Employee medical insurance benefits often complicate things for small business owners, and that fact is unlikely to change.  Recent developments in the employee medical benefit arena offer some good news, some bad news, and some options yet to become available. 

You might be relieved to know that medical insurance premiums for small business employers have increased at a slower rate than those for large employers. Despite sharp increases across the board in 2011, rates for small business programs showed a 6% increase versus 8% for large employers.

Small businesses, on the average, sponsor programs with higher deductibles, co-pays, and less comprehensive coverage. On the other hand, small businesses pay more of the cost per employee than the larger companies do. According to the Kaiser Family Foundation, small business owners pay a surprising 85% of single person plans and 64% of family plans. Fully 35% of small businesses pay 100% of the premium for their employees although this percentage has declined steadily in recent years.

Over all, the percentage of employers offering medical insurance has continued to decline. In addition, the percentage of employees declining coverage when it is offered has increased. It would appear employees feel so pressed by the economy that they decline the cost of the benefit offered. At the same time, employers are pressed by the economy into withdrawing the offer.

The Patient Protection and Affordable Care Act takes effect fully in 2014. It will enable employees, without medical insurance at work, to purchase insurance on the open market. Theoretically, that market will prove competitive. The PPACA will protect applicants with pre-existing condition, and the market should offer a variety of options and plan prices – in time.

There are some signs that employees are risking loss by opting out of insurance now in anticipation of the protections afforded by the PPACA. And, some employers may slim down their benefit programs in advance of the Act. How this will affect premium costs is a mystery at this time. Medical insurance is still a risk pool; fewer participants increase the risk. If the employees secure their insurance – and there is no guarantee they will – outside of the employer’s group, they may or may not reduce the loss ratio experienced by the employer group.

If we assume that the insurance underwriters/companies are working forward on these issues, they will aggressively move into the 2014 market with attractive offers for uninsured workers. However, I believe they will prudently develop plans and rates attractive to employers because employers provide a filtering underwriting screen for them. Underwriters know that steadily employed workers have an edge in character, life style, and longevity.

If you are looking for an alternative to your current HR data management software, workday.com just might be the answer.

You already know that the Cloud is a virtual place for storage and data, reducing user risk and server expenses. For some time, you have been able to save correspondence, records, memos, emails, etc. in the Cloud to enjoy ease of access. However, users are finding an increasing number of specialized applications.  Enter workday.com.

Caution: This application would only be of interest to employers of a “certain” size because its total service package may be more than you need. Still, I think the site and the idea are worth exploring.

 Workday offers you a wide spectrum of payroll needs:

• Enter payroll data on each worker on single page.
• Run multiple pay groups together.
• Empower employees to access online pay slips, tax statements, tax and payment options.
• Update tax changes automatically.
• Calculate and retrieve exceptions and fiscal numbers with flexibility and accuracy.

Workday offers payroll Co-Sourcing to:

• Reduce manual effort in payroll processing, taxes, and garnishments.
• Provide visibility and audit controls.
• Offer one-click management of unique situations like termination.
• Reduce need to transmit data to processing center or to wait on record batching.
• Integrate and monitor payroll activities against other budget behavior.
• Forecast overtime impacts, calculate pay ranges, and predict cash flow.

Workday provides reports on many things:

• Compensation management
• Absenteeism
• Employee Benefits
• Performance Management
• Succession Planning

After reviewing all this, I have to say that Human Resources Management is more complex and important than a website can handle. Human Capital Management serves its purpose but lacks the personal touch only you can bring to the mix. However, I feel it is worth exploring Cloud opportunities for HR data management.

What I like is:

• Lower cost of ownership in your ability to outsource some clerical activities and redeploy personnel and IT resources.
• Valuable actionable analytics, information and cross discipline data that improves management decision making.
• Efficiencies in processing payroll for multiple teams like those in various construction locations, and in having personal ownership of the data wherever you are – on site or not, pc or mobile device.

Take a look – it provides introductory videos and webinars – to see what you think!

