The Treasury Department made it a little easier for companies to comply with the Affordable Care Act (ACA) by delaying the employer mandate to provide health insurance for companies with 50 to 99 employees.
Those businesses will have until January 2016 before facing potential penalties, while companies with 100 or more full-time equivalent (FTE) employees still face a Jan. 1, 2015, compliance deadline.
“Some of it was about giving companies time to come into compliance, but they also don’t know yet how penalties will be enforced or collected. The law doesn’t allow the IRS to collect any penalties, so they have a real challenge trying to figure out how to collect the money,” says William F. Hutter, CEO of Sequent.
Smart Business spoke with Hutter about changes in the ACA and what they mean for employers.
What break have companies with 100 or more employees been given regarding the first year of the employer mandate?
For 2015 only, instead of being required to extend coverage to 95 percent of employees they have been granted a grace period and only need to offer coverage to 70 percent of employees.
But plans still have to meet minimum essential coverage standards and have to be affordable.
While companies are getting that break, one of the most difficult aspects of the ACA is the complexity of the reporting and tracking requirements for companies. Most companies with 100 or more employees are already meeting these criteria, but it’s really a challenge for companies with variable-hour workforces.
It can be pretty challenging for retail and hospitality businesses. When you have 70 full-time employees and 50 part-time employees, tracking those variable-hour employees to get your FTE count can be pretty challenging.
What do businesses need to be doing now?
A lot of the administrative details — creating your policy, and your measurement, administrative and stability periods — need to be done now. Make sure your HR and payroll systems can handle the necessary reporting because it’s going to be virtually impossible to track it with a pencil. You need a way to extract that data from your system in a way that matches the reporting criteria.
For larger companies — 100 employees or more — their look-back period to determine employee eligibility for coverage starts this year, correct?
Yes. A large retailer based in Columbus, Ohio, decided a few months ago that employees would either be full time and eligible or part time, never working more than 27 hours a week. More companies will adopt that tactic because it’s easier. They don’t want to worry about who might become eligible in such a volatile environment as retail.
Almost every company has part-time employees who could become eligible based on the measurement period. Let’s say they work 40 hours a week during peak season, are offered and take benefits, then drop back to 20 hours a week. Normally under IRS code, going from full-time to part-time status would create an open enrollment period. But the ACA says they’re still an eligible employee because they met the criteria during the measurement period, and the change to part-time status no longer produces an open enrollment opportunity because of the stability period.
We’re trying to figure out if there’s a nuance in the ACA that address this issue, but haven’t found it. The IRS says you entered into a contract for benefits until the next open enrollment period or change in family status. So the employer would still have to provide coverage and the employee would have to pay his or her share, even if it’s too expensive on a part-time salary.
That’s one of the challenges with the ACA — it’s constantly changing and evolving. Once you digest and understand the implications of it from a business operational standpoint, it changes again. Because of the latest delay, businesses with 50 to 99 FTE employees don’t need to worry about it for a while and can probably wait until things calm down. ●
Insights HR Outsourcing is brought to you by Sequent
Smart Business spoke with Phil Scott of Sequent Retirement and Benefits Group about trends for plan sponsors.
What are some areas of growing interest and focus for plan sponsors?
One area that continues to be explored is automatic contribution enrollment and automatic contribution increases as ways to boost participation.
By providing better education and communication platforms, plan sponsors are enabling employee participants to be more prepared for their retirement.
Finally, plan sponsors are continuing to keep a close watch on their administrative duties and regulatory requirements.
What are plan sponsors doing to help protect themselves and manage fiduciary risk?
They have leaned on third-party administrators, recordkeepers, investment advisors and legal counsel to identify their responsibilities to maintain plan compliance.
Companies that have embraced outsourcing elsewhere in their organizations have also outsourced segments of their retirement plans to 401(k) fiduciaries. That can be 3(38) investment advisors, who assume responsibility for monitoring, maintaining, selecting and removing investment plan options; or 3(16) advisors, who accept responsibility for plan administrative functions.
Some plan sponsors have adopted or explored the option of joining a 413(c) multiple employer plan. The multiple employer plan option provides an alternative for companies seeking relief from the burdens of independently operating and maintaining their own plan.
How do safe harbor plan designs create advantages?
One great advantage for participants is that all employer matching and non-elective contributions vest at 100 percent immediately. Also, all participants, whether they’re considered highly compensated or non-highly compensated, are allowed to maximize their elective deferral limits. Elective deferral limits, set by the IRS in 2014, are $17,500 for those age 49 or under and $23,000 for those age 50 or older.
Without safe harbor protection, highly compensated participants would only be able to defer approximately 1.5 to 2 percent more than the average contribution of the non-highly compensated group.
From a plan sponsor perspective, safe harbor plan designs are great tools for recruitment and retention of top talent. In addition, the IRS permits a safe harbor plan to be top-heavy, meaning that 60 percent or more of plan assets are attributable to key employees: an officer of the organization, whose annual compensation exceeds $170,000; any employee, who owns more than 5 percent of the company, or owns more than 1 percent and has an annual compensation exceeding $150,000.
What are the implications if a plan is deemed top-heavy?
The plan must meet minimum contribution and vesting requirements for non-key employees for each year the plan is top-heavy. The minimum contribution to bring the plan back into compliance is the lesser of 3 percent of annual compensation for all non-key employees or a percentage equal to the highest percentage contribution of any key employee. Top-heavy penalties are painful infractions, which plan sponsors are able to avoid when utilizing safe harbor as a strategy within their compensation and benefits package. ●
Phil Scott has over two decades of experience in the financial services industry. He is a registered representative with LPL Financial and investment advisor representative with Advantage Investment Management.
