Are You Employing Aimless Drifters?

Morale: noun. The feelings of enthusiasm and loyalty that a person or group has about a task or job. (Merriam-Webster.com)

That pretty much sums it up right there. How is your employee morale these days? Are your employees enthusiastic about their jobs and loyal to you? Or are they half-asleep, have one foot out the door, or have stopped caring about their job? It’s easy to see how poor morale can have a detrimental effect on your organization.

It’s in our nature to improve our well-being and have a sense of purpose in life. Without it, we become aimless drifters without any goals. Can you see why that’s a problem in the workplace?
Let’s be honest. Not all jobs are very stimulating. What we can do is explain to our employees how their job fits into the bigger picture. Why is producing that widget on a daily basis vital for the success of the business? Well-being of the country? World? Etc.

By giving employees a sense of their purpose, showing true appreciation for their work, and doing the little things, you can improve morale and productivity in your workplace.
From the August ed. of The Bertram Business Bulletin

The Rise of the Robot

Retirements, Worker Shortage Leads to Increased Automation

Necessity is the mother of all invention. You’ve probably heard the push for higher minimum wage demanded by fast food workers and the arbitrary $15/hr. demand. Knowing that $10 hamburgers wouldn’t sell particularly well, McDonald’s has introduced a “Create Your Own Taste” self-ordering kiosk. Customers can custom order their meals which are delivered right to their table. It’s not just innovative; it helps them keep payroll down by eliminating these obsolete, order- taking positions.
On a much larger scale, manufacturing has led the charge in automation for years. While many large shops have used robots for years, the smaller manufacturers are now getting in on the party as well. A recent article in the Insurance Journal* cited several reasons for the change:

1. Dwindling Workforce – as baby boomers retire, Millennials have chased other careers instead.
2. Lack of Skilled Workers – Workers who are available often lack the skills needed to perform these jobs.
3. Increased Job Satisfaction – Workers can focus efforts on problem-solving instead of the repetitive tasks now performed by the robots.

The employee benefits climate has also changed dramatically since the ACA went into effect. Employers with over 50 full-time equivalent employees are required to offer group health. This can be crippling to retail establishments or those in the restaurant industry. As these costs continue to soar, employers can realize significant savings by utilizing more automation. The one-time price tag is large, but it more than pays for itself after a few years by avoiding these additional expenses.

And robots don’t complain...

This article is from the May publication of The Bertram Business Bulletin. To subscribe, send your request to abertram@cobrown.com to be included in the mailing list.

*http://www.insurancejournal.com/news/midwest/2015/04/23/365475.htm

Spreading Light Duty Cheer and Reducing Work Comp Costs

I love the Christmas season. The thrill of opening presents isn’t the same as when I was four, but there’s nothing like watching my four year olds tear into their presents after the big guy came. Giving is definitely more fun than receiving. I’m convinced of that.

I also enjoy spreading Christmas cheer. The best part is there are so many ways to do it this time of year. First, you have tree hopping which you’ve probably never heard of unless you grew up in eastern WI. Trust me; it’s the best way to spread cheer. Then you have Christmas cards, cookies, music, work parties, family gatherings, you name it. It’s all good stuff.

Now I’m going to ask you a question, and I want you to think long and hard about it. How do you feel about sending Christmas cards? Personally, I love sending the first few Christmas cards each year. At that point I’m still naïve and ambitious, bound and determined that this is the year I get them out by the first week in December. I also enjoy picking out the stamps too. Kind of dorky, but I find it entertaining. This year’s selection included Hermey, Santa, Rudolph and the Bumble. You couldn’t beat it.

Since I have the attention span of a four year old, I lose interest after about ten cards. Ten cards will take about twenty minutes, and when I see the remaining pile waiting for my attention, I find myself thinking of all the things I’d rather be doing. Like ice fishing, shoveling the driveway, having my fingernails pulled out with pliers, or shopping. Okay, definitely not shopping, but you get the idea. IT’S BORING AS HELL!!! I’m always glad I sent them when it’s over, but at least half my list tends to get theirs between Christmas and New Years Day. I’d be better off sending New Years cards instead.

So what does this have to do with your business? Light duty return-to-work programs. Let’s say you are in an industry that doesn’t lend itself to light duty work, i.e. trucking, manufacturing, construction, you get the idea. You can only file papers and push a broom for so long. And sometimes with doctor restrictions, you can’t even push a broom.

Most employers will end up sending their employee home to watch daytime television. You know, the same daytime television where every other commercial is from a law firm asking him if he’s been injured at work. That same group of lawyers also mentions that your employee’s rights are being violated by you, his employer, or the insurance carrier. You know where this one is going, and it’s not going away soon.

