Tips on Lowering the Cost of Healthcare For Your Business

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It’s no secret that healthcare plans represent a dilemma for many small businesses: on one hand, offering comprehensive, all-inclusive health insurance is often crucial to attracting and retaining talented employees, but on the other, setting up and maintaining a healthcare plan is expensive, confusing and time consuming. 

According to a recent survey of 827 small businesses from Small Business for America’s Future, more businesses (55%) are worried about the costs of providing health insurance to their employees than they are about the dangers of COVID-19 (37%). The study also found that 76% of small business owners do not provide coverage because the cost is too high, while 53% of small business owners said they do offer insurance but are considering dropping it because of rising costs. 

Roughly 90% of small business owners said their health insurance costs increased over the past four years, with 40% responding that costs have risen by 10% or more a year. 

What to Do?

There are several ways to reduce the cost of health insurance while at the same time providing your full-time employees with the health coverage that they need for both themselves and their family members. 

#1 Shop Around for a New Plan

If your insurance provider keeps increasing costs at an unreasonable rate, then simply shop around with a health insurance broker, such as eHealth, for a new plan that offers modest increases in prices. If you have a preferred provider organization (PPO) plan, keep in mind that with the rise of value-based health care – new types of medical care systems that are meant to drive the cost of care down – those types of plans are a thing of the past. You may consider switching to types of plans that are generally cheaper, such as:

  • Exclusive provider organization (EPO) plan, which have a curated number of doctors but don’t require referrals;
  • Health Maintenance Organizations (HMOs), which restrict patients to a particular set of doctors, but often charge higher co-pays if the patient sees an out-of-network physician, and
  • A tiered plan – a plan that offers multiple tiers of physicians under the in-network umbrella. The first tier of doctors already have arrangements with the insurance carrier to offer financial discounts for services, and those savings are passed on to you and your employees.

#2 Offer a Plan With an FSA Option

Flexible spending accounts (FSAs) allow employees to set aside pre-tax dollars to spend on major medical events, such as surgery, teeth replacement, high-cost prescription drugs, or any other future medical need. Insurance plans that offer FSAs typically will offer you, the business owner, high annual deductibles but also a discount on premium contributions while still providing health insurance to your employees. 

#3 Look for Insurance Plans That Emphasize Value-Based Care

Value-based health care is the new trend in medicine today, and there are several ways insurance companies can offer it and pass the savings along to your business in the form of lower monthly costs. Look for plans that include:

  • Wellness plans rewards;
  • Telemedicine;
  • Free annual physicals and flu (and COVID-19) vaccination shots, and 
  • Prescription drug coverage that requires pharmacy benefit managers (PBMs) to automatically offer cheaper, generic versions of prescription drugs before selling patients the more expensive brand name ones, and
  • Dedicated service experts.

#4 Shifting Healthcare Costs to Employees When Applicable

While not ideal, you may want to choose a cheaper insurance plan that places a greater burden of healthcare costs on employees. Some plans can save you money by raising the deductibles and copayments for medical services, and raising the costs of using out-of-network doctors. Be warned, however, that employers must balance this approach with affordability requirements under the ACA.

As a benchmark: A 2020 Kaiser Family Foundation health benefits survey found that full-time employees paid on average 17% of the premiums for single coverage, and 27% of the cost for family coverage. The survey also showed that employers are shifting costs to employees through increased deductibles and out-of-network copays.

You also may want to add “working-spouse” provision to your health coverage plan. These provisions limit an employee’s spouse’s access to a plan when the spouse works for another employer that offers health insurance, thus saving you time and administrative costs.

#5 Educate Yourself and Your Employees

If you and your employees don’t have a solid grasp of the ins and outs of medical insurance, know that you’re not alone. The more your employees are educated on their health benefits, the better and lower-costing choices they will make. You may want to consult with a health insurance brokerage firm such as eHealth or your current insurance carrier to:

 

  • Provide training on open enrollment;
  • Give a simplified summary of benefits from your insurer, as well as explanations on deductibles and in-network doctors, and 
  • Provide access to a health insurance expert, either through your own HR manager (if you have one) or an agent from your insurance carrier.

Which Insurance Companies Are the Most Popular?

Whether you have two employees or 200, there are insurance companies that have a reputation for offering generally lower costs and specialize in providing coverage for small businesses. The most popular seven companies are:

  1. UnitedHealthcare, which has a reputation for providing one of the most extensive network of physicians and emphasizes the use of modern technology for virtual healthcare;
  2. Blue Cross Blue Shield, which operates through 36 local, independent doctor networks and is known for affordable tiered plans;
  3. Anthem, which has the largest network of doctors and takes an integrated approach to medical care through combined health plans, which connect patient data in order to more effectively manage care;
  4. Humana, which offers a diverse array of tiered plans and emphasizes preventative care, and wellness programs;
  5. Kaiser Permanente, the largest managed care organization in the U.S. and offers one of the widest array of plans specialized for small businesses;
  6. Health Care Services Corp., the largest customer-owned health insurance company in the nation that emphasizes affordable plans for small businesses through value-based care, and
  7. Oscar Health, a company that emphasizes cheaper insurance plans for small businesses by utilizing healthcare technology such as telehealth, electronic appointments and automatic wellness checks.  

