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February Hot Topics:
- Improving Internal Communication
By Renee Sheetz Davies, President, Human Resources Professional Group - IRS Clarifies Previous Guidance on Form W-2 Informational Reporting Requirement
By Fred Patterson, lll, District Sales Manager, AmCheck - The Soft Market is Over for Worker's Compensation
By Eric Sheetz, Commercial Insurance Broker, The Michael Ehrenfeld Co. - Are Internal Controls Too Expensive?
By Diane Perusse, Partner, e-Bookkeeping - Strategic Goal Setting
By Michael Sick
Improving Internal Communication
By Renee Sheetz Davies, President, Human Resources Professional Group
Effective communication is one of the most important skills in the workplace. If you could only create an engaged culture where passion is communicated amongst the employees there is the very likely potential that they will do things beyond what is expected of them. A highly engaged employee is someone who will consistently deliver beyond expectations and who has a sense of belonging or a strong bond with the company and its brand. This creates a ripple effect that results in a positively charged atmosphere in the organization.
Despite the importance of internal communication, many employees have little to no formal training about the subject. Further, organizations do little if anything to assist the effectiveness of internal communications through education and training.
The Benefits of Employee Engagement
Research from organizations like Gallup identifies the benefits of enhancing the bond between the employee, their colleagues and the organization.
- Increased passion for, commitment to and alignment with the organization's strategies and goals
- Improved overall organizational effectiveness
- A high-energy working environment
- Increased productivity and improved morale
- Boosted business growth
- Made the employees effective brand ambassadors for the company.
- Created a sense of loyalty in a competitive environment
- Increased employees' trust in the organization
- Lowered attrition rate and higher talent retention
- Created a community at the workplace and not just a workforce.
- Improved customer brand experience and customer loyalty
Start by Pinpointing the Issues to Ineffective Communication
Start examining how communication flows
Even if you are not prepared to undertake a full communications audit, you should at least examine the present methods of communication and assess if they are meeting your company's needs. Communication is not limited to formal tools but includes informal ones as well. Try to evaluate all methods including the following:
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Staff memos/e-mails (who writes them, how are they distributed, when is this method used?)
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Meetings (general staff meetings, small team meetings, supervisor/employee meetings)
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Newsletters (are they conveying meaningful corporate messages?)
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Employee feedback mechanisms (suggestion box, access to department heads, or CEO)
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Intranet site (is information easy to find and useful to employees?)
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Grapevine or office gossip (how much is this method used to convey info and how accurate is it?)
Any key problems causing ineffective internal communications must be pinpointed early before any action is taken. An employee questionnaire can be very effective in gaining a company-wide view on existing problems, not to mention possible ways to overcome them. Ask whether your staff members feel internal emails are clear and whether they feel they have sufficient knowledge of how to write a clear email which properly shares important information. Many non-managerial staff members feel hesitant when sharing information, because they fear sounding too bureaucratic. This must be addressed, as all employees play an integral part in the orchestration of business operations through clear information sharing.
Ways to Improve Internal Communication
First, communication from the management down to the employees should clearly set out the company's ethos, goals, existing strategies and internal structure. One of the most effective ways to do this is to make sure the employee handbooks are strongly written and prepared so that from their very first week, staff members can assimilate the company's code of conduct and get a clear idea of the infrastructure of the business, usually through an organizational chart with contact details.
The organizational chart provides a useful understanding of how the channels of communication are ordered from one level to the next, enabling staff members to direct their information to the appropriate person or group. Meetings should be held regularly to inform all staff members of changes within the organization, including updates on company targets, promotions and other announcements which affect day to day productivity.
Five Tips to Improve Internal Communications
Here are a few tips to creating better internal communications:
1. Engage your employees and excite them about your cause
There's a reason why people joined your organization. Capitalize on these reasons by reaching out to employees to keep their commitment high.
Department and All-Hands Meetings: A great way to remind staff of your organization's values is through storytelling. Client stories or exciting news aren't just for potential clients or investors - let your staff see their impact, too.
Share information about new initiatives, client successes, awards, achievements and events. When you inform staff of major accomplishments, let them know they play an important role in achieving results. They'll feel appreciated and energized about your organization's mission.
2. Understand your audiences
Whether you're a small or large organization, know the staff demographics and the best ways to communicate with them.
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Do you have a bunch of tech-savvy Gen-Ys who will appreciate YouTube videos and a robust intranet?
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Staff who prefer receiving email?
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Employees who like to read a printed copy of a newsletter in their hands?
