However, companies taking a “wait-and-see” approach to deal-making as economic uncertainty persists, may be missing out on growth and value opportunities.
Many companies have looked to divestments to offset cash and credit challenges and to free up capital to drive growth. But this short-term thinking is shifting as companies plan for the long term and take a more strategic approach to divesting.
In a recent EY divestment study that surveyed almost 600 executives, 77 percent said they planned to accelerate divestments within the next two years, and 46 percent are planning to divest in the same time frame. As companies signal an increased appetite for divestitures, it’s important they understand and implement the appropriate steps to achieve greater value for shareholders.
Evidence from our study, combined with our work with clients, has shown that there are five leading practices that companies should follow in order to execute a successful divestment:
Conduct rigorous and regular portfolio management
Review your portfolio regularly. Companies can assess whether assets are contributing to strategic goals or if capital can be better used for other purposes.
Companies that use divestments as a strategic tool to enhance shareholder value or focus on core business strategies, rather than considering them as a reactive move to free up cash or pay down debt, tend to improve their divestment results.
Consider the full range of potential buyers
There is an intense amount of competition from buyers today for good, high-quality assets and they’re ready to transact. Appealing to a broad group of buyers can garner a price that exceeds expectations.
Companies should think about the buyer universe for a potential asset sale differently than they might have in the past, considering potential foreign buyers, buyers within different sectors and private equity firms. Each buyer may have different information needs that require a different planning process.
Articulate a compelling value and growth story
Sellers should provide tailored information about how an asset fits with the buyer’s business to help achieve strategic objectives. Develop an M&A plan for the asset or provide a view of synergy opportunities to buyers.
Effective ongoing preparation can instill buyer confidence. As a result, companies can better control the process and realize greater speed and value. Half of the executives surveyed admit that certain changes to the preparation process could have made a significant difference during divestment.
Understand the importance of separation planning
Probably the most crucial aspect of a divestment is separation planning, yet 56 percent of respondents identified a clear separation road map as the most complex part of the divestment.
Other separation challenges include decisions regarding the completion mechanism, tax planning, estimating stand-alone costs and negotiating transition services agreements.
Every day a company waits to evaluate its capital strategy, someone else is making a change and gaining an advantage.
In heeding these five key practices, companies can take a more strategic and ultimately successful approach to divestments to ensure they get the most value possible and grow the bottom line.
Paul Hammes is the Divestiture Advisory Services Leader for Transaction Advisory Services at EY. Reach him at www.ey.com.
Every day more than 10,000 baby boomers turn 65, and during the next 15 years it’s expected that more than 1.3 million home health and personal care aides will be needed to accommodate them. In addition, in-home care can be costly. On average, a caregiver or client will spend $18,000 a year for 20 hours a week of care.
“Long-term care insurance can fund home care that will allow you to remain at home where you are most comfortable, with safety and independence,” says Tim Able, client advisor and life sciences specialist at SeibertKeck Insurance.
Smart Business spoke with Able about how to maximize your long-term care insurance for home health care.
Do people mistakenly associate long-term care with nursing homes?
Yes, but the opposite is also true. According to the American Association for Long-Term Care Insurance, 7.6 million individuals currently receive care at home because of long-term health conditions, permanent disability or terminal illness, but there are just 1.8 million individuals in nursing homes. Many buy long-term care insurance just so they can receive care in their own home.
Who typically uses home health care?
Every day, guardians, care managers and family members make long-term health care decisions for their clients and loved ones. Home health care can be an appropriate solution for those who wish to age at home.
However, it’s important to understand the differences in home care providers to make informed decisions. The Agency for Health Care Administration licenses home health care agencies following a comprehensive survey. A home health agency can assist with personal care and offer skilled nursing services including medication management. Certified nursing assistants or home health aides provide all personal care, and home health agencies are required to have a nurse available 24/7. A home health agency is a good choice when you desire nursing involvement or assistance with daily living.
What’s key to know when hiring a caregiver?
Here are some steps to follow:
- Look for a home caregiver from a reputable agency, where he or she is licensed, bonded and insured. Also, check that the caregiver is covered by workers’ compensation insurance.
- The caregiver should be supervised by a licensed professional who makes unannounced visits.
- When hiring, review two to three references and require a recent criminal background check, as well as random drug tests, TB tests and a recent physical exam. The caregiver should have a minimum of two to three years of experience.