While setting up a health insurance plan is time consuming and often painfully expensive, we all want to see everyone have access to the healthcare that they need, especially our employees. The good news is that employer health care costs have not risen as sharply as it has in recent years. There is an affordable, well-priced plan out there that is right for your business and employees, it just may take some time to find the right one, but in the end, it will be time well spent.  

Overcoming The Challenges of Hiring Office Workers

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The process of finding and hiring qualified, full-time employees has always created headaches for small businesses that operate out of an office, but as we near the end of the COVID-19 pandemic, those challenges have become amplified. 

As businesses try to recoup their staff to pre-pandemic levels, it’s no secret that there is a plethora of openings for office workers, yet the number of applicants available to fill those roles is far smaller. According to recent data from the Bureau of Labor Statistics, the seasonally adjusted number of job openings in the U.S. far outpaced the number of new hires and voluntary quit rate at the end of April 2021.

You Need Them More Than They Need You

To put it bluntly, the reality of the hiring landscape right now is that as a small business owner, you need employees more than they need you. No matter what type of small business you are, be it a small law, medical or accounting practice; a public relations/advertising agency or a marketing or an IT or web design firm, hiring the right candidates for an office has become more difficult than ever. 

Here are some tips on how to hire the right candidate:

Don’t Fight the New Normal

Frontline hourly wage workers obviously must show up to their place of employment, but for office workers, the pandemic has shown us the future: it is remote/hybrid work. Nobody, especially millennials, wants to shave off hours of their lives everyday by commuting to and from work on a packed train or through rush hour traffic anymore, only then to be confined to a cubicle for eight hours a day. The pandemic has taught us that most office jobs can be successfully performed from the comfort of one’s home. 

If you’re a small business owner and believe that people should be working in the office full time, then you need to seriously reconsider that view if you expect to attract and retain good talent. Even financial services giants such as UBS and Synchrony Financial recently announced that they are offering hybrid work situations. Plus, survey after survey has revealed that large swaths of workers would rather quit their jobs than return to the office. 

The times are-a-changin’, and you need to as well by offering a remote or hybrid work situation. 

Be Concise in Your Job Ads

If you placed a job ad and you find yourself having to sift through hundreds of resumes from candidates who aren’t quite qualified, then you probably were not exact enough in wording your ad. Whether you place the ad on Indeed, Glassdoor, ZipRecruiter or LinkedIn Jobs, be succinct in what you’re looking for, and try using “knock-out” statements or questions to narrow down the list of qualified candidates. Some easy knockout questions include:

  • Did you graduate college?
  • What are your salary expectations?
  • We are seeking someone with at least X years of relevant experience.
  • Are you willing to undergo a background and credit check?
  • Do you have experience using X software or apps?
  • Can you provide samples of your work that are relevant to this position?

Questions such as these in the job ads can significantly narrow down the list of qualified candidates.

Also, try to avoid asking classic-yet-pointless abstract interview questions such as “where do you see yourself in five years from now” or “why do you want to work here?” Obviously, the applicant is seeking a job to make a living. These questions contribute little to the process and will only waste your valuable time having to read the answers. 

Take Advantage of ATS

An applicant tracking system, or ATS, is software that allows you to manage the applicant hiring process and keep track of strong candidates. It can help you organize the interview process and send automated alerts to you on the statuses of candidates. They are not expensive, and are offered by companies such as HRCornerstone and Jobvite.

You can store data and export helpful reports using systems like an ATS, Google Analytics or recruitment marketing software. You don’t need to track every recruiting metric there is. 

Communicate With Candidates

Good candidates will carefully note how you treat them during the interview process when evaluating whether to accept your offer. In this regard, it is important to give them a timeline of when you’re going to get back to them and where they are in the process. When you do interview a good candidate via Zoom or in-person, give them a general idea of where they are in the process. For example, tell them that “I really enjoyed our conversation” or “I have some other candidates I have to interview, but you seem very well-suited for the job.”

Also, act fast with an offer when you do get a good candidate. Remember, if a candidate impresses you during an interview, then he/she is probably impressing other recruiters as well. 

Loosen the Purse Strings

Always keep in mind that you have very strong competition for employees, especially from larger companies. No matter how nice of a person you were during the interview, nothing talks like money. Research what the going rate is for the position you are offering (this can easily be done on Glassdoor or Indeed) and offer them more. Remember that the millennial generation values work/life balance above all else, so offer candidates flexible hours and additional paid time off days as a way of getting an edge on your competition.

Respond to Negative Reviews

You may not know it, but your small business may have bad employee reviews on Indeed, Glassdoor and other web-based job sites, which have become something like the Rotten Tomatoes of workplace reviews. 

You want your brand to come across as strong and your work environment appealing, so it’s important to find any bad reviews of your company (perhaps left by disgruntled former employees) and adequately respond to them. 

This may mean the difference between an acceptance or rejection of your offer. If you’re not reading your company’s employee reviews, you can bet that strong candidates are. 

The New Age of Social Responsibility and Accountability

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The modern era has cemented businesses and companies as one of the most powerful bodies with the ability to shape social change. When companies make a statement, people often notice. It is critical then that companies and businesses know how to harness good attention and meaningfully address bad attention. The COVID-19 pandemic further proved that businesses have a social responsibility to stay in tune with their local community. Navigating the new age of social responsibility can be daunting for small businesses and international corporations alike; it can sometimes feel like the rules are always changing. It is essential that modern businesses and companies not only strive to grow but to also make the world a better place. Companies that transcend that us-versus-them mentality between consumers and businesses are those who hold themselves accountable and are genuinely engaged with promoting social good.