Are dependable employees myth or legend?  Small business owners tell me that they are desperate for dependable employees. And while I’m sure they are hurting for reliable and accountable workers, I sometimes find that part of the problem is confusion in the employer’s expectations, and the other part arises from their failure to structure their hiring interview to these needs. 

Employers look for personal chemistry and, in so doing, miss clues to specific behaviors. They would be smarter to structure the interview around specific desired behaviors. For example, dependability should not be a generalized characteristic. It should be a virtue defined by specific behaviors.  

Dependability is a measure of things that the boss wants to depend on. Employers need employee support in their business process. They need people to show up and be on time. They need workers who respond to customers’ questions and complaints on a timely basis. They look for new hires that are willing to work on teams and go the extra mile. These are all measurable behaviors for which you can structure interview questions.

 Make your list of dependability behaviors:

• Completes assignments as scheduled
• Arrives at meetings or events on time.
• Completes reports to teammates and superiors on time.
• Follows business’s rules and regulations.
• Solves customer problems on time.
• Willingly takes on work when peers are overloaded.

If dependability is delivering on promises, an interviewing employer may want to ask:

• People miss work from time to time. What would you say are good reasons to miss work?
• What would you say is satisfactory attendance at work – 75%, 90% or 100%? How many days work did you miss last year?
• Tell me about a time when you accepted responsibility for a problem at work.
• Describe the reaction of your coworkers when someone is late for work.
• Give me an example of how you prioritize things.
• We expect employees to keep in touch with customers. How frequently would you make contact to keep customers satisfied?
• Only 4 employees showed up when 6 were on the schedule. How would you handle this?
• Suppose you woke up and heard the weather and traffic are bad. How would you react?
• Many things happen in our personal lives. Just what would affect your dependability at work?
• What happens if your car doesn’t start?
• How do you handle a customer problem if the call comes as you are leaving for lunch?

These are all questions you can ask in a qualifying phone interview. If you want to save them for a face-to-face interview, stick to your plan. These questions won’t take more than five of the minutes you allocated for the meeting. Structure the questions, make your list, and take notes. If nothing else, the job candidate will walk away with a sense of how important dependability is to you.

Hiring with Craigslist (www.craigslist.com) might be your best option for reaching interested qualified hourly workers – but only if you use it well.

To be certain, it’s an employer’s market right now with unemployment at 10%. But, you can’t take for granted a pool of talented, experienced candidates. You still have to get the word out that you want the best and brightest to fill your open position.

Small businesses have few effective recruiting resources. Ads in big newspapers are costly and counter-productive. Small local papers reach all the people you don’t want and none of the people you do. Monster sites are too universal for your own good.  Setting aside local networking and word of mouth, Craigslist might be just the resource you need.

Open a Craigslist account.

Follow the prompts at https://accounts.craigslist.org/login/signup. Follow the link they email you to complete your application. Identify yourself as fully or as anonymously as you wish to appear in your postings. For example, you may not want phone calls or walk-ins until you have reviewed email responses.

As you set up account, you will receive an email address that will direct responses to your postings into an inbox you can open at your convenience. There is no fee to advertise (except in large markets), you can use as many words as you like, and you are assured anonymity if you want.

Create intriguing ads.

• Review the categories where your job will appear. You can post the job in more than one category.
• Title the job to attract applicants. For example, “Front Desk Personality” appeals more than “receptionist” does. “Problem Solver” interests more than “customer service rep.”
• Be conversational and inviting in tone. Avoid the dos and don’ts of a job description.
• Offer a snapshot of the job and the workplace culture. Sell your culture and, then, describe your needs and expectations.

For example, an ad for an office assistant might read so:

“It’s 10:07 P.M., and I’m still working!!

Beth Marcus and I are architects in a growing practice located in Farmington. We are different from other design firms in town. Our clients are small developers that rely on our advice. We help our friends and clients with their design needs, and hone their construction strategies so that they can be profitable even in difficult economic times.

But, I’m stuck working late again because I’ve just got too many things to do – accounting, bookkeeping and payroll projects are just piling up. With the housing market in the bind it is, I should spend more time advising clients and less on bookkeeping projects.

Can you help me take care of the accounting so that we are able to provide the high-end consulting services they need?

