Everyone who oversees budgets and staff knows that labor expenses are among the most significant expenses on any balance sheet. As important a role as staff play in every business, controlling expenses is a constant issue for management. For many mangers doing this correctly it has been the difference between a paycheck and filing for unemployment. Considering the implications overtime expenses must take center stage.
Here in Arizona the Industrial Commission has first say in employer compliance. Overtime compensation is one of the few areas where a set of legislation has not been written by the Industrial Commission of Arizona. Instead our state based governing body defers to the federally based Fair Labor and Standards Act. This piece of policy speaks directly to overtime pay and what an employer must do to stay on the right side of the law.
As we all know, compensation equivalent to time and a half of exact or average hourly pay is due to an employee that works more than forty hours in a given week. The weekly schedule is determined by the employer and simply must follow a seven day schedule. Work on weekends and holidays does not count as overtime unless work on those days constitutes an excess of forty hours worked. Avoiding this cost increase is a vital skill for every manager.
A well written schedule is a manager’s best friend. A well written schedule helps to not only avoid overtime but to keep your labor costs in line in general. Overstaffing is just as bad if not worse than paying overtime. Overtime is an identifiable and adjustable issue while overstaffing sometimes becomes commonplace. Once you have identified an overtime issue it is time to look at the scope of your staff’s workload. Take some advice:
- The truth is there might be more work to be done than you originally thought. If getting the job done consistently requires overtime then you will need to add staff, especially during busy shifts or seasons.
- Also try watching and taking mental—or written—notes. Is your staff working as quickly as they should be? Are some employees taking unnecessary breaks towards the end of a day or shift which leads to the increase in how long it takes to get the job done?
- Be clear—yet not overbearing—with your staff about expectations pertinent to the amount of time it takes to get the job done. Provide them with a schedule and order in which job duties are best performed to stay on top of time management if necessary.
- It might be tempting to massage the numbers. DO NOT do this. Not only is it illegal, it is a sure fire way to kill morale and pit staff against management. The Supreme Court is currently considering hearing a case out of California where hospital workers agreed to have their wages altered to avoid being paid overtime for working in excess of eight hours per day. The tradeoff for the employees was that they worked longer days in exchange for more full days off. The agreement was legally upheld in California but there is no certainty that the Federal decision will be the same. If you are not sure about whether your tactics are legal, read up on employment law or consult an attorney. “I didn’t know” will not get you out of fines and other forms of legal recourse.
- Bring in temporary employees to fill overtime gaps. It is a great way to ensure that your staff is not overworked and that your expenses stay in line. We would love to discuss the other advantages with you and help you to put together a plan that fits your business needs. Just call (877-522-7797) and we will find a way to make things better.
The Legality of Reducing Wage Rate to ‘Avoid” Overtime; The Supreme Court May Decide (Wage and Hour Developments and Insight)
Overtime Pay Requirements of the FLSA (U.S. Department of Labor)
The current trend of higher prices at the grocery store isn’t just affecting family budgets–restaurants are starting to feel the pinch, too. An industry that was already struggling, thanks to the recession, restaurants have been trying to slash prices and promote money-saving deals to pull in a regular crowd of customers and stay afloat. These tactics have worked, and most restaurants have actually seen a recent increase of clientele. Now restaurants are facing the difficult decision to not only cease these incentives, but raise their prices to keep up with inflating food costs, possibly undoing any gains they’ve recently achieved.
The primary foods shooting up in price are whole foods such as fruits, vegetables, meats, and flours. Naturally, these are common ingredients in many restaurant meals, leaving little wiggle room to substitute other ingredients or devise new recipes.
Causes of Price Increases
The cost of transporting foods from distributors to restaurants is soaring. The higher gas prices rise, the more restaurants will need to pay for their food supply. Poor weather has also driven up the prices. With higher demand and less produce to sell, farmers and suppliers must increase costs to stabilize their profits this season.
Creating Customer Loyalty
Developing customer loyalty could save a flailing restaurant when prices are forced upward. Regular customers will typically continue to patronize their favorite restaurants, even in the face of higher prices, so long as they continue to receive the customer service and quality food they are used to. Some restaurants have even posted fliers thanking regular customers for their loyalty, and apologizing for raising their prices.
