Rising health care costs have driven up insurance premiums, straining employers’ funds and leaving less money available to invest in their businesses, hire employees or award pay increases.
“Any time costs go up, there’s less money to spend on other things that are important to the growth of a business,” says Ross Farro, a principal at Benefits Resource Group. “It comes down to companies deciding how they will pay the increased expenses and continue to offer health care benefits.”
Smart Business spoke with Farro to learn about strategies employers can utilize to effectively deal with rising health care costs.
Are certain types of businesses hit harder by these changes than others?
Generally the size of the business determines how it’s treated under the Affordable Care Act (ACA). For instance, the new law means community rating is used to determine premiums for companies with fewer than 50 employees, which eliminates medical underwriting. This has driven up rates for companies with healthier workforces — sometimes as much as 50 to 120 percent. They are also obligated to provide minimum essential benefits to meet the plan design requirements under the law.
Also, employers that offer group benefits are being hit with fees and higher taxes that come with the ACA. Large employers are also still awaiting final U.S. Department of Health and Human Services guidance for measuring the eligibility of employees during 2014 for required coverage in 2015.
What are the most troubling issues for employers as health care costs rise?
Employers are concerned with controlling costs without reducing employee benefits. The taxes and fees that come with the ACA are substantial. This year, taxes and fees are roughly 5 percent of fully insured premiums, and are expected to increase next year. Employers paying $1 million for health care premiums will have $50,000 in associated fees. For many companies, that’s the equivalent of one potential new employee’s annual salary.
What should employers do to better control health care-related expenses?
Wellness plans and an emphasis on consumerism are two approaches that can help employers better afford the health insurance benefits they offer employees. Negotiating with or changing providers really doesn’t work. A better solution is to focus on things that can be changed, such as addressing obesity and chronic disease within your employee population since these are factors that increase costs. Wellness initiatives not only have an impact on insurance premiums over time, but can improve productivity and mitigate disability claims.
Health care consumerism is fundamentally about restructuring an employer’s health benefit plan into one that puts economic purchasing power in the hands of its employees. To leverage this approach, companies should consider programs such as a health reimbursement account or a health savings account paired with a high deductible that pays for health care expenses with pretax dollars from the employee, employer or both. Either strategy brings attention to the costs of services and prescription medications, encouraging employees to be more cost conscious.
Self-insuring allows employers to pay the costs of claims rather than pay for a fully insured premium, offering a more transparent look at costs. It also can substantially reduce the amount of new ACA fees and taxes. Self-insuring is becoming a viable option for employers with fewer than 100 employees, as insurance carriers are developing products for groups as small as 25 employees.
If employers do only one thing to deal with the challenge of rising health care costs, what should it be?
Employers need to work with a consultant, not a broker. It’s not only about shopping your benefits with other insurance providers; it’s about being creative and knowledgeable. You need a proactive consultant who understands the laws and can develop strategies to help you. As much as employers might want to wait to see if something comes along to derail the ACA, they must realize it’s not going anywhere at this time. ●
Ross Farro is a principal at Benefits Resource Group. Reach him at (216) 393-1820 or email@example.com.
Insights Employee Benefits is brought to you by Benefits Resource Group
Few challenges are thornier for family business owners than preparing for a transition of ownership. It’s a time for facing tough choices about the company’s future leaders and how the new owner will finance the transfer.
“About 70 percent of family-owned businesses will change hands over the next 10 years as the baby boomers retire,” says Krista Dobronos, senior vice president and Akron market leader for Westfield Bank. “Unfortunately, too many business owners have not planned sufficiently for this transition.”
At a minimum, this planning process should begin three years before the targeted ownership shift, Dobronos says, though five years in advance is ideal.
Smart Business spoke with Dobronos about transitioning family business ownership.
What elements should be included when planning an ownership transition?
About half of all family businesses don’t have any kind of succession plan on paper. The starting point should always be identifying who will take ownership of the business, whether it’s a key employee, a family member or an outsider.
A business owner should also consider to what degree they want to remain involved in the business. Do they want to remain an investor in the business or get out entirely? They also need to consider the best option for financing the ownership transition.
Exit planning isn’t only about the owner’s retirement. Ownership transitions can also be triggered by divorce, disability, an extended illness or unforeseen death.
What are some of the best financial options for family business ownership shifts?
It all depends on the company, its industry and those who will take over the company.
Some buyers may wish to pursue a traditional bank loan for the company, which is usually a seven-year term loan using a 10-year repayment schedule. The buyer of the business can also take out an individual loan that is guaranteed by the company.
When there is a gap between the purchase price of the company and the value of collateral to back a bank loan, the buyer may need to secure gap financing. Mezzanine financing, for example, is becoming increasingly popular, and usually takes the form of subordinated debt or an equity investment like preferred stock. The seller can also provide financing referred to as a ‘seller note’ for the buyer to cover that gap over a period of time.