This information is provided as a courtesy and should not be considered specific advice or recommendations for any individual. Please consult your tax professional before taking any specific action. LPL Financial nor Advantage Investment Management are engaged in the rendering of tax or legal advice.
Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Advantage Investment Management, a Registered Investment Advisor and separate entity from LPL Financial.
Insights HR Outsourcing is brought to you by Sequent
Bashar Nejdawi recruits talented employees with the right stuff and focuses them to deliver the max at Ingram MicroWritten by Dennis Seeds
Bashar Nejdawi doesn’t even pause when asked for an example of talent in action at North American Mobility, a division of Ingram Micro Inc., formerly known as BrightPoint Inc., a global leader in life cycle services for mobile devices — smartphones, tablets and accessories.
To him, a key differentiator for an organization is not how it operates when everything is running smoothly, but how it performs when things aren’t.
“That’s the true test of an organization,” Nejdawi says. “How you deal with it tells a lot about you as a team and also as individuals. That is where you see the key differentiator in terms of people where you have the talent, the way you handle crisis and the way you handle challenges.”
Take for example a recent power outage that interrupted operations at a facility in Central America.
“We lost power down in our facility in Costa Rica, and the power went down for the whole industrial area,” says Nejdawi, president of the firm that tallied $5.5 billion in annual revenue as BrightPoint in 2012. “The backup generators that we had were not enough to run the whole facility to continue production.”
Ingram Micro acquired BrightPoint in 2012 to build and develop its capability in the mobility business.
The pressure was on because Ingram Micro had a Tier II customer that was growing fast, was on a very tight schedule and needed the units “yesterday.”
“The team really pulled together both in terms of figuring out what we had that hasn’t been processed, figuring out the solution for the backup generator, but more important was getting the production back online quickly enough and then making up for it,” he says.
“Instead of everybody waiting for the process to take care of it itself, we really jumped in to figure out how to adjust the process to address the situation even faster. Then we managed it with the customer and caught up on the volume.
“Those are the kinds of things that will happen, and when they do happen, it’s also a learning exercise. That’s when you see how the team reacts, and you see the individuals in the team step up to those challenges.”
While challenges like that involve handling a crisis, Nejdawi says the biggest challenge facing a business is to have strong executive leadership and a talented team. “Talent is tough to come by,” he says. “As you grow a business, you obviously grow the team. You need to load up your organization, your team, to do more and more. The search for talent is always a big challenge for any company that’s really looking to grow.”
Here’s how Nejdawi puts together 2,500 talented team members, trains them and focuses them to deliver the goods.
Take stock of your location
While “location, location, location” may be the phrase often used in describing the most important factor in buying real estate, it plays an even more critical role in the high tech industry when it comes to talent.
“I put talent as No. 1 because if you have the right people in the right places and you have a talented team, then you will have lots of opportunities to grow,” he says.
“Focusing on talent and getting the right executive team in place is the first path to addressing challenges and figuring out the market dynamics and the opportunities and coming up with the right level of solutions, and the right solutions for the market.”
Nejdawi joined Ingram Micro Mobility in 2008 and served in several senior roles before becoming president of North America Mobility a year ago, which gave him a good grasp of the employment situation in Indianapolis — and he liked what he saw.
“That’s really been one of the great attractions for us being in the area,” he says. “We see a lot of good talent from a supply and services perspective. From a distribution perspective, Indianapolis really has a lot to offer, which is why we draw on that talent consistently and constantly.”
But even in an area that may be a talent gold mine, there is a task at hand.
“I have no special recipe for recruiting,” Nejdawi says. “I think like in a lot of other things, there are no shortcuts to hard work on that one. You have to be personally involved as an executive in searching out talent through connections, through local contacts, through universities.”
The presence of universities and educational programs is a big plus to consider, he says.
“We’ve done a pretty good job at Ingram Micro Mobility partnering over the years on a local level with universities, and we have taken on individuals through a fellowship program. That has been a tremendous source of talent for us.
“And having grown up in the Indianapolis area with so many distribution, logistics and supply chain service business — this has really given us very, very good talent to draw on.”
Within that talent pool, examining how its network operates may offer some opportunities. Nejdawi observes that the mobile device industry is actually a very small business in general and you are often bumping into fellow associates and former colleagues in the normal operation of business, creating opportunities.
The relationships that have been developed are valuable in generating everything from referrals for job candidates to those for potential customers.
“You could be a customer one day, you could be working for a manufacturer the next day,” he says. “I have been in the business now for over 30 years, and I continue to bump into people that I either have worked with during my time at Motorola or that I worked with during their time at a carrier.”
Invest in training employees
Recruiting the best talent available is one thing, but once you have your talent in place, you have to invest time and effort on training.
“There is a certain amount of training that you can put people through, but at the end of the day, the best training is on-the-job,” Nejdawi says.
He finds that a well-structured approach with a strong team that focuses on training and talent development is critical.
When new employees or new talent at various levels is hired — all the way down into the warehousing level — the company has a specific program for them.
“But the most important thing when you bring in new talent is making sure that you have a proper orientation. The worst thing that you can do is bring people in and then within the first couple of weeks they are trying to find their way around, to the restrooms or to try to figure out what they are expected to do.”
On the subject of job expectations, Nejdawi finds a mentorship program invaluable for employees and especially managerial candidates.
“I always have one person on my staff who is probably the most junior compared to other senior vice presidents and that individual is usually a couple of years out of the university and works with me as a business analyst in my talent development approach,” he says. “We take one person off their assignment, develop them and then put the person back into the rest of the organization over a certain period of time.”