Businesses who are outwardly socially responsible and active in their community have the most to gain, as Porter Novelli’s 2021 Business & Social Justice Study found that 62% of Americans believe that companies can help normalize social justice conversations through marketing and communications. The same study also found that six-in-ten Americans say it is no longer acceptable for companies to be silent on social justice issues, further, 49% take companies’ silence on social issues to mean they do not care. Not every business, however, has the budget or scope to hire consultants to manage a company’s social image. But, the good news is: there are several low-cost strategies business owners can take to better their community involvement, paint their brand in a better light, and show consumers that they take social responsibility seriously.

 

Familiarize Yourself with the Concept of “Stakeholders”

To meaningfully represent social responsibility, a business ought to work for the benefit of not just shareholders, but all stakeholders in a company. Stakeholders are all people who interact or are affected by a business. Customers, suppliers, employees, and surrounding community members are all considered stakeholders because the business, in some way, affects their lives. Recognizing the interconnected relationship between a business and its community is the basis of stakeholder theory and being aware of the several ways your business can affect the people around you is one of the most tangible ways to increase your social responsibility.

Companies that think in terms of stakeholders instead of “shareholders” tend to make decisions based on ethics and morals rather than investments and returns. Instead of creating value for stockholders or focusing solely on monetary returns, create value for your community. Even if a business doesn’t actually have shareholders, it is still possible to have your business geared toward a shareholder mentality. 

So, how do you determine the difference between a stakeholder and shareholder perspective? An example of stakeholder mindfulness could be establishing more expensive recycling measures knowing they will benefit the community while shareholder mindfulness could be choosing the least expensive waste removal system knowing it will increase immediate returns. Working for stakeholders means planning for long-term success beyond cash returns instead of short-term profits. Whether that means taking direct input from employees and customers, or actively making decisions to those peoples’ benefit, stakeholder theory is the basis of a socially responsible company.

Actively Engage in Local Events

Associate your brand with initiatives, events, and collectives that promote social good. Be present at local events. Being a sponsor for local events promoting modern social awareness is one of the most effective ways to associate your brand with those very concepts. Beyond sticking your brand’s logo on banners and T-shirts, be sure to have a physical presence at events either through enthusiastic team members or product displays. Event sponsorship is also one of the most effective ways to promote organic cross-pollination associating your brand with social good. Through either television and news media coverage or individuals on social media, people are likely to take notice of your brand in a way that does not feel manufactured.

One of the best forums for connecting event organizers to sponsors is Sponsor My Event which regularly features events across the United States ripe for associating your brand with modern social responsibility.

Become a Forerunner for Modern Ethical Labor Practices

No matter if a company is strictly domestic or deals internationally, those who adopt modern ethical labor practices show solidarity with their employees and community at large. As company labor practices become increasingly public, it is much less acceptable to remain silent. Like stakeholder theory, consider the wellbeing of your employees and even the origin of your supplies before your bottom line. 

Strategies to consider include restructuring your hiring process to avoid bias; there are a number of simple things you can do to reduce hiring bias, including tapping new sources for talent – this can mean posting job ads on job boards like Diversity.com and Career Contessa, or using skills assessments which can create fairer evaluation criteria. 

Another strategy is researching and being transparent about your suppliers and the origin of your materials. Especially in textiles and electronics, there are several international suppliers that use unethical practices like child labor or low wages. Ethically sourced products are often more expensive than their counterparts, but by investing in an ethical supply chain a business can quickly turn their intentional supplier choices into a selling point.

If your company is one of the few in your local area to offer intentionally diverse hiring or commits to sourcing ethical supplies, both potential employees and likely local leaders will take notice. With limited publication and fanfare, businesses that employ ethical labor practices are likely to be considered socially responsible. 

 

Meet Your Local Leaders

One of the best ways to learn how to serve your community is to listen to your local leaders. Either through research or social media, find out who in your local area represents business ideals you want to align your company with. Find out who is leading pride month organizations for your city. Find out who represents local unions. No matter which angle best suits your business, there is likely a local leader who would be happy to sit down and talk about how to run your business for the betterment of your community.

Proper Social Media Outreach

Basic social media outreach is no longer acceptable. Either in addressing social change or simply responding to customers, businesses with stale or basic social media presences are missing out on a massive opportunity for growth and refining your brand’s association with social responsibility awareness. The first step toward being socially responsible is being unambiguously honest with your customers. Social media puts companies on equal footing with every consumer; that means holding businesses accountable is often much easier. Avoid obtuse legalese and give your customers transparency and honesty.

The type of writing that works in a professional email or an employment ad falls flat on social media; clear, targeted statements are often the most effective. A timely example is the various ways businesses chose to address June 2021 Pride Month. Companies that simply posted a message with a rainbow banner are missing out on a key element of harnessing social media: intentional and engaging content.. Those companies that published reviews on how their company succeeded and can grow to better support the LGBTQ+ as well as others that meaningfully engaged either with videos or comments from executives will be seen as leaders instead of falling into the fold among thousands of cookie-cutter posts.