What about transitioning ownership to a company’s employees?
An employee stock ownership plan (ESOP) can successfully finance an owner’s exit strategy, but it requires a longer planning process than other financing options.
An ESOP is a way that an owner can transition shares of the business to the company’s employees at a lower after-tax cost, providing employees an opportunity to build wealth.
How can business owners take emotion out of the equation when planning?
It’s important to make a decision that’s based not on emotions but on the sustainability of the business long term.
This is one of the reasons it’s so important to have trusted advisers you can turn to. Sit down with your attorney, banker, accountant, financial adviser and other professionals you trust to help you develop a sound perpetuation plan.
What do banks look for when they consider backing such an ownership transition?
With regard to the company, banks want to ensure there’s adequate cash flow to service debt related to the ownership change. Banks look at the industry the company operates in and how market forces might impact it in the future. In the new owner, banks want to see a track record of experience with that company or industry.
When considering supporting an ownership transition, banks spend time in the company’s facility or office to see them in action, observe the approach to staffing and understand their clients. This interview process is critically important for both sides. It’s like a courtship — the business owner should feel as comfortable with their banker as he or she is with them. ●
Krista Dobronos is senior vice president and Akron market leader at Westfield Bank. Reach her at (330) 668-6420 or firstname.lastname@example.org.
Insights Banking & Finance is brought to you by Westfield Bank
The lifeblood of business growth is innovation — but knowing this is the easy part. It’s a whole other ballgame to actually drive innovation within your organization on a consistent basis.
Your company could suffer if you’re the only one who comes up with the next big idea. Smart leaders build organizations that think for themselves with the right people and channels to spark ideas.
In order to move your organization to the next level, here’s some tips from Pittsburgh business leaders who drew on their teams’ full potential to find new ways to enhance processes, procedures and products.
1. Use internal and external channels
Nicholas DeIuliis, president of Consol Energy Inc., looks inside and outside his industry to bring the best innovation to the forefront of the company’s operations.
Consol Energy Inc. is a more than $6 billion, publicly-owned producer of coal and natural gas and one of the leading diversified energy companies in the U.S. DeIuliis and Consol have been focused on new technologies, new energies and, above all else, staying one of the leading producers in its region.
“There are two broad groups I look to over time for help and insight,” DeIuliis says. “One is the management team that we work with and around. They’re the best and brightest in the industry. Getting that comfort level and that trust level with the exchange of ideas and thoughts as time goes on is the lifeblood of any successful organization.”
The other group DeIuliis looks at is almost the mirror image of his leadership team. He looks toward entities and individuals with insights and experiences outside the industries Consol works within.
“It’s amazing how many already established processes, technologies and concepts are out there in entirely different industries that are being viewed as innovations and ground-breakers with the coal, natural gas and fossil fuel industry that we operate in,” he says.
“Every time we tend to look outside our box and outside our industries, we always come away with an injection of innovation that keeps us going.”
2. Focus your R&D
Bill Byham, chairman and CEO of Development Dimensions International Inc., places so much energy into the company’s research and development the problem isn’t a lack of good ideas, but more ideas than he knows what to do with.
So, the DDI management team works to narrow the options for the company, which is a leader in talent management, leadership development, hiring and talent acquisition.
“We have a series of meetings to cut them out and usually it’s not hard to get it down to eight,” Byham says. “But then to get it down to two or three new projects is tougher. R&D to us is brand new, game-changing products or a big change in what we’re doing.”
He looks at R&D as a 50/50 balance between customer suggestions and being able to develop products out in front of clients before they know they want it.
“We do a lot of customer surveys. We’re out with our customers a lot and they’ll say, ‘We want a training program on this.’” Byham says. “However, I think it was Steve Jobs who said, ‘If you only give your customers what they ask for, you’ll always be behind.’
“What I’ve always noticed is you have to be out in front of the customer because sometimes it takes us several years to develop these things.”
In addition, the R&D process isn’t just about finding the next new product, but also devoting effort to keeping well-performing, existing products up-to-date.
“The more products you have, the more it costs you to keep the old products good,” Byham says. “The ratio for us is around 60 to 70 percent old products and 30 to 40 percent new. You have to look at the sales of the old product. If you’re still going up with the old product, you will want to keep investing in it.”
3. Place a well-informed bet
Early in BodyMedia Inc.’s growth, the company struggled with a lack of focus, waiting for the market to tell it where the best place was. CEO Christine Robins, however, says that with an early-to-market technology, you have to create the need — and place a bet.
“If you’re running a company, you’re making decisions every day that have risk,” Robins says. “But if you’re running a smaller company, you’ve got to place a bet and it’s got to be a focused and well-informed bet. Then you have to go with it and be willing to listen to the reactions of people and figure out how to be a continual learner.