Some restaurants will be forced to explore other options, rather than lose clientele with a price increase. This could mean switching suppliers or negotiating a lower price with their current ones. Some restaurants may look into purchasing more foods locally, to decrease transportation costs. Some switches can occur without the customers’ noticing a difference, but restaurants should be aware that the quality of their meals might fluctuate when switching suppliers.
Who’s Getting Hit
Two types of restaurants will likely be hit the hardest: small mom-and-pop stores, and chains that are already straining under significant debt. It is likely that bankruptcies and closed doors could be in the future for many of these struggling restaurants.
When you are faced with rising product cost, you are tasked with finding a way to offset these increases. You may be drawn to slightly reduce your food quality, but remember that this will not go over with regulars–or new customers for that matter. You can schedule as efficiently as possible or even reduce your hiring costs by partnering with a professional employment agency.
Rising Food Costs Could Force U.S. Restaurant Overhaul (Fox Business)
Higher Food Costs New Hurdle For Still Struggling Restaurants (Orange County Business Journal)
Technology presents the business world with new opportunities to add efficiency and increase cost effectiveness on a regular basis. Over the past couple of years, there has been a lot of growth in cloud-based software. For those of us who are not directly involved in IT, this concept might be a bit ambiguous. The best explanation you might have gotten to this point could have come from the recent Microsoft ad campaign directing consumers “To the cloud.”
What is Cloud Software
In its rawest form, cloud-based business software takes programs that handle everything from backing up data to the POS software that you use in a restaurant or retail establishment and allows it to live on the internet. Instead of buying a physical disk or CD ROM, uploading it to your computer and using it solely on the computers that you have uploaded it to, you can simply sign on to the internet. Then you direct yourself to the website that hosts the cloud software, and you can use the business tool without ever needing to hold a CD in your hand. Basically you accomplish the same business functions that you would with less hassle and some additional benefits.
Benefits of Using Cloud Based Software
- Get exactly what you need: Sometimes you buy a software package and only use half of the features, yet you paid for all of them. With cloud-based applications you only pay for what you use.
- Expand your access: With physical software, you can only use the tool on the computers you have downloaded it to. With cloud based software you can use it at your office, restaurant, construction site (basically wherever you work) and still have the freedom to check in from your smart phone or home computer when you are away from the workplace.
- Protect your data: Cloud software is managed by more IT professionals than most businesses can afford—or need—to keep on staff. This means that the information you store with them is regularly backed up (saved) in a secure place and that the software itself has IT gurus watching to make sure that hackers and viruses do not find their way into your business information.
- Stay current: You might be able to upload patches for your physical software if they are available and you remember. With cloud software, the company that operates it updates your business tools automatically, saving you time and giving you access to the newest technology.
Cloud software is one of the fastest growing sectors of the technology industry because it’s so useful for enterprise. It is just another way to save money and make your business better. If you are looking for ways to do this via staffing, we are always here for you.
Why a Web Based Point of Sale? (ShopKeep.com)
Cloud Based Software Sky High (Yahoo News)
The Different Types of Cloud Computing (DataPlex.com)
Entering a new company as a manager can be an intimidating experience. You’re worried about what your new team will think of you, if they will respect you, and if you’ll be able to shape them into a productive, smooth-running operation. New management can sometimes leave staff members feeling stressed, confused, or bitter. Learn how to nip any chaos or problems in the bud starting on your first day.
Getting to Know Your Company
It’s hard to follow a leader who feels lost in his surroundings. Don’t let your staff feel directionless. Learn about your new company. Educate yourself on how things have always been done. This doesn’t mean you can’t make changes, but it is easier to point employees in a new direction if you know where they are coming from.
Getting to Know Your Staff
A distant manager can intimidate employees or cause misunderstandings. Take time to familiarize yourself with your new team. It will not only improve morale around the office, it will make your delegations much easier. An effective manager knows the strengths and weaknesses of each employee under him. Take note of who gives amazing customer service, who always offers creative problem solving, and who composes the most convincing copy.
Some new managers can take this too far. Don’t try so hard to befriend employees that they lose their respect for you as a boss. Staff should feel comfortable coming to you with their problems or concerns, while still remembering that you give the final word.
