Authentic Leadership, Benefits, Employee Satisfaction, Healthcare, Leadership, Policies & Procedures Tagged With: , , , ,

7 HR basics for Small Business

October 12, 2010 By Leave a Comment

This post could easily be titled “Employees, Paperwork, Leadership…oh my!”. I’m sure it would be safe to say that when you decided to start your own business and venture into the world of an entrepreneur - there are many things you anticipated. You anticipated the long hours, tight budgets, having to do your own marketing, and making sales calls.  You also dreamed of how it would be to have flexibility, be the master of your schedule and reaping the rewards of your hard work. You have seen your company grow and now you find yourself hiring others to assist in the work load. Here is the good news/bad news.  The good news is that you have developed from a one person operation.

The bad news, these extra people have laws, expectations and dreams of their own that you need to manage.

To assist you on this path and to make the transition from entrepreneur to boss, here are 7 human resource basics to keep you on the road to success.

Legalities.  Having employees means having to follow both state and federal laws, the laws you have to follow vary by the number of employees you have and the state you live in.  You can visit the Department of Labor to learn which federal laws apply to you and through this site you can visit your state’s site. Regardless of size or state – you will have to do the following:

  • All employees must complete tax forms (general rule of thumb – if you are taking money out of someone’s paycheck you will need their signature on a piece of paper)
  • All employees must complete an I9 form (this is the one where an employee declares they are legally able to work in the USA). Go here to get the form and instructions.
  • I9′s must be kept separate from the employee file.

Benefits. Most people don’t realize this but a company does NOT have to provide benefits (yes, this will change for some in 2014 with healthcare reform). You must pay people at least minimum wage but benefits are currently not a requirement. However and this is big HOWEVER – if you do provide benefits there are rules on how they are provided and what has to be done when someone leaves.  For example: if you provide healthcare insurance you will have to abide by COBRA when someone leaves.  States also vary on this so check out your states Department of Labor site for details.

Recruitment. This is how you are going to find people to work for you. You must have a clear plan on the requirements you need, how you will determine if candidates possess the requirements, how you will interview and what you will offer.  For many business owners this can be a difficult task as there is a tendency to hire strictly based on personality or skill instead of a balance between the two.  Spend extra time on the process and don’t rush to hire the first person who walks in the door.

Listen. Having people work for you is a great sense of accomplishment and can be time consuming as well.  If you did your recruitment correctly the next step is to listen.  Listen to their concerns, ideas, thoughts, etc. You don’t have to agree with them but listening and giving your attention will go a long way in building a strong working relationship.

Open Communication. Let those who are around you know what you are up to. Share your plans, ideas, concerns, etc. as much as you are comfortable. Tell them about the new client you are going to see, discuss the new product/service you want to implement, and ask for their feedback. This will allow you to start building your credibility as a leader.

Coach. Your employees aren’t going to think the same way you do or view your business the same way. You need to coach each one on how they fit into the organization, on their position (training) and how to improve. Push the limits, set high expectations, and help them get there.

Departures. Some people will decide to leave or you will ask them to leave.  Treat each person with dignity as they depart and they will become a positive spokesperson for your business.  You never know who they are talking to – future employees, future clients or possibly future investors.

Don’t let your dreams get clouded because you aren’t following the basics. Having employees will help you grow your business your business beyond your expectations – enjoy it!

This is the first in a series of articles addressing the HR basics for small business. Need assistance in getting this done, email me at andrea@focushr.biz

Filed Under: Authentic Leadership, Benefits, Employee Communication, Employee Satisfaction, Healthcare, Hiring/Firing, Leadership Tagged With: , , , , , , ,

Healthcare Reform 2010

March 23, 2010 By 3 Comments

It’s all over the news and possibly in the courts soon.  Healthcare Reform will be signed into law today.  What does this mean for small business and everyday people?  Here’s a quick summary of what is in the bill.  However there is a Compromise Plan that was passed by the House and needs to be debated in the Senate which can change what is in the current bill.

Here’s a breakdown of the current bill as it stands:

  • If you have less than 50 employees, you will NOT be required to provide healthcare coverage
  • If you have less than 25 employees and meet certain conditions, you may be eligible for a tax credit for providing coverage
  • There will be ban on lifetime limits on coverage
  • By 2014 states will be required to set up Small Business Health Option Programs (SHOP)  - this will allow small employers to pool together to get better rates
  • Dependant children can be coverage until the age of 26 (some states already have this)
  • If an individual couldn’t get coverage due to a pre-existing condition – they may be eligible for subsidized high-risk coverage
  • Starting in 2013 – families earning over $250,000 will pay an additional medicare tax of 3.8%
  • Medicaid to be offered to those earning up to 133% of the poverty level
  • In 2014 individuals may be fined (earning over certain income levels) for not having coverage
  • In 2018 – tax on so-called “Cadillac” plans
  • In 2020 – the “hole” in Medicare prescription coverage will be fixed
  • Children cannot be denied coverage for pre-existing conditions

There is still a lot of political maneuvering going on so these items may change.  Stay tuned for more details.

What are your thoughts – did it go far enough? Too far? Just right?

Filed Under: Benefits, Healthcare Tagged With: , , ,

Obama and Healthcare

September 15, 2009 By 5 Comments

This is a topic that has caused an interesting and devisive debate.  I personally haven’t met anyone that it is in the middle, they are either for or against.  Let me rephase that – I haven’t come across anyone that is against providing healthcare to everyone.  The debate is how that healthcare is provided.

I understand healthcare, how it works and what it means to business owners and employees.  In listening to President Obama’s speech to a joint session of Congress.  I thought it would be a good idea to provide an unbiased (of politics, commentary, or my own thoughts) summary of what the President is proposing, I will leave it up to you to decide how you feel about the plan based on what was proposed during the speech.  Here it is by topic.

Goal:

  • Provide security and stability to those who have insurance
  • Provide insurance to those who don’t have it
  • Slowdown the increasing costs of  healthcare 

Plan:

  • If you have health insurance (through employer, medicare, medicaide, VA, etc) – no change
  • Illegal for insurance companies to deny coverage due to a pre-existing condition
  • Illegal for insurance companies to drop coverage or reduce benefits once diagnosed with an illness
  • No cap on yearly or lifetime coverage
  • Limit on out-of-pocket expenses one person will pay
  • Required to cover routine check-ups and preventative care at no additional costs

If you don’t have insurance:

  • If you lose or change jobs will be able to get coverage
  • If you start your own business will be able to get coverage
  • Create insurance exchange where one can shop for insurance at a competative prices (available in 4 years)
  • If can not afford insurance through exchange, can be eligible for tax credits based on need
  • Until Exchange is available – government to offer low cost coverage if you become ill
  • Individuals will be required to carry basic health insurance (similiar to auto insurance)
  • Businesses will have to offer health care or help employees pay for theirs
  • Hardship waivers will be available for individuals and some small businesses

Rumors heard in the media that are untrue:

  • Death panels
  • Would insure illegal immigrants
  • Federal dollars would fund abortion
  • Government will take over heatlh insurance industry

The Public Option:

  • An option to be included in the Insurance Exchange
  • To be managed by a non-profit
  • Would be self-sufficient (premiums would pay for the program)
  • Estimated only 5% of population would take this

To hear or read the entire speech check out the speech on http://www.whitehouse.gov or click here –>http://bit.ly/PAKRZ

Would love to hear your feedback and thoughts – let the debate begin icon smile Obama and Healthcare

Filed Under: Benefits, Healthcare Tagged With: , , ,