Surviving the Economic Downturn

As we enter the second calendar quarter of 2008, we continue to read almost daily the views of so called experts about the state of the economy. Opinions abound about whether we are or not on the cusp of a recession—the "R" word—and whether any actions by the federal government or "The Fed" will be sufficient to help set the American economy on the right course. Inevitably, however, it always starts with the consumer and their current economic situation as to whether they will save or spend.

For ECPs, consumer spending and confidence translates to whether or not your patients will attend to their personal health and vision care. Left to make the decision themselves, too often the decision to schedule an annual eyecare examination and to ensure their prescription is current may slip. And as ECPs and other health care providers know, one’s healthcare is not something to be automatically deferred.

So how do ECPs bridge the gap of patient thinking about deferring a health care decision because of the fear of cost and a tight budget? Here are a few suggestions for you to consider:

• Information. When your patient is due for an exam, remind them of why it is important to keep their appointment current. If they have vision care insurance, remind them of the benefit so they are fully aware of the value they derive from the insurance plan. Take a moment to draft a letter to your patients as opposed to the routine annual post card reminder that some ECPs may use. Personal messages, especially relating to one's health, will not be dismissed easily by your patients.

• Education. Highlight important points and recent findings about adult and pediatric eyecare, and the importance of the exam and some of the “early warning signs” associated with one’s health. For children, remind them of the need for children to have an annual exam, and the need to have a current prescription to help them in their class studies. And for active children, inform them of the newest eyewear trends and safety lenses and frames. There are a number of informative points that you can express to your patient that relate to the value of your services, not just the cost of the visit.

• Convenience. People seem busier than ever before, especially families with children. Should you offer extended office hours, remind them of this convenience. Make it easy for them to access your services. They will be grateful you did.

Prepare Your Business Before You Sell

Q: I am in the planning stages of selling my eyecare practice within three to five years when I retire. What steps should I take?

A: The following advice comes from lawyer Fred Steingold in Sell Your Business: The Step-by-Step Legal Guide (Nolo, $49.95).

Many service businesses are not sellable because they depend on the presence of the owner for survival.

You can structure a service business so that there is something to sell, so it's good that you are planning for the sale a few years ahead.

Assuming that your business is already sellable, the first step is to figure out what your business is worth.

"Pricing a business is both an art and a science," Steingold said. You can value the assets, base the price on comparable sales, calculate return on investment or use an industry formula based on sales.

The next step is to prepare the business for sale. In addition to making sure the physical assets are clean and attractive, you need to get the financials in shape. You need to make the financial statement more official, separating any personal actions that lowered income for tax purposes, but make the business look less profitable than it is. Reduce expenses to increase income.

In addition, Steingold recommends developing a future plan that will persuade buyers the business will grow.

For example, you might identify new markets, products or services to pursue, along with a detailed business plan.

All this work should prepare the business for marketing. Potential buyers include a relative, friend, supplier, customer or competitor.

In some cases, you might want to make public the potential sale of your business, but in other cases, you won't because it might hurt employee relations and sales.

Submit your questions to one of our experts.

—Hedley Lawson, Jr.

Payroll Errors Can Take a Costly Toll on Business

In a recently published settlement, the world's largest retailer, Wal-Mart, agreed to settle a case with the California Labor Commissioner totaling over $3.9 million, payable to 50,000 current and former California Wal-Mart employees. Following several claims of "payroll errors," Wal-Mart reviewed its payroll policies and discovered inaccuracies in tracking the overtime of workers. The settlement included current Wal-Mart workers as well as former workers, some of whom received "waiting time penalties" as part of the settlement. In addition, the state received almost $200,000 in civil penalties for the errors.

Industry and employment watch dog groups were quick to point out that this is not the first time Wal-Mart has discovered problems with wage and hour compliance. In 2004, an internal audit uncovered over 77,000 potential violations per week. Wal-Mart settled this discrepancy internally.