Lead your mission so others can focus
Once the talent is in place, the task is to ensure a focus on your mission. Whether you choose to lead or delegate responsibilities is the next question. Delegation is often seen as an essential skill for any leader, but Nejdawi cautions against its ineffective use.
“My expectation is that delegation comes with a responsibility,” he says. “That has to be propagated throughout so people understand that you get a responsibility when something is delegated to you as well.
“Delegation also gives people an opportunity which I think is critical for them to take on the next role. People ask me, ‘How do I get promoted? How can I get to the next level?’ I say to them, ‘All you have to do is start operating at the next level.’
“So if you are a senior manager, and you want to become a director, start acting as a director, start working as a director, start behaving as a director. The ability to delegate to individuals who obviously are the right individuals allows them the opportunity to start operating at the next level, and therefore become at ease when the time comes, and others realize, ‘That individual is already operating as a director, as a senior director.’ It becomes a no-brainer.”
The other aspect is that there are times when you have to take the lead.
“I do that in front of my team, and my expectation of them is to do that in front of their teams,” Nejdawi says. “There are certain initiatives, certain activities especially when it comes to customers because if the customers see the senior individuals within the company personally and actively lead a particular activity that is important to them, that sends the message that nobody is too high up within an organization to not roll up his or her sleeves and get involved and engaged.
“That, I think, also brings a higher level of accountability to making sure that those customer specific initiatives and activities are really done with a high level of focus.” ●
- Take stock in your location and its benefits.
- Invest in training your workforce.
- Lead your mission so others can focus.
The Nejdawi File:
Name: Bashar Nejdawi
Company: North America Mobility division, Ingram Micro Inc.
Born: I was actually born in London. I grew up in Jordan, and I studied in the United Kingdom.
Education: I earned my bachelor’s degree in electronic engineering from the University of Greenwich in London. I worked in Europe for a number of years before I came to the U.S. Then I went on to earn a master’s of business administration in international management at the Thunderbird School of Global Management in Glendale, Ariz. After that I got a master’s degree in telecommunications engineering from Southern Methodist University in Texas while I was at Motorola. I got my doctorate in management from Case Western Reserve University in Cleveland.
What was your first job and what did you learn from it? My first job coming out of Greenwich University in London was with a company called SyCon, which at the time was a consulting telecommunications arm of British Petroleum, believe it or not. I was a software engineer at the time, and one thing I learned which I really enjoyed was the art of being persistent when it comes to software bugs and software fixing. If you persist at following the breadcrumbs of a problem, eventually you’ll get there. Maybe it will take you a week, it may take you two weeks and most people give up after a couple of days. But if you persist, you will get there.
Who do you admire in business? Warren Buffett. I like his style. I like his approach. He is a simplifier in my mind. I also like his humility and the way he is a big philanthropist. I think his goals and objectives are admirable.
What is the best business advice you ever received? Keep it simple. I have that on a piece of paper that I have in the book I carry around with me. That is the first one on the top of my list. Keep it simple. I look at it every once in a while when I’m in a meeting.
What is your definition of business success? I think it’s two things. The first one at the end of the day is delivering the right returns from a financial perspective to the shareholders. Those are the folks who have entrusted us with their investment. The way I look at it is as a partnership with the employees. If we do well, then they will also do very well through our bonus schemes, our profit sharing plans that we have in place. We are all tied into delivering better financial returns that will benefit everybody including the employee base as well as the shareholders. To me that is business success.
The second one, which I think is also just as important, is measuring business success through customers who bring us repeat business and customers and have new ideas or respond to new ideas that we have about how we can do more business. People who go from one organization to the next will come back and say, ‘You guys are performing so well, and now I want to work with you again.’ And existing customers will give us more business, who will talk to us about how we can do more business — that to me is business success.
Learn more about Ingram Micro Inc. at:
How to reach: North America Mobility division, Ingram Micro Inc., (317) 707-2355 or mobility.ingrammicro.com
The Beatles, ready to frame: Trends International is up to the challenge of producing a little bit of ‘Yesterday’Written by SBN Staff
Rewind to 1964, the summer The Beatles invaded America —the world has never been the same.
Fifty years later, Trends International of Indianapolis is hoping to help recreate those old memories — and new ones — by producing licensed posters, stationery and other items showing the record-setting band, marking the 50th anniversary of Beatlemania in the U.S.
For Vice President of Licensing Jeff Loeser, handling a product featuring one of the most popular brands isn’t unusual.
“We are used to dealing with similar types of artists, bands and brands, so we know the steps that we have to go through to get the approvals and what they will and won’t approve,” he says.
Protecting the image
“They don’t like to have their images or likenesses altered, which you can understand. They want it certainly to be a good quality product, and not a case of just kind of slapping their logo on something,” he says.
It’s not a case of taking the money and making a “Run for Your Life.”
“It’s more about protecting the brand perception, and keeping it at a higher end, if you will, and keeping it on products that won’t portray them as selling out,” Loeser says. “We deal with some of the largest studios and consumer product companies in the world, whether it’s Disney, ‘Star Wars,’ Marvel or different sports leagues, they are all very protective of their trademarks and their brands and how they are represented in merchandise.”
While almost everything imaginable has been marketed with the image of The Beatles, Trends International is sticking to some image-specific items — stationery, posters, calendars, stickers, decals and writing instruments.
One of the iconic photos being used is of the young Beatles in coats and ties walking in the streets of London. Later photos of the mustached and bearded Fab Four are also being used.
