August 2, 2015

Business Tip – July 2015

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Benefits of international trade in the tile industry

CTDA members take a trade mission to Turkey
Contributed by CTDA staff

Thirty-four CTDA members recently traveled to Istanbul, Turkey, for an amazing experience they will never forget. The CTDA Trade Mission to Turkey gave members an opportunity to meet with Turkish manufacturers face to face, explore new trends in Turkish tile, visit showrooms, and network with each other. As the United States’ economy recovers and business in the tile industry picks up, distributors are looking abroad for the next great opportunity in tile. International business across all sectors has grown tremendously with advances in technology and a willingness to create a strong global economy.

Dr. Robert Mousettis, professor of International Business & Strategy, and coordinator of the Masters of International Business Program at North Central College in Naperville, Ill., explains that global markets are one of the most attractive reasons to conduct business with a world-wide view in mind.

BT-ctda-0715“In general, the international markets provide an opportunity to venture into untapped markets with enormous potential,” Dr. Mousettis said. “However, it is not easy; if it was, everyone would do it. It requires companies to be comfortable with complexity and ambiguity. It requires companies to have individuals who have exceptional intercultural skills, natural curiosity, flexibility, adaptability, and superb leadership skills.”

With major manufacturers all over the globe, distributors realize the importance of broadening their horizons to buy and sell products abroad. International business does not come without challenges. Dr. Mousettis cites differences in culture and politics as major obstacles to conducting business abroad. As CTDA members learned during the trade mission, understanding more about different suppliers by experiencing their culture first hand is one way to alleviate concerns and become culturally sensitive. Politics and legal differences can arise while doing business internationally so it is important to have a strong understanding and clear communication with business partners.

Imports increase Americans’ purchasing power and give them access to products that may not be available in the United States. The tile industry is full of opportunity for collaboration between countries that excel in creating quality materials demanded by educated consumers. International trade in the industry can also broaden distributor and retailer horizons on how to display, use and promote tile in local markets.

To learn more about the CTDA Trade Mission to Turkey, please visit the CTDA blog (tiledealer.org).

Business Tip – June 2015

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NTCA makes apprenticeship and career development a top priority with web-based Learning Management System

By Dan Welch, Welch Tile & Marble, NTCA Apprenticeship Committee chairperson (Ed. note: This article is a follow-up to the story about the expansion of NTCA educational efforts with CEFGA and MiCareer Quest as reported in May TileLetter’s Benefits Box section. That May story introduced the idea of a Career Development Matrix, which is explained in greater detail here.) The daunting task of updating the existing NTCA apprenticeship manuals and transferring the information to a web-based Learning Management System (LMS) is under way. This Apprenticeship Committee began in San Antonio, Texas, at Total Solutions Plus where I again opened my mouth during a Training and Education Committee meeting and found out that this thought was a common concern and needed a chairperson. As the newly-appointed chairperson I set out to find an easy way to transfer information from the elder employees to the new millennials. BT_matrix_0615A Career Development Matrix idea was spawned during a post company-meeting event. The basic idea was to build a path easily understandable to the young men and women in our trade, linking the job title to the job duty and connecting it to a value or wage increases. The matrix is categorized by Orientation, Task, Skill, Knowledge, and Management. It can be used for personal career growth by an individual, or for a company to use to develop its people and personnel. A matrix shown to me on a YouTube video that night (Crazy/Hot Matrix) fit what I was thinking and the rest is history. Currently it’s in draft stage and is being honed and perfected.

Why an LMS? Apprenticeship development within a working company is tough to implement, and there are several obstacles to overcome if you plan to execute this within your organization. Welch Tile & Marble started a Department of Labor-approved program in 2005 with the help of DMI from Birmingham, Ala., and updated the program in 2008. The first class to go through the program was eager to learn and to improve their earning potential, but the energy it took to set up a class at night and come up with the lessons and hands-on training was exhausting. These are some obstacles to a traditional apprenticeship program:

  • Time out of busy schedule
  • Canceled class time
  • Lesson-plan development
  • Employee engagement
  • Absent employees
  • Out-of-town workers
  • Make-up class
  • Outdated materials
  • Multiple classes needed Apprentice 1, 1a, 2, 2a, 3, 3a training at the same time
  • Cost
  • Employee financial reward upon completion
  • Economy

The LMS is a must-have for two reasons. First, Welch Tile & Marble has 10 years of experience proving that implementing an apprenticeship program isn’t easy. Secondly, the new generation uses the internet for everything and grew up with instant information access. The vision and mission of the Tile Contractors Apprenticeship and Career Development Program is as follows:

  • Vision: A dedicated investment in developing tomorrow’s leaders .
  • Mission: Communicate, educate, evaluate, compensate, and cultivate the future generations of tile professionals through safety, productivity, passion and critical thinking.

