Posts Tagged ‘Small business’

The Journey from Zero to Sixty: Part Two

Thursday, December 3rd, 2015

In today’s video blog, CAI’s Vice President of Membership, Doug Blizzard, continues his discussion series about the journey small employers take, from hiring their first employee to their sixtieth. Doug has broken up the journey into four phases, and will discuss the second phase, from 11 to 19 employees, in today’s video.

While the first phase of development for small businesses is very CEO-centric, Doug explains that CEOs must learn to let go of some of their duties and delegate them to managers during this second phase. With a growing business comes growing responsibilities, and in order to thrive in this stage, Doug advises CEOs to

  • Departmentalize: Create organizational structure by bringing in managers who will report to the CEO and take some of the weight off of his or her shoulders
  • Reevaluate the staffing front: Let go of employees that you have outgrown. It is difficult to do but will ultimately open up new positions for employees who can help your business get to the next stage
  • Add regulations including the Civil Rights Act and the ADA

Tune in next time to see Doug tackle the third phase of the Journey from Zero to Sixty. As always, please contact our Advice & Resolution team at at 919-878-9222 or 336-668-7746 if you encounter any further challenges with the growth of your small business.

The Journey from Zero to Sixty: Part One

Thursday, November 5th, 2015

In today’s video blog, CAI’s Vice President of Membership, Doug Blizzard, begins his discussion about the journey small employers take, from hiring their first employee to their sixtieth. Doug starts by breaking the journey from zero to sixty into four phases, and will discuss the first phase, up to roughly 10 employees, in today’s video.

Doug explains that the key to this first phase is survival. For the CEO, this first phase will be the busiest time of their lives. From taking on hiring, firing, financing and managing, Doug succinctly described this phase as “chaotic.” In order to make it out of this most trying period, Doug suggests small businesses must:

  • Hire carefully: find employees who will fit the established culture and are willing to take on a range of responsibilities as the business grows
  • Solidify your work culture/policies: Create your first employee manual and other workplace documents as your near 10 employees
  • Lay out a clear plan for growth so that each employee understands his or her role and stake in the company’s ultimate success

Doug closes by reminding small businesses to stay abreast of state and federal regulations in order to protect themselves from harm. By following these steps of hiring the right people and laying out a clear plan for your company’s culture and future growth, Doug believes you will make it through the challenges of this first phase. But once you do, how will you handle the next challenge? Find out next time as Doug lets us in on the secrets to tackling Phase II.

10 HR Practices that Destroy Small Business Productivity – Over-Limiting Sick and PTO Policies

Tuesday, February 24th, 2015

In today’s blog, Doug Blizzard, CAI’s Vice President of Membership, shares his first practice that destroys productivity for small businesses. He highlights over-limiting sick and PTO policies in this video session.

There is no perfect solution for sick time according to Doug. However, poorly designed policies encourage staff members to come to work sick or risk losing pay. Sick employees are likely not at the top of their game and are more likely to commit costly mistakes and infect their coworkers.

Instead over-limiting sick and PTO time, Doug suggests some alternatives. He says as a leader, model the behavior you want. If you don’t want people to come in when they’re sick, you shouldn’t come in sick.

He also encourages offering unlimited sick leave, which empowers workers to use their judgment and also serves as a valuable recruiting tool. Additional suggestions he gives include allowing employees to carry over unused time off from year to year and creating a trained pool of Per Diem workers.

If you would like help thinking through your sick and PTO policies, please give a member of CAI’s Advice and Resolution team at 919-878-9222 or 336-668-7746.

 

Affordable Care Act

Wednesday, July 14th, 2010

You may have already heard about the so-called “tanning tax” that went into effect July 1, charging indoor UV parlors a 10 percent excise charge. That tax is part of several provisions that passed in the Affordable Care Act that became law in March, and some may apply to your company. They include:

The Small Business Health Care Tax Credit

Generally, employers that have fewer than 25 full-time equivalent (FTE) employees and pay wages averaging less than $50,000 per employee per year may qualify for this credit, targeted to help employers with low and moderate income workers afford to offer employees health insurance coverage. Because the eligibility formula is based in part on the number of FTEs, not the number of employees, employers that have more than 25 individual workers may also qualify if some of their workers are part-time.

For each year from now through 2013, the maximum credit is 35 percent of premiums paid by eligible small businesses and 25 percent of premiums paid by eligible tax-exempt organizations. Small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011.

To determine if your business qualifies for this credit:

1)     Count the total number of your employees (not counting owners or family members). If fewer than 25, then …

2)     Calculate the average annual wages of employees (again, not counting owners or family members). If the result is less than $50,000, and …

3)     You pay at least half of the insurance premiums for your employees at the single (employee-only) coverage rate, then you may be able to claim the credit.