Trends International released posters and bookmarks late last year and is scheduled to market gel pens, stylus pens, stickers and decals in the first quarter this year. Then in the third quarter, 2015 calendars will be available. All products will be distributed through national retailers, as well as independent specialty and gift stores.
Trust and comfort
“We’ve worked with Bravado (Universal Music Group’s global merchandising company) for a long time, so I think part of that is they have a trust and a comfort level with the types of designs that we do, and our distribution and how we will treat the image of their artists,” Loeser says. “In addition to The Beatles, we represent a lot of other artists, but that is a sensitive topic of course because it does reflect directly on these high profile celebrities. But we are used to doing that.
“I think we treat everybody that way. Everyone’s brand or likeness, if it is a celebrity, we can appreciate their wanting to be portrayed in the best possible light, on the best possible product. We treat everybody that way whether it’s The Beatles or an up-and-coming star. But from our approach, we treat them all that way, and I think based on the types of products we do and sell — we’ve been in business for 26 years — they have that trust that we know what we are doing.
“They know their brand, they know their talent better than anyone, and we know our products and our consumers, our core demographics. We are very good at what we do and they are very good at what they do, so you put the two together and end up with some great products.”
In 2013, Bravado signed an agreement giving them the rights to offer official Beatles merchandise in North America. Trends International, however, isn’t the only third party to reap the benefits of this deal. Boelter Brands is producing merchandise glassware, drinkware and tabletop accessories. Working with Bravado, both licensees will produce special items featuring images from “Yellow Submarine,” the animated film in which The Beatles travel through the fantasy world of Pepperland facing the Blue Meanies.
“When dealing with a band as iconic and beloved as The Beatles, Bravado has had to be very careful with the band’s image and what companies to partner with,” said Tom Bennett, CEO, Bravado. “Both Trends International and Boelter Brands are at the top of their respective areas and we’re confident that The Beatles brand will be well taken care of and that Beatles fans will be very pleased with the vast array of products.”
Loeser says Trends International pursued the licensing deal, but had an existing relationship with Bravado so it was somewhat collaborative.
“For the products that we produce, we are kind of the go-to company for those products,” he says. “They know we have the distribution, we have quality, we have the retail relationships, and because we worked with them on other projects, when The Beatles became one of their clients, it was a good match.”
As for a sales forecast, you have to admit that money “Can’t Buy Me Love,” but it sure can bring back some memories from 1964.
“I imagine the calendars and posters probably will be the biggest sellers,” Loeser says. “Those categories, by nature are larger than our stickers, bookmarks and writing instruments. It is all going to be designed with the core fan in mind, and it seems like every new generation discovers or rediscovers The Beatles. So they always seem to have something going on, like the ‘Love’ show in Las Vegas.”
What will it take for Bravado to call the venture a success? When will Loeser be able to say, “I Feel Fine?”
“I can’t speak for them,” he says. “I think certainly sales are a factor. But if it came down to getting an order for something that they weren’t comfortable with or didn’t really care for the design on, and there was a customer ready to order it, they would probably rather say no and miss the order than get the order and put something in the market that doesn’t meet their expectations.
“There are certain things like that. We haven’t come across that yet, but from just being in this business, working with other licensors, you see that sometime. Some licensors don’t care. It’s just all about the money, and they will put their brand or their logo on anything whether it makes sense or not.
“They are not the fads that come and go but they are the ones that last, are maybe a little bit more particular about what they will and won’t approve,” he says.
In other words, if your effort requires “Eight Days a Week,” it’ll be sure to last.
“We are really excited about it,” Loeser says. “I think it is going to be a great opportunity. We have a great design department. I think we are going to give it a nice, fresh look, using what’s available. Our initial response from our customers and everyone has been really positive too. We think it’s going to be great.” ●
How to reach: Trends International, (866) 406-7771 or www.trendsinternational.com
As a Cleveland Browns fan, I watch the Super Bowl for two reasons — to root against the Ravens or the Steelers and to watch the commercials. Since the first part didn’t work out during Super Bowl XLVII, I focused on the second and discovered something disturbing — most Super Bowl advertisers act as if smartphones and tablets don’t exist.
Take Mercedes-Benz for example. Last February, they spent an estimated $3.8 million to run a 30-second commercial in which the company advertised its new CLA coupe. In the ad, Willem Dafoe plays the devil in the midst of a negotiation with a 20-something. The devil’s deal was the young man’s soul in exchange for a new CLA. Unfortunately, just before he’s about to sign his soul away, the young man spots a billboard for the CLA and realizes its price is under $30,000. He rejects the deal, and poof!, the devil disappears.
When this ad first ran during the Super Bowl in February 2013, it ended with the statement “Coming September 2013” followed by a black screen with a large Mercedes-Benz logo and a small Facebook logo promoting “MercedesBenzUSA” on Facebook.
And that’s it.
And that’s the problem.
Make an incentive
The strongest call-to-action Mercedes-Benz could muster for the biggest game of the year and a car that wasn’t even available for seven more months was a barely-visible Facebook page name. The automaker didn’t encourage viewers to visit its website. It didn’t ask excited consumers to sign-up for email updates leading up to the car’s release. Heck, it didn’t even give fans an incentive to go to Facebook.
What Mercedes-Benz failed to embrace — as do far too many companies today — is that all marketing is now direct thanks to the rise of the mobile Internet. Google estimates that more than 77 percent of U.S. adults watch television with at least one mobile device (smartphone, tablet or laptop) in hand. According to the Reynolds Journalism Institute, more than 55 percent of adults in the U.S. consume news on mobile devices. Furthermore, the latest data from Return Path indicates that nearly half of all email is now opened on a mobile device.