Course Description

The Tile Contractors Apprenticeship and Career Development Program is an organized process designed to:

  • Communicate position descriptions, requirements, duties and responsibilities, measures of performance, and expectations.
  • Establish wage and benefit expectations nationwide.
  • Define career paths for all areas of the tile trade.
  • Develop tasks, skills, knowledge, and management modules to install tile successfully.
  • Provide educational tools, limit risk, and maximize productivity through technology and a positive environment.
  • Evaluate using training modules and certifications.
  • Cultivate passion and culture.

Pay for performance

Pay for performance has always been our belief: provide a good day’s work for a good day’s pay. So how do we provide this pay and who is going to identify what is good? Each market segment, region, work category, and job classification offers a different set of guidelines for what the market will bear and what each company’s core project business operations can offer. This draft is just that, a draft of what an average could be with a market that is diversified. For a company offering a service that is considered a commodity, the cost of doing business is very slim. The workforce is well trained to provide a limited skill with very little flexibility in what they can make available to the end user outside of the core competency. The result is lower pay. For a company offering a service that is considered a specialty, the cost of doing business is larger. The workforce is well trained in multiple areas and has the ability to do projects that are challenging and outside of the norm. The result is higher pay. I hope you are as excited as I am with the Tile Contractors Apprenticeship and Career Development Program and our industry’s attempt to attract new talent, build on their strengths, and move this industry forward. Stay tuned for periodic updates on the progress of the web-based Learning Management System, The Tile Contractors Apprenticeship and Career Development Program, and the refinement of the accompanying Career Development Matrix.

Business Tip – May 2015

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The Affordable Care Act at the five-year mark

By Patrick C. O’Connor, Kent & O’Connor, Washington, DC

The Affordable Care Act (ACA, or Obamacare, as it is referred to by both friend and foe alike) just celebrated its fifth anniversary. It survived an embattled beginning, an embarrassingly inept launch and so many House votes to repeal that we have lost count. Still, it survives. Nearly 10 million people have signed up for insurance on a state or federal exchange. And some analysts even say the ACA has created the possibility of real competition in the individual insurance market for the first time.

Yet, while Obamacare seems to have found its footing, the health law remains in peril. The latest threat is a second Supreme Court decision – with the ruling due in June. King v. Burwell presents a deceptively simple case of statutory construction, centering on language in the ACA that allows subsidies for those enrolled in an exchange established by the State. Challengers say that, under the clear words of the statute, the subsidies only apply in states that have established their own exchange. Therefore, the plaintiffs contend, the law does not authorize subsidies for individuals who live in states that did not set up an exchange (and who, as a result, participate in a federally facilitated exchange). Since there are 36 states without their own exchange, the outcome of this case has potentially huge consequences.

A ruling against the government would not repeal Obamacare, but the law would quickly unravel. The ACA has sometimes been compared to a three-legged stool:

1) Individual mandates/penalties to encourage broad participation, particularly among younger, healthier people, in the marketplace;

2) Subsidies on a sliding scale for low- and lower-middle income individuals who purchase policies on the exchange so health insurance is affordable, with penalties on companies who don’t offer affordable coverage and who have one or more employees receiving a subsidy;

3) Insurance companies must provide health coverage to everyone, regardless of pre-existing conditions or poor health, and cannot charge higher premiums based on health status.

All three legs are necessary or the stool begins to tip over. If the government loses in King v. Burwell, one leg of the Obamacare stool is removed and the others are weakened.

Be careful what you wish for

Many employers in the 36 states without an exchange are rooting for the challengers. Who could blame them? It is, after all, the subsidies that trigger employer penalties – if no employee can receive a subsidy in the 36 states, there can be no penalty on the employer for not providing coverage.

Beyond this clear advantage, however, there are other consequences to consider:

The insurance markets in those 36 states will be in turmoil. The health insurance companies will still be required to offer coverage to everyone, no matter the state of their health, and will continue to be limited in how much more they can charge an unhealthy person. Yet, with the healthiest participants likely to drop their coverage when it is unaffordable (absent the subsidy), a classic “death spiral” is likely to occur: with the deteriorating health status of their customer base, premiums increase across the board, more healthy people leave, premiums increase and so on until the market is unsustainable.

It is estimated that 8 million people will lose health insurance because they can no longer afford the policy without a subsidy. Others are likely to see steep increases in the cost of their health insurance as the pool of exchange participants in these 36 states shrinks, when the healthiest drop their coverage.