Did you know that medical only claims are discounted by 70% when calculating your experience mod? Just by getting that employee back to work in a limited capacity, you can help prevent an ugly lawsuit and keep your experience mod in check. And usually if you keep your experience mod low, your underwriter is going to throw you a few bones as well in the form of schedule credits. But you don’t have any light duty work you say?  I have two words for you: stuffing envelopes.

Think of a local non-profit group that could use some help stuffing envelopes.  Unless your employee has had a severe brain injury, he likely has the capacity to do this and other simple tasks. The savvy employers are doing this for several reasons: 1) it positively impacts their experience mod; 2) it’s great from a PR standpoint; and 3) It will drive their employee to return to normal duties quicker than if he was sitting at home.

Think back to your Christmas cards and how mind numbingly boring it becomes. Now imagine doing this for eight hours a day, every day, for weeks on end. If you’re a welder, plumber, etc. by trade, you’ll be crawling out of your skin and do everything possible to get back to your normal job. Unless you have some strange disease that makes you love envelope stuffing, this is only slightly better than torture. (Okay, I’m exaggerating a bit here, but you get the point.)

If you’re an injured employee, I think it’s safe to say that some of your ambition to return goes out the window as you relax at home watching re-runs of Rocky from your living room couch. If your employee is forced to stay in a routine that brings him out of his house each day to do some charity work, I think you’ll find him much more willing to return to his normal job duties. There is plenty of charity work outside of stuffing envelopes that he could do, but just by engaging your employee you are helping limit the damage and improving the odds that he will return to work sooner than later.

Do yourself a favor and check with some local charities. You’ll be a hero to them, and them to your business. Or you can give me a call. I’d be happy to have your employees send out my Christmas cards next year.

Andy Bertram
Risk Advisor
C.O. Brown
abertram@cobrown.com
651-800-6173

MN Sundays and Supply Chain Risk

I’m a planner when it comes to business. Every “I” is dotted, and every “T” is crossed. My personal life is a different story. Outside of work, I usually just go with the flow and let my better half take care of planning. She loves to plan, and most of the time it’s not a big deal. I just have to look at her little planner book to figure out where I need to be, when I need to go to the dentist, and usual stuff like that. Again, most of the time that approach works out pretty well.

Then comes the conundrum. Picture this: it’s Sunday, the Packers are getting ready to beat up on the Bears and Jay Cutler once again, and we’re hosting a football party at our place. The grill is ready to go, we’ve got a good spread inside the house, and naturally my throat is starting to get dry. It’s a good thing I have a stocked liquor cabinet and fridge full of… uh oh.

I completely forgot my brother came by last Tuesday from Green Bay, and the two of us did our best to solve the world’s problems. Not only did my head feel the pain Wednesday morning, but so did my liquor cabinet. It’s 11:34 a.m., and I live in Minnesota which is bad news for this guy. It’s time to pick up some 3.2 beer from the grocery store and some soda (or “pop” I guess they call it here). I’m going to hear about this for a long time…

While that didn’t actually happen, this is a foreign concept to those of you who live in 76% of our great country. If you’re a 24 percenter like me, you start to wonder whether your first state government was filled with Mormons, Puritans and Quakers. Off-sale alcohol is banned on Sundays here in Minnesota. It is either the result of a genius lobby put forth by the bar and restaurant association where on-sale is permitted on Sundays, or it’s an old fashioned law with more noble intentions in mind. Lucky for me, I live right on the border of MN and WI.

In between all this, there is an inherent supply chain problem in my personal life that I’ve solved. While planning ahead would have taken care of this, living in a border town has done the same thing. Knowing the impending supply disruption that comes every Sunday, I have the option of stocking up ahead of time to avoid this issue. I also have alternate suppliers located in WI that I can fall back on in the event I fail to plan ahead and need to restock my inventory on a Sunday.

Supply chain risk is a real problem for many businesses as well. There are hundreds of concrete contractors around Minnesota right now struggling with a cement shortage. Between the packed rail system, delayed barges this spring, and manufacturing disruptions down south, there isn’t nearly enough cement to go around. Many of these fall projects have had to be delayed and or pushed back to next spring. To a business that makes its hay while the sun shines and before the snow flies, this can be devastating.

So what’s a business to do? There are three common approaches to handling this type of risk: inventory management, alternative sourcing/supplier arrangements, and business interruption insurance.

Utilizing inventory management systems provides you the most control in preventing a supply chain disruption. By keeping accurate count of your inventory and analyzing usage trends, you should have a good idea of how quickly you go use up your inventory and how often you should be ordering replacements. You’ll always know what is available and how many days you can work with what you have on hand. As businesses now keep fewer inventories and “just in time” shipping has become more and more commonplace, inventory management is even more important because there isn’t a large inventory stockpile waiting to be used.

