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Compliance 92
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Posts Tagged ‘human resources’


Creative Ways to Trim Payroll without Laying Off Staff

July 26th, 2010 :: Steven Fisher

It is fair to assume that at one point in your career you will either be involved in a layoff by being laid off or doing the layoff. Nothing is more painful than letting talented people go because of an external issue (i.e. merger, lost business) and getting

I recently came across this great article from Entrepeneur.com on some creative ways to trim payroll without laying off staff:

Keep employees working. If there isn’t enough work to go around, consider switching up people’s duties, suggests Ray Friedman, a management professor at Vanderbilt University in Nashville, Tenn. “I have seen big companies make it through downturns by having factory workers do maintenance work [such as] painting, fixing tools” and the like, he says. Small companies, he adds, can receive similar cost savings by having current employees perform jobs that you would otherwise hire someone to do.

While such a role reversal will likely upset some workers, Christopher J. Collins, an associate professor of human-resource studies at Cornell University in Ithaca, N.Y., says that “complete honesty is really important.” If you articulate to your employees that such a job shift is only temporary, they may appreciate your resourcefulness and pitch in where they can.

Explore alternatives. As you converse honestly with employees about your business’s struggles, ask them for their cost-reduction thoughts, suggests Collins. “They may have creative ideas that have to do with nonpayroll ways to save money.” For instance, there may be some inefficient processes that an employee may have noticed that, if fixed, could save the company a bundle.

Ask for volunteers. You might also ask employees to consider a voluntary furlough, which is typically an unpaid temporary layoff or leave of absence. “Some employees may want time off,” says Friedman. “It’s better to let those who want, and can afford, time off to not work, rather than forcing it on everyone.” Some employees might consider using the time off to take a vacation, spend time with family or work on a personal project if they’re promised a job when the furlough is over.

Offer other incentives. Look into other forms of compensation, says Gene Marks, a small-business consultant in Philadelphia. For instance, providing stock options in lieu of payment may be acceptable for a short period. Additionally, if your company regularly provides bonuses but can’t afford them this year, consider offering nonpayment incentives instead, Marks says. “If you have anything like a vacation home or a timeshare that you can give to an employee that doesn’t cost you really anything, offer it,” he says. Just make sure you’re upfront about the switcheroo, as (understandably) many employees will chafe at having their bonuses disappear.

Install shorter work weeks. Reducing your employee’s hours may do the trick as well. For instance, Tray-Pak, a custom plastic packaging maker in Reading, Penn., has for the past two years instituted a four-day workweek during the typically slow months from February until April. “In our slow period, we really don’t need full staff,” says Ken Ritter, the company’s chief financial officer. Historically, he adds “we would have laid those people off.” However, Tray-Pak has found that it’s worth keeping the employees on because the training process, which takes three weeks, is so costly.

Reduce pay. If all else fails, consider reducing employees’ pay, says Collins from Cornell. This is obviously going to be controversial. However, since a person’s livelihood is on the line, a pay cut vs. a job cut, for many employees, may be preferable. The key to this predicament, he adds, is to “keep employees involved.” It will be a difficult conversation, but after relaying to your staff that the business is being squeezed and its overall stability is in question, a pay cut may be an easier pill to swallow.

Takeaways from this post:

  • If you are forced with trimming payroll you might not have to lay people off
  • You can get creative and explore many alternatives to cut costs and payroll expenses to make it through a tough time
  • If everyone is invested in keeping their colleagues by keeping their jobs everyone can benefit
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Why Every Small Business Needs an HR Program, Not an HR Department – An Interview with Jack Hayhow

May 5th, 2010 :: Steven Fisher

I met Jack Hayhow from Opus Communications at SOBCon in Chicago last year. Opus creates custom online training with large corporations for whatever issue they might have (business processes, risk management, human resources). Jack is also a long time Network Solutions customer. He is a gregarious and knowledgeable guy who after spending 10 minutes talking with him realized we had much in common. He had just put out this book called “Wisdom of the Flying Pig”. It is a great title and wanted to read it but he didn’t have any copies so he asked for my card and promised to send a copy. As most conferences go, you hope to stay in touch with usually you never talk to them again. Low and behold about a month later I received this package and in it was a copy of the book and a box with a battery operated, you guessed it, a flying pig. This became quite the popular toy in my office and left an indelible impression so I would never forget Jack. So a year goes by and he emails me about a new business that he has spun out from Opus called ReallyEasyHR. Of course, I wanted to know more. Recently I was able to sit down with him, catch up on things and talk about this new business, ReallyEasyHR. This is a transcript of the interview:

Steve: Jack, you mentioned that the motivation to build this started about 5 years ago based on the need to do HR compliance for your own small business. You decided to build your own so, why were other solutions not a fit?

Jack: To answer that, I need to give you a little background.  Our business had grown quickly from three to nine employees.  I suspected there were some HR issues I needed to tend to, but I had no idea exactly what they were.  I looked, but I could find nothing that told me in definitive terms what I needed to do to keep myself out of trouble.

So I hired an HR consultant and worked with our lawyers and we put together a very good program – but it cost close to $10,000.  When I saw what I got for that $10,000, I thought  –  “there HAS to be a better way”.

Lawyers are good for dealing with problems but they cost a lot.  HR consultants want to make a huge deal out of HR stuff.  Small business owners like me want to comply with the law in quickest, easiest, cheapest way possible.  We’re not interested in becoming HR professionals – we’ve got businesses to run.