“You have to get a product or service built that satisfies your hypothesis of the market and who you’re going after, build your messaging and get it to market to get real feedback. You can iterate in an office and give your opinions until you’re blue in the face, but if you don’t put it out in the real world and it doesn’t sell, it doesn’t matter what you think.”
But it wasn’t just a clear focus for the product that launched BodyMedia into growth mode. Once the company turned to the consumer market, it had to turn its attention toward making the product more functional and attractive in terms of design. This ultimately increased sales volumes and led to San Francisco-based Jawbone acquiring the company in 2013.
4. Watch marketplace trends
Flemming Bjøernslev, president and CEO of Lanxess Corp., has found that the company’s production and product base is extremely quick with regard to innovation, technology and the right ideas to make new products that will propel the company.
He couldn’t decide where to focus the company moving forward, however, without listening to what was happening globally.
“First, you have to listen to your customers,” he says. “Secondly, make sure that you assess the entire value chain. You want to make sure that you reach out and listen to the customers of your customers. You want to make sure that you’re integrated in the right manner in order to cost-effectively and profit-effectively cater your products to the market.
“You have to make sure that you read the signs of your time, meaning the trends in the marketplace. You have to live in a global world. Today, it would be very risky to only focus on the U.S. or North American markets.”
5. Get the right talent
Fred Potthoff, co-founder and co-owner of Kroff Inc. attributes the company’s success — more than 80 employees in eight different businesses under the Kroff name with annual revenue of more than $50 million — to finding the right talent.
In fact, each of the leading water and wastewater treatment and recycling services company’s businesses started with ideas from sales associates.
“Aside from the original company, my partner and I didn’t come up with any of the other ideas,” Potthoff says. “It was people in our organization coming to us, and us listening to them and running with that idea.”
When Potthoff interviews candidates, he is interested in trying to spark that kind of enthusiasm and interest in the company.
“It doesn’t mean that everybody who comes here is going to run their own company, but it’s part of our culture,” he says. “People who fit in well here think that way and look for opportunities.”
And one way to encourage those true difference makers is to do a good job of listening to ideas.
“It’s one thing to give lip service to somebody, but if somebody comes to you with a good, creative idea, you can’t summarily dismiss it because maybe you tried it before or it seems a little harebrained,” Potthoff says. “You have to be willing to listen and trust the people, and if you think it’s a great idea, be willing to move and invest in it. When you do that, the culture responds to it.”
6. Leverage the region’s strengths
Charles Bunch, chairman and CEO of PPG Industries Inc., says the founders of Pittsburgh Plate Glass were attracted to the Pittsburgh region because of the coal supply needed as an energy source, the sand and mineral resources, and the river transportation system that were critical for the manufacturing and sales of those first plate glass products.
Today, the region has different strengths to offer.
The Pittsburgh region has some of the best educational institutions and hospital systems in the country, and as a result, research and development is more than $3 billion of the local economy, Bunch says.
“This is clearly a home for innovation here in the Pittsburgh region,” he says. “Big business provides technology, innovation and support to many of these smaller businesses, leading to a healthier overall ecology for growth. And now we’re creating that environment here in our region.”
Organizations like the Allegheny Conference, which are dedicated to improving economic growth, are in a unique position to build on these strengths for the betterment of the region.
Bunch says they can help employers by marketing the region globally and supporting existing business with venture capital funds to support the success of entrepreneurs and startup companies.
7. Break assumptions
MARC USA, a full-service advertising firm, has a history of doing things differently and bringing innovation to the industry. Behind Michele Fabrizi, president and CEO, the company even created an off-the-wall word to describe its unique capabilities.
“We’re using breakthrough research techniques and new technologies to drive innovation every day,” Fabrizi says.
“At MARC we say what we do is a word we made up because there is no word for what we do. It’s called ‘wezog’ and it’s how we think. It’s what we expect from our people. It’s a critical component of our long-term client relationships. It means doing things the way they haven’t been done before — thinking outside the box.”
The firm builds successful brands and drives sales through its creativity, insights and technology.
“It’s really about not doing things the way they’ve been done before, being highly collaborative with clients and finding ideas to break assumptions and challenge conventions,” Fabrizi says. “This is the kind of thinking that really helps brands strive in good times and in bad times.” ●
A mathematical approach: RMU professors built predictive modeling tools to help place natural gas stationsWritten by SBN Staff
It’s a moment of panic for drivers: You suddenly notice the warning light on your fuel gauge, but you don’t know when it came on or how close you are to the nearest gas station.
Now, imagine you drive a compressed or liquefied natural gas-powered vehicle. The Pittsburgh region, for example, has only five natural gas fueling stations. That scarcity is a barrier to more people adopting cleaner, more fuel-efficient natural gas vehicles that could also reduce dependence on foreign oil.