The majority of consumers are now mobile-enabled. This means that every bit of your advertising — whether on television, in print, out-of-home or online — has the opportunity to immediately connect with consumers if you include a mobile call to action.
In this age of mobility, we can and must ask our paid advertising to do more than just create brand impressions. It should be generating sales and building our direct, proprietary audiences of subscribers (email, SMS, YouTube), fans (Facebook) and followers (Twitter, Instagram, Pinterest).
Failing to leverage paid media in this fashion is akin to leaving money on the table — something no one wants to do whether they’re spending $1,000 for a local spot or $3.8 million for 30 seconds of Super Bowl time.
The moment of truth
So come this Feb. 2, I hope we’ll see a different kind of Super Bowl in which the advertisers fully embrace mobile-empowered viewers. Perhaps this will inspire brands of all stripes to revisit whether their paid advertising embraces the potential of all marketing to be direct marketing.
And of course, I’m glad it’s also a Super Bowl without the Ravens or the Steelers. Because as a Browns fan, that’s what makes the Bowl Super. ●
Jeffrey K. Rohrs is vice president of marketing insights for ExactTarget, a salesforce.com company, and author of “AUDIENCE: Marketing in the Age of Subscribers, Fans and Followers.” For more information, visit www.AudiencePro.com.
Expansion of the Medicaid program in Ohio was approved by the state Controlling Board because there wasn’t enough support to get it passed in the legislature. But there’s no economic reason for anyone in Ohio to oppose the expansion, says William F. Hutter, CEO of Sequent.
“The battle about Medicaid expansion was based on principle; it was about certain forces resisting an additional expansion of federal government in Ohio. And that somehow expanding Medicaid to the less affluent population in Ohio was an endorsement of health care reform,” Hutter says. “That is one view. I started taking a view that Medicaid expansion in Ohio is good for business and good for the population.”
Smart Business spoke with Hutter about how the Medicaid expansion helps businesses and what companies are doing in response to the program.
Why is Medicaid expansion good for businesses?
Under the Affordable Care Act (ACA), if an individual meets the criteria of having an income of less than 138 percent of the federal poverty level they can apply for Medicaid benefits.
Consider industries like hospitality and retail, which deal with a lower-cost, transient employee population. They’ve taken a position that they have employees they would like to move to full time, but have health care to deal with under ACA and the benefits cost too much. One of the advantages for that group of people, and those industries, in Ohio is that they might qualify under Medicaid.
If employees are covered under Medicaid, they are exempted from the full-time equivalent (FTE) count of businesses. That means they aren’t included in determining whether a business has 50 FTE employees and would be subject to penalties starting in 2015 if they do not provide health insurance coverage for employees. Normally, hours of all part-time employees are totaled to compute how many FTE employees are added to the number of full-time employees to see if a business hits 50.
Having more employees exempted from the FTE calculation could allow businesses to hire more people and get them qualified for Medicaid. Employees get medical coverage, the business gets exempted from the ACA and health care providers benefit.
How do health care providers benefit?
Providers complain that they don’t make money on Medicaid patients because reimbursement rates are lower. However, hospitals and urgent care centers do not turn people away; they provide medical care 90 percent of the time whether or not someone can pay. What’s better, to be paid zero for providing $500 worth of medical services, or to be paid $400? From a patient standpoint, while Medicaid might not cover all costs, it takes some pressure off because there is reimbursement from the federal government.
Have businesses developed strategies in response to the Medicaid expansion?
Absolutely. They are trying to get employees signed up for coverage. We’ve been working with clients on helping them with the Office of Healthcare Transformation, which built the Medicaid application portal in Ohio. Director Greg Moody has done a good job creating a portal that makes it easy for people to sign up.
There have been comments that only 30 percent of the people who register get qualified, but it’s a financial qualification — it’s not arbitrary. It’s a set amount based on income being up to 138 percent of the poverty level.
This is one of the more worthy social benefits that helps keep people healthy and is in-line with the intent of the ACA. It will be good for small and midsize businesses and keep more people employed. Yes, it’s not in high-wage positions, but it is an improvement and will move more money into Ohio and create economic flow.
Employers are starting to figure this out. They want to do what’s best for employees, the company and shareholders. For the current circumstances and environment, Medicaid expansion is good for Ohio. ●
Insights HR Outsourcing is brought to you by Sequent
Many companies talk about the need for employee engagement, but few are taking the necessary steps to engage their workforce.
“While it’s a commonly used term, it’s not common practice. For example, 75 percent of leaders have no engagement strategy, yet 90 percent consider engagement to be a critical component of a company’s success,” says Beth Thomas, executive vice president and managing director of Consulting Services at Sequent.
“Right now, 70 percent of employees are disengaged at work, and it’s costing companies over $300 billion in lost productivity, turnover and diminished business success. Based on statistics, you would think that companies would view this as a critical initiative,” says Thomas.
Smart Business spoke with Thomas, author of “Powered by Happy: How to Get and Stay Happy at Work,” about how to boost employee engagement.
Why have companies been slow to address engagement?
There are several reasons. Some companies believe customer satisfaction is engagement — it’s not. You can have happy, disengaged employees who are genetically happy or pleased with the company, but are not engaged in their work or in the right role.
Surveys will address items like wages, benefits and the company café, but that doesn’t get into the emotional connection to work and employees’ desire to use discretionary effort to be the best performers they can be.
Sometimes companies conduct surveys and do nothing with the results, which creates even more disengagement.