The health insurance systems in these states – the hospitals and doctors – will experience similar disruptions as the number of insured patients abruptly declines.

Politically, even Republicans in Congress who detest the law may be chagrined at the prospect of an estimated 8 million people becoming uninsured virtually overnight (in mostly Red states) while chaos roils the health insurance and provider markets – not the kind of headlines you want in an election year.

(Editor note: It’s also been widely reported that Health and Human Services Secretary Sylvia Burwell announced that in 2014 hospitals saved $7.4 billion in uncompensated care costs due to patient enrollment through ACA health insurance exchanges and Medicaid. In 2013, before ACA, hospitals provided more than $50 billion in uncompensated care.)

Of course, Congress could always take action to fix the problem or devise an alternative approach – but either would involve some degree of bipartisan cooperation and compromise, both of which are in short supply on Capitol Hill these days.

And so, we watch and wait for the Supreme Court to rule.

What’s next for employers?

Even if the Supreme Court sides with the challengers in King v. Burwell, important new reporting requirements will soon apply to all employers (with 50 or more employees), whether or not the company is located in one of the 36 states impacted by the court decision.

The reporting is meant to provide the IRS with information on who is providing coverage, what kind, to whom and at what cost. Fines and penalties apply for non-reporting. The reports must be filed whether or not the company offers health insurance coverage.

The statement of coverage for 2015 must be provided to each employee by January 31, 2016 on a Form 1095-C and sent to the IRS by February 28, 2016. The information includes:

Certification as to whether the company offered full-time employees (and dependents) the opportunity to enroll in Minimum Essential Coverage by calendar month;

The months during which coverage was available;

Each employee’s share of the lowest cost monthly premium for an individual policy (regardless of whether the employee opted for a higher cost plan or declined coverage), by calendar month;

Number of full-time employees for each month during the calendar year;

Name, address, SSN of each full-time employee during the calendar year and the months, if any, during which the employee was covered.

The take-away for employers: even if the Supreme strikes a blow to the health law in June, that’s not the end of Obamacare.

States without a state-based Health Exchange:

Pat O’Connor is a principal in Kent & O’Connor, Incorporated, a Washington, D.C.-based government affairs firm. A veteran of Capitol Hill with particular expertise in health, transportation and the environment, O’Connor works with trade associations and companies to find workable solutions to the most pressing regulatory and legislative issues. For more information, visit www.kentoconnor.com or call 202-223-6222.

 

 

Business Tip – April 2015

mapei_sponsorWho would think that snails, insect pests, weeds and seeds would threaten the ceramic tile business? But they do! Unwanted passengers in the form of bugs or agricultural pests – such as seeds and weeds – often hitch a ride amongst large quantities of ceramic tile and quarry products exported to the United States from Mediterranean countries – particularly Italy and Spain, as well as from China.

GPP_0415How does that happen? Before shipment to the U.S., tiles are boxed and then stacked onto pallets where they are held for shipment. Often those pallets of tile and stone are stored outside uncovered. Sometimes pallets are stored in areas where vegetation becomes overgrown. Snails and insect pests may be attracted to the warmth and moisture in pallets. These pests, among other import issues, often cost distributors large sums of money and time during the import process.

To assist its members in overcoming these challenges, CTDA has been working with U.S. Customs and USDA for several years. Last year, CTDA and Confindustria Ceramica (The Italian tile manufacturers association) announced the creation of The Good Phytosanitary Practices certification program for tile manufacturers and shippers. The program is quite extensive and prescribes the processes manufacturers and shippers must implement in order to significantly reduce or eliminate pest issues in their shipments. To date, 93 manufacturers have achieved the certification. A list of all certified manufacturers is available at this link: http://ctdahome.org/pdf/GPP_program_Register_01042015.pdf.

CTDA has also created an Import Form Submission System that helps track and manage issues with customs when importing ceramic tile from around the world. CTDA members can log into the system through the members-only section of CTDA’s website (or by placing an icon for the system on their desktop) and report problems using a drop down menu format. Members can enter the factory name, port of entry, receiving terminal, freight forwarder company, shipping line and other pertinent information. Members can also upload pictures of the problems found with the shipment. The information is then available to CTDA staff in a database. Accessing this data and sharing it with U.S. Customs will help CTDA demonstrate to U.S. Customs that it is no longer necessary to check EVERY tile shipment from Italy.

This state-of-the-art program is only available to CTDA members. To learn more about the benefits of membership, please contact CTDA at info@ctdahome.org.

