Marcia Passos Duffy
Simply having insurance to cover your property, employees and other potential liabilities used to be enough. In today’s global economy, companies are facing more than just fires and lawsuits. New threats include intangibles such as geopolitical instability, new regulations and legislation, supply chain interruption and more.
In the post-Sarbanes-Oxley world, where industries, the government and investors are taking closer looks at companies’ risk management processes, today’s businesses need to embrace enterprise risk management (ERM), a more holistic approach that addresses tangible and intangible threats to a business’s finances, operations and strategies, according to Chris Smith, senior vice president of Aon Risk Services Inc.
“Many organizations use ERM for compliance purposes, but rarely does a company use ERM to its full capacity,” says Smith.
Smart Business spoke to Smith about how a business can utilize ERM techniques to address risks in all areas of an organization.
Why is it necessary to employ ERM?
The biggest incentive for public companies to start seriously embedding ERM within their organizations is Standard & Poor’s upcoming plan to include ERM as part of a company’s credit rating. This will be used as one of the many criteria to evaluate companies with public debt. The inclusion of ERM in credit ratings makes sense when you consider how globalization has made the definition of ‘risk’ broader for companies.
What are the biggest risks businesses face?
Threats can happen for a number of reasons, including product recall, investor litigation, regulatory sanctions, supply chain interruption, competitive challenges, union unrest, political instability, financial fraud, pandemics or natural disasters. The major risks are things like:
- Damage to reputation
- Business interruption
- Third-party liability
- Distribution or supply chain failure
- Regulatory/legislative changes
- Failure to attract or retain staff
- Market risk
- Physical damage
- Failure of a disaster recovery plan
How does using ERM address these risks?
An ERM is a process that helps a business understand the risks facing it and how those risks are interrelated. It can also be used to develop a plan to mitigate these risks should they happen. The blend of risks is unique to each business. The solutions on what to do when confronted with these risks are also exclusive to a company. For example, a business might have many different answers to a problem when a supply chain is disrupted in an overseas operation. It can opt to just monitor the situation until it changes, find new sources of materials, buy insurance, simply tolerate the risk or opt to close down that part of the business if the situation gets dire.
Who should oversee an ERM?
Many times, the executive sponsor is the CFO or the CEO. Larger companies may have a CRO, or chief risk officer. Some companies appoint board members to champion the process. Other times, it is the risk manager or internal auditor. However, the ERM process must be delegated by someone with a broader perspective — the higher up you get in the C-level, the better.
Before embarking on ERM, what do businesses need to consider?
Businesses can’t and shouldn’t try to implement an ERM strategy overnight. It is a slow process that needs to be realized in stages in order for it to be successfully embedded within a company’s culture. Some businesses already have some components of ERM in place but don’t have a formalized plan. A good starting point for formalizing the process is evaluating where you are in the ERM continuum and developing a process tailored to your company’s culture.
That said, there are certain commitments that must be in place before beginning:
- Personnel commitment. Senior management needs to be supportive of the
ERM process and dedicated to ensuring
staff activity and accountability.
- Collaborative effort commitment. If a
business hires consultants to help guide
ERM, there must be a collaborative environment with open and honest communication.
- Time commitment. ERM is a long-term
process — not a project. Each organization
will be different on how quickly ERM gets
integrated into the culture, but measurable
progress should be achieved at regular steps
along the way.
What does ERM look like when it is fully embedded into an organization’s culture?
Generally, employees have an awareness of what the risks are and know how they must be managed. For example, a manager sees a business opportunity and presents the upsides to pursuing that opportunity. If that manager is ERM-savvy, he or she will look at the risks that may impact the opportunity, both on the upside and downside. While the new business venture might bring in revenue, what will it do to the reputation of the company’s existing brands? The key is for everyone to understand the big picture.
Aone-size-fits-all approach doesn’t fit today’s age-diverse work force: The generation gap between the youngest and oldest workers in some workplaces can span more than 40 years. On one end of the spectrum, there’s the 20-something who is fresh out of graduate school or college and is seeking flexible schedules or work-from-home options; on the other end are the employees nearing retirement.
“A company might have four generations of workers at one time,” says Kathi Crawford, Vice President of Human Resources for Talent Tree, a staffing company based in Houston. “Each generation comes with its own set of values, needs and attitudes, and vastly different expectations on communication styles and work expectations.”
