Marcia Passos Duffy
When public companies donate to charities, one irksome but legitimate question that often surfaces is this: Should CEOs/managers be allowed to give the investors’ profits away to charity? Or, should the profits be distributed back to investors? Should there be oversight by the board of directors?
“This question has become a very hot topic,” noted Dr. Suresh Radhakrishnan, The University of Texas at Dallas’ director of research for the Institute for Excellence in Corporate Governance and a professor of accounting and information management.
Smart Business asked Radhakrishnan about his research on the benefits of corporate giving as part of corporate social responsibility.
Should a company’s social responsibility be part of corporate governance?
Public companies must have in place corporate governance policies that encompass corporate social responsibility. However, in most companies, the board may not be consulted when it comes to charitable giving, but it should be part of that decision-making not only because the money belongs to the investors but because the board can provide valuable input about the charities that the company wants to be, or should be, allied with.
What ways do companies derive benefits from being socially responsible?
While companies may not have viewed charitable giving for their own monetary benefits, based on my recent research conducted with scholars at New York University, corporate giving has been linked with future sales growth of companies. This is one of the first studies that links corporate giving with future sales growth and not vice versa. This is true especially for those companies that deal directly with consumers such as banking and consumer goods.
We find that for every dollar a company gives to a charity, future profits go up by roughly $2, which is a 200 percent return on investment. This seems too good to be true. However, one should note that the cost is fairly small; thus even a not-so-great increase in sales can lead to a substantial return. On average, charitable giving amounts to 0.1 percent of sales revenue. Companies spend 50 times more than that on advertising. Thus, for the rate of return on charitable giving to be so large, it needs to return only one-fiftieth as much. Overall, charity can only have a minor role in the quest for profits. What our research shows is that the role of charitable giving may be underappreciated.
Going back to the concern that using investors’ money for a company’s preferred charities could be a wasteful expenditure, does this study prove that it is not?
Yes, it shows that corporate giving is not burning investors’ money and that there is an impact on future sales. But exactly how it happens has not yet been revealed. What we can say is that charitable giving appears to work similar to PR and advertising.
Publicizing a company’s good deeds is beneficial in boosting the company’s reputation and brand image.
How can this be done?
Basically, a company needs to consider what value it shares with the customers. It needs to think of its customer base and the implication that giving will have in demonstrating that the company stands for moral/ethical/social values that are similar to the customers’ values such that the customers become long-term customers. Companies appear to be doing this, with McGraw Hill supporting literacy programs, Avon supporting the breast cancer crusade and Coca-Cola supporting the Olympics. It suggests that companies associate themselves with programs that demonstrate shared values with customers.
There needs to be a shift in the investors’, board of directors’ and the managers’ thinking: Corporate giving needs to be treated as a long-term strategic business decision. This can happen when corporate governance mechanisms are included in the decision-making and companies think of how giving to specific charities can demonstrate commitment to values that the company shares with its customers.
Has your study found other benefits to companies becoming socially responsible through corporate giving?
This is the first layer that we have peeled back, but there are other possible links. For example, is giving to charities overseas as beneficial as giving locally? Is there a link between employee retention and charitable giving?
The conclusions from our research suggest that companies are not wasting the investors’ money. An implication is that companies need to think strategically about charitable giving and may be able to enhance their returns by involving corporate governance in the process.
DR. SURESH RADHAKRISHNAN is a professor of accounting and information management at The University of Texas at Dallas and the director of research for the Institute for Excellence in Corporate Governance. Reach him at Sradhakr@utdallas.edu or (972) 883-2111 x443.
Many business owners use an insurance broker for buying commercial insurance. While business owners may feel secure knowing that their business is covered, the litmus test of a policy’s adequacy is when a claim is filed.
But how does a business owner tell one insurance broker’s services from the next? They may end up basing their decisions exclusively on price or an attractive package deal.
“Insurance is often treated like a commodity, but selecting an insurance broker should be done with the same care as selecting an accountant, banker or attorney,” says Rob Kempa, a commercial insurance broker with Westland Insurance Brokers with offices in Irvine, San Diego and Temecula.
Smart Business spoke with Kempa about tips on how a business owner can determine if an insurance broker is good fit for his or her business.
What are the hallmarks of a good insurance broker?