So we developed ReallyEasyHR.  ReallyEasyHR provides a complete small company HR program for just $30 per month.  It gives small business owners a way to deal effectively with HR compliance and get back to their business.  We built it because we couldn’t find an existing option that was anywhere near cost effective.

Steve: From your experiences you first wrote HR Basics to help other small business avoid the landmines you experienced. What is the core of this white paper?

Jack: HR Basics tells small business owners what they need to do right now, what can wait until later and what they can forget about completely.  If I would have had this information a few years ago, I would have saved myself a bunch of money.

Fundamentally, HR Basics details the three things a small business needs to do to comply with HR laws and regulations.  If a small business does these three things, it’s tough to get in too much trouble.

Steve: After living with this application and evolving it to a mature solution that others could use, you decided to open ReallyEasyHR into the wild. What was the catalyst to spin this off from Opus and start and entirely new business?

Jack: The business model for ReallyEasyHR is substantially different from Opus.  It just seemed to make more sense to operate it as a separate entity.

Steve: ReallyEasyHR is sold as software as a service (SaaS) and includes many things around compliance and HR management. What are its core functions and more importantly, what does it not do? What are the real differentiators in this solution that small business should note?

Jack: That’s a great question.  The core of any effective HR program is the employee handbook.  ReallyEasyHR provides an Instant Online Handbook.  The business owner answers 12 questions and ReallyEasyHR generates a customized online employee handbook with the policies most small businesses need.  It takes less than five minutes.

Most importantly, after an employee reads the handbook, the employee acknowledges receipt and acceptance of everything in the handbook by digitally signing.  A record of that acceptance is stored in the system.

ReallyEasyHR also provides high-quality, video based training on a variety of essential topics.  Sexual Harassment Prevention, Time Management and Management Skills to name a few.  Every course has a test and test records are stored in the system for reporting purposes.

Finally, ReallyEasyHR also accommodates any proprietary documents, notifications or training a business might have – all of it goes right into ReallyEasyHR making it really easy to administer.

I guess the other differentiator is the price.  For $30 per month it’s almost impossible to go wrong.

Steve: Many small businesses get pitched with all types and sizes of products these days, what have you learned from marketing and selling a product (ReallyEasyHR) to marketing and selling a service (Opus)?

Jack: I wish I had a magic bullet or a secret sauce but I don’t.  I think it always comes down to understanding what the target audience needs and addressing that need in a far superior manner.  HR is a distraction and a pain in the butt for most small business owners.  We alleviate that pain quickly and cheaply.

Steve: I usually close my interviews with a “five things” question. In this case I would like to have you talk about five HR mistakes that could kill a small business.

Jack: HR is about two things:  Compliance and performance.

Let’s start with compliance.  Every business needs an employee handbook that lays out the rules and regulations.  If you don’t have that, you run the risk of having all kinds of problems.  So if you don’t do anything else, put together an employee handbook.  Take a look at our HR Basics document to get a sense of the policies you need.

Every company needs to maintain certain employee files.  Again, refer to our HR Basics for details.  But make absolutely certain your I-9 file is in proper order.

And every company is required to post certain state and federal information.  I don’t mean to sound like a broken record, but it’s all covered in HR Basics.

Now, to performance.  I think the short version is performance is about selecting the right people and providing what they need to excel.

I believe you can’t stack enough good people up to make a great one, so selection is critical.  And finally, great people need great managers.  In my opinion, companies languish or fail far too often because they lack great managers.

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Thinking of Hiring? 5 Questions You Need to Answer First

January 19th, 2010 :: Thursday Bram

276639499_f2b002ceaaIn order to grow your business in the next year, you may need a spare pair of hands. But the idea of hiring someone can be intimidating, especially if you’ve been running your business on your own for a while. You’re not just handing off responsibility for your business — you’re also taking responsibility for tasks like making sure your employee gets paid on a regular basis. These questions will help you make sure that you cover all your bases before you start interviewing applicants.

  1. How are you going to handle payroll and other human resources tasks? As an entrepreneur, your time is at a premium. Making sure administrative tasks are completed may not be your highest priority — in fact, that may explain why you’re hiring someone. There are a variety of options for payroll, like having your CPA handle it or using a payroll service. You may not be offering benefits to your employees, but you’re still required to handle payroll taxes and Social Security.
  2. What will your employee do? You may have a general job description in mind, but it’s worth going through and figuring out the tasks you would assign your new hire, as well as how long they’ll take. You may find that you need a part-time employee, rather than a full-time worker, or you may find that you actually have a series of projects in mind, rather than on-going responsibilities. In that case, bringing in a contractor, a temp or a freelancer on an as-needed basis may be a better deal for you.
  3. How do you plan to communicate with your employee? There are a number of communication issues that can come up when you add a new member to your team. If you’re out of the office on a regular basis, it’s best to address that fact before you actually hire someone who you need to train and assign tasks to. If you have a partner in your business or another employee in place, it’s also important to address what the chain of command looks like in your business.
  4. How will you reward your employee? You can get a decent idea of what’s considered market rates for the type of employee you need by looking at help wanted ads. But you may not be able to offer the type of benefits that big corporations can. While you don’t have to offer much beyond a pay check upfront, it’s worth considering in advance what you’re willing to negotiate and whether you want to do something like get health insurance for your employee down the road.
  5. Have you read up on the process of hiring a new employee? There is plenty of bureaucracy that goes along with hiring your first employee, from getting workers’ compensation insurance, registering with your state’s new hire reporting program and verifying employees’ eligibility to work. Depending on the state your business operates in, there may be additional legal steps required by law before you can actually hire your first employee.

Photo — MadeByTess