Many employees, especially ones who have worked in the same company for years, are going to feel resistant if you start making several changes at once. In most cases, a gradual pace for change is best. Your staff will slowly adjust to the differences in their daily routine, and you can accurately observe what is working and what methods need to be reevaluated.
As you are settling into your new position you will have to get into the swing of things relatively quickly. Your ability to make the right decision will probably be tested your first week, if not your first day. If you are looking for ways to save money and time and show upper management that you can make a real impact, then you should consider reducing labor costs by utilizing temporary labor for some your open positions.
Top 10 New Manager Mistakes (About.com)
At some point, every manager will have to deal with a customer complaint or negative review. No system is perfect, and pleasing a population with increasingly individualized tastes tends to create speed bumps. As difficult as it may seem, responding to customer complaints is extremely important. It does not matter whether you run a restaurant or a construction firm; if the people who help you pay the bills are not happy, you run the risk of losing a customer.
Decide Whether to Respond
By and large, you will be responding to most negative reviews. There are some exceptions which make it acceptable not to respond or to delay a response.
- Your emotions: As a manager, it is your responsibility to remain calm and mop up messy situations. As a human being, you may find this is not always possible. Angry customers will say rude things and possibly even yell. You must be mentally prepared for this to happen. If you are having a considerably bad day or are upset about the complaint itself, it is best to delay responding or have another, calmer, staff member respond for you. Turning a complaint into an argument is a lose-lose situation.
- Debbie Downer: This is an expression about someone who always finds the negative side of things and focuses on them. Some people complain simply because that is the way they communicate the majority of the time. Responding to these people can lead to disaster, as they are truly just looking to argue and have no real problem with your staff, product, or service. You should still provide customer service to these people, but do not plan on going above and beyond. It is important to note that these customers comprise the minority of the population. Do not be too liberal in defining customers as fitting into this group simply because you do not want to deal with a complaint.
Tips for Responding to Customer Complaints
- Listen: The number-one thing that you must do is listen to your customers or clients. Let them speak their entire mind without interruption. Do not interject until they have finished talking. This lets them know that you want to get to the bottom of the problem, and it gives you an idea of exactly what the issue is.
- Stay level headed: Even when customers are yelling, they are not yelling at you. You represent the company that has displeased them. Do not allow yourself to get into the mindset that they are personally attacking you; it takes away your ability to communicate effectively.
- Repeat the issue: Once you have calmly listened to your customer, you must show that you understand the specific problem. Restate what you see as being the specific issue, and let them know that it is not acceptable (assuming there is a real issue; there normally is).
- Make it up to them: You must resolve the issue to satisfy your customer. How you go about doing this often determines whether you retain the customer or not. It might be as simple as replacing a meal or defective product. It might be as (financially) painful as reducing a bill/invoice for a set period. Regardless, you must make up for what went wrong and do what it takes to keep the customer.
- Be equitable: The customer might not always be with you here, but your resolution must fit the issue. A less than optimal experience at a restaurant does not necessarily mean that you are giving up a $100 gift card. Stress to the customer that you want to equitably fix the mistake, but remember to be polite.
Not very many people wake up in the morning and hope to have to diffuse a situation with an angry customer. Unfortunately every manger will have to do it at some point in time. One way to reduce complaints is to employ well trained staff who can deal with your customers successfully. That is one of the major criteria we use when hiring temps who will work directly with the public. If you need to save some time on the hiring process, drop us a line.
The term human resources was coined because that is exactly what your staff are: valuable resources that make your business work. Without people, most businesses would be filing for bankruptcy in no time. Effectively managing staff is one of the most important parts of any business model. Taking some tips on managing staff and personalities is a great way to improve your business with little or no financial investment.
Tips for Managing Staff
Your staff is comprised of different people, with different personalities who all share a goal when they come to work. The goal is to make your business as profitable as it can possibly be. By giving your employees the right tools, direction, and encouragement, you can make sure that you staff focuses as a team on the things that are important to your business.
- Be clear: Staff members need to know exactly what is expected of them when they come to work. They need to know “big picture” things like the overall goal of your business, any short-term goals or schedules, and more individualized information such as a well defined job description. Be straightforward and specific in your communications, so that individuals know what is expected of them and how they fit into the bigger picture.