Smart Business spoke with Crawford about how managers can best understand and meet the needs and priorities of each generation from the younger Generation X and Y to the middle-aged baby boomers to the older Silent Generation.
What is the most pronounced work style difference among the four generations?
The most glaring difference among the generations is the preferred method of communicating with others. Those in their early 20s, known as Generation Y, have had technology in their lives since they were very young. High-tech tools, such as video-conferencing, are second nature to them. Generation X those in their mid-20s to late 30s is also very comfortable using e-tools, such as e-mail and text messaging. Baby boomers who did not grow up in a high-tech world still prefer face-to-face meetings and telephone conversations over electronic methods of communicating, as does the Silent Generation those over 62.
What are the other differences among the generations that can be challenging to managers?
Each generation has a different approach to how it views the workplace. The Silent Generation tended to conform and not question authority; 95 percent of this generation, by the way, has already retired, although some remain in high-level positions. The baby boomers the group that is now running most companies tend to very optimistic and idealistic. They are typically overachievers and work long hours.
Generation X and Y are very different from the preceding generations in that they are much more concerned about their work-life balance. Perhaps they learned from their parents how difficult it can be to have a high-powered career and raise a family. The younger generations do work hard, but they are extremely careful to maintain a good quality of life outside of work.
How can managers help bridge the generation gap?
Managers need to be cognizant of the age gap of the audience when making a presentation, running a meeting or creating incentives for an employee. For example, a baby boomer might be motivated by a bonus, but a member of Gen X may prefer more vacation time.
It is also important that the generations take time to learn each other’s communication styles. Gen X and Y workers need to learn how to conduct face-to-face meetings and when to pick up the telephone rather than send an e-mail. This training can easily be accomplished through coaching, a method to which Gen X and Y employees are very receptive. That said, it is also important that the older generation work to incorporate more high-tech communication tools in the workplace, such as video-conferencing for clients or employees in remote locations.
Those employees in Generation X, in particular, come into the workplace with a lot of confidence and perceived ideas about how things work. Baby boomers or the Silent Generation must resist the urge to micromanage these young workers and instead help them along through mentoring and by gradually increasing their responsibilities. Remember, Gen X and Y are very sensitive about the work-life balance and are motivated by companies that respect that.
As the baby boomers retire, how important is it to change corporate culture to accommodate the needs of Gen X and Y?
It is very important because there are less people in this newer generation who can step into the shoes of the baby boomers as they leave. The competition for talent in Gen X and Y workers is already fierce, with talent shortages creating voids in certain industries such as IT, finance and engineering. It is the responsibility of the baby boomer and Silent Generation to transition their knowledge to the Gen X and Y workers and groom them for succession and leadership.
Companies can begin to do that by looking at the best practices used in other businesses in their industry. Business owners and managers should also seek support from their human resources departments and training and development professionals to help them facilitate and coach their staff about generational differences.
KATHI CRAWFORD is the Vice President of Human Resources for Talent Tree, based in Houston. Reach her at (713) 361-7315 or email@example.com. She is also serving as 2008 president, Houston Chapter, American Society for Training and Development (ASTD).
What is the biggest factor in driving up the cost of health care in business today? Unhealthy lifestyles and an aging population, according to Thomas Scurfield, senior vice president of Aon Risk Services Inc.
“Smoking, poor nutrition, obesity, drinking or drug problems account for more than 50 percent of health care claims,” he says. As we age, our lifestyle choices have a significant impact on our consumption of health care.
What if businesses could do something to help employees with these problems? They can, says Scurfield. Health Risk Assessments (HRAs) are tools that can help employees evaluate their lifestyles and health histories. Based on the HRA results, a personal action plan can be developed to help employees change their behaviors and improve their health. As employees become healthier, they consume less health care services, which results in lower health plan costs.
Smart Business spoke with Scurfield about how to obtain HRAs and how to encourage employees to take the assessment and implement the results in their lives.
What is involved in HRAs, and where can businesses get them?
It is usually a question and answer form, taken online, which focuses on health history and lifestyle. The HRA will ask questions related to nutrition, physical activity and smoking, along with specific medical information, such as cholesterol and blood pressure levels. Many companies, as part of their health and wellness plans, will provide on-site medical screening, which will provide employees their medical data prior to completing their HRAs. HRAs are typically developed by third-party firms that sell these assessment programs to health insurance companies. Businesses can check with their current health plan administrators for implementation and communication of HRAs for their employees. Many health plans are including HRAs in their group health policy.