At the very least, an insurance broker should assess your risks, tailor an insurance program that will protect those risks and provide recommendations to improve the insurance program to transfer the risk via risk management processes that include buying an insurance policy.
Insurance brokers that go above and beyond these basics are a true asset to a business owner.
What are some of the things that make an insurance broker stand out from the pack?
A good insurance broker will help business owners consider risks that they would not normally consider and help them foresee problems that could jeopardize the company in the future.
Clients ought to expect that an insurance broker behave like an attorney, a banker or another trusted adviser rather than simply a salesperson.
A good insurance broker is often very involved in advising clients on the ever-changing landscape of insurance trends, policy and coverage changes. A good broker should also make sure that clients are in compliance with ever-changing laws and regulations, so that if a business is inspected everything will be in order. The broker can achieve this by hosting seminars and workshops within the client’s company about pressing issues, such as compliance with OSHA and reviewing a company’s safety programs.
A good insurance broker can also communicate with clients through e-mail or a newsletter about insurance issues that can affect businesses.
What are some red flags that a business owner should be aware of when selecting an insurance broker?
Beware of insurance brokers that emphasize only price and savings. While you may save money in the short-term, the premium savings can be eradicated if there is ever a claim not covered due to a gap in coverage.
Also, be wary of brokers who do not have experience insuring companies that are similar to yours. Brokers or the insurance companies they represent need to understand the industry that you are in if they are to completely understand all the risks that need to be covered.
Do not take a cookie-cutter proposal. Make sure that the broker has analyzed your business and is giving you custom-designed services.
Lastly, make sure that the insurance brokerage firm you select has adequate resources to properly manage your account. Make sure the broker has a highly qualified staff to support your servicing needs. The broker should represent many high-quality carriers that can support your company in the ever-changing marketplace.
What are some tips when seeking a good insurance broker?
Get recommendations from your other trusted advisers, your business associates, friends or your chamber of commerce.
Interview at least two to three prospective brokers, similar to the way you would interview a prospective employee. Research the history of the broker.
Make sure the insurance broker has experience insuring a company in your industry. How long has he or she been a broker?
Make sure that the broker is not acting as just a salesperson, but takes on the responsibility of becoming your risk manager and insurance adviser.
Do not make your decision based on price alone, but ask the broker to provide a line-by-line assessment of the coverage so that you can easily review and compare with other brokers.
Ask for references and a list of clients, and call them.
Make sure the carriers the broker is presenting are A-rated AM Best carriers. This can easily be checked by visiting www.ambest.com.
Make sure the broker can provide full brokerage services not only property and casualty insurance but also employee benefit, personal lines and safety management. By selecting a full-service broker, this will give you the convenience of working with one firm rather than many.
ROB KEMPA is a commercial insurance broker with Westland Insurance Brokers (www.westlandib.com), a full-service commercial and group insurance company with offices in Irvine, San Diego and Temecula. Reach Kempa at email@example.com or (619) 584-6400, x3216.
Have you thought about what your business would do if it were wiped out by a fire or flood? What if someone broke into the office and stole all your computers? What if your entire sales department was hit with the flu all at the same time? Would your business be able to survive any of these disasters?
“Organizations that have thought through these scenarios and have created contingency plans are better able to cope with these events than businesses that are not prepared for the worst,” says Jim Parks, chief operations officer and chief information officer for ViewPoint Bank of Plano, Texas. “Insurance isn’t enough as it doesn’t provide a method to deal with the disaster.”
Smart Business spoke with Parks about how business owners and managers can create contingency plans that prepare their organization for disasters.
What are the risks of not having a contingency plan in place?
It’s expected that leaders in an organization would take charge in the event of a disaster. However, with no contingency plan, they might make decisions in the heat of the moment, which may not be in the best interest of the company or provide for the quickest recovery. Such quick decisions could result in the loss of customers and the company’s reputation because it can’t deliver its products or services on time. This loss of confidence could result in an erosion of business over time that is hard to recoup.
Don’t many businesses already have contingency plans in case of a fire or theft?
Yes, but these plans are often simplistic and only exist on paper. The question is: Has the business owner and staff done a walk-through or drill of these scenarios? Have owners also thought of other events that would be disastrous to their particular business? This is the step that many companies neglect to do. If you spend an hour around the table talking about the consequences of a fire, theft or loss of electricity for a day, you will discover that your on-paper contingency plans may have many holes.