Three professors at Robert Morris University have developed a mathematical model that determines the optimal locations for natural gas fueling stations in Pittsburgh, based on existing traffic flow and traffic density. The paper, authored by Tony Kerzmann, assistant professor of mechanical engineering; Gavin Buxton, associate professor of physics; and Jonathan Preisser, assistant professor of mathematics, predicts the optimal locations for up to 128 fueling stations in Pittsburgh. The paper is being published in the journal Sustainable Energy Technology and Assessments.
A step toward energy independence
According to the U.S. Department of Energy’s Alternative Fuels Data Center, 14.8 million natural gas vehicles operate worldwide but only 112,000, including buses and trucks, operate in the United States.
Yet as the RMU professors note in their paper, while the U.S. imports 45 percent of its total petroleum consumption, the nation produces nearly 90 percent of the natural gas it consumes.
“A transportation sector dominated by natural gas vehicles would provide a huge step toward energy independence, but this is not the only advantage of natural gas vehicles,” the authors write. “Natural gas vehicles significantly lower carbon monoxide, nitrogen oxide, non-methane hydrocarbon, particulate matter and greenhouse gas emissions.”
Taking a look at the model
As a first pass, the authors considered the total vehicle miles traveled through each location as the numerical variable with which to optimize the distribution of natural gas fueling stations. The fueling stations are treated in the model as wandering around, trying to find the regions with the higher numerical variable.
The computer model finds the optimum locations for a large number of natural gas fueling stations simultaneously, while penalizing the overlapping of natural fueling station locations — fueling stations that are close enough to one another that potential customers will be divided, and use both.
However, the numerical variable used to optimize the distribution of natural gas fueling stations is at present too crude. The authors, therefore, are looking at the socioeconomic factors that might make a given location a sound investment for placing a natural gas fueling station.
“Say you are BP and you wanted to change some of your existing gas stations to supply natural gas. Our computer program could tell you where to distribute the natural gas stations that would make the most sense, that would increase the likelihood of customers switching over to natural gas vehicles,” Buxton says.
The typical customer of a natural gas-powered vehicle might prefer to see natural gas fueling stations near his or her neighborhood, where he or she is likely to be refueling his or her vehicle, than in areas of high vehicle traffic. Therefore, while vehicle miles traveled through a given location may be an important variable, it is not the only variable to consider.
The number of residents in a given neighborhood might influence the decision of where to place a natural gas fueling station, along with the average household income — with customers from more affluent neighborhoods being more likely to purchase a new vehicle.
Furthermore, the typical political persuasion within a neighborhood might also influence the customers’ likelihood to purchase a natural gas-powered vehicle. For example, might it be possible to consider the type of customers that are more likely to buy a more environmentally-friendly vehicle, or a vehicle that reduces our dependence on foreign fuel?
The presence of existing gasoline fueling stations that could be converted to also provide natural gas refueling capabilities would be another influencing factor. For example, currently no gas stations are located in downtown Pittsburgh, making the Golden Triangle an unlikely destination for natural gas fueling stations.
However, it’s important to remember that ultimately a robust network of natural gas fueling stations could ease the transition to even cleaner hydrogen fuels. The infrastructure that we invest in now to transition to natural gas-powered vehicles is the same infrastructure required to store and transport hydrogen for hydrogen-fueled vehicles. ●
Natural gas basics
Natural gas is an odorless, nontoxic, gaseous mixture of hydrocarbons — predominantly methane. Because of the gaseous nature of this fuel, when stored onboard a vehicle, it must be in either a compressed gaseous (CNG) or liquefied (LNG) state. Both CNG and LNG are clean burning, domestically produced, relatively low priced and widely available for fuel vehicles.
› There are three types of natural gas vehicles:
- Dedicated vehicles are designed to run only on natural gas.
- Bi-fuel vehicles have two separate fueling systems that enable them to run on either natural gas or gasoline.
- Dual-fuel vehicles, traditionally limited to heavy-duty applications, have fuel systems that run on natural gas and use diesel fuel for ignition assistance
› Natural gas accounts for about a quarter of the energy used in the United States.
› About one-third goes to residential and commercial uses, such as heating and cooking; one-third to industrial uses; and one-third to electric power production.
› Only about one-tenth of 1 percent is used for transportation fuel.
Source: Alternative Fuels Data Center, part of the U.S. Department of Energy’s Clean Cities program
An army of volunteers: Katie Carter built a strong team with passionate and engaged partners at Komen ColumbusWritten by Jayne Gest
Katie Carter, executive director of the Columbus Affiliate of Susan G. Komen for the Cure, hears stories all the time from volunteers about how they or someone in their lives have been touched by breast cancer. But one in particular sticks out.