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In some cases, it may be a combination of the above.
3. Communicate regularly
Once the communication methods have been decided on, pick a timetable and stick to it. It might be a department meeting, all-hands meetings, email updates, You-Tube posts, a monthly newsletter or a weekly phone call, but be as consistent as possible.
| It's very easy for small groups to be so focused on the projects that they're working on that they don't even realize that down the hall something big may be happening. |
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It often helps if your communications are creative and fun, making it more likely that the messages won't be ignored. Get creative around how you deliver information, and still make it useful. The point is to get across information, but not put people to sleep
. 4. Leverage technology
Companies can transform their internal communications by going completely online. Using an abundance of cloud computing tools such as DropBox, Google Docs, SmartSheet, and Salesforce, enables employees to work more efficiently, share information with people throughout the country and find content quickly and easily. Logos, spreadsheets, blog posts, budgets, contacts, policies, and more may be accessed - anywhere, anytime.
A good motto is: create information once, distribute it widely and access it anywhere.
5. Don't forget to share
At times, organizations assume that staff are too busy to listen to internal communications, or aren't interested. But that couldn't be further from the truth.
At the end of the day, the method of internal communication is probably less important than the idea that people want to know information. Employees are invested in where they work, and it's important to share as much as you can with the group as a whole. It's amazing when you're busy how easily that can be forgotten.
6. Make communication roles explicit
It's very easy as a management team member to let internal communication slip. Often, you're so immersed in the big picture issues and have discussed them with your board and senior staff so frequently that it creates the illusion that “everybody here knows this stuff.” As well, if communication roles are not planned and clearly defined, you may assume certain information is getting through to general staff when it is not.
Gaps can also occur when messages are lost because they are not well-suited to the medium used to convey them. For example, attempting to explain complex or abstract ideas in written form is often less effective than face to face meetings.
Unless you thoughtfully and consistently examine internal communication strategy, you are more than likely not accessing your organization's best potential and ignoring a program that could greatly add to your company's productivity.
We invite you to contact HRPG if you would like to discuss ways that HRPG may assist your company in working through any of the HR challenges you see for 2012. Contact us at rdavies@hrpg.com or (619)421-0074.
IRS Clarifies Previous Guidance on Form W-2 Informational Reporting Requirement
By Fred Patterson III, District Sales Manager, AmCheck
On January 3, 2012, the Internal Revenue Service ("IRS") released Notice 2012-9, which restates and clarifies its prior guidance on the requirement under the Affordable Care Act to report the cost of employer-sponsored health coverage on employees' annual Forms W-2 (using box 12, code DD). Notice 2012-9 supersedes the prior guidance issued under Notice 2011-28 and clarifies various aspects of the reporting requirement.
Below you'll find a general overview of the reporting requirement, updated to reflect the latest guidance, and summarizes other changes and clarifications contained in Notice 2012-9.
Background
The purpose of the reporting requirement is to provide useful and comparable consumer information to employees on the cost of their health coverage. It does not cause otherwise excludable employer-provided health coverage to become taxable. For these purposes, the amount reported includes both the employer's and the employee's contributions towards coverage, regardless of whether the employee paid for the coverage on a pre-tax or after-tax basis.
When is the requirement effective, and to whom does it apply?
The reporting requirement is effective starting with the 2012 Forms W-2 (the Forms W-2 for calendar year 2012 that employers are generally required to furnish to employees in January 2013).
The requirement applies to most employers, including federal, state and local government entities, churches and other religious organizations, and employers that are not subject to continuation coverage requirements under COBRA, to the extent such employers provide applicable employer-sponsored coverage under a group health plan (although employers who only sponsor self-funded group health plan coverage that is not subject to COBRA are not required to report the cost of the coverage on Form W-2). Notice 2012-9 clarifies that until further notice, the exemption for federally recognized Indian tribal governments is expanded to include employers that are tribally chartered corporations wholly owned by federally recognized Indian tribal governments.
Also, to the extent an employer chooses to honor the request of an employee who terminated employment during the year to receive his/her Form W-2 before the end of that calendar year, the employer is not required to include the reportable cost of coverage with respect to that employee.
Small Employer Exemption: The exemption for small employers contained in prior IRS guidance continues to apply under Notice 2012-9. Small employers (those that are required to file fewer than 250 Forms W-2 for the calendar year prior to the reporting year) are not subject to the reporting requirement for 2012 Forms W-2, nor subsequent years, until further guidance is issued. The Notice clarifies that if an employer filed fewer than 250 Forms W-2 only because the employer used an agent to file the forms, the exemption does not apply.