Finding an alternative supplier or sourcing arrangement can help you avoid disruption if your main artery shuts down. This isn’t possible in all industries, especially in the cheese world where your suppliers of brine and rennet are very limited. But in most types of business, a little planning and research can help you identify two or three backups should your main source of a certain product no longer be able to meet your demands.

Last but not least, you can purchase dependent business interruption insurance. For those of you in the cheese industry and others as well that rely on a sole supplier for certain products or ingredients, you can purchase this coverage to protect your lost income should there be a covered cause of loss at this named supplier. If you lose two or three months of cheese production because your supplier of rennet had a fire in their plant, you would be reimbursed by your insurance carrier for your lost profit during that time. The same can be applied to other industries as well.

 

It’s time for me to practice what I preach. Supply chain risk is a very real threat to businesses today, and also to those of us who live in Minnesota. You can bet my inventory will be well-stocked every Sunday when the Packers play.

Andy Bertram CPCU, ARM-E
abertram@cobrown.com
651-800-6173

Why Prescott, WI Matters to You

Just across the Mississippi River from Hastings, MN lies Prescott, WI. A town of about 4,300 people in Pierce County, Prescott is more than a small border town filled with Packer and Brewer fans. Prescott is also a textbook example of why you should never ignore what’s going on in the world of politics. You see, Prescott is also home to a brand new industrial park, sprawling with new construction.

In May of 2013, a new set of state business-to-business taxes were approved by the Minnesota Legislature. One of the tax hikes added a state sales tax to business-related warehousing and storage services. It targeted all tangible goods that are sent through third party warehousing and distribution. Essentially, you could argue that the majority of goods produced in our state our consumed in our state would have been subject to some sort of new tax. Minnesota had the dubious distinction of being the only state in the nation implementing a tax on third party warehousing and distribution.

To say tax policy doesn’t affect business decisions is ignorant at best, though admitted ignorance has been a common theme here in MN that last four years. I won’t get real political here, but when several businesses signed up to build new warehouses and distribution centers in Prescott after the tax was passed, it wasn’t a coincidence. (In full disclosure, our legislators eventually repealed the tax this spring, but the damage was already done.) A few of these businesses pulled out, but United Natural Foods (UNFI) is in the process of constructing a 300,000 square foot distribution and warehouse that will add up to 314 new jobs and inject $37.8 million into the WI economy.

Think for a moment what that tax would have meant to their business. Had they ignored what was going on at the legislative level, they may have wound up building here in the wonderful city of Hastings. We have the land available here for them, and we would have loved to see them set up shop in our industrial park. You could argue Hastings was a better location because of our vicinity to the cities and other major highways. Had they ignored our legislation and built here, they also would have been saddled with the burden of paying this extra tax that is not around in 49 other states. That would’ve had a huge impact on their profitability, and it all could have been avoided (and was).

Taxes are just a small portion of the red tape and other legislative issues that can impact your business. Different bills and amendments get passed into law each year, sometimes under the radar, and it is important to know how they affect you so you can plan for the future. Rather than ignoring politics, you should be actively involved trying to put people in office who are going to support your interests. As a small business, there are many different trade associations or business interest groups who will do the lobbying for you and keep you in the loop about what’s coming through the pipeline. You could also have someone on your staff tasked with staying up to speed on any and all laws and pending legislation that will affect your business. Regardless of what you do, do something!

Before you vote this year, remember the story about Prescott, WI. If you haven’t previously done so, make a conscious effort to pay more attention and get more involved in your local politics. The future of your business depends on it.

Andy Bertram CPCU, ARM-E
abertram@cobrown.com
651-800-6173
www.northriskpartners.com

Be the Best Boss and Save Your Business

I have one bit of advice that will make you the best boss ever, and at the same time, I could save your business. What is that magical advice you may ask? Mandatory vacation. No, that is not a typo.

Wouldn’t it be great if your employer came in and told you that you were required to take five consecutive days of vacation? I can just imagine him saying, “Andy, you’ve been working too hard. As a condition of your employment here, I am requiring you to take a five day vacation. Forget about those financial reports and the payroll you planned on doing. It’s non-negotiable. I don’t want to see or hear you at all next week.”

As an employee, I’m thrilled that I’m “required” to take five days off because let’s face it, I doubt I’d do it on my own. I hate doing payroll at the end of the month. Not to mention that balancing the books often means late days at the office.

As an employer, my boss is very shrewd. He probably isn’t real concerned that I never take a day off. In fact, he loves it. And he also doesn’t have some sick desire to do payroll and balance the books. What he does want is to make sure that the numbers are the numbers are the numbers.