Are employees always willing to reveal this kind of personal data?
Some employees can understandably be reticent to participate, but they need to be reassured that their specific data is never shared with an employer. There is also a strict Federal Health Insurance Portability & Accountability Act of 1996 (HIPAA) that protects employees’ health confidentiality. To increase participation levels, companies often create incentives, such as offering reduced employee contributions or increased medical plan benefits. What is interesting is that studies have shown that the majority of people don’t hide ailments on these assessments; there is a high correlation between what employees report and the condition of their health. The HRA is a good tool to identify employees who are at risk for significant health care expenses, and who can benefit from programs that can improve their lifestyles and overall health.
How can a business go about administering an HRA?
If your health care plan administrator has an HRA, it is accessed at the employee password protected Web portal at the medical plan administrator’s Web site. Employees simply go to the site and answer questions, which can take about 20 to 30 minutes to complete. Once an employee fills out the HRA, recommendations are provided to the employee to reduce risk factors. In addition, high risk participants are contacted by a health care coach to help them understand their risk factors and to assist them in making lifestyle changes that will improve their health. One of the recommendations can be that the employee participates in an educational online course on nutrition, exercise and alcohol consumption.
Many companies have increased HRA participation significantly by offering incentives to employees who complete an HRA with additional incentives for completion of recommended courses. Examples of employee incentives include reduction in employee contributions, fitness club stipends or deposits into Health Reimbursement Accounts or Health Savings Accounts. By the way, the HRA is part of a bigger trend among health insurance providers called ‘consumer tools,’ which include health care and disease information, and guides to help employees lead healthier lifestyles. This is a positive trend in the industry since it empowers consumers to make decisions about their own health; some health care providers even offer Web sites for consumers to compare health care procedures and costs.
How do HRAs help a business keep premium costs down?
The goal is to help employees identify their health status, and then provide resources to help them change behaviors that will improve their health. It could be lifestyle issues that are putting them at risk for problems down the road, or it could be a genetic predisposition to a disease, such as cancer or diabetes. The HRA identifies the high-risk employees so that they can be proactive about managing their health issues, so down the road there is less of a chance of a catastrophic claim that will result in increased plan premiums. If you can get a person to lose weight, for example, he or she will lower the risk for Type II diabetes and hypertension, reducing the risk of significant future health care expenses.
THOMAS SCURFIELD is the senior vice president of Aon Risk Services Inc. Reach him at (216) 623-4126 or firstname.lastname@example.org.
What does being a “team player” really mean? The phrase has been worn threadbare in corporate America, but nonetheless, it is an important characteristic among employees in order for a business to run smoothly and successfully. While the term refers to, essentially, honoring obligations and being supportive to co-workers, the aspect of meeting deadlines appears to be the most important characteristic according to a national poll conducted by Accountemps, a temporary staffing firm for accounting and finance professionals owned by Robert Half International.
“Today’s workplace requires a high level of collaboration and cooperation among employees,” says Lisa Schneider, branch manager of Accountemps in St. Louis. “It is important for managers and employees to understand what playing on a ‘team’ really entails.”
Smart Business spoke with Schneider about the definition of “team player” and how businesses can achieve more productive collaboration among employees.
What can professionals do to become better team players?
Our survey showed that 40 percent of the executives polled said ‘meeting deadlines’ was the most important characteristic of a team player. For individuals, being part of a team means having accountability for your own responsibilities while putting the team’s goals first. Professionals need to realize that they may have individual goals, but they need to see the bigger picture and support the collective interests of the group in order to achieve the ultimate goal the team is working toward.
In our competitive culture, it is often difficult for employees to realize that what may work for them, personally, may not work for the good of the entire team. Adjusting your work style may be a compromise you need to make for the group to be effective. For instance, if you normally prefer to wait until the last minute to complete projects, you may need to change your work style to avoid hindering coworkers’ progress. Lastly, it’s important for all team members to have a clear understanding of the team goal.
Is it the team leader’s job to make sure that everyone is on the same page regarding the team goal?
Yes, the team leader needs to establish the group’s mission early in the process, discuss the project’s strategic implications, and define the role of each team member. The manager must be open to communication and encourage the same among team members. Managers should also be aware of the feedback they give to team members. Certain tasks require praise for the whole team, while other times, it is more appropriate to recognize an individual for his or her work in a particular area. One of the single most important things a manager can do for its team is lead by example. Since employees take their cue from their managers, they should be the first to dive into a project and express their enthusiasm for the team’s efforts.