 

The Importance of Social Responsibility

Social Responsibility is a bizarre balancing act for businesses in the modern world. Actions benefiting the social good often are counter to direct monetary returns but have the potential to make your brand more appealing in the long run. Companies that over-publicize their social outreach also run the risk of appearing insincere and only driven by the potential for cash returns. A truly socially responsible business must genuinely make choices and changes to the betterment of the community with positive PR as a byproduct instead of the sole purpose.

In learning what steps toward social responsibility best suit your company, the first stage is collaboration. Talk to your staff and engage with your community not out of obligation, but genuine interest on how to do better.

The Challenges of Hiring Union Workers

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Small businesses need to prepare for the challenges of hiring and managing union workers in the coming years, as union membership is expected to increase under the Biden Administration.

While union worker employment did not decrease that much during the pandemic as much as non-union workers, according to a study by the Economic Policy Institute, union membership is still at historic lows, thanks to union barriers created by previous presidential administrations and more states embracing ‘Right to Work’ laws over the past decades.

The Biden Administration, however, as part of its Build Back Better initiative, has already outlined plans to increase union membership across all sectors by promising punitive action against companies that violate labor laws, and denying funding to companies that engage in union-busting activities, among other things.

What Does This Mean For You?

So what does this mean for your small business? Whether you operate out of an office, are a small construction company, an independent restaurant or a small medical practice, you are most likely going to have to deal with tougher salary and benefits negotiations with union applicants. You also risk a protest and a giant, inflatable rat being placed in front of your office if you choose not to hire union workers. 

Alina Clark, marketing director at CoCoDoc, calls hiring union workers ‘more challenging than ever’ in post-pandemic world.

“Pro-union workers feel that syndicates are a fundamental building component of a powerful working class,” said Alina Clark, co-founder and marketing director at software development firm, CoCoDoc. “Opponents believe that unions are excessively restrictive and damage workers. Especially after the pandemic, the task of hiring union workers has become more challenging than ever.”

Challenges of Hiring and Employing Union Workers

As a hiring manager, there are challenges you will face when hiring union workers. Some of them include:

Bargaining and organizing.

Small business owners or their human resources managers cannot interfere with employees’ rights to organize, according to the National Labor Relations Board (NRLB). Small business owners, managers and HR executives are not allowed to fire, demote or strip an employee of his or her benefits if they join a union without some sort of negotiation.

Dealing with employee grievances.

When a union employee has a grievance with a company, the company’s actions must be consistent with any collective bargaining agreement that has been reached. Union employees can also be represented by a union official when meeting with a company’s management over a grievance. 

Meeting workers’ salary and benefits demands.

This issue is especially important as safety concerns still linger due to the COVID-19 pandemic. Businesses both big and small must negotiate with unions on wages, hours, and workplace safety conditions. 

Managing union dues. Some union employees may demand that their union dues be automatically withdrawn from their paychecks, so this is an issue that your accountant or payroll department may have to deal with.

Innovation May be Stifled

Some hiring managers said one of the biggest concerns of hiring unionized workers is that being in a union may stifle their creativity.

Brack Nelson, HR manager at Incrementors, a web design and internet marketing firm, said “Laborers are connected by the opinions of the union…working in groups promotes ‘group think’ positions, which troubles individual creativity.”

Clark added, “Union workers mainly work in groups which promotes conditions of ‘group thought’ that, in turn, deter individual innovation. The Unions are greatly focused on seniority. This typically means that fresh and high-performing [union] employees are not progressing. Likewise, personnel that do not perform at high levels are tough to demote. That, in turn, makes the process of hiring good and innovative [union] workers very difficult.”

Tips on Hiring, Managing Union Workers

Some tips on hiring and managing union workers:

  • Let union applicants know right away that your company is neutral on whether employees join unions or not, and that you are willing to negotiate fair wages and benefits.
  • Make sure you and your managers are following the guidelines set forth by the NRLB in not discouraging employees’ right to organize and form a union.
  • Just because an applicant is a member of a union, it does not mean that they can’t be creative, innovative or worthy of promotion. Encourage that. 
  • When negotiating with a union, negotiate job performance standards for unionized employees, and terms of termination or demotion if those standards are not met. 
  • Educate employees on the fact that your company is union-neutral, and strictly warn them that no one is to be pressured into joining or pulling out of a union.  

Remember, despite the potential inconveniences unions may represent, they are not your enemies. Unions are there to ensure safe work environments, fair wages and, lest we forget, we can even thank them for weekends and 40-hour work weeks! The point is, we all want workers to be treated fairly, and if you already do that, you should have minimal problems with hiring union employees. 

Setting Up a Remote Work Environment – the Challenges and Benefits

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“All of humanity’s problems stem from man’s inability to sit quietly in a room alone,” wrote French philosopher Blaise Pascal. While that statement was written in the 17th century, we’re about to find out if it’s true in 2021, as tens of millions of Americans will continue to work quietly alone in their homes. 

If your small business operates out of an office and has decided to permanently move to a remote work environment, you are going to experience both benefits and headaches from that decision. Of course, most of your employees will be happy with the arrangement, but you’re also going to have to deal with new tax classifications and employee productivity issues, among other things. 