The Ceramic Tile Distributors Association (CTDA) is a nearly 40-year-old trade association representing distributors as well as manufacturers in the ceramic tile, stone and related products industry. CTDA’s mission is to connect, educate and strengthen tile and stone distributors. CTDA’s members receive tangible value from participation in CTDA through educational events such as webinars and online training programs, valuable business tools such as benchmarking reports, certification of ceramic tile salespeople, planning of Total Solutions Plus, the annual conference for the industry, and industry issues coordination such as the Good Phytosanitary Practices program. For more information about CTDA or to become a member, visit the website at www.ctdahome.org or call 1-630-545-9415.

Business Tip – March 2015

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Obstacles to doing more business

Often salespeople are their own worst enemies

steve_rauschBy Steve Rausch

There is an old adage that says: “When I ask you what time it is, please don’t tell me how to build a clock.”

Many of us in this industry find ourselves “constructing clocks” frequently instead of listening completely to the question the customer is asking (don’t assume you know), and then answering that question, and that question only. It’s wise to ask the customer another question if you want to go further in your information-gathering process.

Listen, and keep it simple

It’s perfectly understandable how we grow into making these mistakes: we’ve spent years learning and perfecting our skills in the ceramic tile and flooring industry, and we are delighted to share that knowledge whenever we can. Unfortunately, we tend to forget to LISTEN to the question completely. Instead, we listen until we hear something we want to hear, and then like a buzz saw we take off “helping” that person by sharing all of our technical knowledge about the subject. The problem is the customer didn’t want to know all of that, or why/how it works, etc. He or she just wanted that one question answered.

Please try to remember this: “IF I want more information, I will ASK for it.” An example of this would be: “I was only asking about the color or grout because I want to coordinate with the new furniture I am planning to buy for that room when the work is completed. I really don’t care about all the technical characteristics of the product.“

Buzz-word fail

The same holds true for industry buzz words that you know and use, but are confusing for the customer because they don’t know, use, or even care to learn them. That’s YOUR job, not theirs.

Think of it this way: if you are standing in a courtroom explaining your side of the case to a judge, who knows nothing about your industry, telling that judge that ANSI, ASTM, TCAA, TCNA, or NTCA is the authority on this situation will not endear you to that judge. However, if the judge asks you WHY you did your work the way you did it, then you have permission to explain, in plain language, that your company does all work to ceramic tile industry standards as published by the Tile Council of North America and the National Tile Contractors Association. You can further explain that those two organizations publish technical manuals for material and installation procedures that your company follows. Now you are showing your true technical expertise without scaring or offending anyone.

Gently lead, don’t steamroll

Another obstacle to doing more business is giving your customer the impression (true or not) that you know everything about everything and whatever it is they want doesn’t matter. An example of this would be saying or thinking: “This product will be right for you and the other one you picked just isn’t going to work.” You may in fact know that, but you must gently lead the customer to come to that conclusion on their own. I one time had a salesman who really did know better than I did what I should have been looking at and purchasing; however, my resentment toward him for the way he expressed himself blocked me from purchasing from him. I went to a competitor, was properly treated and educated, and ended up purchasing that exact product. The first salesperson lost the sale with his inappropriate expression of his vast product knowledge. The second salesperson may have had exactly the same knowledge, but in addition, he had people skills enough to “read” the situation and educate me to find the proper conclusion with his expert guidance.

Stop talking!

The final point in our discussion of obstacles is too much talking after the sale is made. In the classic TV series Columbo, starring Peter Falk, in almost every episode the prime suspect blabbers on, answers unasked questions and provides more details about the crime. Almost without fail, that unrequested information was what allowed Columbo to put them in jail.

The same is true with many salespeople. The customer has made the decision, yet the salesperson just keeps on chattering and unwittingly raising new issues the customer hasn’t thought about or considered. Sometimes that slows down or completely eliminates the sale.

An easy example of this would be a seemingly innocent statement like: “Oh yes, this product you are buying – and this exact color – is and has been our single most popular product. Everyone is buying this.”

“Oh,” replies the customer, “Cancel my order. I wanted something unique and different than anyone else I know.”

If you are trying to generate revenue for your company, please consider these points and consider attending training in a sales and/or business development program to learn the most efficient way to increase your business without being tripped up by the many obstacles that are present every day.

Steve Rausch has been involved in the tile and flooring business for over 30 years and is currently an industry consultant specializing in sales, marketing, and interpreting technical issues in understandable terms. You can contact Steve at Rauschsteve@comcast.net or 404-281-2218.

Business Tip – February 2015

Five ways to get strong referrals – and lots of ‘em

SponsoredbyMAPEImarc_wayshakBy Marc Wayshak

Running a small business in today’s economy requires a departure from conventional business rules. In order to sell a product or service, businesses can no longer rely upon old-school sales tactics of bygone eras. Prospects are overwhelmingly distrustful of the traditional sales pitch; they’re busier than ever and they have access to more information than ever before.