What are some other characteristics of a successful team?
A strong work ethic among team members and individuals. The ability to be flexible team members need to know when to switch gears when a project is not going the right way. This decision, again, should not be made by the individuals on the team, but should be for the betterment of the group as a whole. Also, team spirit most successful teams have good camaraderie.
Is it a good idea for managers to coordinate social events outside of work to help build team camaraderie?
Yes, since it helps people get to know each other and bond. These social events can be team-building exercises, such as bowling or other sports events. Managers can be creative. For example, our company had a team-building exercise that involved getting groups together to assemble children’s bikes for charity. It was a lot of fun. We had 12 groups of four assembling 12 bikes in 20 minutes. At times, it was frustrating because some of us didn’t even know how to use a wrench. But we ended the project with a lot of takeaways about working as a cohesive team. The exercise was a microcosm of what can happen in a real group project situation, and often communication among team members is a sticking point for groups.
How can managers best deal with communication problems among team members?
Managers need to play the role of the mediator not judge. Pay particular attention to how information is relayed to each member and to key individuals outside the group. If there are weak spots in the system, you’ll soon see them. Once you’ve identified problem areas, share your insights with the team. Be careful not to place blame. Instead, frame the difficulty as a group dynamic that needs fine-tuning. Suggest options and encourage everyone to brainstorm practical solutions.
Managers must trust that people can work out their differences and encourage team members to discuss their issues. Ideally, employees should come up with a solution that will be best for the team. The bottom line is that successful teams run smoothly when responsibilities are clear, team members get appropriate credit, the project is done on time, and there is strong communication.
LISA SCHNEIDER is the branch manager of Accountemps in St. Louis. Reach her at (314) 621-8367 or Lisa.email@example.com.
Administrative professionals must learn key business skills — and not just for the obvious reasons of professional growth and career development. An administrative professional who is proficient in time management, accountability, problem-solving and decision-making can truly drive an organization and make it more productive, according to Anne Hach, executive director of training and development at Corporate College.
“In today’s business environment, an administrative professional works with much more autonomy than years ago,” says Hach, adding that administrative professionals are more involved in negotiating, decision-making, project management and composing original documents.
“It is important that the administrative professionals’ skill level and training be commensurate with duties they are being asked to perform.”
Smart Business spoke with Hach about the changing roles of today’s administrative professionals and why it is critical that these professionals learn key business and management skills.
What types of business skills are important for administrative professionals?
There are four main foundational skills that are important:
- Effective verbal communication skills.
This includes professional telephone
skills, knowledge of how to participate
in meetings and effective face-to-face
verbal skills. A good administrative professional will also have an intuitive
sense of the best method of communication for any given circumstance and be
able to advise or independently use this
- Proactive listening. Communication is
not a one-way street. I consider proactive listening to be closely linked with
probing or investigative skills, which
includes rephrasing a statement until
you make sure you understand what the
person is saying. Proactive listening also
includes filtering communication out at
times and prioritizing. Administrative
professionals are often bombarded with requests coming from various channels:
a customer who wants something done
one way, peers who advise it done another and the boss with yet another opinion.
The challenge for the professional is to
prioritize the information and act
accordingly — with the customer often
becoming the top priority.
- Written skills. Writing is perhaps the
biggest challenge for not only administrative professionals, but also mid- to
senior-level management. Administrative
professionals are often composing most
of the e-mails, letters and other documents for management. Therefore, it is
imperative that they understand not only
the commonly accepted uses of English
grammar, but also the business jargon of
their particular industry and how to write
in an appropriate business ‘tone.’
- Time management skills. Administrative professionals must manage their
own day and prioritize their own work. If
they do not know how to do this effectively, other people in the organization
will feel the fallout of this lack of organization and time management skills.
Are there other attributes necessary for administrative professionals to succeed?
Yes — confidence. Some administrative professionals may be very skilled at time management and communication but lack the confidence in their own professionalism. Therefore, they do not speak up at meetings or do not take the initiative. Because the administrative professional is often the first person the client or customer meets in an organization, it is important that he or she exudes business professionalism and understands business etiquette. The definition of this depends on the tone and business culture of a particular office or industry.
Why are the skills of an administrative professional important to the executives or managers of a company?
