June 2007 Newsletter
June 2007 Newsletter
Federal Minimum Wage Increase Goes Into Effect July 24th
The Federal minimum wage will increase to $5.85 per hour on July 24 after President Bush signed a spending bill that includes the first minimum wage hike in a decade. The “Fair Minimum Wage Act of 2007” provides for a three-step increase in the minimum wage, beginning with an initial increase from the current $5.15 per hour to $5.85 per hour, a boost one year later to $6.55 and a final increase two years later to $7.25 per hour. The last increase in the federal minimum wage was September 1, 1997.
Eight Tips to Prevent Employee Theft and Fraud
One of the most serious threats to the success of a small business is employee theft. Misplaced trust, lax hiring and supervision, and a failure to implement basic financial controls can lead to an environment that is ripe for internal theft and fraud.
The Association of Certified Fraud Examiners (ACFE) estimates that the typical business will lose an average of six percent of revenues from employee theft. The ACFE Report to the Nation on Occupational Fraud and Abuse indicates that small businesses suffer disproportionate losses because of the limited resources they have to devote to detecting fraud. And a U.S. Chamber of Commerce survey reported that one-third of business bankruptcies are due to employee theft.
Small business owners can help protect their businesses from employee theft and fraud by following these eight recommendations.
1. Create a positive work environment. A positive work environment encourages employees to follow established policies and procedures, and act in the best interests of the organization. Fair employment practices, written job descriptions, clear organizational structure, comprehensive policies and procedures, open lines of communication between management and employees, and positive employee recognition will all help reduce the likelihood of internal fraud and theft.
2. Implement internal controls. These measures are designed to ensure the effectiveness and efficiencies of operations, compliance with laws and regulations, safeguarding of assets, and accurate financial reporting. The controls for safeguarding assets and financial reporting require policies and procedures addressing:
3. Hire honest people. Of course, this is the goal of every company, and is easier said than done. But if you have weak (or nonexistent) internal fraud controls, it's even more important to make sure your employees are honest. Dishonest employees will ignore your attempts to provide a positive work environment, and search for ways to defeat even the most comprehensive internal controls..
Preemployment background checks are an excellent way to cut down on hiring dishonest employees. A thorough preemployment background check should include:
4. Educate your employees. You need to inform your employees about your policies and procedures related to fraud, the internal controls in place to prevent fraud, the organization's code of conduct and ethics policies, and how violations of these policies will be disciplined. Every employee should sign a form to verify receipt of this material. Employees should receive annual training on these topics and on the definition of what's considered fraudulent behavior, and sign an acknowledgement each time.
5. Implement an anonymous reporting system. Every organization should provide a confidential reporting system for employees, vendors, and customers to anonymously report any violations of policies and procedures. Promote and encourage the use of the reporting system whenever possible.
6. Perform regular — and irregular — audits. Every company should have regular assessments, but random, unannounced financial audits and fraud assessments can help identify new vulnerabilities, and measure the effectiveness of existing controls. It also lets employees know that fraud prevention is a high priority for the organization.
7. Investigate every incident. A thorough and prompt investigation of policy and procedure violations, allegations of fraud, or warning signs of fraud will give you the facts you need to make informed decisions and reduce losses.
8. Lead by example. Senior management and business owners set the example for the organization's employees. A cavalier attitude toward rules and regulations by management will soon be reflected in the attitude of employees. Every employee — regardless of position — should be held accountable for their actions.
Implementing these recommendations can dramatically reduce the opportunity for employee theft and protect the assets of your business. If you suspect fraudulent activity by an employee, seek professional assistance to conduct the investigation. Determine what's necessary to protect your business and prevent a reoccurrence.
Source:www.allbusiness.com
Some employers might think the keys to getting maximum results from a business enterprise are tightly managed employee procedures, a “strictly business” atmosphere, and employees chosen primarily because their skills best fit the job.
Quite the opposite, says a surprising study by the Gevity Institute, a Bradenton, Florida-based human resources consultant. The study was done in conjunction with Cornell University’s Center for Advanced Human Resources.
Gevity and Cornell studied 323 businesses, with employee sizes ranging from 8 to 600. The average size was 53 employees. Their objective was to quantify the effect of specific human resources policies on financial results and turnover.
What they found was this:
The study showed that choosing employees because they fit into company culture was more important than matching job skills to the task at hand. Using this recruitment strategy increased revenue and profit growth by 7.5 percent and 6.1 percent, respectively, and cut turnover by over 17 percent.
A second key finding was that self-managed, trusted and empowered employees are happier and more productive than those who perform under tight guidelines and close monitoring. The improvements in revenue and profit growth were 11.5 percent and 3.9 percent, with turnover reduced more than 15 percent.
Companies like to boast that they are more like families than business organizations, but those that really are improve their results, said the study. And they improve them more than by offering individual monetary incentives.
“Use increased socials and company meetings” to create a “family-like environment,” say the study’s authors, and you win both ways … better results and lower expenses than if you used individual money incentives to retain workers. How much of a win did the study show? Revenue and profit growth rose by 3.8 percent and 13.3 percent, respectively, for companies run this way, while turnover dropped over 19%.
The greatest improvements, said the study, was seen in companies that employed all three strategies, and the result was truly startling. Those betting on this business trifecta kicked up revenue growth by 22.1 percent and profit growth by 23.3 percent, while they cut turnover a remarkable 66.8 percent.
The improvements, say the study, were most pronounced in small businesses of over 50 employees, with high growth goals, and in highly competitive markets. The power of the surveyed policies was virtually doubled under those conditions, and sometimes tripled.
For example, companies in highly competitive business sectors using money as an employee retention incentive showed turnover of 27.8 percent. But put a family atmosphere in place in the same type of company and turnover dropped to under 8 percent.
And if that’s not enough of a reason to schedule an employee social, what is?
Source: blr.com