Are you somebody who’s superb at handling details? A loyal, hardworking, energetic person who follows through and almost never misses a deadline? Your last employer considered hiring two people to replace you? Excellent with QuickBooks and understand bookkeeping inside and out? Comfortable in a small business environment where priorities change quickly? A super organized get-it-done type who’s also very good at communicating with people?

If you are all these things, reply with your resume and cover letter.

Did I mention we need someone loyal, energetic and deadline driven?”

This creates a picture of the need and the person we are looking for. It lets candidates really express their own fitness and show what they bring to the table. Let your readers and target group know what you REALLY want and encourage them to sell themselves and your business!

Grovo is a small, business friendly online training program. A hub for web users, Grovo trains people in the latest ins and outs of social media and other sites – all at no or low-cost, depending on your preferences.

You’ll find easy-to-follow videos on navigating social media, such as Twitter, Facebook, and LinkedIn, as well as more challenging sites like Google Analytics. It offers self-paced courses for employees with certificates awarded on completion.

Enroll for a free three-day trial, or sign up for $9 per month. (Special programs for larger or more directed business applications run to $190 per month.)

Grovo is a timely innovative idea  promising big things. Check it out at www.grovo.com. You’ll find an extensive list of sites served and courses offered. Grovo writers and voices have created a university of videos, lessons, quizzes, and glossaries. Videos and materials demonstrate high quality, well done, production standards.

The system sets up a personal dashboard from which you can customize and follow your progress to become more proficient in use of sites that promote or manage your business

Grovo begins with a survey (some may find too narrow) that asks you to choose a category:

• Social Media include Facebook, Quora, Twitter, and others.
• Productivity has sites such as BasseCamp, Google Docs, Mint, and more.
• Online Marketing navigates Craigslist, GoDaddy, Facebook Pages, and similar tools.
• Web Essentials over Chrome, Skype, Firefox and related sites.
• Shopping offers courses in eBay, PayPal, and Amazon.
• Entertainment takes you through Yelp, YouTube, Opentable, etc.

 Grovo lists course title and duration. The structure of courses is well planned and easy to follow, and I can recommend Grovo, especially to business owners who, frankly, are lost when it comes to the technology overwhelming them and waste time hunting and pecking their way around sites that are less than intuitive.

 I also think it is a great tool for training employees to a consistent skill set. How many of your new hires claim a competence that you find they exaggerated? By assigning them to Grovo training, you can follow their progress and be satisfied in a certificated outcome.

 What’s the downside? Well, some people find the content to be weak. The scripts sometimes sound like the website’s own public relations. Perky, upbeat, and filled with buzzwords, they are often superficial, failing to drill down into definitions or navigation steps.

 Users with a higher level of experience and expertise may find their training needs better served by www.lynda.com, But, more about that at a later date!

Do incentives really motivate increased productivity?  Do rewards guarantee repeated behavior? If you believe they do, then you’ll need to reward valued and productive employees – but only if you want to keep them. If you think your workers feel entitled to wages, then build incentives into employee productivity.

I should point out that a structured incentive program is not for every situation. It requires  thought, advice, communication, and a real commitment to see it through.

Let your compensation consultant determine your business readiness for an incentive plan, but you can anticipate a few basic ideas:

• Individual Performance. Give an employee $10 every time a customer commends his/her performance. Hand a receptionist a gift certificate for every five callers qualified as sales prospects.
• Department Performance. Divide a cash prize among department workers when they exceed a target. For example, spread cash among customer service reps if satisfaction surveys hit the target or if they meet an attendance goal.
• Overall Performance. Pay a bonus to everyone if the business meets its overall goals. (You can tier the distribution and require employee longevity.)

Cautions:

• First pay a living wage. If workers are not paid fairly in the first place, there is no incentive in improving your profits.
• Understand that cash is not always the most effective incentive. For example, employees are more likely to be motivated by improved health or pension benefits.
• Performance problems may not be resolved with incentives. For example, poor performance may reflect poor morale that may be turned around with a change in equipment, supervision, or communication.
• Provide metrics for goals that are reasonably achievable. You cannot measure attitude; you can measure attendance. You cannot measure product knowledge, but you can count quality rejects.
• Communicate clearly, thoroughly, and repeatedly the terms and conditions of the program. It is good to promote competition, but you’ll lose if the plan seems unfair or inconsistent. You might be surprised how hard it is to sell employees on their own benefits.