From the executive’s point of view, a highly trained administrative professional, who is also well versed in business etiquette and has a highly professional demeanor, is an asset to that executive and the company. Frequently, the administrative professional is in the role of gate-keeper to the executive. If he or she can effectively utilize written and verbal communication skills and gain confidence, the role could evolve to be more of a conjoiner and problem-solver. That kind of professional makes the executive many times more effective and productive at his or her own job.
Can these skills be learned?
Yes, however, for some people these skills are second nature. But for those that these are not, communication skills, time management and even confidence can be developed and practiced.
ANNE HACH is the executive director of training and development at Corporate College (www.corporatecollege.com) based in Cleveland, which offers employers custom-designed training programs to enhance future work force development, job growth and job retention in Northeast Ohio. Reach her at (216) 987-2962 or firstname.lastname@example.org.
If your business receives checks on a daily basis from customers and clients, you know what a nightmare it can be to coordinate trips to the bank every day. Sometimes the designated employee who takes the checks to the branch may not be available or cannot make the run until the next day. Meanwhile, cash flow is impeded unnecessarily.
“Remote deposits can make this cumbersome system manageable,” says Nicki Davis, treasury management sales associate for Plano-based ViewPoint Bank. “Remote deposits sending checks electronically to deposit at the bank is like opening a branch of the bank inside your business.”
Smart Business learned from Davis how remote deposits work and when they may be a good option for your business.
Could you explain the process of remote deposits?
Instead of going to a bank branch, an employee loads the checks into a check scanning device, which can be purchased or leased. The check is scanned using software from a desktop, and the image is transmitted electronically over the Internet to the bank. The bank gets the file, inspects it for quality and duplication and then sorts the checks for clearing.
Once the deposit confirmation comes in from the bank, the business can either store or dispose of the paper checks.
Typically, software that is installed on the scanner will tell the bank which account it will deposit the funds into; the scanner will also stamp the check ‘void’ or ‘scanned’ to eliminate the possibility of the checks being scanned more than once.
What kind of businesses can benefit from scanning checks electronically?
Remote deposits are just for check deposits, so any business that accepts checks for payments doctors offices, dentists, retail operations, etc. can benefit. One caveat: travelers’ checks and money orders with their multiple colors and designs can sometimes get distorted in the scanning process. You need to check with your bank to make sure that the scanner supplied with the service is sensitive enough to scan the details of these items.
What are the costs associated with using this service?
The biggest investment is the scanner, which can cost anywhere from $1,000 to $2,000. Each bank has different fees, but monthly maintenance can cost anywhere from $100 to $150. There can also be a per-item fee for each check scanned.
Any disadvantages to using remote deposits?
The upfront costs of purchasing a scanner although you can also lease a scanner often cause businesses to pause. There is also the inconvenience of shredding or storing the scanned checks. When depositing checks manually at the bank, the institution is responsible for discarding the checks. Some businesses are not comfortable with this responsibility.
If a business doesn’t want to make the investment in a scanner to make remote deposits or if the number of daily checks doesn’t justify the service, is there an alternative to physically going to the bank to make deposits?
Yes. You might want to ask your bank if it has a courier service that will pick up checks on a designated day and time to deliver checks to the bank.
However, if you are finding that you’re holding on to large-dollar checks too long because of the inconvenience of traveling to a bank branch, and it is impacting cash flow, you should look into the cost benefit of switching to remote deposits. <<
Small and medium-sized business owners know how difficult it is to compete for talent with the “big boys” in the arena of employee benefits. However, what most business owners do not know is that there is a way to level the playing field.
HROs, or Human Resource Organizations, are fast becoming the best way for small and medium-sized businesses to compete by pooling together benefit packages, human resource services, payroll and retirement plans.
“HROs level the playing field,” says Mike Leach, Senior Vice President of Employco Group, an HRO that handles human resource outsourcing for 400 small and medium-sized Midwest companies.
“A small company can become a member of an HRO and offer its employees the same benefits as a Fortune 500 company.”
Smart Business spoke with Leach on how Human Resource Organizations operate and the benefits to becoming a member.
How does an HRO work?
It is an outsourcing vehicle to help reduce and stabilize labor costs by using the power of a large group. You can outsource several areas of a business, but there are four main areas: human resources, employee benefits, payroll and workers’ compensation. The smaller company falls under the umbrella of the HRO and is therefore able to offer discounted health, dental, auto insurance and even pet insurance to its employees. This is a huge advantage for smaller companies that must compete for the same shrinking talent pool.