How can a business go through an existing contingency plan and make it stronger?
There needs to be an initial risk assessment where the business owner and other key personnel brainstorm all the potential disasters. You can break down the potential disasters into three major categories: 1. Those that affect only the business, such as fire, theft, break-ins, loss of power, loss of phone service, loss of Internet service, the loss of a major supplier, etc. 2. Disasters that affect employees, such as an outbreak of an illness 3. Disasters to a community, such as a flood, hurricane, earthquake or a threat to security
The next step is to figure out the probability of these events occurring. For example, here in Texas, we are not likely to experience an earthquake. But the likelihood that we could get hit by a tornado is very real. More attention needs to be dedicated to the events that are more likely to occur and would have the most negative impact on the business.
Once you have a list and the probabilities what’s next?
The most important part of this exercise is to do a walk-through of the high-risk disasters for your particular company. This should be done in a meeting with the business owner and other principals of the company so as not to disrupt your day-today operations. For example, walk through the scenario of what would happen if one day your supplier could not provide you with a critical raw component to make your product.
The next step in this process is remediation. After walking through a scenario, you need to make plans on what to do to lessen the impact to your business. In the previous example, you’d probably want to have more than one supplier for that critical component.
What scenario would be the most disruptive to a company?
Anything that wipes out what your employees are working on that day. The most critical elements of what’s happening in a business are also the most exposed they’re generally found on top of an employee’s desk at the end of the day. Things that happened three months ago are usually filed safely away. What an employee is working on at the moment is what needs to be protected from theft, from fire, from disappearing. What would you do tomorrow if all your current papers, files, contacts, phone numbers and calendars disappeared? Or a fire wiped out everything on your sales staff’s desks? What’s your backup plan? That answer is the heart of a good contingency plan.
JIM PARKS is the chief operations officer and chief information officer for ViewPoint Bank, www.viewpointbank.com, headquartered in Plano, Texas. Reach him at (972) 801-5861 or firstname.lastname@example.org.
After the holidays — i.e., after bonus time — there is sometimes a nagging fear among business owners and managers that their top employees will take the money and run. With talent increasingly at a premium — and jobs plentiful for many executives — the fear of losing top workers is not entirely unwarranted.
“It’s a tight market and good employees are hard to find,” says Rob Wilson, president of the Employco Group, a Westmont, Ill.-based firm that handles human resource outsourcing for 400 small and medium-sized Midwest companies. “To avoid unnecessarily losing top talent, employers need to be proactive and create a strategy to retain — and motivate — top employees.”
Smart Business spoke with Wilson on the four categories that every business owner must address in order to retain his or her top employees.
What are the key ways employers can help keep employees happy and on the job?
There are four main categories that need to be addressed to retain — and motivate — employees:
- Competitive compensation
- Competitive employee benefits
- Family-focus benefits and other perks
- Career planning
In each of these areas, the employer needs to have up-to-date information about two things: the competition and the employee.
How can an employer make sure that the salary is competitive?
The first step is to make sure the employee has a concise job description. You also need to look at the competitiveness of the bonuses and raises. Are you on par with your competition — or under? If you are under the average compensation for a particular job description, what other advantages do you have over your competition?
If the salary is close or equal for your employees and those of competing companies, what usually tips the scales — in terms of an employee staying or leaving — resides in the three other areas.
Your second category, employee benefits, is usually a hot button for many employees. What if an employer can’t afford to fully fund these benefits?
Start-up or small companies that are trying to attract talent from larger companies need to realize they have to offer a competitive salary and some kind of health benefit package — this is a basic requirement. Smaller companies usually cannot compete in this category with large companies, but there are many creative options available today that won’t break the bank. There are health insurance cafeteria plans that work by using an employee’s pretax dollars to pay for his or her portion of insurance premiums.
Outside of the typical health insurance, a business can also provide discounted dental or eye care plans, home, auto and even pet insurance. These kinds of options are what will set your business apart from the competition — even if the employer does-n’t pay for the premiums.