As a result, small business owners must master a new set of tactics in order to make sales. The key is to start with strong referrals.

It’s no secret that getting referrals from clients who believe in your services is an effective way to connect with new clients. But in today’s business world, it’s not enough to just get referrals – they have to be strong, and there have to be lots of ‘em! Here are five ways to get lots of strong referrals:

1. Ask for introductions, not “referrals”! Salespeople often tell me that when they ask for a referral, all they get is a name, a phone number and an instruction to “tell him I sent you.” This is not a referral – it is, at best, a warm lead. The term “referral” is vague and unclear, which is why requests for them can frequently lead to disappointing outcomes. Instead of asking for referrals, ask for introductions. You want to be introduced directly to the person you want to meet, after all. The introduction can take place via face-to-face meeting, phone call, email exchange, or social media, but the key is that an actual introduction is made. Now, promise yourself you’ll never ask for a “referral” again!

2. Get over your fear and ask! I’ve done extensive research on what holds people back from getting more introductions, and it always comes back to the same issue: fear. Asking for introductions shows vulnerability and can feel uncomfortable. But the reality is that if you don’t ask, people will not think to introduce you. It’s your job to ask everyone in your network for introductions on a regular basis. The more you ask, the easier it becomes. In all of my years as a sales strategist, I’ve never heard of someone losing a client because they asked for an introduction. So what do you have to lose?

3. An introduction a day…really adds up. I have a challenge for you: ask for one introduction every work day. It’s a task that takes less than five minutes, but it holds enormous potential for your business. Here’s how.: One introduction per day equals five per week; five introductions per week equals 250 introductions per year. That’s a lot of introductions! Let’s say that you receive only one in five of the introductions you ask for – that still means you’ll receive 50 introductions in one year. If you turn half of those introductions into sales, then you’ll have closed 25 new pieces of business. What are you waiting for?

4. Ask for help. Help. That simple four-letter word is one of the most powerful in the English language. When you ask for help, people generally want to give it to you. On the other hand, people are turned off by phony confidence and a reluctance to accept assistance. So ask for help when it comes to introductions, just as you would in any other context. Start the introduction conversation by saying, “I’m wondering if you might be able to give me a little help.” Let the person say that she is happy to help – which she probably will be if you have any relationship at all. Then ask for the introduction to the type of prospect you’re looking to meet.

5. Help people help you. Salespeople frequently squander the chance to get introductions by not clearly explaining the exact type of prospect they’re looking to meet. When someone says that he’s willing to help you out with introductions, don’t respond, “Well, who do you know?” This forces the person to have to figure out which of the 1,000 people he knows to introduce you to. Instead, be laser-focused on the exact type of person you want to be introduced to. For example, you might say, “I’m looking to meet high-end custom-home builders or remodelers who invest in qualified labor.” When you get very specific, you narrow a person’s mental rolodex down to 1-3 people. Bingo!

When you focus on receiving more introductions (and actually take action!), your business can grow exponentially. If each of your clients introduced you to one new client, your business would double. By following these five simple strategies, you can bring on more clients without a massive effort.

Marc Wayshak (www.marcwayshak.com/) is a sales strategist who created the Game Plan Selling System. He is the author of two books on sales and leadership including his latest book, Game Plan Selling (http://amzn.to/15MdhA9)and a regular online contributor to Entrepreneur Magazine and the Huffington Post Business section. Get his free eBook on 25 Tips to Crush Your Sales Goal at http://gameplanselling.com/. (Twitter: @MarcWayshak)

Business Tip – January 2015

mapei_sponsorConstruction employment swells in 228 metro areas

In reports from the Associated General Contractors of America, good news continues for construction employment, with construction employment growing in 228 metro areas. The report also emphasizes the need for qualified workers to answer the demand as construction grows. In addition, a new bill passed by the House will allow employers and employees to protect retirement benefits. Details follow.

Construction employment expanded in 228 metro areas, declined in 64 and was stagnant in 47 between October 2013 and October 2014, according to a new analysis of federal employment data released in December 2014 by the Associated General Contractors of America. Association officials said the construction job gains come as new federal figures show year-over-year growth in construction spending and many firms report impacts from growing shortages of qualified workers.

“Even as a number of markets continue to struggle with declining construction demand and employment, most metro areas are adding construction jobs as the industry slowly recovers,” said Ken Simonson, chief economist for the association. “As spending on construction continues to climb, more and more firms will struggle with the impacts of a labor market that is not keeping pace with demand.”