- Be open: When a problem arises, it is usually a member of the staff, not the management team, who finds out about it first. An open communication policy will make it easier for your staff to report the issue so it can be solved. It will also make it easier for employees to voice complaints that might improve the atmosphere and company culture or suggestions that can save time and money. The ability to take criticism constructively and to work through trouble with a level head are vital to an open communication policy. If your staff do not feel that they can talk to you, they probably won’t.
- Allow autonomy: Certainly you will have policies and structures that everyone on your staff must follow in order for business to be done smoothly. It does not matter if you need staff for a construction project or a catering company, this fact holds true. But whenever possible, it is best to let staff take control of their work and choose ways to do it that best suit their preferences. For instance, every dish washer must follow sanitation standards, but if you micromanage to the point that you are telling them which angle to spray the dishes from, you are too involved. Let people have some freedom in their efforts, and it will pay off.
- Point out the positive: Do not hesitate to tell a staff member who has done well that you are pleased with his work. People need to know that they are appreciated; this is just as true for management as it is for labor. Remember that people work for you, not just nameless employees, and that people respond well to encouragement.
- Train, train, train: Training can be expensive and seem like a waste of time, but it is vital. Without proper training, staff will not be aware of the nuances of your business. This will become glaringly obvious when you review negative customer feedback–and it will be no one’s fault but your own.
Managing staff is one of those things that sounds easier than it is. You have clearly defined business needs, taken in combination with different personalities and personal values. All of these things must work together towards the highest possible profit margin you can achieve. We practice what we preach here at Labor Systems and are open, honest and encouraging with our administrative staff as well as our temps. We would be happy to go over the options you have at your disposal when it comes to temporary staffing in Arizona. We have offices throughout the state, making one stop shopping possible for your staffing needs in Phoenix, Bullhead City, and Apache Junction, among our other locations.
10 Ways to Manage Creative Personalities; Bright Hub
As business people, we must constantly be concerned about the economy. We must take reports from activity in the recent past and combine it with projections for the future, stir in a grain of salt, and use the product to help shape our decision making. To make sure that we are all as informed as possible, we want to dedicate this week’s blog post to an update on the state of the economy.
The National Economic Outlook
On a national scale, things seem to be coming together very well from an economic standpoint. The National Association for Business Economics released some figures from a survey that polled economists and business people throughout our nation. The results predict that gross domestic product (the sum of the value of all products and services produced within a nation’s borders within a given year) will increase 3.3% this year versus 2010. While that seems like a small figure, realize that it represents billions of dollars that will be produced by business people and distributed out via payroll and taxes before the cycle starts over again. Let’s review some of the recent events and possible future happenings that will fuel this growth in GDP.
- Last month service industries throughout the U.S. expanded at the fastest rate since 2005!
- Retailers such as J.C. Penney and Macy’s experienced same-store sales growth in February 2011, which beat out most analysts’ predictions for those sectors of retail merchants. This indicates increased consumer confidence and disposable income, which is good regardless of which products/services you sell.
- Growth in labor markets was evidenced by both fewer unemployment claims and projections showing growth in employer payrolls.
- Local Tempe, Arizona-based supply management association ISM reported that manufacturing in February 2011 grew at the most rapid pace that it has since May of 2004.
Economic Outlook Here in the Grand Canyon State
For business owners and managers in Flagstaff and Tucson, we are primarily concerned with the local economic outlook. Obviously the national news gives us reason to be optimistic, but local factors will affect our bottom lines first. Some recent legislation from our state legislature and governor will bring some very business-friendly changes.
- Beginning in 2014, the corporate tax rate (state tax not federal) will begin to be reduced over a three-year period, until it is 5%. This change from the current 7% rate means that a substantial amount of your profits will stay in your possession.
- Industrial and commercial property taxes are set to drop a touch. The current assessment ratio (a figure combined with the face-value appraisal of a property to determine tax rate) of 20% will decrease to 18% between 2013 and 2017, saving property owners on taxes and possibly giving business owners more leeway to negotiate reduced rent.
- Some tax relief is also on the way for some Arizona-based manufacturers. Right now you pay a higher tax rate if you manufacture a product in Arizona but sell it in another state. Over the next few years, this taxation penalty will be reduced (not entirely yet still reduced), making life a bit easier for those who make the products that people need.