Savings Benefits With Remote Working

One benefit to remote working is a potential savings on office space. The average rent-to-revenue ratio in some business sectors in the U.S. is as high as 15%, so with fewer or no workers coming into the office, you may think about moving your company’s headquarters to a smaller, cheaper and more tax-friendly location anywhere in the country, especially if your headquarters is in an expensive urban area such as New York City or San Francisco.

Don’t Lose Valuable Employees

Moving to a remote working environment could very well allow you to retain valuable employees. This is particularly important since the number of job openings right now far outpace the number of new hires and the volume of people quitting their jobs, according to the Bureau of Labor Statistics. Roughly 40% of Americans prefer to work from home full-time, compared with 35% who seek a home-office hybrid and 25% who want to go back to the office full-time, according to The Harris Poll survey of 1,224 working adults.

Put simply, there are more job openings right now than available employees, so the competition for new employees is fierce right now. By not setting up a remote work environment, you risk losing much of your staff.

A recent poll of American workers from Flexjobs revealed that 60% of women and 52% of men who have been working from home during the pandemic would rather quit their jobs than return to their respective offices full time. 

You are also no longer limited to just hiring employees who live in the area surrounding your headquarters. You are free to hire talent from anywhere across the country, or even overseas. Bear in mind that every state does have different employment laws that could be costly. 

Challenges With a Remote Work Environment

While a remote work environment may be great for some of your employees, it will create challenges for you from a human resources and accounting standpoint. Some of the potential downsides of moving to a remote working environment include:

  • The ability for employees to collaborate and communicate may suffer;
  • Remote communications technology may need to be added or upgraded;
  • Payroll taxes and deductions may be confusing;
  • Workers may become less productive and motivated, and
  • The mental health of some workers may suffer due to the isolation of working at home alone.

Talk to Your Accountant

The first thing you need to do if you move to remote work is to speak to your accountant about managing your payroll. If your employees are out of state, you may have to deduct state and local taxes (SALT) from both the location of your company’s headquarters and the state in which your employee lives. 

Some employers will choose to make the employee responsible for his or her own SALT taxes, and some employers may even opt to make some out of state employees independent contractors in order to avoid the confusion. While some states such as New York and New Jersey and Washington, D.C. and Maryland do have reciprocity agreements in place that allow employers to pay only one set of SALT taxes, you still need to speak to your accountant about your options. 

If you do classify some of your employees as independent contractors, be aware that the PRO Act was reintroduced in Congress in January 2021, which will require employers to engage in the ABC test to determine if an employee can be labeled as an independent contractor to keep in compliance with the National Labor Relations Board. 

Use the Latest Communication Apps and Technology

To make remote working work, you’ll need to use the latest remote communications software that will allow for you and your employees to meet regularly. 

Video conferencing apps such as Zoom, 247Meeting, and Teamviewer will enable you to do that. Additionally, it’s crucial that you implement apps such as Google Docs, G Suite or Think Free that allow you and your employees to freely share and edit documents. 

Additionally, it is important for your IT or HR teams to set up a system to send laptops (with cameras) and other office equipment out to your employees so that they can stay connected.  Your HR team (which may be you, depending on your business) will also have to adjust payroll to allow employees to receive direct deposit and to have access to their paycheck stubs online. Services offered by ADP, Paychex or Onpay can help you with that. 

Hold Employees Accountable

According to a recent survey of small business leaders by The Harris Poll and Trinet, 55% of them said that employees were less productive when asked what the biggest challenges of a remote working environment is. The distractions of working from home, taking care of children or doing household chores can be a major deterrent. 

As a result, you may want to set up regular video conferences during the work week with your employees to go over what assignments they are working on. Set definitive performance goals and deadlines for them, and do not be afraid to set up one-on-one calls with employees whose productivity may be slipping since working from home. 

Keep Mental Health Issues in Mind

While working from home is considered a blessing by most, the lack of office friendships, the inability to pop your head over your cubicle wall and confide in your co-worker, and the general absence of employee camaraderie can lead to a feeling of isolation and depression in others, especially for those who live alone. According to the most recent Census data, single occupancy households are now the second-most prevalent in the country. 

Amber Broughton, managing director of The Harris Poll, said in a statement, “Small and medium size businesses continue to step up as they adapt to the new realities of this pandemic, investing in the wellbeing of their workforce through enabling remote work, staying in close contact, and offering increased flexibility to balance daily work and life.”

According to human resources association SHRM, some tips to avoid employee loneliness in remote work situations may include:

Encouraging regular, non-work related video chats between employees.

  • Creating a private Facebook group for your employees to share personal photos and thoughts.
  • Creating  a video conference  happy hour once a week where employees can grab a beverage of their choice and socialize.
  • If you can afford to, offer employee discounts at gyms, restaurants and other places where they can get out of the house.
  • As mask-wearing mandates loosen, try having company outings if most of your employees live within a close vicinity to the office. Also, the isolation factor could heighten the importance of holding an annual office holiday party and other events so employees can meet at least once a year.

Morgan Stanley’s CEO James Gorman was recently quoted as saying, “If you can go into a restaurant in New York City, you can come into the office.” While that may be a hard-line view, employers should carefully weigh the many pros and cons before moving to a fully remote work environment.

Challenges of hiring hourly wage workers

Overcoming Challenges That Come With Hiring Hourly Wage Employees

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Small businesses have always had a hard time finding good hourly workers, but those difficulties have been exacerbated by the COVID-19 pandemic, forcing many business owners to rethink how they hire and incentivize, compensate and treat part-time help. 