In 2005, a California jury awarded 116,000 Wal-Mart employees a huge verdict of $172 million for missed meal breaks.

Wage and hour litigation is the most common form of employment legal action at present. While some may think that only large employers such as Wal-Mart are targets, many employers are not careful enough about determining exempt and non-exempt status and requiring meal periods. Also, payroll errors are common because of time keeping systems and failure to audit on the part of small employers. Sometimes, these errors can go on for long periods of time before discovery.

It is always best to conduct internal audits and resolve problems beforehand rather than waiting for a claim to be filed with a state agency or a class action lawsuit to be filed by current or former employees. Here are some steps employers should consider to prevent these common problems:

• Establish an annual HR calendar, one element of which should be an internal audit of payroll against job descriptions. This should be done at least once a year.

• Establish a policy in your employee handbook, which requires the taking of breaks and meal periods in accordance with your state's law.

• Send a memo out annually to your employees confirming the accuracy of vacation and sick balances as well as asking employees if there are any issues related to payroll.

When Bad Supervisors Impact Good Employees

Are your supervisors driving your eyecare practice to succeed or is their behavior putting the brakes on your organization’s success?

A report from the National Academy of Public Administration (NAPA) about the "Price of Poor Supervision" suggests that three key problems develop when supervision is poor:

1. Job performance suffers. As the managers in charge on the frontlines, where the work actually gets done, supervisors are critical to mission accomplishment. The NAPA report concludes that supervisors may be the most important factor in their individual work units' productivity.

When supervision is poor, performance lags and productivity drops off dramatically.

2. Poor supervision drives good employees away. Remember the saying, "Employees don't leave companies, they leave managers and supervisors?" If you've got poor supervisors, you've got a built-in "anti-retention" tool in your workplace. All your morale-boosting efforts combined can't blunt the effect of poor supervision.

Watch closely how your supervisors use power. That's a good sign of how well they are doing. (If you discount or downplay supervisor assessments, you're leaving the door wide open for the "Boss from Hell.")

Even if bad supervisors don't actually drive people to leave, there are still problems. Studies have linked employee mental health to the relationship with the boss. One study suggests that rapport with the boss largely predicts incidence of depression and other psychiatric problems.

3. Problems that require or attract third-party intervention increase. Supervisory behavior impacts the number of grievances and complaints filed by employees, internal and external. As HR managers know too well, the cost of resolving these issues can be very significant.

What to Do

Executives should consider their supervisory cadre as a driving force for organizational outcomes. "While there are costs involved in starting and maintaining programs to strengthen the performance of supervisors, they pale in comparison to the price paid for inaction," according to the NAPA report.

Some recommendations for employers from NAPA include:

• Give development of supervisors the same level of attention you give to development of executives.

• Balance technical competencies with managerial or leadership competencies when selecting and developing supervisors.

• Hold executives and managers accountable for managing their supervisors.

• Develop an ongoing mechanism such as an organizational climate survey, for determining the performance and capabilities of the supervisory cadre.

• Devise a mechanism for recognizing and rewarding first-line supervisors.

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Survey Says: Workers Lack Accountability for Own Health

They know they should eat right, but less than half are highly motivated to do so.

They know they should exercise, but only about one-fourth are highly motivated to get in a workout.

A lack of time (42 percent) and feeling tired or stressed out (40 percent) are the top two reasons people don't exercise, according to a survey that found workers want some outside help with getting healthy.

The survey was conducted in November and December 2007 with more than 1,000 client companies of ComPsych, a provider of employee assistance programs.

Almost 88 percent of those surveyed are interested in an employer wellness program, and two-thirds (67 percent) would probably use such a program. About as many (68 percent) said access to a personal coach or trainer would be the biggest motivator to improving their health and lifestyle.

According to the survey, earning days off (55 percent), reducing their health premiums (53 percent), being challenged to reach a goal or win a contest (51 percent), and receiving gym discounts (49 percent) also would motivate them, they said.