A Columbus-area woman with young children was struggling with her stage IV breast cancer, undergoing chemotherapy and radiation. She received a drug that was developed in part through the donations of Susan G. Komen for the Cure.
“She’s doing well now,” Carter says, “but when you’re talking about a drug that Komen was a part of — that saves someone’s life and continues to make them live longer — that’s what it is really about.”
Susan G. Komen for the Cure, which seeks to help find a cure for breast cancer, is the largest non-government funder of breast cancer research in the world, having donated $58 million to research last year.
“We’re here to save lives, but we’re also making an impact from a local level,” she says.
Komen has been involved, at least in some way, in every one of the breakthrough cancer treatment drugs, according to Carter.
“Again, there are lots of collaborations, so you need the researchers, and you need the pharmacy to create it and mass produce it and get it back into the hands of the patients, but it’s a fact that everyone who was a part of that breakthrough helped save her life. And we had a small part in that.
“That’s what really matters, and the impact we make every day in the lives of so many that we don’t hear stories about. We know that we’re continuing to do great work, and we do make a difference.
“But we need help,” she says. “We need to continue to make that help through our community and continue to raise more money, so we can give more to research, and we can give more to our local programming to continue that.”
Such goals and the many volunteers at Komen Columbus helped the affiliate win the Affiliate of the Year award for 2013 from the national organization.
The affiliate strived to diversify funding, increase awareness and expand outreach communication activities to be visible throughout the year. Through the collaboration with corporate sponsors, community support and dedicated volunteers, Komen Columbus was able to fund 20 breast health programs in Central Ohio and invest its 20 millionth dollar toward the organization’s mission — to save lives and end breast cancer.
Here’s how Carter and her staff manage 1,000 volunteers as a team and engage them on the mission of one of the most widely known brands in its field.
Getting in position
One of the keys to keeping a workforce engaged is finding an opportunity for employees to exercise their talents. “Do the work you love, and love the work you do.” is more than an aphorism — it’s the attitude the employees at a successful organization exhibit.
Likewise, Carter finds matching volunteers with a role that makes the best use of his or her aptitudes leads to successful outcomes.
“As long as you place everyone in the right position and in the right seat, you’re going to be successful,” Carter says.
The Columbus affiliate has new people coming in all the time who want to be involved. Carter says they don’t just say, “Great, thanks for joining. Here’s a job for you.”
If they aren’t in the right position, the volunteer might get bored or lose interest.
Instead, a Komen Columbus staff member interviews the volunteer, a procedure that is almost like a job interview, to get an understanding of his or hers passion and why the person is interested in volunteering. Finding out the story is the first step.
“Usually the volunteer has a story — my mom was diagnosed or my aunt or my grandmother or my wife, or I myself am a survivor,” Carter says. “And they say, ‘I just want to give back,’
“Anytime you have a volunteer, they have to be engaged in your mission, and believe in it and entrust in it, and know that they are there to help,” Carter says.
The second matter is asking what the person has done, and finding out about his or her background and interests.
“I think we all know that whether you’re in a job or volunteering, you have to love what you do. And if you don’t, then it’s very hard to motivate someone,” Carter says.
“You want to sit down and ask the right questions, and make sure that it’s a good fit for the organization and that it’s a good fit for that volunteer.”
Although communication skills are helpful because there are a lot of jobs where volunteers interact with other people, there are other ways to make an impact, Carter says. Whatever roles they fill, volunteers, staff members, board members and corporate partners know the strength of the organization’s mission.
Keeping the engagement
The mission and vision statements of a company, when used properly, guide an organization to inspire employees to reach its goals.
But how you maintain inspiration in any organization, for-profit or not-for-profit, where burnout is a concern, may be a large factor in your success.
Susan G. Komen for the Cure allows people to help in many ways, whether by donating money, participating in events or donating their time and talents to make the organization grow and be what it is today, Carter says.
That flexibility keeps the nonprofit strong — as long as it stays true to its vision of a breast cancer-free world.
The affiliate works with volunteers’ schedules, and seeks to let them know that whatever they can give helps.
“As organizations grow, people come and go, and they serve their time. But they are still always connected by it,” Carter says.
“And once you leave, you don’t really leave. It’s one of those things where you’re always connected by Komen or breast cancer,” she says. “So we always say that even though people maybe don’t stay with us every day, they are still with us in spirit, and support the organization.”
For example, the Columbus affiliate’s founders still come to the annual race and are engaged with overall community support, even though they may not be involved with day-to-day operations.
Carter says it’s just like anything else, whether it’s a job or an organization, you’re going to have turnover in terms of people coming and going. As others get involved, however, new ideas and innovation can come out of it.
“That’s OK with us as long as we know that we always have a core volunteer base, as our go-to,” she says. “Then as people move on, they get replaced and that’s OK. It’s good to have change and get others involved.”