Houston-Sugar Land-Baytown, Texas, added the largest number of construction jobs in the past year (12,900 jobs, 7%), followed by Dallas-Plano-Irving, Texas (11,000 jobs, 9%), Chicago-Joliet-Naperville, Ill. (9,200 jobs, 7 %) and Seattle-Bellevue-Everett, Wash. (8,300 jobs, 11%). The largest percentage gains occurred in Pascagoula, Miss. (28%, 1,800 jobs), Terre Haute, Ind. (24%, 1,000 jobs), Cleveland-Elyria-Mentor, Ohio (21%, 7,800 jobs), Cleveland, Tenn. (19%, 300 jobs) and Fargo, N.D.-Minn. (19%, 1,700 jobs).

The largest job losses from October 2013 to October 2014 were in Bethesda-Rockville-Frederick, Md. (-4,500 jobs, -14%), followed by Edison-New Brunswick, N.J. (-3,000 jobs, -7%), Gary, Ind. (-2,800 jobs, -15%) and Putnam-Rockland-Westchester, N.Y. (-2,200 jobs, -7%). The largest percentage decline for the past year was in Steubenville-Weirton, Ohio-W.V. (-36%, -800 jobs), followed by Fond du Lac, Wis. (-15%, -400 jobs), Gary, Ind. and Bethesda-Rockville-Frederick, Md.

Association officials noted that newly-released federal figures show construction spending increased by 3.3 % between October 2013 and October 2014 as demand for residential construction and other private-sector segments slowly expands. Even public-sector construction spending experienced an all-too-rare increase between September and October. At the same time, 83 % of firms report trouble finding qualified workers, which is limiting competition and forcing many firms to change the way they operate.

“Instead of capitalizing on the emerging recovery, many firms instead are struggling to find qualified workers to fill their construction crews,” said Stephen E. Sandherr, the association’s chief executive officer. “It is time to rethink our educational priorities when we have too many unemployed men and women who lack the skills to earn the kind of above-average wages construction work affords.”

 

House-passed spending bill

protects retirement benefits

In addition, Sandherr recently released the following statement regarding passage in the House of Representative of a Omnibus Spending bill that included a series of association-backed reforms designed to allow employers and employees to protect and improve multi-employer retirement programs:

“The House’s wise decision to include a series of multi-employer pension reforms in the broader spending bill will protect retiree benefits, help keep thousands of employers competitive and ensure that the broader economy continues to benefit from the billions of dollars that pension funds invest each year. The most important aspect of these new reform measures is that they finally provide employers and employees with the flexibility to voluntarily act to shore up multi-employer retirement plans. Without these new measures, thousands of retirees would likely have been forced to accept the savage cuts to their retirement benefits that come when the Pension Benefit Guarantee Corporation is forced to step in. This is the culmination of three years of joint labor and management cooperation to shore up troubled plans.

“The Senate and President Obama must move quickly to enact these needed reform measures so that thousands of employees and their employers can have the tools needed to protect their hard-earned investments and benefits,” Sandherr concluded.

Business Tip – December 2014

mapei_sponsorLook ‘em in the eye

wally_adamchikBy Wally Adamchik, president,
FireStarter Speaking and Consulting

I learned a lot in the Marines. One of the things I learned was the importance of people. I also learned how important it is to pause from time to time and thank people for their contribution. And then there are the times when we need to do more than pause; we need to stop.

Gene Duncan (“Dunc”) is a former Marine who wrote several books about his time in the Corps. His books are a collection of funny, sad, and poignant “letters” relating the experiences of two professional Marines, truthfully telling it like it was in the fifties, sixties, and seventies. As a young officer of Marines, I learned from reading Dunc. Like you, I continue to learn from reading. Consider that you are reading this issue of TileLetter.

Dunc wrote about the importance of letting people know you cared. In fact, taking care of people is a chapter in my first book, No Yelling: The Nine Secrets of Marine Corps Leadership You Must Know To Win In Business. He cited Thanksgiving and Christmas as two times that deserved special attention. His advice was to form up your platoon and put the Marines “at ease.” Then walk through the ranks, talking to each Marine, asking about their holiday plans, making sure they were taken care of. Finally, he advised, look them square in the eye while shaking their hand, and say, “Thank you for your valuable contribution.” The first time I did this, it felt a little awkward – but it felt good also. It felt good because I could feel the connection with my Marines and I knew they appreciated my action. This appreciation leads to higher performance and deeper loyalty. The kinds of things that differentiate your business and make it succeed.