There are other employee benefits that companies can offer, such as 401(k) plans and 529 college savings plans, which, surprisingly, are not offered by many small businesses. Again, there are creative ways to fund this — including matching or non-matching, or even profit-sharing. You can also offer discounted theme park tickets, car rentals or health club memberships.
Your third and fourth categories are family-focus benefits and career planning. Could you explain creative options for these areas?
Family-focus benefits include flextime, job sharing, child care benefits and telecommuting, to name a few. Workers have different needs in this area, so it is important that employers reach out and ask employees what would work best for their particular circumstance. For example, a single parent may want to come into work earlier and leave earlier to pick up a child from school. Others may want to have a telecommuting option when a child is home sick.
Employee recognition also falls under this category and can include company celebrations for anniversaries or the completion of a major project. Celebrate accomplishment large and small.
In career planning, you need to have a one-on-one conversation with employees because, like family-focus benefits, one size does not fit all. These conversations can occur during performance appraisals, which ideally happen more than once a year. This is the time to ask the employee about his or her career aspirations and to set benchmarks to help that employee reach those goals. Create opportunities for employees to learn and grow and link the goals of the organization with the goals of each individual in it.
ROB WILSON is president of the Employco Group (www.employco.com), a division of The Wilson Companies. Employco handles human resource outsourcing for 400 small and medium-sized Midwest companies. Reach him at (630) 286-7345 or by e-mail at email@example.com.
Does your business receive an average of more than 100 checks per month from your customers? If it does, you may be all too familiar with the problems that can arise from handling a multitude of accounts receivables, particularly if your business is growing. Checks arrive only once a day by mail and must be processed and deposited in the bank on a regular basis in order to ensure good cash flow. The problem arises when you must hold checks over a day or two because your staff doesn’t have the time to process them.
One way to manage this inflow of money is to use lockbox processing, which is a cash management service provided by banks to their corporate customers.
“Lockbox services are designed to speed up the collection and deposit of check payments that are received through the mail,” says Tracy Marshall, vice president of Treasury Management Operations for ViewPoint Bank, based in Plano, Texas.
Smart Business spoke with Marshall about how a lockbox service works and the advantages of using this type of service.
What types of businesses use lockboxes?
Businesses that typically use lockboxes are those that receive paper check payments in the mail from consumers or business customers. Businesses that receive payments by credit card, through an online merchant account or over the counter do not need a lockbox service.
Businesses that use lockbox services either deal directly with the consumer such as doctor’s offices, local utility companies, cable TV franchises and local governments or are companies that have many business clients, such as printers or manufacturing suppliers. Banks sometimes offer two different lockbox products, one for retail and one for wholesale. Retail accounts typically have more checks to process and more paperwork.
What are the benefits to having a business lockbox?
Its primary advantage is the lockbox’s direct impact on a business’s cash flow. Checks are received faster, bypassing the business’s internal mail sorting and delivery time. Once the checks are received in the special P.O. box, they are processed faster often checks are delivered to the bank several times a day. Therefore, the money is available to the business sooner. Using a lockbox also reduces internal staff requirements, since the lockbox service acts as an accounts receivable department.
Another benefit is the ability to see remittance information online many banks offer image delivery services, which allow the business to quickly access financial information such as average daily sales, average remittance size, etc.
How does the lockbox service work and what are the fees?
A special local post office box is set up to collect all remittances. The bank’s lockbox service collects these payments several times a day from the post office, sorts and processes the checks, posts the payments, and makes copies of the checks and all correspondence/remittance paperwork, then deposits the checks in the business’s account. The remittance package is then sent along to the business either electronically or by mail to post on the business’s system.
The cost varies depending on the types of services, but a basic maintenance and per-item fee can be bundled into a $100 per month charge. That will typically include about 100 processed checks per month, online check retrieval for paid items and e-mail notification of a deposit. For customers who have a higher volume of checks that need to be processed, the price goes up from there to a maximum of about $350 to $500 per month. Again, the price depends on the business’s needs. Retail accounts are generally more expensive than wholesale accounts since more checks need to be processed on a monthly basis.
Are there any downsides to using a lockbox service?
The perceived downside could be the cost of the service, but not if a business owner considers the cost of paying an accounts receivable employee or two.
Also, banks’ commercial clients are often on account analysis, meaning that if a certain balance is met on a monthly basis, the client is eligible for a credit. That credit can be used to offset the lockbox service charge.