Stay true to your mission
There are always potential challenges facing an organization. They can range from financial woes to straying away from the mission. But once you notice a growing challenge, it’s time to execute your response.
“I think everybody always has challenges,” Carter says. “I think you have to adapt, and I think that’s the biggest thing. You have to know why things are changing, whether it’s good or bad.”
The next step is to take an introspective look at the situation.
“Evaluate where you’re at and what needs to happen to make those changes, because in any organization, whether it’s nonprofit or business, things do change,” Carter says. “Whether it’s through financial crisis, the economy has issues, or there are changes in laws, or there are just changes in how people give — you have to adapt.
“Make sure that your vision and your mission are true. It’s the same vision, but the way we’re going to adapt is we’re just going to do it a little differently. But our vision stays the same, and we just adapt and make those changes that we need to make to continue that vision and make sure it goes forward.”
In any organization you are going to have times that are difficult or challenging.
“You just have to make important decisions that go toward that vision,” Carter says. “And I would hope that our organization shows that. We are great stewards of our funds, and we try to continue to say that to the public, and to our sponsors and to everyone that we serve. We do it the right way, and make sure that it goes right to the mission, which is research as well as providing direct service and funding that money here to keep it local.” ●
- Matching the right person with the right job allows you to succeed.
- Be flexible, and know that new ideas can come out of change.
- Adapt, but stay true to your mission.
The Carter File:
Name: Katie Carter
Title: Executive director
Company: Columbus Affiliate of Susan G. Komen for the Cure
Education: Undergraduate degree in psychology from Capital University, and a master’s degree in public administration from Ohio University.
What was your first job and what did you learn from it? I worked at an IGA grocery store. When you’re young, you’re happy to have a job and finally have your own money, but as you grow you realize those first jobs were stepping-stones that added to the experience of your life. One of the great things about it was interacting with people.
I think that’s what I love about my job now and what I’ve always loved about jobs — the interaction with individuals, whether it’s employees, volunteers or corporate partners.
From every job I’ve ever had, one of the most important takeaways has been treating people with respect.
Who do you admire in the business world? I’ve been surrounded by great board members in our community, and I think from each and every one of them you learn something different. Being here 13 years, I’ve been engaged with probably a few hundred people. So, I would probably have to say they’ve been a big influence on my life — some more than others — but I think you have certain people who you’ve taken more from. They’ve made me grow as a person. How do you repay that? It’s really hard to.
What’s the best advice you’ve ever received? The biggest advice that I’ve always tried to emulate is to just treat others how you want to be treated; work hard and good things will happen. It’s simple but true.
What’s your definition of success? I think for me, success is if you’re looking around the room, knowing that you’ve got the right people in the right place, and they support you every day. You love working with them, and they love working with you for one common goal — and that is to end breast cancer. It’s not just one person. It’s thousands of people that make it all possible.
Learn more about Komen Columbus at:
How to reach: Columbus Affiliate of Susan G. Komen for the Cure, (614) 297-8155 or www.komencolumbus.org
A trusted resource: Elmer’s Products solidifies itself as a brand of choice for the education communityWritten by Jayne Gest
Elmer’s School Glue is synonymous with education. We all remember buying school supplies in the fall and packing the iconic white bottle with its orange cap in our backpacks.
“Elmer’s has been a staple in schools for many years, and we’ve been asked, ‘How do you make glue?’ many times,” says Terri Brown, director of consumer engagement at Elmer’s Products Inc.
The Westerville-based company understands that students and teachers are one of its core user groups — and to help solidify that relationship between business and consumer, Elmer’s works extensively with the education community.
“Through the Elmer’s Teachers Club, we provide lesson plans, creative classroom project ideas, discussion boards and more. Being a trusted resource for this community helps to solidify Elmer’s as the brand of choice,” Brown says. “Nationwide, school systems have been affected by massive budget cuts. If we want to see students succeed, we consider it a responsibility to provide the resources we can to make that happen.”
Having a two-way conversation
Developing a two-way dialog between your company and consumers not only solidifies brand awareness, it also helps with development.
“Elmer’s has always been true to its desire to be the most trusted school glue in the classroom,” Brown says. “It’s in our DNA to be a part of classrooms, and Elmer’s has been able to accomplish this by providing resources, being authentic and developing beneficial content for parents and teachers.
“The Elmer’s Teachers Club has given us the opportunity to have a two-way conversation with educators. We get to learn their needs and respond to these through the content we develop. The feedback we receive from this highly influential user group is invaluable.”
Educating the future workforce
Reaching out to the education community isn’t just about teachers; it’s about educating students, who are future employees.
The latest interactive lesson plan developed by Elmer’s, “The World of Glue: An Investigation of Adhesives,” teaches students about the science of polymers and common adhesives. It’s supported with hands-on activities and the award-winning children’s book, “Too Much Glue,” by Jason Lefebvre.