What is the process of engaging employees?
We utilize a nine-step process:
- Create a vision. What do you want to achieve? What’s the value proposition?
- Determine the metrics of success. Use benchmarks and create performance goals needed to improve engagement, which will also build customer loyalty and your bottom line.
- Align expectations. Once you have a vision and decided how to measure success, develop an employee engagement survey designed to get the information needed to improve engagement.
- Execute the survey. We conduct an educational webinar first, so employees know why the survey is being done and their role in making it a success.
- Create an action plan based on the survey results. The plan should prioritize tasks and assign ownership and timing to each milestone. Communicate the survey results and how they are being used.
- Establish a team of influencers. This group will organize activities — based on survey results — to help achieve and sustain a higher level of engagement.
- Develop leaders and frontline managers. They need to understand how to impact the company culture and employees every day. Many managers think they are prepared to coach and lead engagement, but they really aren’t.
- Evaluate if course correction is needed. Training or action plan activities may need to be modified to ensure you’re set up for a successful journey toward engagement, rather than a pit stop.
- Ensure sustainability. Creating that initial engagement is easier than sustaining or improving engagement. We have an engagement application that provides managers with a support network of tips, tricks and hints on how to continually drive engagement. You have to create engagement as a habit; it occurs naturally because of the way you manage people.
What mistakes do companies make when implementing engagement strategies?
One is rewarding performance without behaviors. Someone might be a great producer, but have a bad attitude. Knowing that they have a bad attitude and rewarding them based on sheer numbers or performance is a mistake.
The management and leadership team also has to believe and drive the engagement process; it’s not enough just to say it’s an important initiative.
The benefits of engagement are so great that more companies should make it an emphasis. Engaged employees generate 40 percent more revenue than disengaged ones and are 87 percent less likely to leave. So being able to recruit, retain and benefit from engaged employees will impact your bottom line and the success of your company. ●
Insights HR Outsourcing is brought to you by Sequent
You’ve probably learned the hard way not to communicate anything emotional in email because the medium tends to be tone deaf. No doubt you’ve also learned to overlook misspellings and shortened words in texts and tweets.
We’re certainly connecting more ways and more often. But are we connecting any better?
It’s hard to say. The challenge of effective communication is to trim the time between the exchange and the realization that the communication got through or wasn’t understood. In business, the sooner we know we’re not connecting, the sooner we can fix it.
Actual conversations are still the best way to communicate. Phone calls lead to less miscommunication than email. Why? Conversations — whether in person, by phone or via Skype — have built-in error detection and correction. You can hear the pause. You can see the puzzled look. You can explain. Communication is therefore successful.
Be sure you and your organization empower staff to ask when they aren’t clear on any communication — from any source.
According to a compilation of work trend studies, more than 77 percent of all employees do not trust their managers. Some 63 percent do not believe in what leaders say, and 83 percent believe that managers work just for their own benefits. Less than 40 percent of the workforce reports being “truly committed” to their boss or company.
If we don’t trust our bosses, aren’t committed to our workplaces and don’t value our community leaders, what hope do we have for the future of our economy?
One of the real catalysts for creating shared value within your company is to create an environment of trust and credibility to allow people to unleash their true potential. And because leadership is about people, passion, drive and communication, author Andreas Dudas suggests four major leadership objectives to begin to turn the tide of distrust and noncommittal employees:
■ Earn trust through credibility.
■ Ignite fire inside people.
■ Empower people.
■ Create a sense of purpose for employees.
Comedian Jerry Seinfeld famously says, “The way to be a better comic is to create better jokes. And the way to create better jokes is to write every day, which I do. Consistency is the secret to my success.”
The same can be said for top performers in any field. They are more consistent than their peers. Even after a particularly off week or a bad quarter, the most successful performers — that is, leaders — hit the ground running the next day.
They appreciate that leadership isn’t just being top dog. It’s not a position. Leadership is a practice — the practice of pushing the envelope, working all the angles, developing yourself and your team, striving for excellence — day after day, no matter what.
Your work ethic is the key to your success, no matter your field. It is appreciated, respected and it pays off. ●
David Harding is president and CEO of HardingPoorman Group, a graphic communications firm in Indianapolis consisting of several integrated companies all under one roof. The company has been voted one of the “Best Places to Work” in Indiana by the Indiana Chamber of Commerce. Harding can be reached at firstname.lastname@example.org. For more information, visit www.hardingpoorman.com.
Connect with David Harding on LinkedIn http://linkd.in/HCZpz3.
As we head into peak 2014 planning season, numerous digital marketing priorities will emerge. However, there is one that is quickly becoming the most important, as customers continue to drive a transformation across business. The amount of personalization possible is endless, and companies need to change traditional marketing practices to optimize the digital marketing opportunity.
Consider the following: The Direct Marketing Association in 2011 reported that for every dollar a marketer invests in email, the return on investment is approximately $40.
Both sides now
Social media provides an additional avenue to collect and analyze customer data to build comprehensive customer profiles that truly reflect preferences, lifestyle and personality. The data in these profiles is extremely actionable and can drive relevant communications, personalized experiences and custom offers that increase engagement. However, it is important to remember both sides of the consumer psyche.
Consider this quotation from Daniel Pink in Booz & Company’s article “How to Design a Winning Company”:
“I've since come to realize that empathy is related to understanding someone's emotional state or feelings, whereas perspective taking is much more cognitive and analytical — it's understanding someone's interests. I think interests are the key word here. The facts say that both perspective taking and empathy can enhance your understanding of someone else, but if you have to go with one, go with the analytical. I think the evidence says very clearly that people are able, especially in negotiation and sales situations, to reach a better deal for both sides when they're focused on interests.”