TRACY MARSHALL is the vice president of Treasury Management Operations for ViewPoint Bank, headquartered in Plano, Texas (www.viewpointbank.com). Reach Marshall at (972) 801-5838 or Tracy.firstname.lastname@example.org.
Hanging out with coworkers after hours can be fun and a new survey suggests it may also benefit on-on-job performance. Fifty-seven percent of executives said that office productivity improves when coworkers are friends outside the office; nearly two-thirds (63 percent) of employees surveyed agreed. The survey, developed by Accountemps, the world’s first and largest specialized staffing service for temporary accounting, finance and bookkeeping professionals, included responses from 150 senior executives and 519 full- or part-time office workers.
“It makes sense that when colleagues are friends they will support each other when presented with work challenges or responsibilities. It increases team spirit in the workplace,” said Chuck Cave, vice president and regional manager for Accountemps in Cleveland, Ohio.
Smart Business spoke with Cave about the benefits and some caveats to having friendships at work.
Why are friendships important at work, and why do you think it improves productivity?
When friendships form at work and go beyond the workplace as well employees feel good about going to work, because part of their outside social life is at the workplace. This has the effect of increasing morale, which increases productivity. Friendships also increase retention because of the higher morale and bond to the workplace that goes beyond just a place of employment.
It seems like this might be something that businesses need to encourage. How can managers help create an atmosphere at work where friendships are encouraged?
While friendships happen spontaneously among people who have an affinity toward one another, managers can encourage this by providing more networking opportunities. Create these opportunities through brainstorming exercises, team-building events after work, department lunches or dinners.
Are there any downsides to having friendships in an office environment?
There are a few things that managers ought to be aware of when it comes to friendships in the office. First, office cliques could arise from friendships. The danger in office cliques is that other people in the department might feel left out of the friendship ‘clique’ that has formed. This can have a negative effect on morale in a department. It is helpful if managers can watch these friendships and make sure that friends are not excluding other people in the department. One way that managers can deal with this is to create teams outside of the friendships to work on projects together.
Another risk is ‘group-think’ taking over. This is when a group of friends get together in a meeting and they are so close that they always agree with one another. This can stifle productive brainstorming sessions since sometimes it is beneficial to have members of the group disagree and bring out opposing viewpoints. Friends may genuinely agree with one another, or they may not want to rock the boat of their friendship by disagreeing.
What about friendships that become disruptive with too much idle chit-chat?
Employees themselves need to realize that there is a line they have to draw. While having conversations and fun with coworkers is fine, there could be a point when it becomes disruptive. And the manager needs to gently point out that this kind of conversation needs to take place after work or during lunch. If a manager sees that the friendships are getting in the way of work, he or she needs to set those expectations so that the friendship although a positive influence on morale and productivity doesn’t cross the line into total socializing and start to affect the workplace in a negative way.
What about friendships that cross the line into romantic relationships?
According to a poll from Society for Human Resource Management, 58 percent of managers feel that office romantic relationships are completely unprofessional; and 38 percent feel that they always end in disaster. More often than not, this kind of relationship in an office environment has a negative impact on morale and is generally frowned upon.
CHUCK CAVE is vice president and regional manager for Accountemps in Cleveland, Ohio. Accountemps has more than 350 offices throughout North America, Europe and the Asia-Pacific region, and offers online job search services at www.accountemps.com. Reach Cave at (216) 621-4253 or email@example.com.
Getting together with the gang after work can be fun and, as a survey suggests, may be good for business.
Fifty-seven percent of executives recently polled said that office friendships help on-the-job performance for employees; 63 percent of the employees themselves agreed. But managers and employees aren’t as aligned when it comes to just how beneficial it is to have buddies on the job: Twenty-two percent of employees said befriending coworkers has a “very positive” impact on productivity while only 2 percent of managers felt as strongly.
The surveys, developed by Accountemps the world’s first and largest specialized staffing service for temporary accounting, finance and bookkeeping professionals included responses from 150 senior executives and 519 full- or part-time office workers.
“Friendships at work establish that people get along and can work well together,” said Lisa Morgan, branch manager at Accountemps in Akron, Ohio. “Friendships can be a wonderful win-win for both the employee and the company and create a very nice team atmosphere.”