It may seem contrarian that hourly workers are hard to find right now. During the pandemic, hourly workers suffered a 24.5% unemployment rate in April 2020, versus a 12.8% unemployment rate for full-time workers in the same month, according to a recent study by the Congressional Research Service. The worker shortage numbers, however, are very real.

Worker Shortage Numbers

In April of 2021, the number of job openings far outpaced the number of hires in various sectors in which small businesses operate, according to the latest Jobs Opening and Labor Turnover Survey from the Bureau of Labor Statistics. Those sectors include retail trade, in which independent, boutique clothing and apparel stores may operate; professional business services, in which small companies operate out of an office, and leisure and hospitality, in which independent restaurants operate. 

The restaurant industry is being hit especially hard with worker shortages after suffering the most during the pandemic. Not only were roughly 110,000 restaurant establishments permanently closed due to the pandemic, but a recent National Restaurant Association study also revealed that as of the end of April, 50% of family dining establishments; 55% of casual dining restaurants, and 54% of fine dining restaurants are operating below their normal staffing levels. 

Despite the establishment of the $28.6 billion SBA Restaurant Revitalization Fund, as well as the Biden Administration’s new rule that makes business meals 100% tax-deductible as a way to boost the restaurant industry, independent restaurants are still struggling with not only being able to find good help but with rising costs of consumer items, forcing them to increase prices. 

Stiff Competition, Unemployment Benefits

Several factors are making hiring difficult. Small business owners are facing stiff competition when it comes to hiring hourly workers. Large, corporate stores and restaurant chains are also seeking hourly workers and have deeper pockets to pay them more than the minimum wage.

Additionally, one of the most politically contentious topics surrounding the current worker shortage is the $300 per week federal unemployment benefit, which ends in September. Economists have found that, on average, anyone who previously made less than $34,000 per year would receive more money by collecting jobless benefits than the person would be returning to work. Many politicians and trade groups are calling for an end to the benefit as a way to force people back to work. A recent survey from Alignable found that 54% of small business owners blame unemployment benefits for the reason why people are not returning to work.

Lousy Jobs

On top of those factors, let’s face it: many hourly positions such as waiting tables or being a cashier were considered lousy, low-paying jobs to begin with. Many people may simply not want to go back to those jobs due to health concerns or childcare issues still lingering from the pandemic. A large percentage of those jobs were already taken by people simply seeking a way to supplement their income; students working their way through school or contractors seeking income in between jobs, so turnover in these positions was already high well before coronavirus came along. 

What to do?

Despite all of the factors working against you right now in terms of hiring, there are ways to attract and retain hourly workers.

Offer more than the minimum wage.

If you can afford to, offer hourly workers more than the minimum wage. Your larger competitors are already doing it, and according to the New York Federal Reserve Board, the reservation wage – the average lowest wage respondents are willing to accept for a new job – has gone way up since the beginning of the year. Several states have already raised or are working to raise their minimum wage requirements, and you need to adjust.

Use Job Boards.

such as Glassdoor, Indeed, Ziprecruiter and even Craigslist to advertise your job. Also try to think outside the box when advertising your job. College job fairs and campus bulletin boards, for example, may land you that perfect intern, paralegal or junior accountant that you’ve been seeking. Clearly explain the salary and job requirements in those advertisements. You might even try to poach good candidates from other places. If you’re an independent restaurant owner for example, and you are impressed with a server at another restaurant, try making them a better offer.

Don’t “ghost” strong candidates.

Gone are the days when you could say to someone after an interview, “I’ll get back to you” and then wait two weeks to actually get back to them. Once you find a strong candidate, you shouldn’t take more than 24 hours to make them the best offer you can afford. 

Treat hourly workers with respect.

Now is especially not a good time to treat an hourly worker as a merely dispensable one. Whether you’re an independent restaurant or a small law office, make hourly workers feel like part of the team. Include them in weekly planning meetings, or perhaps give them a say in what their hours will be. Keep in mind that many part-time workers need flexible hours, as they may have other jobs or families to take care of. 

Preventative Measures for Small Businesses To Take During COVID-19

Preventative Measures for Small Businesses To Take During COVID-19

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With COVID-19 having broad impacts on the global economy, you might be wondering if there are preventative measures for small businesses to take to protect themselves and their customers during these uncertain times.

Indeed there are. Below you’ll find actionable steps that businesses operating in a wide array of industries can take to secure services, put customers at ease, and stay nimble as new information becomes available.

Bolster Inventory

One of the most important preventative measures small businesses can take during these earlier stages of the COVID-19 disruption is to bolster their inventory.

It’s time to examine your current purchasing practices. Pay special attention to your overseas suppliers that may be impacted by export delays. You’ll likely want to increase orders from a typical 30-day supply to a 60- or 90-day supply, especially for your most popular inventory. If you find suppliers challenged to meet your increased quantities, don’t be shy about exploring alternative suppliers. At the very least, you’ll establish new supplier relationships and lay the groundwork for securing operations during current and future market disruptions.

You’ll also want to take steps to bolster your internal inventory for things like office and cleaning supplies. Consider increasing your orders for your daily consumables. Purchases like copier/printer paper, shipping supplies, and in-office consumables like paper towels and toilet paper can all be stored. Whether supply chains get disrupted for these items or not, you’ll use them regardless.