I realize you’re not going to put your people into platoon formation, but I do know that you can visit them in their workspaces or on the jobsite and extend the same courtesy and respect that I did when I talked to my Marines. You’ll be amazed at the impact this will have. You may decide, Christmas being so close to Thanksgiving, that you’d prefer to “spread out” your thanks. That’s fine; choose another important holiday when people traditionally take time away from work, celebrating with family and friends. The day you select should be special to the members of your team. In our multi-cultural society there are other options. Your recognition on this occasion will make a positive impact on them.

A word of caution: don’t do this if you don’t believe it. If you are the type of leader who really does value your people and views them as important peers in the process of creating your product or service, then this will be well received. If you view people as expendable production assets, and use this advice as a technique to motivate them, forget it – they will see right through you. Last year a client of mine did this for Christmas and he could not stop talking to me later about what a positive experience it was.

In closing, I want to look you in the eye and thank you for reading. I can’t set you up in platoon formation, but please accept my gratitude for your trust and confidence in me. Best wishes for a happy, healthy, and prosperous 2015.

NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at www.firestartervt.com to NTCA members. Contact him at wally@beafirestarter.com to learn more about how the NTCA/FireStarterVT partnership can save you training dollars while improving your leaders at all levels.

Business Tip – November 2014

mapei_sponsorPay or Play? The moment of decision is drawing near

By Patrick C. O’Connor, Kent & O’Connor, Washington, D.C.

Much has been said about the Affordable Health Act (ACA) mandate – otherwise known as Obamacare – and many strategies discussed to cope with its complexities. Soon, however, the talk will yield to reality and “play-or-pay” will be more than just a slogan. Bottom line, here is what you need to know now: on January 1, 2015, the health insurance mandate for companies with 100+ employees will begin. One year later it will kick in for companies with 50-99 employees.

The no-coverage penalty

A company subject to the mandate that does NOT offer health insurance to 95% (70% in 2015) of its full-time employees (and child dependents) will pay a “no coverage” penalty of $2,000 annually for every employee, minus the first 30 employees (the first 80 employees in 2015). This penalty is triggered if any employee receives a subsidy/tax credit to purchase health insurance on the exchange.

1-BT-1114The inadequate coverage penalty

For those companies who decide to offer health insurance to 95% of their employees, that is not the end of the matter. You must also be certain that the coverage meets the ACA requirements: it’s affordable and has minimum value. If not, a company will face an “inadequate coverage” penalty of $3,000 annually for each employee who receives a subsidy on the exchange.

2-BT-1114What is “affordable?”

Fortunately, the IRS has made this easy by providing “safe harbors” for companies to use to determine affordability. The “W-2” safe harbor deems a policy affordable if the employee’s share of the single policy premium is 9.5% or less of the employee’s W-2 wages. Alternatively, the Federal Poverty Level safe harbor says a plan is affordable if the employee’s share for a single policy is no more than $1,110 in 2015 (which is 9.5% of the Federal Poverty Level).

3-BT-1114What is “minimum value”?

Your health insurance plan has “minimum value” if the plan’s share of allowed costs of benefits provided under the plan is at least 60%. Your benefits administrator can work with you to determine if your plan meets this threshold. The U.S. Department of Health and Human Services (HHS) has developed an online calculator tool to assist companies in measuring the value of their plan. However, beware; recent reports say the HHS calculator has serious flaws that actually give approval to clearly substandard plans.

At this point, you might ask: “If we do all of the above, there will be no penalties. Right?” Well…maybe. This is, by all measures, an incredibly complicated law. You can set out to do everything right and still unwittingly encounter any number of hidden traps. For instance:

Delayed effective date for mid-size companies

This applies to companies of 50 to 99 employees. The one-year grace period until 2016 is conditional – a fact many do not realize. A company of the requisite size eventually will have to certify that it did not reduce its workforce or any previously-offered health insurance in 2014 to qualify for the reprieve. The certification will occur as part of the employer health care reporting that begins in January 2016.

4-BT-1114Misclassification of employees

Everyone is familiar with the existing negative consequences for a company who misclassifies an employee as an independent contractor – back payroll taxes and penalties for each misclassified person. That is bad enough. But, when you add the ACA, it’s possible to incur a significant new liability entirely disproportionate to the number of misclassified workers. When forced to count the misclassified workers as employees, this could cause a company to be out of compliance with the 95% coverage rule, triggering the $2000 per employee no-coverage penalty – applicable to all employees (minus the first 30), not just the misclassified employees! This could occur even though the company is already paying premiums for coverage on, say, 92% of employees.