With a brighter national and state outlook, it appears that there are promising things in store for the Arizona business community. We are in the beginning stages of a period of growth, according to all sides. With growth comes the need for additional staff to fill your orders and please your customers. The recent economic conditions have taught us to err on the side of caution. The best way to do that from an employment standpoint is to hire slowly and use temporary labor. This gives you a chance to ensure that you really do need new staff and even try out new employees before you hire them.
Before you bring on a new staff member, you want to know as much as possible about the candidate. Past experiences, not solely work experiences, have a profound effect on who prospects are and how they will perform their role in your business. An interview or two can give you a good idea of who a candidate is, but many employers want to know a little more. Are there any important details that the applicant might have left out of the interview or their resume? A background check can be a great way to find out and verify that the person you are considering is on the up and up. You don’t necessarily have to eliminate candidates based upon what you find, but you do want to know as much as possible before you offer them a position.
What to Look For
You can use an independent supplier to collect background information on your candidates and supply you with a total picture, or you can look for individual pieces of information on your own. Deciding what you want to know in advance will help you decide whether to look yourself or hire a company to conduct your background checks.
- Credit scores: Some employers do in fact look up the credit scores of the applicants. This can tell you a little about their ability to handle finances and let you see what they have been up to. If you collect this data, you must have the applicants’ written permission in advance. Also keep in mind that if you use your findings to make a hiring decision, you must share the report with the applicant and explain how it led you to your decision.
- Criminal background checks: This is the most popular form of background check for employers. You may still hire someone with a criminal record, but for the integrity of your hiring process and the safety of your staff you want to know whether an applicant has been into trouble with the law and to what extent. Criminal history is generally a public record. Here in Arizona, employers and candidates can request both a background check and a fingerprint clearance card (for positions that require considerable security) from the Arizona Department of Public Safety. This includes only crimes committed in Arizona, so be sure to have a national criminal background check performed if you want a full picture.
- Medical records: You might be tempted to look into these, but be advised that federal regulations state that you can ask only whether a candidate can reasonably perform required job functions and cannot ask for medical records. In general it is best to avoid the potential liability—yes you can be sued by someone you do not hire—that is associated with asking for this type of information.
- Military or school records: If an applicant says he went to a particular university or has military experience, this might set the applicant apart from the pack. You will want to find out for sure, but know in advance that you will need to request transcripts from the applicants themselves. Let them know why you want the information and consider having them sign a document that states in legal terms how the information will be used and that they consent to your having it. Most often you cannot get much more information than name, rank/major and other general pieces of information from the military or a particular school. If you want information on GPA, commendations, or anything like that you will need your applicant to provide it.
With any and all information you collect via a background check you must consider privacy issues This is sensitive information and if it is leaked, even internally, you as the employer can end up in hot water. Make sure that background check information is limited to “need to know” personnel and never the subject of conversation outside of these circles. Background checks are common parts of the hiring process. They can be time consuming and usually have little to do with your core business functions. If you want to save time and alleviate the trouble associated with background checks or other compliance issues pertinent to hiring, we would be happy to help. Labor Systems Job Center can supply employees on a part time, temporary or direct hire basis and as always you can try out a staff member before making a firm decision.
People who occupy their time running a business know that sometimes—and by sometimes we mean all the time—your employees will be partially consumed by the subject of compensation. After all, compensation is the quantitative expression of the employer-employee relationship. To make sure that you are in compliance with both the United States Department of Labor and the Industrial Commission of Arizona, we will cover some of the finer points of compensation.
- Pay schedule: Obviously you have to pay your staff, but legally you are required to keep some form of a payment schedule. You must pay at least twice a month and your pay periods cannot be separated by more than sixteen days. You can, of course, pay weekly if you prefer. Many wage employees seem to prefer frequent paydays. We even make pay available daily to our temporary workers.
- Amount of pay: We all know that we must pay at least minimum wage, which has been set at $7.35 per hour since January 1, 2011. We must also pay overtime to any employee who works more than forty hours per week. As soon as their workload hits forty hours, you must pay time and a half. This is a federal guideline, not one from the state of Arizona, which does have exceptions. By and large the exceptions apply to sales people and other professionals. Hospitality employees, construction workers and manufacturing staff are all due overtime pay. You cannot make an arrangement in advance with the employee that allows you to omit overtime pay or use any other form of compensation outside of wages paid on a paycheck. If overtime is a necessity for your business but seems to be affecting your bottom line, we would be happy to help.