We typically put individuals in charge of our finances that we have a great deal of trust in. Whether it’s a family member or employee, if we were concerned about them embezzling money, fudging numbers, etc, we wouldn’t put them in that position in the first place, right?

Because of this trust, it can be easy to ignore the possibility of malfeasance. Make no mistake. Payroll fraud is real.  According to the Association of Certified Fraud Examiners, it’s the number one source of accounting fraud and employee theft.  According to an article in Forbes:

• Payroll Fraud happens in 27 percent of all businesses
• Payroll fraud occurs nearly twice as often (14.2 percent) in small organizations with less than 100 employees than in large ones (7.6 percent).
• The average instance of payroll fraud lasts about 36 months. That’s three years of paying ghost employees or overpaying existing ones.

http://www.forbes.com/sites/matthewgarrett/2013/09/10/payroll-fraud-a-big-threat-and-how-to-avoid-it/

Trust is an important aspect of every successful business. You need to be able to delegate to thrive in your career, and you need to be able to provide your employees the flexibility to do their jobs well. Great things can happen if you let them. Trust, but verify.

So go ahead, be the best boss around. Let your trusted employees know they deserve a vacation. It may just save your business.

 

Andy Bertram CPCU, ARM-E

Risk Advisor

C.O. Brown

651-800-6173

abertram@cobrown.com

Dash to the Finish Line - Ensuring a Successful Transition Starts Now

You’re out on a walk on a peaceful summer morning. There is a cool breeze blowing off the Mississippi, and you’re soaking up the early morning sunshine. The soothing lapping of the water on the rocks is suddenly interrupted by a steady thump, thump, thump of a running animal pounding the pavement behind you. The thumping keeps getting closer and closer, harder and harder, until suddenly you can hear the breathless panting of the grizzly bear running you down from behind. Just before you take off in a panicked sprint, praying for dear life, you turn around only to see this guy drop a quick wave as he lumbers by on his early morning run. That’s right, no grizzly, just me.

To say I’m not a graceful runner is an understatement. While I may not be much of a runner, I am stubborn, competitive and determined. I also enjoy a good challenge, so when I saw the Warrior Dash was coming to Afton, MN this year, I didn’t hesitate to sign up. After months of training and prep work, race day was here. The first 200 yards went as planned, and then came the first unexpected obstacle. That’s right; this one was not on the list. We had to run from the bottom of the ski hill all the way to the top. And then back down. And repeat again, and again. I don’t know how many hills and wrenches were thrown my way that day, but I’ll bet my thighs could tell you.

Regardless, I managed to power through and finish the race within two minutes of my goal. Did it go as planned? Not exactly. Did I consider it a success? Absolutely. I had mentally and physically prepared to finish the race, and that’s what I did.  Even though it wasn’t perfect, all of that preparation paid off and I was able to cross the finish line. After the first hill, I had to adapt and switch gears. In a perfect world, unexpected hills and twists would never happen. In the real world, you need to be practical and realize that things won’t always go as planned. If that sounds a lot like running a business, it’s because it works the same way.

I’d guess that when you took on the challenge of starting your business, you had a general goal in mind on where you wanted it to go. That goal probably didn’t include working every day for the rest of your life. By being flexible and creative, you persevered to get where you are today. As you’ve had to switch gears, it can be easy to forget to do so in other areas too. What does your final game plan look like? Are you so caught up in the day to day that you haven’t spent any time on your exit strategy?

Succession planning is a talent and organizational improvement initiative that enables an organization to grow and thrive now and in the future. Having a clear picture of the future of your business will allow steps to be taken now to ensure the future success and direction of the company. Your business can neither succeed nor grow without a clear understanding of how the business will continue after the departure of key leaders of the business, including yourself. Not only is it imperative for the long-term success of your business, but I’d assume you want to make sure you’ll be getting paid for your investment when you retire.

Succession planning isn’t limited to retirements only. Think of your critical employees, yourself included, and how your business would be affected by their loss. A life insurance guy would talk end of the world type stuff, but let’s consider more likely scenarios – disability, retirement, moving away, joining a competitor. Life and Disability policies are available for two risks, but for the others it’s critical that a backup plan be established that includes cross-training your employees. Good planning is good business, and failing to do so could put your future and the future of your business in jeopardy. Succession planning should be part of a broader enterprise risk management plan. That’s right, not just insurance risk management, but a holistic approach to address those risks you can’t insure for. If your broker isn’t helping you with this already, it’s time to find someone that will.

Flying by the seat of your pants has a time and a place for certain things. Solidifying your future plans and protecting your business does not make the list. If you haven’t already done so, now is a great time to start as you make your dash to the finish line – your retirement.

 

Andy Bertram CPCU, ARM-E

651-800-6173

abertram@cobrown.com