Misclassification of workers could also turn a “small” employer (less than 50) into a large employer (50 or more) when the misclassified workers are counted in, bringing a company under the employer mandate retroactively. The lesson here: be very careful about classifying your workers. The stakes have just gotten a lot higher.

Reimbursing employees to purchase on the exchange

When faced with the cost and complexity of this new law, more than a few businesses have considered sending their employees to the individual health exchange and reimbursing them for the cost of their premium. That could be a huge mistake. The IRS just recently published guidance (Notice 2013-54) clarifying that such arrangements are not permitted on a pre-tax basis. In fact, not only would employers risk penalties for not providing health coverage, they could also be subject to an excise tax of $100 per day per employee because such non-tax arrangements run afoul of existing IRS rules for employers’ group plans.

However, small employers (less than 50) can provide workers extra money to purchase health insurance, but it will be taxable income to the employee and subject to payroll tax withholding. Also, the emerging Small Business Health Exchange (SHOP) may eventually be an option for companies with fewer than 100 employees.

Catch-22 for families

As discussed, a company health plan is deemed “affordable” if the cost of an individual premium is 9.5% or less of the employee’s wages. If so, both the employee and his/her family are ineligible for a subsidy/tax credit to purchase insurance on the Exchange. This is true even if the family coverage is in fact unaffordable to the employee. For companies whose primary motivation in offering health insurance is to provide a valuable benefit to their workers and their families, it could actually have the opposite effect, depending on the demographics of your work force – a factor to bear in mind.

In the end, there is no one right or wrong approach to meet the challenges of this new law. Some companies are confident, boldly saying, “Bring it on!” Others are scratching their heads, mulling whether to pay premiums or penalties. Still others are tightening their belts as they brace for increased insurance costs. Whatever your approach, weigh your options methodically, keep asking questions and stay alert and agile as this process unfolds.

Pat O’Connor is a principal in Kent & O’Connor, Incorporated, a Washington, D.C.-based government affairs firm. A veteran of Capitol Hill with particular expertise in health, transportation and the environment, O’Connor works with trade associations and companies to find workable solutions to the most pressing regulatory and legislative issues. For more information, visit www.kentoconnor.com or call 202-223-6222.

Business Tip – October 2014

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Speak up

wally_adamchikBy Wally Adamchik, president
FireStarter Speaking and Consulting

You need to communicate more. The people you work with – and the ones who work for you – want information, they want feedback. They don’t want to be left in the dark. No news is not good news, it is an opportunity for rumor and second-guessing. Over time a lack of communication and feedback can lead to indifference, apathy, and animosity – none of which are very sound motivational strategies! The solution to this lack of communication is to, well, communicate. Too bad that is a lot harder than it sounds. A lot harder!

First of all, the construction world is not one of relationships. It is one of tasks. Getting things done is what creates value, not having conversations. But how else will you build capacity in your organization for the future if you are not having developmental conversations with people?

I am working with a client and nine months ago, we have identified developmental conversations and giving feedback as being important issues. We trained the senior leaders on how to do it. Nothing happened. I then did one-on-one coaching conversations with each of them to help them learn how to do it. They still delayed. We all agreed that it was still important. No action. More one-on-ones, and finally these leaders are starting to have the conversations. Why so long to do such a simple thing?

We already identified the task nature of the industry as one reason. Another reason is that lack of practice leads to lack of proficiency and that leads to inaction. Who wants to do something they are not good at?

The remedy to this is to follow the mandate of Nike and “Just Do It.” No, you may not be perfect but the only way you can begin to get better at communication is to do it. One of the best books on the subject is Crucial Conversations by authors Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler. We teach a multi-day workshop based on the book but you don’t need to attend the workshop to read a book. Another fine book is the The Lost Art of Listening by Michael Nichols. If you want to be a better communicator you can start by reading those books. Short of reading a book, you can tell yourself to listen. Put away the technology and focus on the person. Listen for content and for meaning. Pause, paraphrase and repeat back what you heard. These are all simple and highly-effective techniques to enhance communication.

Today in a planning session with a leadership team the subject came up again. The leadership team told the president of the firm they wanted feedback. I then asked how much feedback they gave to their people. Silence. How ironic that these people were saying they wanted feedback but weren’t giving it. So, we start from scratch and outline the expectation that communication is an important part of employee development, then we train and follow-up that the developmental conversations are happening.

Our human ability to communicate is a blessing and a curse. It’s a blessing when employed well. A curse when we get it wrong. Any effort you make to be a better communicator is one of the best investments you can make in yourself.

 

NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at
www.firestartervt.com to NTCA members. Contact him at wally@beafirstarter.com to learn more about how the NTCA/FireStarterVT partnership can save you training dollars while improving your leaders at all levels.