Establish In-Office Protocols

Major consumer-facing businesses have made a proactive practice out of sharing their preventative measures with the public. Whether it’s an airline sharing aircraft disinfectant procedures or your local fitness club letting customers in on their cleaning methods, your customers and employees will appreciate your procedural transparency.

Let the people you rely on most to keep your business running know that you’re taking their health and safety seriously. Here are some tips for safety measures small businesses like yours can take to reassure your team and customers:

  • Office/store cleaning: Consider an email or in-store signage letting customers know your daily and overnight disinfectant procedures. Offer hand sanitizer pumps or wipes if you have shopping baskets or carts. Add additional wipes at checkout/customer service areas. Place paper towels instead of reusable fabric hand towels in all public restrooms.
  • Examine return policies: Explore whether you need to make adjustments to return timelines to accommodate a customer’s desire to limit public exposure. Also, examine how you’ll process returned items and sanitation procedures for returns if necessary.
  • Employee measures: If you haven’t already, now’s a perfect time for an all-hands meeting to discuss COVID-19, its impacts, and safety measures your company is taking. Ensure employees have a plentiful supply of disinfectant products like wipes, soap, and hand sanitizer. Establish a firm sick policy and consider a permanent adjustment to your paid sick leave time.
  • Leverage technology: Consider limiting employee travel (even out and about in town) to avoid unnecessary exposure. Implement digital meeting tools like videoconferencing to continue collaboration during times of limited mobility.

Using the tips above, you can both reassure customers and employees as well as continue business operations responsibly.

Stay Up-To-Date

New information comes out each day about the impacts of COVID-19. One of the most important preventative measures for small businesses is an ongoing commitment to awareness.

Establish a point person or team within your company to stay up-to-date on the latest news. This includes information about new cases, travel recommendations, safety suggestions, and more. The following sites can provide reliable, authoritative information on COVID-19:

Depending on how COVID-19 affects your region, you might consider closing your business for some time to prevent disease transmission. While not an easy decision, it could be a necessary one for safety. Always consider whether a temporary closure of your physical location(s) could benefit public health and make contingency plans for key employees to work remotely during times of potential closure.

With so much news coming out each day about COVID-19, it’s natural to feel a bit flummoxed. However, a bit of planning, a generous amount of communication, and some common-sense safety measures can make your team and customers feel more secure during unsettling times.

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How Customer Service Can Help Small Businesses Survive A Potential Slowdown

How Customer Service Can Help Small Businesses Survive A Potential Slowdown

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Customer service might be the key that helps many service-oriented SMBs survive slow supply chains caused by COVID-19.

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professional employer organization

What is a PEO? And How to Choose the Right One for Your Business

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You probably started your business because you enjoyed the work. Maybe you opened your ideal restaurant or started an electrical contracting business. That part was fun, but other responsibilities surfaced. Now, you have to deal with employees’ human resource issues, find ways to offer benefits and make sure all payroll taxes were filed and paid. Fortunately, small business owners don’t have to cope with these responsibilities by themselves. Professional employer organizations can lift those chores off of the owners’ shoulders. This helps business owners focus more on managerial tasks and growing their businesses. Now, what is a PEO, exactly?

What is a PEO?

A professional employer organization and a business enter into a shared relationship known as “co-employment.” Co-employment means that the PEO is the employer on record. They provide human resource support and handle payroll functions – while you, as the owner, keep the authority and responsibility. You’ll still manage your employees’ day-to-day activities.

Through the co-employment model, PEOs:

  • Are responsible for paying wages, managing employee compensation claims and overseeing other wage-related requirements
  • Assist with regulatory paperwork and compliance issues
  • Manage human resource issues and risk management functions
  • Provide employee benefits. Benefits include- but aren’t limited to – health insurance, unemployment insurance, Section 125 plans and other voluntary insurance products.

What are the Client’s Responsibilities?

The business owner is responsible for:

  • Managing employees’ daily activities
  • Maintaining a safe work environment
  • Keeping track of hours worked and reporting these figure to the PEO
  • Making sure payroll funds are paid in advance to the PEO

Advantages of a PEO

PEOs can take time-consuming HR tasks and responsibilities off your plate. A PEO:

  • Handles all human resource activities so you can focus on managing and growing your business
  • Provides competitive benefits and health insurance. A PEO has the purchasing power to negotiate better health insurance rates and more affordable benefits, such as a 401(k)plan, dental and vision coverage. Using the lower-cost benefits from a PEO enables small- and medium-size companies to compete with and attract employees from larger companies.
  • Stays up-to-date on regulations. As a business owner, you don’t have the time to read the latest regulations. A PEO does this for your and makes sure that you remain compliant.
  • Provides attorneys and HR professionals to handle employee-related issues. PEOs give advice on proper employee termination and disciplinary procedures.

Disadvantages of a PEO

Method of pricing

Sometimes, it can be difficult to determine how much you’re really paying. Many PEOs price their programs as a percentage of wage payroll, but this figure can vary monthly. So, sometimes it’s hard to figure out how much you’re actually paying. The other pricing method is the per-employee-per-month. This approach has add-ons for setup fees, administrative fees and costs for running some payroll reports.