- If the position involves driving, determine that the caregiver’s driver’s license and car insurance are current and valid.
How does long-term care insurance cover home health care?
Activities of daily living (ADL) refers to what we do on a daily basis to care for ourselves, including bathing, dressing and using the bathroom. Individuals with chronic diseases often have trouble performing some of these ADL, so the measure is used to assess long-term care insurance benefit eligibility.
Depending on your policy, you might have a waiting period before you can access your funds. Does your policy allow you to start collecting benefits on the day you begin receiving assistance, or are you subject to a waiting period of anywhere from 30 to 120 days? It’s important to get advice from your broker when deciding which policy is best.
Also, seriously consider when you can initiate a claim. The waiting period often corresponds to the benefit period, or the maximum amount of time that the insurance company will pay benefits. The longer the waiting period before benefits begin, the longer the company may pay for care. Benefits typically last three to five years.
When is a good time to buy?
Many people don’t realize the significant benefits to purchasing long-term care insurance earlier in life. For the same policy, yearly premiums for policies purchased at age 50 are notably less than premiums at 70. Also, the earlier you purchase, the more likely your application will be approved. By planning ahead, you will be best prepared to secure an affordable policy that helps you stay at home when the time comes.
Tim Able is a client advisor and life sciences specialist at SeibertKeck Insurance. Reach him at (330) 294-1363 or email@example.com.
Visit SeibertKeck on Twitter @SeibertKeck or online at www.SeibertKeck.com/page/skmedical.
Insights Business Insurance is brought to you by SeibertKeck
When Lisette Poletes joined up with her mother, Hortensia Albertini, to help lead Global LT in 2009, she did so with an air of curiosity.
“Probably for the first eight or nine months I was here, I took an approach where I really just watched what was going on,” Poletes says. “I had to build my own ideas of what I thought was working and not working coming from a different background.”
The numbers show it was time well spent. Global LT, a language training and translation provider, closed 2009 with just more than $9 million in revenue. When 2012 wrapped up, that figure had risen to more than $20 million.
“We’ve had one of the worst economies ever, and we’ve managed to not only survive but thrive,” says Poletes, the 101-employee company’s owner and CEO. “I’m very proud of what the team I work with has done. It’s to their credit.”
Earn employee trust
Poletes joined Global LT with extensive sales and marketing experience from her education at Michigan State University and her prior work experience with Pfizer. But she had not been a part of Global LT, so she had to earn employee trust.
“I wasn’t coming in to take it apart, to sell it, to bring a venture capital firm in,” Poletes says. “I was in it for the long haul.”
Words are one thing, but Poletes backed it up with action.
She invested in new accounting systems and customer relations databases and elevated employees who had worked hard into management positions. She also instituted a profit-sharing program for employees.
“We basically put a plan in place where I don’t take a dividend out of the company if they don’t all get paid,” Poletes says. “It’s fostering that environment where we all feel like we’re in this together.”
Make use of good ideas
Poletes does not need to be the lead voice on every new idea at Global LT.
“We’ve done a lot of different things based on someone saying, ‘This process doesn’t work,’ or, ‘This works in my department,’” Poletes says. “My response is, ‘Let’s make it a best practice and see if we can make it work across all departments.’”
A great example is the suggestion that was made to bring together the people who recruit teachers and translators around the world for the company’s language training department under one leader.
“It was something that had been tossed around in the past, but she came up with a great proposal and a great plan, and we said, ‘Let’s try it,’” Poletes says. “That’s probably been in place the last two or three months and seems to be working well. It may be that we move all our talent to do the entire recruiting under one giant umbrella instead of just for language.”
Keep pushing ahead
As Poletes looks to the future, she sees endless growth opportunities for Global LT’s language services in emerging markets such as China and Brazil. She also sees opportunity in the government sector.
“We just obtained our GSA certification, which allows us to go after government contracts,” Poletes says. “That will be a brand-new focus that has a ton of potential growth.”
And you can be sure that her employees will be part of the pursuit of those new opportunities.
“If it doesn’t work, you can always go back to the way it was,” Poletes says. “But you can’t move forward unless we try these new ideas and who better to come up with them than the people who do the work every day?”
How to reach: Global LT, (888) 645-5881 or www.global-lt.com
Business owners have many choices when it comes to how to pay their employees.