Smart Business spoke with Morgan about the benefits, as well as some drawbacks, to mixing friendships and work responsibilities.
Since friendships can help productivity in the workplace, what can managers do to encourage friendships in the office environment?
Supervisors can create an environment where coworkers are encouraged to celebrate each other’s successes. This can be done through team-building lunches, trainings, retreats and brainstorming sessions. It is beneficial to try and get workers outside the office environment, since this often helps foster friendships.
In the survey, managers were less enthusiastic in their response about how friendships affect work productivity in the office. Why do you think they have a different view about this?
Because managers have a different level of responsibility, they probably tend to look at friendships with a more critical eye. For example, as an employee, I might think it would be wonderful to work with all of my friends, and I might not think of the consequences of how it might affect my work performance positively or negatively. As a manager, however, I would view this more critically. I would think how this could impact the work environment if it is not managed correctly.
What might be some of the downsides to having friendships at work?
There might be several. For one, if the friendship starts to exclude other people, it might have a negative impact on morale within a department. Another would be bringing too much personal talk into the office environment, such as talk about weekend plans, what they did last night in general, just too much socializing.
From a manager’s standpoint, it is important for everyone to be an equal part of the team and intense friendships can be viewed as clique-ish. A way a manager can handle this would be to occasionally form work groups using different departments (if that’s appropriate) to tackle projects.
The manager might also want to talk to the friends if too much socializing is preventing workflow, or excluding other individuals in the office. Friends may not even realize they are excluding others, and just pointing it out in a non-threatening way may be enough for them to start including others, or to pare down the idle chit-chat that might be going on.
Is there a way for a manager to bring these issues up without discouraging the friendship?
It is a fine line, but a good manager will not want to discourage a positive friendship. The key is to keep the lines of communication open with employees and have one-on-one conversations with the friends should problems arise. These issues should never be aired in public. It is important for the manager not to give the impression that there is something wrong with having a friend in the office, only that behavior such as excluding others, or too much socializing is impacting workflow or morale.
Office friendships are one thing, but what about office romances?
Having an office romance is vastly different from having office friendships. It’s taking office friendship to the extreme level, and some view it as crossing the line. Most managers view this as unprofessional and having the potential of wreaking havoc on office morale. If it does happen, the public display of affection needs to be non-existent during office hours, and the couple should not be exclusively with each other every second of the day. Overall, it is a very hard line to walk. If friendships can become cliquish, romantic relationships are the extreme version of this that can really shut other people out.
LISA MORGAN is a branch manager with Accountemps based in Akron, Ohio. Accountemps has more than 350 offices throughout North America, Europe and the Asia-Pacific region, and offers online job search services at www.accountemps.com. Reach Morgan at (330) 253-8367 or firstname.lastname@example.org.
Entry-level accounting and finance professionals can’t always depend on their companies to find a mentor, suggests a new survey. The majority of the chief financial officers surveyed (58 percent) said that it is uncommon for new employees to be matched with mentors to help them up the career ladder either formally or informally within their organizations.
The survey, developed by Accountemps, was conducted by an independent research firm and included responses from more than 1,400 CFOs from a random sample of U.S. companies with 20 or more employees.
“Mentoring is certainly a valuable way for companies to transfer wisdom, nurture talent and get new employees up to speed quicker … but not many companies make the effort to create mentoring programs,” says Tom May, Cleveland branch manager for Accountemps. But, May said, even if a company does not have a mentoring program, there’s a lot an employee can do to seek out his or her own personal mentor.
Smart Business spoke with May about the importance of creating mentoring programs and what employees can do if no such program is available.
What are the benefits of a mentoring program from both the employer and employee perspectives?
From the company’s perspective, it is an excellent way for new hires to become more productive more quickly. It also helps new employees understand the corporate culture, office protocol, and how to confidently handle sensitive situations.
From the employee’s perspective, having a mentor for those first few crucial months on the job helps them get up to speed quicker, helps them grow in their professional career and, ultimately, makes them a better employee. A mentor or a confidant within a company can help a new employee understand the aspects of an organization that often are not obvious to a newcomer.
Why do you think so few companies institute mentoring programs?