PEO Clients: Employers who are in a professional employer organization ("PEO") relationship or who use employee leasing organizations should consult with legal counsel to determine how the reporting requirement applies to them.
Multi-employer Plans. Consistent with prior guidance, an employer that contributes to a multiemployer plan is not required to report the cost of coverage under that multiemployer plan. If the only applicable employer-sponsored coverage provided to an employee is provided under a multiemployer plan, the employer is not required to report any amount with respect to that employee.
Which lines of coverage are reported?
The reporting requirement applies to employer-sponsored group health plans (whether fully insured or self-funded), which generally include major medical plans and limited benefit plans (e.g., so-called "mini-med" plans). A determination of whether a particular arrangement constitutes a group health plan may require a review of the relevant facts and circumstances.
Which lines of coverage are not reported?
The following lines of coverage are not included when reporting the cost of coverage:
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Employee Assistance Program (EAP), wellness program, or on-site medical clinic coverage if the employer does not charge a premium to COBRA-qualified beneficiaries with respect to that type of coverage; however, an employer may include these lines of coverage if desired, provided such coverage is applicable employer-sponsored coverage.
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Dental or vision coverage, to the extent it qualifies as a HIPAA-excepted benefit.
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Long-term care and accident-only or disability coverage
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Specified disease or illness and hospital indemnity or other fixed indemnity insurance, to the extent that the cost of coverage is paid by the employee on an after-tax basis and the coverage is offered as an independent, non-coordinated benefit
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Contributions made to an Archer medical savings account (MSA) or a health savings account (HSA) because they are reported separately in box 12 using code R for MSAs and code W for HSAs
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Employee contributions to a health flexible spending account (FSA). Notice 2012-9 clarifies that the value of an employer-funded FSA is reported only if the amount of the FSA for the plan year exceeds the salary reduction elected by the employee for the plan year (in other words, the requirement does not apply to FSA coverage if contributions occur only through employee salary reduction elections)
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Coverage under a health reimbursement arrangement (HRA); however, an employer may include it if desired.
The guidance clarifies that to the extent an employer offers a benefit that includes otherwise reportable coverage as an incidental part of the benefit, the employer is not required to include either the reportable or non-reportable portion of the benefit. Similarly, an employer may, but is not required to, include the non-reportable portion of otherwise reportable coverage if the non-reportable portion is an incidental part of the benefit, notwithstanding the prohibition on reporting coverage that is not applicable employer-sponsored coverage.
Additional Guidance in Notice 2012-9
In addition to the changes discussed above, the Notice clarifies several other topics from the previous guidance, including:
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Clarifying the application of the reporting requirement to certain related employers not using a common paymaster
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Clarifying that the reporting requirement does not apply to excess reimbursements under a self-funded plan that fails certain discrimination requirements, or premium payments made on behalf of a 2% shareholder-employee of an S corporation who is required to include such payments in gross income
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Modifying the application of the reporting requirement if a composite rate (e.g., single coverage class or single-only coverage and family coverage, or self-plus-one coverage and family coverage, etc.) is used with respect to the premium charged to active participants, but not the premium charged under COBRA to a qualifying beneficiary. The guidance clarifies that if an employer is using a composite rate for active employees, but is not using a composite rate for determining applicable COBRA premiums for qualifying beneficiaries, the employer may use either the composite rate or the applicable COBRA premium for determining the aggregate cost of coverage, provided that the same method is used consistently for all active employees and is used consistently for all qualifying beneficiaries receiving COBRA coverage.
In addition to the changes discussed above, the Notice also provides the following new guidance, which includes:
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Clarifying that any reasonable, consistently applied method, may be used to calculate the reportable amount for coverage, only a portion of which constitutes coverage under a group health plan
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Clarifying that the reportable amount may be based on the information available to the employer as of December 31, and a corrected Form W-2 need not be provided if an election change occurs that has a retroactive event (e.g., notice of a divorce in the prior year)
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Clarifying that any reasonable, consistently applied allocation method is acceptable to calculate the reportable amount where coverage extends over the payroll period including December 31
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Clarifying that the reportable amount is not required to be included on a Form W-2 provided by a third-party sick pay provider (the guidance clarifies that the employer must include the reportable cost of coverage on Form W-2 regardless of whether that Form W-2 includes sick pay, or whether a third-party sick pay provider is furnishing a separate Form W-2 reporting the sick pay).