Inflexible health plans

PEOs partner with certain insurance companies, and you don’t have a choice. If you like UnitedHealthCare, but the PEO promotes Aetna, you have to accept Aetna.

Customer service

PEOs handle large numbers of clients and employee issues. Customer service responses can sometimes seem rushed and indifferent.

How to Choose a PEO

Choosing the best PEO for your company requires doing your homework. Here’s a list of questions to help you get started.

  • Assess your company’s needs. What do you need help with -Payroll processing, HR issues, employee benefits? Define what you need before approaching a PEO.
  • Is the PEO a member of the National Association of Professional Employer Organizations? Membership in the industry’s trade organization indicates professionalism and respect.
  • Does the PEO have experience in your industry? You want a PEO that understands the daily lives of your employees and the risks they take on their jobs. How many employees do they represent in your industry?
  • Conduct a background check; ask for references to check; get first-hand feedback directly from the PEO’s clients.
  • Are the financial statements independently audited by a CPA? You want assurance that the PEO is legitimate.
  • Are their risk management practices certified by the Certification Institute?
  • Have their ethical practices been accredited by the Employer Services Assurances Corporation? ESAC audits PEOs annually to make certain each PEO has at least a $1 million surety bond.
  • Does the PEO have certification from the IRS? Check for accreditation such as the Certification Program for Professional Employer Organizations from the Internal Revenue Service.
  • Review the fine print in the contract. What guarantees does it provide? How can you terminate the contract if the relationship goes bad?

 

According to NAPEO, the U.S. has over 900 PEOs. While you have plenty of choices and setting up a co-employment agreement with a professional employer organization will relieve you of a ton of administrative tasks, you must thoroughly investigate each PEO candidate before signing on the dotted line. You don’t want any surprises.

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best books for small business owners

Best Books for Small Business Owners Series: The Five Dysfunctions of a Team

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Continuous learning is essential to business and careers success. As a small business owner, do you make time to continue developing yourself, considering new ideas and how you might apply them to your business? This is likely a challenge. But, one way to fit learning into your schedule is by reading or listening to great business books; and we’d like to help. With our Monthly Must-Reads series, we share the best books for small business owners.

Not only do we find books helpful for small business owners, but we also aim to save you time. For each book, we share who will benefit from reading it, the book’s key take-aways, and even reader reviews, so you can quickly determine whether it’s worth your valuable time.

This month, we’ll cover The Five Dysfunctions of a Team by Patrick Lencioni. For a list of past Monthly Must-Reads, like January’s Start with Why, check out the bottom of this article.

Business Book:

The Five Dysfunctions of a Team, by Patrick Lencioni

Focus:

How leaders can uncover and address issues that prevent their teams from collaborating and performing successfully.

Main Idea:

Fostering and leading a strong team takes more than a charismatic leader. It takes a leader who’s willing to do the hard work of uncovering and working through conflict, and a team that’s able to honestly identify and work through any issues that stand in the way of success.

Great for Small Business Owners Who:

Struggle with leadership, specifically creating cohesive, trusting teams

Synopsis:

InThe Five Dysfunctions of a Team, Lencioni takes readers through a novel-style fable illustrating five common issues keeping teams from functioning at their highest potential. In his story, Kathryn is a fictional CEO hired to lead a team of rockstar executive leaders, who excel in their individual roles, but have trouble working together. The reader follows along as she guides the characters to overcome their political and interpersonal drama, all while discussing and addressing each type of dysfunction they exhibit.

After concluding the story, Lencioni outlines the concepts of each dysfunction with an pyramid illustration. He dives into each type of dysfunction, explaining how to recognize and address them. At the end, Lencioni offers a quiz that you and members of your team can take to understand your strengths and weaknesses within the pyramid.

Key Take-Aways:

Managing and working as a team not only takes discipline and communication, but also courage to overcome obstacles that can seem personal. The five dysfunctions teams often experience are:

  1. Absence of trust
  2. Fear of conflict
  3. Lack of commitment
  4. Avoidance of accountability
  5. Inattention to results

Reviewers Say:

“Lencioni shares simple truths about teams that should be more intuitively obvious to everyone. Yet, these things are very easy to grasp while being very difficult to actually practice … without practice. This book focuses on what prevents a good team from forming and describes what’s needed. His companion book [Overcoming the Five Dysfunctions of a Team: A Field Guide for Leaders, Managers, and Facilitators] focuses on the implementation of these ideas but does not stand alone. If you only get one, get this one. The biggest problem I see is that both books are framed about C-level and top-level executive teams. Very few mid-managers would have the leverage and ability to implement all of these principles at lower levels of the organization. It’s definitely possible in some cases, but it would significantly more challenging. His principles are universally true, but his coaching is directed at executives.”

“A must-have in any manager’s toolkit. I have loved this book for awhile and regularly give it on loan. A perfect way to understand the people aspect of team and support managers through what is a common situation. Very cleverly written and full of tools to help get dysfunctional teams moving in a shared direction. Also good for some self-analysis as everyone will identify their own character.”

Monthly Must-Read Business Books:

August, 2019 – Blitzscaling

September, 2019 – The E-Myth Revisited

October, 2019 – Influence: The Psychology of Persuasion

November, 2019 – Built to Last

December, 2019 – Multipliers

January, 2020 – Start with Why

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