DO not do this on your own, and don’t even think about it if you are not willing to commit to honoring it for at least a targeted number of years.

Who needs a resume when you’re self-employed? The simple answer is that you do – and you need to grow it with your small business.  Why?  Two main reasons that benefit your small business include: 

1. Vendors and customers want to know that they are dealing with an experienced and capable leader.  Your resume – which is a detailed foundation for your short bio or Curriculum Vitae – provides evidence for your experience and capabilities.
2. Keeping a record of your small business achievements helps inform your marketing efforts and gives you solid evidence to back up your sales claims.

Focus on action and results!

You are the best one to keep a record of your small business achievements. Think of your performance every six months, and write down the benchmarks as if you were preparing a real resume.  Consider the resumes that most appeal to you as an employer. 

I prefer to see a one-page resume, two at the most. I want to see a list of titles and bullets that match the needs I have identified and put into my search. I don’t need or want flowery or rambling discourse on life’s objectives and dreams. The best candidate is the one who can make the match, and demonstrate how actions correspond to results. 

• List bullets beginning with action words, such as, negotiated, brokered, contracted, hired, budgeted, and so on.
• Wherever possible, quantify the action. List the number of contracts or the dollars budgeted. Use whole numbers, percentages, currency, and the like.

In short, the small business owner needs to be his/her own record keeper. If nothing else, this is therapeutic; it just makes you feel better. But, it also remains a record of achievement that may be meaningful down the road to clients, vendors, employees, and other potential partners. It will reflect your sweat equity, the building of your business and confidence, the shaping of your personal and business identity.

Expect excellence from your employees?  Let’s review five secrets that smart managers can use to help employee performance move from mediocre to excellent.

We’re looking at employee performance, not employee morale. Name tags, mascots, and work games are not what the “whatever” culture needs to improve its work ethic, nor does it help with managing for excellent employees.

If a good work ethic is a moral and ethical issue – doing the work you are paid for – how can we fix the damage? How do we make workers understand that reliability, accountability, and productivity are the right things to do? What can the small business owner do to redirect the “whatever” mind-set when time and resources are already a problem?

1.      Look at the example you set:  On one hand, leading by example can be not only a cliché but also a managerial cop out. However, I do think there is a role for modeling and mentoring. If you have at risk employees – perhaps because of the wages you can afford to pay or the social climate you find yourself in – you need to structure some performance training and still avoid the cost of training. In short, hold yourself and your managers (if you have them) narrowly responsible for appearing prepared for work on time, for working at work while at work, and for working quickly by accurately – all measure of employee performance, no matter the industry.

2.      Break jobs down:  Some employees have difficulty seeing “the big picture.” To the owner, “the big picture” is a vibrant 3-D reality, but to the rank and file, it is someone else’s dream. Create and communicate smaller tasks. Break long term projects into smaller do-ables. Then, hold them to the finish dates and quality standards.

3.      Publish their productivity:  Once you set goals and standards, explain them in quantity and time. Set daily, weekly, and monthly metrics, and put them on the wall. I knew an Accounts Receivable Manager who placed a performance chart on a white board outside the department’s office. The performance of each named employee was posted at end of morning and end of day. The fact that all employees could see the performance was enough incentive to drive the department employees. 

4.      Pay for performance:  Recognize good work, consider sweat equity, and communicate the direction of compensation. Consider immediate non-cash incentives, such as gift cards, gas cards, shopping coupons, and so on. Make the presentation and recognition public and lasting. In short, reward stellar employee performance.  However, try not to create a monster. If the incentive is not clearly connected with the productivity and quality, it becomes just another entitlement. 

5.      Be a boss:  Hold employees responsible and eliminate poor performers and trouble-makers early. Don’t be afraid to hold their feet to the fire, but don’t make it all punitive. Team the new hire with a model you can trust; demand and review daily reports, but leave it to the model to shape things before you have to step in. Expect the model to reward and punish in real-time and to develop morale and loyalty as well as the preferred work ethic.