Some handle the payroll process internally, and spend a great deal of time managing all the paperwork of federal and state taxes, Social Security, Medicare, union dues, 401(k) contributions and more. Some use payroll software, which allows accurate record keeping but often has a long learning curve. Some hire a local accountant or a professional tax lawyer/CPA.
Others outsource these tasks to companies that provide automated payroll services.
Smart Business spoke with Michael Cheravitch, director of Business Banking at FirstMerit Bank, about what services to expect from payroll providers and how to ensure you choose the right one for your company.
Why is it important for a business to choose the right payroll provider?
Payroll appears to be pretty simple on the surface. Employers calculate employees’ gross earnings. They deduct the respective payroll taxes and other ancillary deductions such as insurance or 401(k). Then, they send the government its share and produce a payment for the net amount to the employee.
However, payroll is actually more complex than this. There are bonuses, sick time, overtime and other factors that can change from pay period to pay period, affecting compensation. In addition, federal, state and local taxes are always changing and, depending on the complexity of a payroll, the time it takes to keep track of all of these changes can turn it into a daunting task.
If employers aren’t up to date on payroll tax requirements, such as rates or frequency of payments and filings, and they miss a deadline or pay an incorrect amount, they can be fined. Additionally, these errors can lead to an inaccurate payroll and, ultimately, unhappy employees. That’s why it is so important to do it correctly.
How can an outsourced payroll provider benefit a business?
With payroll being a much more complicated task than it appears, businesses need someone they can count on for more than just paycheck calculations. Entering all the data and pushing out a check is the easy part. It is everything else after the fact that becomes difficult.
A bank’s business online payroll, for example, could provide payroll tax payments and filings as well as 100 percent guarantee that payroll taxes will be paid and filed accurately and on time. With online payroll, you can offer direct deposit, which saves time and money for the employer and employee. There are no checks or check stubs to print, and the employees don’t have to make an extra trip to the bank on payday, so their time is spent focusing on business productivity.
How does this compare with attempting to do this work in house?
With most in-house accounting products there are additional costs for keeping the technology up to date and tax tables current. With an outsourced payroll provider, there is no software to purchase, no need to have personnel maintain it and no ongoing fees to keep it current.
Having an employee do in-house payroll presents a risk of knowledge walking out the door if that employee leaves the company. There is no need to have an ‘expert’ in-house with an automated payroll service.
How can business owners determine which payroll provider would be the right fit for their company?
There are many factors that go into determining the best solution when it comes to payroll. The five most important factors are reputation, customer service, ease of use, ability to grow with the company and, of course, cost.
Businesses need to look at the complete picture when deciding on a payroll provider. Working with a small, local payroll provider can present issues with out-of-state calculations and few, if any, offer any liability or guarantee with their service. However, working with a payroll provider that has a proven track record of success and growth offers peace of mind to the business owner.
Businesses should look for a payroll provider that has been recognized and awarded for the customer care it provides and can answer questions and provide solutions to problems. Also, look for a payroll service that provides live support available at one number, eliminating all the shuffling around and waiting for a call back.
With the many options available for payroll services, ease of use is one of the most important factors for business owners. For example, employers can look for an award-winning online product that allows business owners to run their payroll from any Internet-capable device. Employers simply log in to their online account, enter hours and other specific payroll information, preview the payroll to ensure data is correct and press ‘approve’ — everything else is taken care of. Processing payroll this way takes about five minutes.
Another important factor to look at is whether the provider can grow with the business’s future needs.
Finally, businesses should consider the cost of working with a payroll provider. One of the major advantages of working with an all-inclusive provider is that there are no hidden costs for direct deposit, reports, and payroll tax payments and filings. Online technology significantly cuts operational costs, and those savings are passed on to customers. For example, some customers could pay half the cost charged by larger companies, accountants and CPAs, and most local providers.
Michael Cheravitch is director of Business Banking at FirstMerit Bank. Reach him at (330) 849-8699 or firstname.lastname@example.org.
Insights Banking & Finance is brought to you by FirstMerit Bank
In April 2012, President Barack Obama signed into law the Jumpstart Our Business Startups Act. Meant to encourage initial public offering activity, certain provisions of the act impact the application of Section 404 of the Sarbanes-Oxley Act, which requires management to establish and maintain internal control procedures for financial reporting. So how do emerging growth companies cope?