- No holding wages- In most cases you cannot withhold an employee’s wages from them. This also means that you must pay employees who quit, under any circumstances, the full amount for their time worked. The only exceptions involve:
- The employer being bound to withhold wages by state or federal law
- The employer having the employee’s written permission in advance
- The employer has a “reasonable good faith dispute as to the amount of the wages, including the amount of any counterclaim, reimbursement, recoupment or set-off asserted by the employer.”
If you fail to comply with regulations associated with compensation, you may end up in trouble. You can be reported to the State Labor Department for violations. If you are reported, the department will perform an investigation, which will include looking into your compensation policies and practices. If they feel that you are out of compliance, they will request that you get caught back up in a reasonable amount of time. If you fail to do this, they will exact other punishments including fines.
It is important to keep in mind that sometimes State and Federal laws differ when it comes to compensation law. For instance, in California and Nevada overtime is paid to employees who work more than eight hours per day as opposed to more than forty hours in a given week. The regulations described here are pertinent to the State of Arizona. Taking the time to brush up on employment law in your state is a necessary part of running a business.
Large orders require manufacturers to work their staff more; busy season means restaurateurs need more man hours worked; and deadlines can do the same thing to the construction industry. If you would like to avoid the possibility of being fined or subject to oversight, then temporary employees might just be the answer to your troubles.
As an employer, you probably receive cold calls and walk-in visits from insurance salespeople on a regular basis. When they show up at inopportune times, you likely shoo them away so as to focus on the task at hand. Do you ever find yourself wanting to know a little bit more about insurance later? Most of us do, so today we are going to cover some of the types of insurance that an employer can offer their employees in Arizona and delve into the finer points of some of the health-related coverage options.
Types of Insurance
There are many types of insurance that you can offer.
- Employer-sponsored disability insurance: Covering staff for the potential that they become disabled via an accident, disease or other occurrence is one option for employers here in Arizona. While employees can take out disability policies on their own, this option is offered by you, the employer, and generally costs the employee less than more independent options. You will foot some of the bill yourself, but making this a part of your overall insurance benefits package means that employees who become disabled will be paid a portion of their salary to help them get by. Employees have less wiggle room when it comes to suing the insurance carrier as compared to independent forms of disability insurance, but the difference can arguably be made up in financial savings.
- Workers’ compensation: This type of coverage kicks in when an employee is injured on the job or as a result of something they encountered at the workplace. You are required to carry workers’ compensation insurance as an employer. For a full report on this type of insurance, refer to our blog specifically on the topic.
- Health insurance: This type of insurance can come in many forms. In fact, disability insurance is considered to be one form of health insurance, as many policies will cover medical care related to the disability in question. There are different kinds of policies, from Preferred Provider Organizations (PPO) to Health Care Services Organization (HCSO). Going over the different types requires several blog entries. For now we will reinforce that employer-provided health insurance generally costs both the employer and the employee on a monthly basis and covers medical expenses to varying extents, depending upon insurance provider and policy type. Some of the things that you might not think to be coverage requirements include the following:
- If your policies include diabetes care, then they must include coverage for necessary equipment, from syringes to the insulin itself.
- All policies must cover mammograms for female employees of required age.
- If you policy provides maternity benefits, these benefits must be offered to the natural mother of an employee’s adopted child for one year after the birth of the adopted child.
- All policies must cover screenings in an emergency room, as well as ambulance transports to the emergency room.
- All policies that cover prescription medications must also cover FDA-approved contraceptive drugs and/or devices.
Combing through health-related insurance policies is best done with a qualified and valid insurance salesperson. The state of Arizona does warn that individual consumers as well as employers looking to purchase group policies should be aware of insurance scams and fake insurers. For more information on avoiding dishonest insurers, visit the Arizona Department of Insurance for some sound advice. If you do not have time to devote to insurance but are in need of staff at a moment’s notice, then finding out more about the services offered by Labor Systems Job Center can get you the staff you are looking for without any hassle.