Each of these approaches teams work with training, accountability with responsibility, and quality with productivity.  While there is no guarantee that these approaches will produce performance in ALL employees, hopefully, you can bridge the excellence gap without taking your eye off the prize.

Our culture – in its endeavor to be sure that everyone is recognized for their efforts and treated fairly – has traded excellence for equality, particularly in today’s workplace.  Small employers face workers who have grown up in a world where excellence has become a relative term. 

Excellence is put on the back burner once scoring a goal is not as important as having a good time. Productivity is put on hold while we wait for everyone to take a shot. Quality is at the back of the line when trophies are presented to everyone.

A nation of spending constituencies

We have become “a nation of spending constituencies” as Senator John Sununu recently wrote in Time Magazine‘s “One Nation, on the Dole” (2011 August 4, p. 22). He observes that, as our population demographics have changed, so has our character. We have become a nation of retirees, students, veterans, teachers, and government workers. These powerful special interest groups have come to game the system, and it has come to serve no one well.

A community college instructor I know works in a heavily unionized environment. He is an excellent teacher with much evidence to prove it. However, in order for everyone to be treated equally, his performance evaluations rate his work as satisfactory – or not. There are no criteria for excellence, no measure of excellence, and no recognition for it.

If small employers they want productivity out of employees who have grown up in this world of shifting values, they need to get ahead of the curve.

• Consider hiring interns:  Partner with a local trade school or junior college to see if they can match your needs with earnest, responsible, and motivated workers. Pair the intern with a mentor who holds a short leash but also has the leadership skills to model performance issues in a sort of craftsperson – apprentice relationship.
• Recruit service veterans:  Contact the veterans’ support person at your local unemployment office. Where related experience is not a strong need of yours, you can collaborate with the veterans’ advisor to recruit the accountability and maturity you want. These advisors look on you as a customer, and they are likely to go out of their way to shape a recruit to your needs.

Solutions such as these require planning and follow through. However, increased productivity and quality are likely to cover any related costs. What’s your experience?

Expecting – and getting – excellence from your employees does not happen by accident.  Rather, it is the product of deliberate decisions regarding the management and operation of your small business.

High up, near the roof line of the Children’s Hospital of Orange County (California), the word “excellence” is carved into granite in letters 20 feet high. Is this a boast, a claim, or an order?

Children’s Hospital of Orange County (CHOC) is one of the leading hospitals in the country, and excellence is among the reasons why. Of course, it has highly respected doctors, state-of-the-art equipment, and a high degree of specialization. But it is employee excellence lived by all the members of the CHOC family that earn the acclaim.

I am not one to put much faith in sloganeering or posting whimsical signs. Still, it is interesting that – at least in this case – “excellence” is the one word they decided to put where everyone can see it. I’d put up the sign,too, if I wanted all my employees to work for it, or to reward them for pursuing it, or to drive them towards it.

Excellence is a character issue!

The small business owner needs to take ownership of employee excellence, both at home and at work. “Walking the walk” sounds a little superficial and automated. Excellence is a character issue – not just something you work toward, but also something that compels you.

Two obvious measures are found in quality productivity and customer service.

• Try your best to reduce quality issues to as few key elements as possible. Publish these as “do or die” rubrics and hold everyone to it. Employees listen to the owner; they work to please their supervisor; but, they will fundamentally follow their own interests. You need to make these coincide.
• Make employees accountable for customer service. I like the Honda service idea. Their service consultant will tell you on your way out that you will get a phone survey from Honda; however, the consultant asks you to call him/her before you give a negative score. That puts the customer service reputation up front. The Honda dealership’s ability to get first delivery on new models depends on keeping a certain score. When everyone on the Honda floor knows that, things change. In a small business, you can tell employees that you will be calling customers to assess their satisfaction.

Excellence is a character issue.  It is cause and effect. It is a metric with components. Instill  excellence in your business and your goals.  Teach it to your kids and grandchildren.  Better yet – show them…