In the financial world, in particular, experienced professionals (who would make excellent mentors) are often hard pressed to squeeze a mentoring relationship into their already-packed schedules. Plus, companies themselves often don’t see it as a priority to start a mentoring program. Employers do see the value of these programs, but it is something that gets put on the back burner and often never gets implemented because of time constraints.
What could a newly hired employee do if no mentoring program is available?
New hires should not expect a mentor to come knocking on their door. Employees need to be proactive and seek out one or more informal mentor. And companies that don’t have a formal mentoring program often encourage this kind of informal mentoring.
Employees don’t necessarily have to say, ‘Will you be my mentor?’ but instead they need to work to form casual alliances with employees they admire, who are well-established in the company, and who are also approachable. The employee needs to feel safe and comfortable asking this ‘mentor’ for advice.
What kind of person would be a good informal mentor to a new employee?
Someone with wisdom and perspective and age or title is not necessarily a factor in that. The employee should also seek out people who not only have the required skills they want to emulate, but who are admired and respected. Also, new employees should not rule out finding mentors outside the company through professional and community organizations.
There also can be different kinds of mentors. One can guide employees on the technical aspects of their job; other mentors can guide them on the managerial or corporate-culture aspect of the company.
While this may be out of the comfort zone of some employees, they need to remember that these ‘mentors’ are often honored to be asked advice.
Finding a mentor is not something new employees often think about doing. But, while it is an underused tool, it can truly help a new employee’s learning curve and ultimately help advance a career.
TOM MAY is the Cleveland branch manager for Accountemps, which has more than 350 offices throughout North America, Europe and the Asia-Pacific region and offers online job search services at www.accountemps.com. Reach May at (440) 777-8367 or Tom.email@example.com.
While mentoring programs are an effective way to help employees get up to speed, it is an uncommon practice for companies to match new hires with mentors either formally or informally according to a recent survey conducted by Accountemps, the world’s first and largest specialized staffing service for temporary accounting, finance and bookkeeping professionals. The survey, which was conducted by an independent research firm, included responses from more than 1,400 chief financial offices from a random sample of U.S. companies with 20 or more employees.
“New hires are often left to take it upon themselves to find someone to help them up the career ladder,” says Lisa Morgan, an Akron branch manager with Accountemps. Morgan noted that 58 percent of those surveyed said that mentorship programs were not common in their companies.
Smart Business spoke with Morgan about her own valuable experience as a mentor and mentoree, and the importance of establishing formal mentorship programs in a company.
Why are mentorship programs uncommon among the U.S. companies that were surveyed?
I don’t think that companies are completely unaware of the benefits of mentor-ship programs, but I believe that the major roadblock is time. Typically, the best mentors in an organization are also, not surprisingly, top producers or model employees. Their supervisors may not want these employees to take time away from their normal day-to-day business activities in order to mentor a new employee.
That said, I believe that mentoring is really a valuable way to transfer the wisdom of these individuals to the next generation; it is also a great way to get new hires integrated quicker into the culture of an organization. And a confidant mentor is invaluable for explaining the nuances and the unspoken rules of a company and its expectations to a newcomer.
Could you explain, from your experience, the benefits of being a mentor and a mentoree?
From the mentoree perspective, it helps new hires learn more about how they can fit into the organization and see the bigger picture. It also helps to have a mentor who is not a direct supervisor because the newcomer can talk to the mentor more freely about any concerns or challenges without holding back or feeling like comments may have an negative impact on his or her career. An added benefit is that when the formal mentor program is over, often the mentor/mentoree relationship continues. In my case, I still contacted my mentor for advice even after the formal 12 week program was over.
It is also beneficial for those doing the mentoring as well. From my personal perspective, it certainly was an honor to be asked to be a mentor. And it turned out to be a rewarding experience to help someone who was struggling with some of the same things I struggled with when I was a new hire. There is also pride when the people you mentored get promoted and become mentors themselves.
What are some steps that a company can take to start a mentoring program?
The most important thing is to talk to employees at all levels, from veterans to the newly hired, to get input on how they would see a mentoring program and how it ought to be structured. The mentoring program will look different for every business, and even vary from department to department within one business because needs are different.
Once information is gathered from employees, you need to clearly define the parameters of the program. Some questions to ask include: How long does the program need to be? What are the top three goals for both the employee and the company? When do you want employees to start a mentoring program (ideally, it should be when the employee has settled into the job for several months)? And how long should each mentoring session take (for example, one hour once a week)?