The HRO takes on what the business owner does not have time to deal with — including HR, providing decent health coverage, claims management, payroll taxes, direct deposits, etc. It is a way to simplify a small business owner’s life by taking away the administrative burdens.
Why don’t more companies in the Chicago area utilize this service?
HROs have been around for a long time in Florida, Texas and California. In other areas of the country, it has required a fair amount of education for business owners to understand how HROs work. But, as the economics of business are changing because of the exorbitant cost of health care for employees, business owners quickly understand the benefits of belonging to an HRO.
What type of company is best suited for HROs?
There are two types: small businesses that are finding it a challenge to get decent health care for employees; the other is a business with high workers’ compensation costs. Companies usually range from 10 employees up to 500. HROs are very advantageous to start-up companies and franchise businesses that cannot manage HR and employee benefits on their own.
Clients come from various industries; however, there are certain industries that will not be accepted by most HROs because of the high risks, such as roofing companies or ammunitions factories, to name a few. Companies must apply to the firm and, honestly, many are turned down. The business must be well managed to participate in an HRO and add to the stability of a group.
How much does it cost to participate in an HRO?
HROs charge a percentage of a business’s payroll. They often conduct an extensive analysis of a business’s needs in order for the costs to break even with the savings. Most firms have flexible programs — and employers can often pick and choose the programs to meet the ‘no cost’ goal.
What kind of company would not benefit from using an HRO?
Companies that are too large — over 500 employees — often can get good benefit deals on their own and don’t have a need to belong to an HRO. Very small companies — with less than 10 people — can most certainly use the service, but not all HROs will take on such small operations.
What are the steps to selecting a good HRO?1. Look for stability. Select a firm that has a good track record and has been in business at least 10 years.
2. Go local. An HRO that is in your city or region has its advantages since paychecks need to get to employees on time.
3. Ask for, and check, client references.
4.Get flexibility. If you are a small business owner, you need to be able to start small and have the HRO grow along with your needs.
MIKE LEACH is Senior Vice President, Employco Group (www.Employco.com), a division of The Wilson Companies. Employco handles human resource outsourcing for 400 small and medium-sized Midwest companies. Reach him at (630) 286-7357 or mleach@Employco.com.
Financial professionals will continue to be in high demand and reap higher salaries in 2008, according the recently released 2008 Salary Guide from Robert Half International, a specialized consulting and staffing services firm, which has published its yearly salary data based on an analysis of the thousands of job placements managed by the company’s U.S. offices.
According to the survey, base salaries for financial professionals are projected to increase, on average, by 4.3 percent in 2008 over the previous year, with the biggest gains going to public accountants, financial analysts and internal auditors.
“This high-demand, high-salary trend for financial professionals, which we have been witnessing for several years now, will continue into 2008 and perhaps beyond,” says Lisa Morgan, branch manager for Robert Half International’s Accountemps Division in Akron, Ohio.
Smart Business spoke with Morgan about the details of the salary increases for accounting and finance employees, along with the outlook for businesses that hire these professionals.
What is different in your projections for 2008 over the previous year?
Salaries are continuing to rise for finance and accounting professionals. In 2007, they were up 3.7 percent, on average, over 2006; this year they are up 4.3 percent, on average, over the previous year. We are also seeing new titles entering our radar screen that are being considered high-demand specialties, such as business analysis and forensic accounting positions.
What are the top three specialties that will see the biggest increases in pay in 2008?
Public accountants, financial analysts and internal auditors are the top three specialties that figure to see the biggest salary gains in 2008.
Public accountants at the senior manager or director level can expect a 7.7 percent increase in their salaries in the year ahead, to between $88,250 and $129,250. Those with one to three years experience will also see the same rise in average salary to a range of $44,750 to $53,250. The demand for these professionals will continue to rise because of corporate governance rules, which have caused the rising workloads.
Entry-level financial, budget, treasury and cost analysts at large companies companies with more than $250 million in sales will see a salary increase of 6.9 percent to between $38,250 and $47,500 annually. Again, corporate governance initiatives plus business expansion are fueling this demand.
Internal audit managers at large companies can expect to receive starting compensation between $81,500 and $109,500 per year, which is an increase of 6.7 percent over last year’s projections.
Are there any particular industries that are seeing a faster growth rate in these financial professions than others?
The demand for financial and accounting professionals is strong across the board, regardless of the industry, but we are seeing a spike in the demand among the manufacturing, public accounting and health-care industries.
