Retaining Employee Loyalty Despite Limited Finances
Today's small-business answer file looks at the challenges of retaining employee loyalty when competitors are actively pursuing your work force. Also, among other topics, the answer file addresses substance abuse and managing employee disagreements.
Q. I am concerned that larger companies offering more money are recruiting some of my key employees. Unfortunately, in this economy, I do not have the money to raise their salaries significantly. How can I keep them interested in working for me despite my limited financial resources?
A. Employees always want to be well-compensated. However, money is rarely their primary motivating factor. Many people desire to work in an environment that offers them an opportunity to learn and advance, express ideas, receive recognition and be a valued part of a successful team. We have found that organizations that offer growth, as well as a good working environment and culture, are the organizations that are extremely productive and profitable. Often, in a smaller company, each employee has a greater impact on the bottom line. Creating a positive environment where people can make a difference will allow you to retain top talent. -- Jeffrey S. Davis, founder and chairman, Mage LLC
Q. I own a manufacturing company. Recently, we discovered some of our assembly workers were "high" on the job from using an illegal substance, and we dealt with that issue accordingly. I want to prevent this from happening in the future. Can I screen new hires to heighten the prospect of a drug-free workplace?
A. Use of illegal drugs is not a protected activity under state or federal laws. It is not unusual to have pre-employment drug testing as part of the hiring process. You owe it to the rest of your employee population to keep the workplace as safe as humanly possible, especially in a manufacturing environment with machinery. You should make it clear to prospective candidates that accepting them as new employees is contingent upon passing a pre-employment drug test. This can be stated in the employment application. Also, make sure a certified provider conducts the testing. -- Patrick Moquin, president, HR Legal Group LLC, Winchester
Q. My emerging distribution company has grown rapidly, but I am afraid we are missing our only real window of opportunity. I would like to increase my advertising budget, but what should I look at before I consider putting time and money into a new advertising campaign?
A. While it seems that a big boost in advertising should directly benefit sales volumes, there are a number of factors that have to be considered. Do you have a clear advertising strategy? Is your product line positioned to benefit from a large ad spend? Have you targeted the key demographic segments of your market? Have you explored which media channels will give you the best return? Have you determined how much new equity is needed, and the valuation of your company on which this investment would be based? And remember, growing a business is a more like running a marathon than a 100-yard dash. Make sure your business will have staying power; the first to market is often the first to fail. -- Stephen L. Hochberg, CEO, Mage LLC
Q. What are the fees associated with a 401(k) plan to the employer?
A. There are three types of fees related to 401(k) plans. First, there are fees related to the investment vehicles. With mutual funds in 401(k) plans, the sales charges are usually waived but there are the internal operating expenses disclosed in the prospectus that are deducted on a daily basis. With insurance-based 401(k) plans, there is an additional "wrap fee" charged in addition to the fund expenses. The second costs are the annual record-keeping and administration costs.
Whereas investment fees are usually deducted from the plan assets, the record-keeping and administration costs are billed separately. The third possible fee would be to a consultant retained to assist in managing the plan design, fund selection, fiduciary management and participant communication. -- Aviva Sapers, president, Sapers & Wallack, Cambridge.
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