Without these parameters a mentoring program can easily become just two people talking with nothing to gauge whether it is effective and what it needs to accomplish.
What should employees do if there is no mentoring program available at their work place?
The next best thing is to join professional organizations, which is a great way to align yourself with individuals in your field who are serious about a profession. Employees can also take it upon themselves to do their own internal networking; this can include trying to find an informal mentor by picking out key employees and aligning themselves with them (asking them out to lunch, asking their advice, etc.).
LISA MORGAN is a branch manager with the Accountemps office in Akron, Ohio. Accountemps has more than 350 offices throughout North America, Europe and the Asia-Pacific region, and offers online job search services at www.accountemps.com. Reach Morgan at (330) 253-8367 or firstname.lastname@example.org.
For information technology departments already burdened with heavy workloads, two months may seem too long to wait to replace a worker. But that’s the reality, according to a new survey conducted by Robert Half Technology, a leading provider of information technology professionals on a project and full-time basis.
Chief information officers (CIOs) say it takes an average of 56 days to fill a staff-level position and 87 days to bring a new manager on board. The national poll includes responses from more than 1,400 CIOs from a random sample of companies with 100 or more employees.
“One thing that companies can take away from the results of this survey is that the fight for talent in the IT world is very real and will not go away any time soon,” says Chris Ferguson, division director for the Columbus office of Robert Half Technology. “Another thing companies need to realize is that taking too long to make an IT hiring decision can mean the difference between having good talent on board and losing that hire.”
Smart Business spoke with Ferguson about what business owners can do to ensure that good IT talent does not slip away, and what to do to attract and retain good information technology workers.
Why is there an IT talent shortage at the moment?
There are not enough IT professionals for the increased work demand. The IT talent problem will become heightened in the next few years because baby boomers are poised to retire starting in 2012. That talent is not being replaced by younger workers because fewer high school graduates are entering computer science and engineering programs in college. Overall, the unemployment rate for college graduates is low in general, even more so for those graduating with a degree in computer science.
Couple the talent shortage with the increased demand for workers who understand and can implement ever-changing technology in the workplace and you have an intense demand for IT talent.
What are some of the top challenges in this environment?
Companies are stealing talent with the lure of better salaries and other perks.
We’re also seeing a trend where companies are losing good talent because of the hiring ‘waiting game.’ You need to realize that IT workers are getting multiple offers simultaneously. If you want to bring someone on board and you wait too long to make a decision, you will most certainly lose that talent. Sure, the hiring manager wants to make sure that the IT worker is the right fit and wants to do a thorough search process but if that process is too long or complicated, you can bet that IT professional will have other job offers waiting in the wings.
Your survey indicated that it takes two months or longer to fill IT positions. What is the cost to business of this waiting game?
The primary cost is remaining competitive. The cost of being understaffed is great in terms of stressing an already overburdened IT staff; then there’s the issue of missed deadlines, productivity gaps and dissatisfied customers which can lead to lost revenue and business.
An understaffed IT department can mean unhappy workers and these workers are in a good position to find another job very quickly. It is a fact that the cost of retaining current employees is lower than finding a replacement.
What can businesses do to lessen the impact of this scenario?
They can fill these gaps with temporary or project workers.
Another option is to view recruitment as an ongoing process instead of looking for workers only when the need arises. Hiring managers need to continually keep a pipeline open of potential IT workers.
There are a few ways to do this: CIOs can find top talent through industry trade shows, conference networking events, user-group communities, job fairs, and through college recruitment, as well as through staffing/recruiting firms to fill short-term gaps.
Other good sources of IT talent are through the job boards at HDI (Help Desk Institute: www.thinkhdijobdesk.com) and ITIM (Information Technology Infrastructure Management Association: www.itimassociation.com).
What other advice do you have for CIOs trying to fill IT positions?
Stay networked, utilize referrals and set up an internal referral bonus to existing employees who bring in top talent.
CIOs also need to realize that this demand for IT talent is not going to go away. Information technology is continually expanding with new products always coming into the market and new challenges to face. To be competitive in this landscape, companies must be able to effectively retain top talent and always be on the lookout for new IT professionals.