"Employees recognize the need for healthier habits and many have made New Year's resolutions to make changes," ComPsych chairman and CEO Dr. Richard A. Chaifetz noted in an announcement.

"But we are still seeing a general lack of accountability for achieving personal health. Workers are seeking outside motivation, such as access to personal trainers and a healthier workplace, for health improvement," he said.

Slightly less than half of the respondents (42 percent) consider themselves highly motivated to eat healthily, and more than one-third blame poor eating habits on a lack of time (34 percent). In addition, they blamed food cravings (27 percent), feeling down (18 percent), stressed at work (11 percent) and stress at home (10 percent) for bad eating habits.

When it comes to working out, though, looking marvelous seems more important as a motivator than feeling marvelous. Among those who exercise, almost 45 percent say it’s because they want to improve or maintain their appearance.

Other reasons were: improving their energy level (20 percent), reducing stress (17 percent), reducing the likelihood of health problems (15 percent) and medical recommendations (3.5 percent).

"The findings provide valuable insight," Chaifetz said, "in what employees need to do to reach their health goals and what will work in wellness programs."

"For lasting health improvement, wellness programs must coach and inspire workers to take responsibility for their lifestyle choices and give them the tools to self-manage their health," he said.

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New IRS Interactive Online 401K Tool 

The Internal Revenue Service (IRS) has announced a new, interactive online 401(k) compliance tool, which may be useful in assisting plan sponsors to avoid, identify, and fix common errors in their plans. Each potential mistake is listed in a table, followed by tips for identifying, correcting, and avoiding the mistake. The table also includes hyperlinks to more information about each topic, including extensive discussions of each issue, the available correction programs, and the appropriate correction methods. Additionally, there is a general summary and overview of 401(k) plans and the IRS’s Employee Plans Compliance Resolution System (EPCRS).

Access 401(k) Plan Potential Mistakes.

Undocumented Workers Can Be a Costly Expense

It's going to be more expensive for American companies to violate federal immigration-related employment laws.

"We are increasing civil fines imposed on employers who knowingly hire illegal immigrants by 25 percent, the maximum allowed by law and the first such increase since 1999," said U.S. Attorney General Michael Mukasey. "We are also working with the Department of Homeland Security to increase criminal prosecutions against the most egregious employer offenders."

According to the Federal Register announcement, the new fines for knowingly hiring an undocumented worker (or discriminating against a legal worker) will range from $375 to $3,200 (up from $275 to $2,200), with a maximum of $16,000 (up from $11,000) for repeat violations.

However, the federal fines for I-9 form paperwork violations ($110 to $1,100) will remain unchanged, since they didn't qualify for an inflation adjustment.

The revised fines took effect on March 27, 2008.

It's Your Business
Surviving the Economic Downturn

From the Top
Payroll Errors Can Take a Costly Toll
on Business

Ask the Experts
Prepare Your Business Before
You Sell

 People Management
When Bad Supervisors Impact Good Employees

Survey Says: Workers Lack Accountability for Own Health

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Did You Know?

• 70 percent of the
  U. S. population wears some form of vision correction.

• Visual impairment is one of the 10 most frequent causes of disability in America.

• Two-thirds of employees would trade a vacation day for vision care benefits.

• 1,000 eye injuries occur in the workplace daily and cost businesses more than $300 million per year in lost production time, medical expenses and workers’ compensation.

• Vision coverage prevalence continues to grow, increasing from 82 percent to 85 percent between 2006 and 2007. This growth, during a period of rising healthcare costs, reflects the value companies and consumers see in vision benefits.

Easy-reference to Web resources about human resource policies and rules

Sell Your Business: The Step-by-Step Legal Guide

National Academy of Public Administration (NAPA)

ComPsych

The Internal Revenue Service (IRS)

401(k) Plan Potential Mistakes.

Federal Register announcement

Workforce Management

Manpower