However, I want to point out that a financial or accounting professional’s narrow skill sets are not all that is demanded from employees; in order to get top pay, these professionals must also be technologically savvy and demonstrate superior communication skills.
What will be the biggest recruitment challenges in the new year?
We did a recent survey of finance and human resources managers and found that 55 percent of these hiring managers were having trouble finding skilled job candidates. Companies need to understand that there is a talent shortage at the moment and they must stay competitive. That means knowing what other organizations are paying entry-level and skilled financial and accounting professionals. It also means understanding that in this competitive environment what could make or break a decision to work for a firm is not only salary, but also a positive corporate culture, work-life balance and other perks.
Could you give more details about this salary guide and if it is available to the public?
The data for the guide is gathered through our permanent and temporary placement in the U.S. throughout the year. The company has been putting this information into a yearly free guide since 1948, and it is invaluable when companies are looking to determine salary ranges in the accounting and financial services industry.
The U.S. Department of Labor’s Bureau of Labor Statistics references this guide when it prepares its Occupational Outlook Handbook. Anyone can get a free copy of the 2008 Salary Guide from Robert Half International at www.roberthalf.com or (800) 474-4253.
LISA MORGAN is the branch manager at Robert Half International’s Accountemps Division based in Akron, Ohio. Reach her at (330) 253-8367 or email@example.com. Robert Half International has more than 350 locations throughout North America, Europe, Asia, Australia and New Zealand, and offers online job search services at www.rhi.com.
Old-school philosophy suggests that leaders are simply born that way. While there are natural-born leaders, leadership skills are not necessarily innate and must be honed, says Anne Hach, executive director of training and development at Corporate College of Cleveland.
“Even ‘born leaders’ need to learn specific skills to become successful,” says Hach, adding that there’s a leader in all of us. “However, what can never be taught is the desire to uncover that leader. That really is the fundamental first step to becoming a leader.”
Smart Business spoke with Hach about the elements of good leadership and the specific skills a person must learn in order to become a truly successful business leader.
What are the core skills one needs to learn to become a great business leader?
There are several, such as effective communication, accountability, delegation, decision-making and coaching. The embodiment of each of these skills is what makes an effective leader. All of these skills can be learned. There are also habits that are counterproductive to leadership that can be unlearned. For example, some people have a tendency to finish a thought or sentence with a question. While this can make someone approachable if it is used in small doses, overuse can undermine a person as an effective leader.
What is the most important skill an effective leader must have?
They are all important, but one thing true about all good leaders is that they lead by example. Being genuine is critical to being a successful leader. People who imitate a style, or act in a way that is not authentic short-change their potential.
Is there anything about leadership that can’t be taught?
The desire to lead. As I once heard a speaker say, ‘If you want to be a leader, don’t wait your turn.’ That is a compelling statement that says, essentially, if you want to become a leader, you need to take charge of your own development. There are people who may say that they want to be a leader, and they may whine about not having the skills or complain that their company doesn’t provide opportunities for leadership. Well, leaders do not wait for someone to recognize them as leaders. True leaders look for opportunities to hone their skills and take charge of their own life. That ‘fire in the belly’ to become a leader really can’t be taught.
We all have had experience with formal leaders — and informal leaders. The informal leaders are those people who are on a committee, for example, and while they may not be chair, they lead the show, and others look to them for advice, wisdom and leadership. That is an example of a person who did not wait to be asked. That is the characteristic of a true leader.
Why is it important for employees to have leadership skills?
If you are an entrepreneur, it is obvious you can’t grow a company on just your own hard work. To exponentially grow a business, you have to involve the work of others — and to inspire these people you need to be a good leader. For those who work for a company, leadership skills are equally important since, if people want to get ahead in their careers, they also can’t just get ahead simply on their hard work. They may need to supervise other employees. To be successful at motivating others, they need to hone skills that allow the ‘inner leader’ to come out.
What role should businesses play in cultivating leaders?
Savvy businesses understand the value in training potential leaders and take an active role. These businesses spend a lot of time and energy in succession plans and identifying leadership potential. All this activity, by the way, becomes a reinforcing cycle that attracts leaders to the company.
Along with the talent shortage, is there also a leadership shortage?