Smart Business spoke with Bill Philippe, a senior audit manager at Sensiba San Filippo LLP, about SOX compliance and the JOBS act.
How would you define an emerging growth company and the requirements in question?
An emerging growth company generally has less than $1 billion in revenue in the fiscal year prior to its IPO and its status generally lasts for five years after its IPO. It is exempted from the internal control audit requirement of Section 404 of the SOX Act. In practical terms, this exemption from the audit requirement should reduce the cost of compliance for an emerging growth company, as its auditors will not be required to audit its internal controls over financial reporting (ICFR), thereby reducing the scope and focus of the annual audit process. However, emerging growth companies are not exempted from the management reporting requirements of Section 404 of SOX.
The most challenging aspect of SOX is Section 404, which requires management and the external auditor to report on the adequacy of the company’s ICFR. This is the most costly aspect of the legislation for companies to implement, as documenting and testing important financial manual and automated controls requires a significant sustained effort.
Under Section 404, management is required to produce an ‘internal control report’ as part of each annual exchange act report. It must affirm ‘the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting.’ The report must also contain an assessment of the effectiveness of the internal control structure and procedures of the issuer for financial reporting. To do this, companies generally adopt an internal control framework such as that described in Committee of Sponsoring Organizations of the Treadway Commission (COSO).
What should an emerging growth company do following an IPO?
During the five years following an IPO, an emerging growth company should take a risk-focused approach to SOX compliance by specifically identifying, implementing and monitoring those internal controls that enable management to certify the design and operating effectiveness of controls with confidence.
You want to develop a SOX implementation process that is designed with clearly defined goals and executed by an experienced team. You need to lay the foundation for your company’s regulatory compliance requirements as well as practice effective corporate governance now and into the future.
How does the post-IPO process break down?
Activities in the first post-IPO year are focused upon the identification of high-risk processes and the implementation of the documentation and monitoring activities necessary to support management’s annual reporting requirements under Section 404.
The focus in the second and third post-IPO years is on evaluating and understanding the company’s internal control priorities in light of the company’s growth. Monitoring activities necessary to support management’s annual reporting requirements continue.
In the fourth post-IPO year, add the additional objective of documentation and assessment of the moderate- and low-risk processes. Evaluation of the company’s internal control priorities continues along with monitoring activities necessary to support management’s annual reporting requirements.
Monitoring activities necessary to support management’s annual reporting requirements continue in the fifth year, as do those needed to support the integrated audit work of the company’s external auditors.
What are the effects of the recent changes to the Internal Control – Integrated Framework?
On Sept. 18, COSO released Internal Control over External Financial Reporting: Compendium of Approaches and Examples.
It includes the Updated Internal Control – Integrated Framework, which reflects feedback from its recently closed comment period and the proposed Illustrative Tools: Assessing Effectiveness of a System of Internal Control.
The compendium illustrates how the principles set forth in the proposed updated framework can be applied in designing, implementing and conducting internal control over external financial reporting. It provides additional reference material for concepts discussed within the framework, including types of external reporting, suitable objectives, judgment, overlapping objectives, deficiencies in internal control and smaller entities.
The Updated Internal Control – Integrated Framework was initially made available for public comment in Dec. 2011, and incorporates the following major changes from the original 1992 framework:
- The financial reporting objective was expanded to address internal and external, financial and non-financial reporting objectives.
- An increased focus on operations, compliance and non-financial reporting objectives.
- Codification of the 17 principles that represent the fundamental concepts associated within the five components of internal control.
- Expanded discussion of the governance role of the board of directors and committees of the board.
- The changes in technology and how they impact all components of internal control.
Companies should assess the impact that the expanded areas of focus in the updated framework will have on their current internal control processes and draft an implementation plan for any enhancements deemed necessary by internal stakeholders and those charged with governance.
Bill Philippe is a senior audit manager at Sensiba San Filippo LLP, a regional CPA firm based in the San Francisco Bay Area. Reach him at (650) 358-9000 or email@example.com.
Insights Accounting is brought to you by Sensiba San Filippo
When hiring a member of the IT team, weeding through all of the candidates out there is a tremendous challenge. Particularly if you are a smaller organization, it is likely that a non-technical person is doing the interviewing. In that case, it is very difficult to determine whether or not the person you are talking to actually knows their stuff. Even someone with a very technical background can be fooled by an impressive resume and a smooth talker.