The quote points to one thing in the marketing world — responsible marketing — which is the one tenet that should be universal for all marketing agencies, technology firms and consultants.
Responsible marketing is our ability to leverage the massive amount of customer data to create a personalized experience for each individual customer. The value isn’t just from the marketing message itself; it’s from the intelligence and optimization in each that builds a 1-to-1 ongoing relationship with each customer that scales across the enterprise, builds brand loyalty and drives sales.
Personalization and using it
Traditional marketing has been about finding and utilizing empathy. You can watch any episode of AMC’s “Mad Men” to understand the beautiful and creative relationship between advertising and consumer empathy. In order to be creative, Don Draper, the lead character in “Mad Men,” had to understand the emotional drivers of the customer or at least give a good guess.
However, the world has changed. Personalization is becoming a central part to any marketing process. Empathy is only one part of the equation, and it is becoming smaller as technology advances. Do we have to understand the emotional state of a consumer? Of course.
Do we have to understand past sales data and behavior to truly relate? Absolutely.
Daniel Pink is right when he suggests that truly understanding someone’s interests is the essence of effective selling (and marketing). We must build strategy based on data and personalization to reach today’s hyperconnected, on-the-go consumer.
Kyle Lacy is senior manager, content marketing and research for ExactTarget. He is the author of Twitter Marketing for Dummies, Social CRM for Dummies, and Branding Yourself. For information, go to www.exacttarget.com.
Scott Moorehead use culture to drive success at The Cellular Connection to the tune of $600 million in salesWritten by Dennis Seeds
When Scott Moorehead became the CEO of The Cellular Connection in 2008, he thought culture was just what people knew about art.
“If you had culture, then you drank your coffee with your pinkie in the air,” he says. “I didn't know anything about culture. I didn't know what it meant. I didn't know if it was important or not.”
But after being in the driver’s seat for a short time, and networking with some other companies, he realized that a company culture was a crucial matter.
“Now I believe that no matter what your company sells, what it does, no matter how many inventions you have or patents you have, your only secret sauce that nobody can steal is your culture,” he says.
While you might say Moorehead’s mind-set makeover sounds like a dramatic enlightenment, it was more of a shift in what he knew about the company already but hadn’t quite put together all the pieces.
While growing up, the ebullient Moorehead knew that one day he was expected to take the reins of the company that was founded by his parents. So over time, he worked 32 positions in the organization — nearly every one — to earn his spot at the top so everyone would know it was not just given to him.
“Because of having worked my way up through the company, I could see there was a cultural difference between the people who worked in the stores, and the people who were in the corporate office, and the people who were in executive positions,” he says. “It didn't match, and it didn't feel like we were all on the same page. That was the feeling I got before I knew what culture was.”
The Cellular Connection is the largest Verizon premium retailer in the nation with more than 800 locations across 28 states. Annual revenue went from $191 million in 2009 to $606 million last year under Moorehead’s leadership. Here’s how the culture Moorehead drives plays a big part in the company’s success.
Make order out of chaos
Starting a company and building a culture from the ground up is one thing; merging two cultures is another matter; and the hardest job of all may be sorting out a disorganized culture. That’s what was facing Moorehead. The de facto culture created a lot of barriers walls that one had to hop over constantly to get things accomplished, and Moorehead realized it was a tall order.
“We didn't even talk the same language, man,” Moorehead says. “It was a constant battle because the stores were speaking a different language than the executives because the executives didn't have a lot of transparency at the time. They had the right intentions, but the transparency wasn’t there.”
Once Moorehead found the weaknesses in the primitive culture that was in effect, he took time to consider the journey ahead.
“You have to take a step back and look at what your values are,” he says. “Then you can build your culture around that. Trying to force a culture that doesn't exist, from a value perspective, is impossible.
“It's a constant battle to make sure that your culture is right and you have to do research, and you have to have opinions from all levels of the company, and you have to figure out how to get people to speak up on their own behalf. It's tough. Otherwise it's just one person's point of view. That's not really a culture; that's more of a directive.”
Moorehead’s major goal was to build one team out of several disconnected ones. That meant getting the big picture to be accepted by 1,400 employees.
“Somebody's got to raise the sail, and somebody's got to paddle, and somebody's got to steer, and somebody's got to make sure we are cooking the food to feed everybody who's hungry, to keep them healthy; it takes a crew to run this ship,” Moorehead says. “Everybody has a job — but everybody realizes everybody else's job is just as important.”
When you explain the big picture, it likely will be easy to get employees to buy in. Moorehead found that his good fortune was to follow the excellent vision his father, who co-founded the company with his mother, had laid down: he wanted a company where people wanted to come to work each day, he was not going to manage by intimidation, and there would be a family aspect of the company.
“When you put all that together — customers matter, employees matter, no management by intimidation, and family feel, and let's just make a company where people want to come to work, — and you say that out loud, it sounds like buzzword bingo!” Moorehead says. “So getting people to believe in it wasn't hard. It wasn't hard at all. Now, getting it actually executed is a whole different story. And that is hard.”
Let your culture be your filter
What makes it difficult to get everyone on the same company culture page is how each employee views his or her personal role in the process. So a key feature is to keep the explanation simple.
Moorehead conveys the message this way: the culture serves as a filter through which every decision must flow.
“You have to build the culture around what you believe in, making it the first thing that you filter all your decisions through,” he says. “It’s hard, because you have to try to get every person to do that. And without a doubt, it is not perfect here. You can’t have several thousand employees and make it perfect every time, but we are getting a heck of a lot closer.”