Health Coverage for Employees’ Older Children

Health coverage for an employee’s children under 27 years of age is now generally tax-free to the employee. This expanded health care tax benefit applies to various workplace and retiree health plans. These changes allow employers with cafeteria plans (plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits) to permit employees to begin making pre-tax contributions to pay for this expanded benefit. This also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return.

Employees who have children who will not have reached age 27 by the end of 2010 are eligible for the new tax benefit, if the children are already covered under the employer’s plan or are added to the employer’s plan at any time. For this purpose, a child includes a son, daughter, stepchild, adopted child or eligible foster child.

Therapeutic Discovery Project Program

This program is designed to provide tax credits and grants to small firms that show significant potential to produce new and cost-saving therapies, support jobs and increase U.S. competitiveness. IRS guidance describes the process by which firms can apply to have their research projects certified as eligible for the credit or grant. Applications must be postmarked no later than July 21, 2010.

More information on the Affordable Care Act can be found at the IRS website at http://www.irs.gov/newsroom/article/0,,id=220809,00.html.

For more details on how the act affects your business, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: a.drian

HIRE Act Can Save Employers Money This Year

Friday, May 21st, 2010

On March 18, 2010, President Barack Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act, which includes new tax benefits directly related to hiring employees. This bill, aimed at providing hiring incentives to restore some jobs lost in the latest economic recession, offers business owners the following benefits:

  • Its payroll tax exemption provides employers with an exemption from the employer’s 6.2 percent share of Social Security tax on wages paid to qualifying employees (meaning previously unemployed workers), effective for wages paid from March 19, 2010 through Dec. 31, 2010.
  • For each qualified employee retained for at least 52 consecutive weeks, businesses will be eligible for a general business tax credit, referred to as the new hire retention credit, of 6.2 percent of wages paid to the qualified employee over the 52-week period, up to a maximum credit of $1,000.

New employees must be hired between Feb. 3, 2010 and Jan. 1, 2011 in order to qualify for the business tax credits. The newly-hired employee must have been unemployed 60 days prior to starting work or worked fewer than 40 hours for someone else during the 60-day period.

The IRS has released a new Form W-11 that will help employers claim the special payroll tax exemption. Employers must retain this form along with other payroll and income tax records. Most eligible employers then use Form 941, Employer’s Quarterly Federal Tax Return, to claim the payroll tax exemption for eligible new hires.

The new hire retention credit will be claimed on the employer’s 2011 income tax return.

Business owners will get the most out of the tax credits by hiring qualifying employees sooner rather than later, as the credits diminish over time and disappear completely by Jan. 1, 2011. The benefits do not apply to household employers or federal, state and local government employers, other than public colleges and universities.

More information on the HIRE ACT and its other business incentives, such as writing off investments in equipment, can be found at http://hireact.org/. For tax details, consult the IRS Q&A page.

Photo Source: alancleaver_2000

Recent Studies: Better Management Equals Better Financial Results

Monday, April 12th, 2010

Recent research studies from Cornell University and RainmakerThinking, Inc. point to direct links between how well organizations manage employees and their financial results.

The Cornell study of small businesses (average size of 53 employees) found that companies implementing effective employee management strategies experience 22.1% higher revenue growth, 23.3% higher profit growth and a 66.8% reduction in employee turnover compared to companies that don’t.  Workforce alignment practices in the areas of employee selection, people management, and motivation had the most impact on business results.

The most influential strategies include:

  1. Basing recruitment on organizational fit rather than on just job skills.
  2. Using self-management rather than a controlling management strategy, giving employees greater discretion in how they work.
  3. Creating a family-like environment/community to motivate and retain employees rather than focusing on just pay as a motivator.

The second study, by Bruce Tulgan and RainmakerThinking, Inc. , found that increased supervision and management was the number one most effective business strategy during the economic crisis of 2009.  The findings are based on a study of thousands of managers from organizations in the private, public and nonprofit sectors. You may recognize Bruce Tulgan – he was a keynote speaker at CAI’s 2008 HR Management Conference.

The research found that leaders and managers were likely to pursue at least one of three strategies to survive during 2009:

  1. Cost cutting;
  2. Innovations other than cost-cutting; and/or
  3. Increased supervision and management, including more one-on-one training, direction, and feedback from managers and/or more written tracking of individual performance.

Managers who pursued all three strategies reported having the strongest bottom line financial results in 2009.  The individual strategy that had the biggest impact on results was better management.

Photo Credit: nDevilTV