Yes. Hiring managers report that, while candidates may have excellent technical skills, many candidates fall short on leadership skills. There are also many frustrated employees who long to move up the corporate ladder but don’t have the leadership skills necessary to make that leap. The leadership shortage doesn’t have to do with the potential leaders out there — it is the training that is necessary in the core leadership skills that’s lacking. However, many companies are beginning to wake up to this fact and are helping these employees get the skills they need to become great business leaders.
ANNE HACH is executive director of training and development at Corporate College in Cleveland. Reach her at (216) 987-2962 or firstname.lastname@example.org. Corporate College offers employers affordable, cutting-edge and custom-designed training programs to enhance future work force development, job growth and job retention in Northeast Ohio. Visit them at www.corporatecollege.com.
As the unemployment rate hovers around 2 percent for college-educated workers, it’s becoming increasingly difficult for businesses to find qualified candidates to fill job openings. As the competition for skilled labor heats up, workers are getting more assertive about asking for better compensation packages.
According to “The Employment Dynamics and Growth Expectations (EDGE) Report,” an annual study on employment and compensation trends conducted by Robert Half International and CareerBuilder.com, the majority (57 percent) of hiring managers polled said it was difficult to find qualified candidates a year ago; and 91 percent said it’s equally or more challenging today.
According to the survey which polled more than 1,000 hiring managers and 900 workers 58 percent of workers said they are more likely to negotiate a better compensation package today than 12 months ago, double the number from last year’s poll.
“This intense demand for qualified workers puts potential candidates at a distinct advantage, and they are realizing that they have strong negotiating power,” says Terry Phillips, vice president of Robert Half International in Akron, Ohio.
Smart Business spoke with Phillips about the rising concern over employers’ ability to fill open positions and some solutions to the current recruitment problem.
What is causing the hiring shortage?
There are two major factors: the impeding retirement of baby boomers and the increased demand for professionals with college degrees, because of the boon in the economy over the past several years, which allowed many businesses to expand. There is an increasing demand for professionals with certain skill sets, and less of a talent pool.
What particular skill sets are in the greatest demand, and why?
The greatest shortages are at the staff level in sales, customer service, information technology (IT) and accounting. These positions require more than two years of experience. The Sarbanes-Oxley mandate has a lot to do with the demand for accounting positions in public companies. But corporate governance affects all companies private and public. In the accounting profession, we are still suffering from the fallout from the corporate scandals, which discouraged students from taking the accounting/finance route. That same scenario applies to the IT shortage. With the dot-com bust, fewer students were willing to go that route in their college studies. In other skill sets, the recent boon in the economy has led to a greater need for customer service and sales positions.
What does this mean for companies looking to fill spots?
Frankly, I see businesses getting less picky about candidates. This does not mean lowering standards, but if hiring managers are looking for candidates with two years experience, they will have to dig deeper into the pool of talent and opt for aptitude rather than experience. In other words, they will have to hire more entry-level workers who have just graduated from college than those who have been in the work force for several years.
What sales pitch should companies give to potential candidates?
Hiring managers need to talk to candidates more about careers rather than jobs.
They also need to stress the success of the organization, the growth potential in its market niche and the business’s past track record or success. The idea of making this kind of ‘sales pitch’ to candidates may be foreign to many companies, particularly those that are steadfast in the perception that there isn’t a talent shortage out there. And, indeed, some companies may not be seeing a shortage because these businesses have not had to hire because they are not growing. But companies that are on the fast track are all too aware of the shortage. All businesses need to understand the trends, and the pendulum has clearly swung in favor of the job candidates.
What should companies do to keep good employees?
Companies need to focus more on retention, which could mean more compensation and better perks, such as flex schedules and telecommuting. Interestingly, our survey did not see a rise in turnover from last year, so that leads us to believe that companies are waking up and beginning to implement good retention strategies. In fact, 31 percent of hiring managers we surveyed said their firms have instituted new policies and programs to increase staff retention rates in the last 12 months, including offering bonuses, increasing pay, improving the office environment and providing a more defined career path.
Hiring managers may want to rethink those retention efforts, however, and focus on things more closely related to work-life balance, since the top perks that workers said that would cause them to jump ship for another job are flexible schedules at 65 percent, telecommuting opportunities at 33 percent, employee stock purchase plans at 33 percent and on-site fitness facilities at 31 percent.
TERRY PHILLIPS is the vice president of Robert Half International in Akron, Ohio. Reach him at (330) 253-8367 or Terry.email@example.com. Robert Half International has more than 350 staffing locations in North America, Europe and the Asia-Pacific region, and offers online job search services at www.rhi.com.