Action Items
- Employers should continue to work with payroll administrators to determine their level of preparedness to administer this new reporting requirement.
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Employers should determine which of their benefit arrangements must be reported so as to accurately capture the correct benefit values for the 2012 Forms W-2.
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***Please contact your attorney should you have specific questions regarding any aspect of these health care reform topics.
For more information or questions regarding your payroll processes, please contact Fred Patterson III, District Sales Manager for AmCheck, a payroll solutions firm with offices throughout the United States. Fred may be reached at fred.patterson@amcheck.com. (619) 595-7900.
Worker's Compensation Reporting: Post All Work Related Injury and Illness
By Eric Sheetz, Commercial Insurance Broker, The Michael Ehrenfeld Co.
This month I want to remind employers that the annual summary of all work-related injuries and illnesses (Form 300A) must be posted at their place of business from February 1 through April 30.
The purpose of the form is to provide all employees the opportunity to review any and all injuries or illnesses that occurred at their place of work during the previous year. Former employees and their representative also have the right to review the form for their convenience. This form must be posted in a visible and easily accessible area by all employees.
Transparency and accountability are extremely important aspects of the employer to employee relationship. The form gives employees and former employees access to worksite injury and illness data. Full and accurate reporting of injuries and illnesses is crucial to understanding hazards in the work place, which is a good tool to determine where additional safety and health measures are needed When an employee is fully aware of the potential for injury, the steps to alleviate work place hazards are minimized when the employer configures the proper safety programs, wall postings and return to work programs.
Employers are required to fill out and post this form every year, even if no workplace injuries occurred. Information that must be disclosed on the form includes total number of cases with days away from work, total number of days injured or sick employees spent away from work, and the different types of injury or illness suffered.
Click here for the OSHA log.
For more information or questions regarding your companies risk exposure, please contact Eric Sheetz, Property and Casualty Insurance Broker for The Michael Ehrenfeld Co. at ESheetz@ehrenfeldinsurance.com, (760) 809-8510.
Are Internal Controls Too Expensive?
By Diane Perusse, Partner, e-Bookkeeping
When inquiring with small business owners about Internal Controls the answer is almost always, “we can't afford the staff to have Internal Controls” or “we are too small to need Internal Controls”.
At the highest level Internal Control is defined as:
Systematic measures (such as reviews, checks and balances, methods and procedures) instituted by an organization to (1) conduct its business in an orderly and efficient manner, (2) safeguard its assets and resources, (3) deter and detect errors, fraud, and theft, (4) ensure accuracy and completeness of its accounting data, (5) produce reliable and timely financial and management information, and (6) ensure adherence to its policies and plans.
Very boring to the average small business owner, who is occupied everyday with the demands of running a business. Because small businesses usually have active and involved management, “trusted” staff and uncomplicated procedures, the small business owner often feels as though Internal Controls are not necessary. Well tell me if you feel that way after this story.
A few months ago a friend that I work with on a Non-Profit Board called needing help. His Accountant had been out for three weeks due to a breakdown. The company experienced impressive year over year growth in this rough economy, which I thought was impressive and made me look forward to working with them.
When inquiring about the Accountants duties, trying to find the right place to jump in and get the most important things done first, I became concerned. This person had complete responsibility over everything in the accounting department. She invoiced the customers, entered the bills, made the deposits, wrote the checks, “reconciled” the bank statements and credit cards and was virtually the only interface with the tax accountant. She also had the entire bank and credit card logins, as well as the ability to send electronic fund transfers. This is always concerning and unfortunately way too common.
It was not long, less than 24 hours when my concern became founded. First we found that the Accountant was paying her personal SDG&E bills along with the Company's. Then we found that the credit card bills were not really reconciled in months, the steps were followed but entries were made to force the balance to reconcile. Next, the electronic fund transfers used to process payroll did not in fact equal the actual payroll and Petty Cash was missing. Everywhere we looked we found signs of theft and were able to accumulate over $30,000 of misappropriated funds. There was more to be found as we only went back a few months, but the owner did not want us to look anymore as they found that their insurance did not cover the employee fraud. Their Attorney also advised them that it was difficult and expensive to prosecute these cases and since the Accountant had nothing of value they would never recoup the cost.
So I ask- can you NOT afford internal controls?
e-Bookkeeping provides affordable wrap-around services to support your company's Internal Control function.