“IT people are weird. I should know — I’m one of them,” says Zack Schuler, founder and CEO of Cal Net Technology Group. “They are the hardest to hire and even harder to retain, and are sometimes hard to fire, as many of them make themselves indispensable as they convince management that their skills are unique. Many of them have technical egos that are larger than life.
“At Cal Net, we have roughly 35 talented IT engineers that we had to hire, train and retain. And we’ve had to let some go over the years. We would like to think that we have this down to a science.”
Smart Business spoke with Schuler about the best process for hiring and retaining the right IT people.
Should IT people be interviewed differently than other potential hires?
Like with any position, you should be screening for the personality traits. An egocentric IT person is the last person you want on your team. Some interviewers are naturally talented at sniffing this out. For others, I would recommend a personality profile. In my opinion, personality is more than 50 percent of what you should be screening for.
Another of the most important traits is good communication skills. We have all experienced the IT guy who wants to sit in a closet somewhere to minimize his contact with humans. If they do make enduser contact, it is usually a painful experience, as they will say the least amount possible so that they can head back to their cave. You should have the expectation that your IT person will be able to communicate as effectively as anyone else in the organization.
How should a company screen an IT person?
Start with, ‘Tell me about your IT environment at home.’ If they give you an answer along the lines of ‘I have three physical servers, running seven VMs for testing, and I’ve got my own mail server running Exchange, and I’m running VDI for my primary workstation,’ then that is a good first step. They view this as their ‘sandbox.’ If they respond, ‘I’ve got a laptop at home and I try to stay away from the computer as I get enough of it at work,’ then they probably aren’t a good technical fit. You want your IT folks to be passionate about technology, and most of them do their best research and learning at home, after hours.
The second easy way to screen is to have a short technical quiz that can be administered by anyone. Feel free to email me for our quiz.
Last, and perhaps the most time-consuming and difficult process, is to put them through a technical lab. We require that our new hires come in and build a network in an eight-hour time period. We have a point system that scores the candidate, as no one ever finishes the lab. This gives us an excellent assessment as to what they do know, and what it is that they need help with. Depending on what you are looking for, there are companies that will administer these sorts of labs for you. If you are testing on Microsoft infrastructure skills, we can administer this sort of lab.
What are some of the challenges of retaining IT people?
In general, IT people are motivated by advancement and the quest for knowledge. In organizations where there isn’t any room to move up nor is there anything new to learn, IT people will stagnate and usually move on.
Good IT people are always looking to explore and learn the latest and greatest technologies. Just as they have a sandbox at home, they want to work for an organization that invests in IT and gives them an opportunity to learn.
Good IT people are also looking to move up the food chain. While some IT folks are motivated heavily by pay, many are more motivated by an increase in title and responsibility.
How can these challenges be overcome?
Quenching the IT person’s quest for knowledge isn’t always the easiest thing to do. There are two ways to attack this. First of all, if you hire someone who is a master of all of the technologies that you are currently running, you’ll get someone who can hit the ground running, but you will also get someone who becomes bored quickly. On the other hand, if you hire someone with like experience and aptitude, but not exact experience in the technologies you are running, you will give someone an opportunity to learn. You will obviously have to weigh the business risk in doing this — and while they are learning you may want to supplement their skills with a consultant — but it can be well worth it in the long run. In short, I recommend slightly ‘under-hiring’ for the position.
The second way to attack this is to give your IT person some latitude when it comes to decision-making. If they want to implement a new technology that is reasonable from a cost standpoint, and delivers business value, I would err on the side of letting them do it. Even small concessions can give your IT person a sense of worth and something new to learn.
Last, in terms of advancement, don’t ‘over-title’ a person. Don’t call your lone IT person ‘IT director’ right away. Create a career path: network administrator, senior network administrator, IT manager, IT director and so on. Even very large IT organizations should be using this model. Look for increases in responsibility along the way, along with small increases in pay. Thinking out a career path before you hire someone will go a long way in making sure that they hang around for a long time.
Zack Schuler is the founder and CEO of Cal Net Technology Group. Reach him at ZSchuler@CalNetTech.com.