“Now, students can think of Elmer’s glue in a more holistic way from its ingredients to how it makes things stick. Glue is more than the adhesive used to make an art project — it’s science in and of itself,” Brown says. “Glue is fun for kids, and this lesson plan helps students understand how an everyday item like glue actually works.”
Another example is Elmer’s Presentation Ready microsite, which provides parents and students with steps for creating presentations, such as science fair projects, and connects them with the right products to put the assignment together.
“Elmer’s becomes a better company through initiatives like this because we’re providing innovative content that helps advance and educate students, and ultimately our future workforce,” Brown says. ●
How to reach: Elmer’s Products, Inc., (888) 435-6377 or www.elmers.com
Tyler’s Light creates its own blueprint for the silent stigma of addiction
Wayne Campbell, the founder and president of Tyler’s Light, knew when he started the nonprofit in 2011 the group needed to be about more than his son’s death, which shocked the Pickerington community.
In order to create longevity, the organization had to become more about the issue than the personal story.
“There are organizations out there trying to do what we’re doing, but they are two-person, five-person operations that were basically the same thing: Born out of a tragedy in a family and community,” Campbell says. “They start with a lot of activity and emotion towards it, and then in a year or two it fades away because the shock is gone, and then funding becomes an issue.
“We’re obviously different because we’ve been here for 2 1/2 years and we continue to grow — going out to more places, reaching more people and collaborating with more organizations,” he says.
Tyler’s Light has spawned other organizations, including an affiliate in Cleveland called Robbie’s Voice. Groups on the West Virginia/Ohio border and in Kokomo, Ind., have expressed interest in starting their own organizations as well.
“It’s almost like franchising. Since we can’t be everywhere, if we can help start other little satellite operations that would make our numbers grow,” Campbell says.
Looking at the bigger picture
Started after Tyler’s death from a heroin overdose two years ago, the volunteer-based grass-roots organization serves as a forum to equip parents and youth with information and resources to help them choose a drug-free life, while providing resources for family members and/or friends who are involved in the battle to defeat drug abuse.
Since its founding, the organization has slowly moved away from being about Tyler. It’s about the issue — all the other faces, the Matts, the Janes, the Marys — children’s lives that have been wrecked by addiction.
Addiction is looked at as a poor choice, bad character or bad parenting. But it’s a disease, no different than cancer, HIV/AIDS or Alzheimer’s — only more prevalent.
Managing and attracting volunteers is extremely difficult, Campbell says. If you don’t have a personal connection, it’s hard to spend the amount of time that’s needed.
“Everybody wants to volunteer for the cancer walks. It’s easy to tell a story about a cancer survivor or fatality,” he says. “But people won’t volunteer unless they feel comfortable with the subject.”
And, according to Campbell, people in high profile positions or with status can’t do it yet. The CEO of a company, the mayor of a town or the owner of a small business may have it in their house, but they can’t tell anybody about it.
It’s getting better though, Campbell says. The governor and attorney’s general office are openly, via the media, taking addiction on. On Jan. 8, Gov. John Kasich’s office came out with the “Start Talking” initiative to try and help communities in seven Ohio counties fight the opiate epidemic.
When those things happen, Tyler’s Light makes more sense. You just need to keep moving forward, Campbell says. You connect dots, and then you keep bumping into new and talented people who can help you. ●
How to reach: Tyler’s Light, www.tylerslight.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
In recent years there has been an increase in the number of claims filed against employers arising out of employment practice disputes. Many claims have no legal basis, but employers are still forced to defend themselves — spending time and money.
“Businesses are more likely to have an employment practices claim than a property claim,” says Marc McTeague, executive vice president at SeibertKeck. “There are over 100,000 charges filed annually against employers under statutes imposed by the Equal Employment Opportunity Commission (EEOC). The majority of these claims target smaller businesses. However, no business is exempt.”
Smart Business spoke with McTeague about understanding employment practices liability coverage.
What’s important to know about employment practice claims?
Employment law has grown at an incredible pace since passage of the Civil Rights Act of 1991 and the Age Discrimination in Employment Act, among others. Ambiguities in these laws allow the widest possible interpretation, which in turn opens the door for litigation.
The most frequent types of claims made against an employer are discrimination, sexual harassment, wrongful termination and retaliation. There’s also been an uptick in wage and hour lawsuits. Claims can come from potential hires, former and current employees, clients, suppliers or vendors.
Discrimination can be defined as the termination of an employee, demotion, refusal to hire or promote due to race, color, religion, age, sex, physical or mental disabilities or handicaps, pregnancy or national origin. Think about the times you or someone in the office told an off-color or racy joke to a new employee or client. It’s only a matter of time until this comes back as a claim.