Diane Perusse is a Founder and Partner at e-Booking Online. Contact Diane at (877) 292-9684 ext. 3 or diane@e-bookkeepingonline.com. e-Bookkeeping provides the benefits of a large company outsourced accounting solution customized to fit your company's specific need and your company pays only for the services it needs.
Strategic Goal Setting
By Michael Sick
Without a plan, any road will get you there. Consider that if a major league baseball player bats .300, he'll be handsomely rewarded but if a business person or owner strikes out 70% of the time, they are likely to be broke or out of business. Here are a few tips to improve your batting average so that you can hit it out of the park!
Like any large undertaking, breaking down the task into manageable steps is an excellent way to proceed. Here's three major steps to take the next time you are looking to improve your results.
Assessment & Evaluation: It is important to know where you are before you begin a journey. Just like you put in your starting point in your GPS, creating an assessment of where you are, where you have been, what has worked, what hasn't worked, strengths, weaknesses opportunities & threats, is that critical first step.
Capturing thoughts, measurements and data points on paper or in a digital document helps organize a volume of seemingly unconnected information. Finding the correlations between the causes and effects will help in trying to repeat or improve what has worked in the past. You don't need to be a large enterprise with a team of IT and finance experts. A huge amount of information can be obtained from QuickBooks, Google Analytics and even your phone bill. You just need to look and study which metrics work in tandem.
Competitive Strategy: As a means of narrowing your options, spending some time on your competitive strategy will reduce the amount of mistakes and wasted effort down the road. How will you set yourself apart from the competition? Will you offer the same products or services at the same price, a higher price or a lower price? With better service, hours or delivery schedules? Understanding that you can't be all things to all people is the first step towards sacrificing what you don't want to be and what you don't want to be spending time on.
Take for example the competitor who is larger, financially stronger and has a well staffed sales team. On the surface, they may seem to be hard to compete with but if they invest resources against every opportunity and seek to pass that cost on as part of their overhead, a smaller competitor may be successful by focusing on a smaller segment of customers with slightly different needs. Not only may you generate a higher win rate (thereby reducing your selling cost as a percent of revenues) but you might actually be able to charge a premium because you have customized your product or services more specifically for the class of customers you are targeting.
Goal Setting: What do you want to accomplish? Now that you have conducted a thorough situation analysis and targeted the customers that are your best prospects, you are in a much better position to determine some realistic goals.
While increased revenues may be the ultimate goal, think more granularly about how you will achieve that goal. Will it be from price increases, selling more to existing customers, securing new customers or from new products or markets? Breaking down your sales process into a series of milestones will give you a number of items that you can measure and hold yourself or your staff accountable for.
Here are a number of questions you should ask that will suggest some intermediate goals.
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How many leads are in your database or CRM (Customer Relationship Management) system? How has that increased versus the past? How often are you touching those contacts through a phone call, direct mail, an email newsletter? Are you measuring response rates to different offers? Do you have a multi-year history?
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What do you want your website visitor to do? Fill out a form, provide their email, call your phone number or make an online purchase?
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Does social media have a role in your business? As social media may be a longer term strategy, identifying measureable sales goals may be challenging. Building a community can consume a fair amount of time and resources and for many brands it may be difficult to correlate those efforts to sales. There are a number of metrics that can be measured. One could be what percent of your website traffic is coming from Facebook? How many fans do you have and what's the level of engagement? How many pages are those visitors viewing and how much time are they spending on your website? These are quantitative measures easily secured from Google Analytics. Having 3000 Facebook fans in Croatia that don't speak English are not likely to translate into much value, so be careful about black hat gaming that many service providers utilize.
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Building dashboards and updating your metrics regularly will give you insight as to whether or not you are making progress to your goals. The last thing you want to do is have a single annual sales goal that you look to after the year is over.
The preceding are just examples. Each business may have slightly different milestones and sources of information (QuickBooks is a treasure trove of data if used properly). There is a goal setting acronym that is quite popular and provides a framework for setting goals. Just remember SMART which stands for Specific, Measurable, Achievable, Realistic and Time (Deadlines). Be SMART, be successful!
Michael Sick is a nationally recognized, innovative Management Consultant specializing in strategic marketing, advertising and business development. He spent 25 years in corporate marketing and was a Marketing Vice President for Jack In The Box, Pearle Vision, Arby's and others. Currently he serves as a part-time Chief Marketing Officer (CMO) for a number of clients around the US. Contact Michael Sick at (858) 342-0998, Michael@GetTheSickness.com or visit his website: www.GetTheSickness.com.
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