Insights Technology is brought to you by Cal Net Technology Group
When a position opens up at your company, a decision must be made whether to fill it with someone working in the company or hire someone from the outside. Each course has its benefits and drawbacks.
“When assessing your current staff, consider possible positions that a highly skilled employee would benefit from,” says Mary Delaney, an account manager with Ashton Staffing, Inc.
She says it may be the case that certain employees are outperforming or underperforming in their current roles and highly skilled employees may not be using their abilities to their fullest in their current positions.
However, there is reason to exercise caution. Delaney says, “Internal hiring immediately limits the prospective hiring pool and the company may miss out on a better-suited candidate.”
Smart Business spoke with Delaney about the difference between promoting from within and seeking to fill a position with a new hire.
How should a company evaluate the talent it has on its staff?
Aside from role-specific evaluations, monitor the employee’s work ethic. Look to see if they abuse sick days, are consistently tardy, if they share the company’s values and mesh well with its culture and if they’re able to adapt to changes within the company.
Consider the dedication level of the employee, which can be measured by the number of years they’ve invested with the company and what they have contributed in that time. Don’t just rely on numbers for this. Think back to instances where the employee succeeded in building and creating a flawless name for the company. Seek feedback on the employee from customers, phone surveys, email responses or co-workers.
Discuss your findings with the employee. Let the employee know they are not going unnoticed. Choose areas in which an employee has overachieved and acknowledge them for his or her hard work and dedication. Suggest ways of improving specific areas of concern you have with them. If there is a suitable promotion or role change, offer it to them.
What are the risks and benefits of looking inside the company to fill an open position?
Hiring from within can be very beneficial. A current employee’s familiarity with the company will allow for a cleaner and simplified transition period. Already aware of the company culture and policies, the current employee will most likely get up to speed much faster than a person new to the organization. Time spent interviewing and negotiating with an external employee is eliminated. Many companies use promotion from within as an incentive tool and a reward for good work or longevity with the company. This increases motivation and loyalty from internal employees. Hiring from within is typically economically beneficial. The position to be filled immediately transitions to a lower-level, less skilled position. This can significantly reduce the costs of recruitment and training expenses.
Hiring from within the company can also have some drawbacks. An internal promotion may inhibit the opportunity for innovation and progression. The company may lose out on fresh ideas and the creativity that can come from an external hire. Company morale could be negatively affected and friction among colleagues may arise if an envious employee feels slighted by a colleague’s promotion.
Ultimately, each company’s hiring decision is going to be unique. What’s best for one company may not work for another. Be sure to consider both positive and negative implications of internal versus external hiring before opening the position. Consider your budget, time frame, company culture and prospective talent on hand first. Internal hiring is generally faster and cheaper but may create hostility between colleagues and leave the company without the best-suited candidate or fresh innovative ideas.
How can a company ensure it has qualified candidates prepared to fill positions as they come available?
Both mentoring and cross training are great tools for motivating your employees and sharpening their skills. By implementing a combination of these two, your employees will step out of their normal role and comfort zone by taking on new challenges. This keeps both the employee and job role from becoming stagnant. The challenge gives the employee a sense of achievement, which increases confidence and overall job performance.
Mentoring establishes a positive atmosphere of teamwork and success. When a talented employee displays initiative to go above and beyond, support that with cross training. Give them higher-level responsibility. Invite that employee to participate in more company-wide planning and decision-making meetings. Give them room to establish more goals and priorities. Reassign responsibilities that the employee does not like or are routine. A great way to promote company-wide training and development is by providing access and reimbursement to continuing education classes or company-specific training seminars, which ultimately sharpen employee skills.
In terms of cost, which is most often the more prudent: hiring internally or from outside the company?
Hiring internally can save you time and money. You avoid expenses on advertising, screening and in-depth job training. Current employees are familiar with company policies and culture, and generally transition instantaneously into their new position.
However, if you strictly hire internally to save on these costs, you may lose out in the long run. Consider the risks and benefits of internal and external hiring before you make your decision. Each company is unique. Consider how your company morale will be affected if you hire internally. Do you already have a candidate who is an excellent fit? Or would you be sacrificing the need for ‘new blood’ and fresh ideas? Hiring internally to save on costs up front may lead you to losing out in the long run. Determine which is the best route for your needs before you decide to open the position.