While you make the essence of culture real, make it regular as well. Repetition leads to mastering the process.
“You have to really make it habit,” Moorehead says. “If you can make it habit, then you've got a chance. But if you just talk about it just once a year, when the annual sales rally comes around, and you don't live it, then you've got no chance.”
Part of making the culture real is transparency when it comes to the company goals and how the team is going to reach those goals.
“I don't keep anything from anybody,” he says. “They know the corporate goals and they know where we are trying to get to and then ultimately, they need to know what every department is doing to help everybody to get to the same place, so we are all headed in the same direction, talking the same language. That makes everything pretty easy.”
One other cultural feature that can be effective is to appeal to employees on a family level.
“We do ultimately feel like we are a non-blood family, and when you feel like that, you feel like you want to help your family out,” Moorhead says. “I think they are absolutely bought into being part of bigger than just themselves.”
Nurture the entrepreneurial spirit
While it is not necessary for all employees to have it, an entrepreneurial spirit is sought for all high-level execs at The Cellular Connection.
“If you don't have an entrepreneurial spirit, then you probably should not come work here because you may not be completely fulfilled with your job,” Moorehead says. “We are not going to hand you a piece of paper with a bunch of boxes to check. And that's empowerment.”
With empowerment there is a lot of trust involved, so you have to hire the right people.
“Then every now and then, you have to check up on everybody and make sure things are smooth, but there is a ton of empowerment, and that is a thin line to walk on. Things can go awry pretty quickly and if you're not engaged, as a boss, you can have things fall apart on you very quickly.”
If you are not good at it, empowerment can become a reactionary style of management.
“But if you're taught how to be a great leader, and you're taught how to stay out front, and be that person who motivates the team and sets reachable goals and who works together with a plan that's built by everybody instead of just from the top down on how to achieve these things, then you can do it,” Moorehead says.
“It just takes the right person. Not every person is right to come work at our company. Not everybody likes it. But we have found that the people who we have brought on board have been yearning throughout their entire career to have their thoughts and their personality to be heard. It's like they've been set free.”
Moorehead cites the example of a TCC employee who was a new hire into a management position, but wasn’t feeling fulfilled.
“It took him a while to really jump into the fact that his opinion mattered now,” he says. “As soon as he figured that out, he developed a program called the Rock Star Sales Process. Customers have to feel like rock stars, that's the point.”
In short, his suggestion became the standard sale process for the company — and he got to be in charge of it.
“He was just beside himself with the fact that one good idea rolled into something that thousands of people across the country now use has their technique to do sales in our stores,” Moorehead says. •
- Make order out of chaos
- Let your culture be your filter
- Nurture the entrepreneurial spirit
The Morehead File:
Name: Scott Moorehead
Company: The Cellular Connection
Birthplace: I was born and raised in Marion, Ind.
Education: I'm a Boilermaker. I went to Purdue University, and I graduated from the school of business, majoring in business management.
What was your first job and what did you learn from it? My first job ever was bagging groceries at a grocery store. No tips. This was beyond the days of tips. I learned that I didn't want to do that kind of job forever. My first, I would say, job was for my dad on the wire line side, when we were pulling in local area networks. I didn't know any better at that point in time, so when I got to work, I worked hard. And not everybody liked the fact that I worked my butt off. It was like maybe you should slow down and have a cigarette, or something, man. But I don't smoke! One of the jobs that I worked the whole summer was when we were wiring the state hospital in Richmond. There are several buildings that are 100 years old and I had to work through difficult spaces. I told my dad, this wasn't all that great, and he said, “If you don't graduate from business school at Purdue, this is what you're going to do the rest of your life!”
What was the best business advice you ever received? A lot of the guiding principles that I use as a manager, and I feel like I'm a pretty good manager, a pretty good leader, have been from my dad. My mom and dad, Phyllis and Steve Moorehead, shared a lot of the same practices. My dad told me you always take care of the company and the company will take care of you — essentially, don't make selfish decisions. That's the fastest way to lose your staff. This is business advice that you can't just send to everybody; this is from an ownership perspective. But I have given the same advice to my leaders, and I think it's worked for them.
Who do you admire in business? There have been several people who made an impact on me, in a lot of different ways. My dad, first and foremost; both my mom and dad actually. In my early years at Verizon, I had a lot of people who had a positive effect on me. Nick Pyros had a huge impact on me, and a woman who is actually the COO of Verizon Wireless now, Marni Walden. Every time I am around her I seem to take way something from her that makes me better. Then from an ownership standpoint, and building your business from small to big, I've latched on to a guy who I have partnered with recently, and his name is Marcelo Claure, founder of Brightstar Corp. He is an amazing business person. If there is one person on the planet who was in the top 1 percent of the top 1 percent of business people, it's him. Being in the same room with him and watching how he conducts himself is like getting a master’s degree.
What is your definition of business success? A lot of people ask me what my goals are, and when I want to quit or move on, or do something different or whatever, and I say, man, I wake up every single morning, and I want to come to work and have fun, and I do. And the day that I wake up and am absolutely sick of this whole thing, then I know it's time to quit. But I've never felt like that. Ever. I mean every single day since I have started this, I've never dreaded going to work. Ever. Not once. It didn't matter what's going on. It's fun around here. I don't have a financial resolution or any particular saying other than I want to stick to my morals, and I want to come to work. Those other two things that I feel like if I can stick to that, then I have success.
The Cellular Connection Social Media Links:
How to reach: The Cellular Connection, (765) 651-2001 or www.ecellularconnection.com