The average claim costs an employer $50,000, and defense costs represent about two-thirds of the total settlement. Without a mechanism to transfer risk, these costs could cripple smaller businesses, or at least damage their reputation. For larger businesses, one uninsured claim can lead to potential shareholder lawsuits.
How does employment practices liability coverage mitigate this risk?
Businesses can purchase a policy that provides coverage for a wide spectrum of employment-related claims and offers risk management services to help minimize the risk of getting sued. This policy protects the corporation, directors and officers, employees (including leased and temporary), volunteers, and in some cases can be endorsed to include independent contractors (when working for the employer).
The definition of a claim includes arbitration, regulatory and administrative proceedings, and EEOC and Department of Labor investigations.
Limits can range from $500,000 up to $10 million or higher. As your business assets grow, so should your limits. Settlement costs and legal fees are typically included in the policy limits. However, some carriers will provide separate limits for these costs.
It’s important, however, to be aware of the varying contracts and differences in coverage and exclusions from one policy to another. There is no standard form. Sitting down with your trusted insurance adviser will help with this process.
Beyond buying insurance, what preventive measures lower claim risk?
Minimize the possibility of costly claims by:
- Creating an employee handbook detailing company policies and procedures.
- Educating employees on sexual harassment and discrimination, and offering sensitivity training.
- Establishing a procedure for handling employee complaints.
- Developing job descriptions with clear expectations of skills and performance.
- Conducting periodic performance reviews.
- Creating an effective record-keeping system to document employee issues, and what was done to resolve them.
- Instituting at-will employment.
- Implementing procedures for hiring, firing and disciplining employees.
Many carriers offer free risk management services. Online resources provide best practices training modules for addressing sexual harassment, discrimination, investigations and termination, while providing links to HR websites. ●
Insights Business Insurance is brought to you by SeibertKeck
Benchmarking your business to see how it stacks up against industry competitors helps you learn about your company and where operations can be improved.
“If you focus on just sales or profits, you miss other variables and expenses that, with some tweaking, can make a substantial difference in your profit and cash flow,” says Dave Cain, vice president of operations at Rea & Associates.
Smart Business spoke with Cain about the benchmarking process and how to utilize the data that is produced.
Can the benchmarking process be applied to any business in any industry?
Benchmarking compares you to your industry. I’m not aware of any industry where it wouldn’t work — one service we use has a database of 10,000 different entity types that can be used for comparisons. Dental, medical, construction and manufacturing all have some type of benchmarking tools. Software programs are available that allow you to find real-time data and develop benchmarks based on immediate industry information rather than information that might have been accumulated a year ago.
What data should be benchmarked?
Net profit margin and liquidity ratios are two general ones that can be used for any business. If you’re in manufacturing or retail and have accounts receivable, one good benchmark is turnover ratio — how quickly do you collect receivables in comparison to other businesses of the same type?
Industry comparisons have substantial value because you can understand what’s going on in the industry and improve your company’s performance. For example, a manufacturer of plastic bags would be able to find information specifically about plastic bag manufacturers, not just the plastics industry as a whole. If that manufacturer has a sales percentage of revenue ratio of 10 percent, compared to 15 percent elsewhere, it would be worth investigating why competitors can operate at a lower margin.
Who should be involved in the benchmarking process?
Involve your accountant, your internal accounting department and members of senior management. Determine what ratios and analysis are important to your business. If accounts receivable turnover ratio is an area of priority, the person in charge of accounts receivable should be included.
Companies can do benchmarking themselves, depending on the level of experience within the accounting staff and the resources available to them. However, it also takes expertise to determine how to use the information. That’s where a CPA can work with your accounting team and senior management to develop a strategic plan.
Do you need to decide in advance how the benchmarking information will be used?
Benchmarking results will dictate what actions you take. If your inventory cycles through every 90 days, you might think that’s good. But having inventory sitting for three months could be why you have no cash flow. If you find competitors collect receivables in 45 days, you would look at how you can cut down that period and improve cash flow.
The whole idea of benchmarking is to discover areas where you can make an impact. It’s learning about your business to determine best practices. So many businesses only look at sales and profits, which are the basic indicators, but there are always other areas to review. One client increased his revenue by $200,000 and kept focusing on that top line, but it cost him $225,000 in payroll to get that boost.
Is the process different with internal benchmarks?
Yes, because then you’re measuring against yourself to ensure consistency. Whether by department or location, you look at the revenue and expenses, as well as the contribution margin to the rest of the organization. Then those metrics are applied to outside data information to see how you compare against your industry.
Benchmarking is usually done at year-end, although you might do an interim report to analyze if adjustments you’ve made are having the desired impact on your business.
Benchmarking is really learning about your market and your business, and helping you determine best practices. ●
Insights Accounting is brought to you by Rea & Associates