Mary Delaney is an account manager with Ashton Staffing, Inc. Reach her at (770) 419-1776 or firstname.lastname@example.org.
Insights Staffing is brought to you by Ashton
Your staffing agency should be much more than an order taker. Instead, an effective agency can serve as a partner to your company, creating a relationship that develops over time, similar to those with other professional partners you may have whom you rely on for advice when making a business decision.
As the relationship develops, your recruiter will learn about your business culture and, most importantly, what your hiring managers are looking for regarding their current staff, future projects and even potential layoffs, should that be the case.
“Companies need the best candidates to fill an open position, not just warm bodies,” says Jacque Myers, senior engineering recruiter with The Daniel Group. “When we have the opportunity to develop a partnership with a client, we can understand their challenges and help them resolve these issues with one of our hiring solutions.”
Smart Business spoke with Myers about making the most out of your relationship with your staffing agency by developing a strong partnership for the long term.
Why is it important to form a long-term relationship with one staffing partner?
Companies with a consistent and sizable need for temporary staffing stand to benefit from forming a long-term relationship for several reasons, including having access to a broad, specialized pool of employees who can be qualified to meet the specific needs of your industry or business; having a single point of contact who can handle all of your staffing needs; and realizing the potential cost savings that comes from working with someone who has knowledge of your business and your industry.
From the agency’s perspective, having a long-term relationship helps your recruiters build familiarity and a knowledge base that will help them prepare a cadre of pre-qualified candidates for you to review and consider. Doing this means that when your project begins, your recruiters should be prepared to provide you with better-qualified candidates in a much shorter period of time.
However, failing to establish a long-term relationship with your recruiter can result in a ‘revolving door’ situation with hires that can lead to frustration on the part of the hiring manager and co-workers, as well as a delay in the completion of the project.
Should you be looking for direct hire placement, the staffing partner who, once again, understands your culture, long-term goals and the industry in which you work, will be much better able to find a candidate who fits within your organization.
What should you expect from your staffing partner in addition to resumes?
Your staffing partner can begin finding and earmarking potential contract and direct hire candidates long before your business enters its crunch time. Let your staffing agent know what you are dealing with, both from a budget standpoint and in regard to the long-term goals of the resource they are looking for.
This will put your staffing partner in a position to advise you of the best way of getting the right talent and ultimately realizing staffing success. It will also help to make sure that you do not have any skills gaps by implementing the right mix of direct hires and contract consultants.
The qualification process is equally important. Having a staffing partner who understands your culture and is clear on where your employee or contractor will be spending their time gives you a much better chance of accomplishing your goals through the hires that are made.
To determine if you have a strong relationship with your staffing agent, ask the following questions:
- Does the agent have true ‘partnership’ aptitude? Is the service built around the need to invest sufficient time toward understanding your business, your hiring managers, key drivers, value proposition, and both the hard and soft skills of the candidates?
- Does the agent provide scope, reach or expertise that complements what you are able to do yourself? For example, can the agent identify and penetrate strategic talent populations that are out of your current reach or otherwise not on your radar?
- Will your agent be a true consultative partner who is willing to share constructive feedback and provide recommendations instead of telling you only what you want to hear?
- Is the staffing agency prepared to be your partner in this for the long run and not just the one-time placement?
How soon should you discuss your staffing needs for 2013?
Now is the perfect time to begin meeting and discussing your hiring challenges for the coming year. It is important to share with your staffing agent what you expect your budget for staffing might be, as well as the overall challenges you expect to face so that your staffing consultant can determine how he or she can best accommodate your hiring needs for the upcoming year.
Once all of the information is gathered, the right staffing partner will help you reach your goals by making insightful, timely recommendations and determining the best staffing arrangement that will be most effective for you and your company or department. <<
Jacque Myers is the senior engineering recruiter with The Daniel Group. Reach her at (713) 932-9313 or email@example.com.
Insights Staffing is brought to you by The Daniel Group
On the heels of the Affordable Care Act and health care reform, business owners are going to deal with the shakeout of more costs or potential fines, exchanges and other uncertainties. All the while, the sleeping giant of the commercial Property & Casualty (P&C) industry is awakening with wide speculation of a potential hardening market in workers’ compensation and property casualty. Frankly, it seems to have arrived here in California and other states, as workers’ compensation renewals are causing sheer exasperation.
Gloria Lam of Risk Placement Services lets us know that the market is gyrating; low-price carriers have started high and the clients are demanding quote revisions up to three times for price reductions. It is our job as brokers to persist on behalf of clients by presenting high-deductible plans and other options. Professional Employer Organizations (PEOs) and captives may not be the best shelter, and the repercussions can be costly and can be felt for years to come. It feels as though CEOs are in the eye of the storm that is circling around them, taking bits and pieces, as CFOs are boarding up the windows trying to hold on to what they have.
Ken A. Crerar, president and CEO of the Council of Insurance Agents and Brokers (CIAB), said the P&C market has officially achieved hard-market status. With price increases in the last two quarters and tightening in underwriting, the market has made a hard turn. He goes on to say, “It is hard to predict the length and severity, but the market has turned.”
Mark Lyons, CEO of Arch World Wide Insurance Group said, “Overcapitalization is hiding losses on business. We have had $12 billion in reserves released in the 2011 calendar year alone. … It has been three loss-ratio points of reserve releases over the past three to four years on average. … This sheltering losses on current-year business and masking how unprofitable current business is because of releases in this year for accidents which occurred prior.” The soft-market pricing is catching up and the longer-tails in commercial lines are causing depleting cushions in reserves. Acts of God and other disasters have an aftermath effect and there has been frequency internationally.
Market Scout says workers’ compensation and commercial property rates both rose 4 percent in April, which was the highest of the product lines. Richard Kerr, CEO of Market Scout, notices admitted and nonadmitted insurers are showing similar pricing models. This is against historical approaches to underwriting which, in the past, showed considerable differences. These similar pricing strategies could lead to more business for the nonadmitted insurers. The admitted insurers may begin to restrict their risk appetite and begin to decline tougher risks.
The last 10 quarters have generated negative cash reserves, which are beginning to impact companies. Business leaders are looking for leadership that will re-energize local economies and lower the cost of doing business. Brian Allen in National Underwriter goes on to state how these business leaders are demanding improvements in state's business climates. “These changes include reforms to workers’ comp laws that deal with how medical treatment and benefits are delivered to injured workers and the costs that are ultimately passed on to local businesses.”
California is beginning to see double-digit increases in workers’ compensation and some businesses are responding by closing their doors in the state. U.S. Legislators, State Department of Industrial Relations and Governors are demanding more than piecemeal reform and taking a hard look at the delivery of care, prescriptions and costs. The broker’s role is to go to the insured and make sure they know what is happening. The only safety net is to be prepared for the storm as it continues to pass through.
Insights Business Insurance is brought to you by Montage Insurance Solutions.
Mike Robb is the passionate executive director of three nonprofit agencies: Center for Community Resources, Alliance for Nonprofit Resources and the Nonprofit Development Corp., all located in Butler, Pa. Robb works to unite these three agencies under the goal to provide support to both the community and fellow nonprofit agencies in order to build a comprehensive support network in the Western Pennsylvania region.
CCR, the original organization, is a human service agency that connects community members in need with the appropriate network of supports and services. Robb wanted to capitalize on CCR’s abilities and evolve its services to include those of ANR and NDC, both of which provide support services to other community nonprofit agencies. ANR offers backend support and services including grant writing, fiscal support, and marketing and design. NDC, formed in 2010, focuses on property management and offers support through technical assistance, training and capacity-building opportunities.
Together, the three nonprofits showcase Robb’s diverse leadership and analytical skill to utilize human and financial resources. After a total of $825,000 in funding cuts this year, Robb has found new ways to maintain staff members and continue each agency’s impressive growth. He constantly pursues new programs and services to fill gaps in the community and also seeks out inefficient programs in hopes to partner with the nonprofit and offer resources to improve operating efficiency.
Currently, Robb oversees 59 programs available to more than 180,000 residents, including transportation, housing and crisis management programs. CCR, ANR and NDC are all embarking on new projects and partnerships to better the nonprofit community, and Robb hopes this will continue and develop a regional Western Pennsylvania presence.
Robb hopes to impact 25,000 people per year and achieve agencywide compliance and accreditation in the near future. Recently, Robb was named the Ernst & Young Entrepreneur of the Year Western Pennsylvania and West Virginia award winner.
How to Reach: Center for Community Resources, (724) 431-0095 or www.ccrinfo.org