Braden Black CEO
“Skilled Trades is a skilled personnel provider to the industrial, commercial, and energy construction\maintenance industry. If you would like to learn more about how we can help your business maximize productivity and minimize employment risk, please click on your state below for a Market Manager in your area.”
Wednesday, August 25, 2010
States' Financial Woes May Increase Taxes on Business
Even as the country struggles to gain any sort of economic momentum, the lingering unemployment debacle threatens to increase business costs well after we turn the corner in terms of stock prices, consumer spending, and increased construction and manufacturing.
Even if the economy suddenly became robust and all signs pointed to two decades of steady growth, the lingering effects of prolonged and rampant unemployment would continue to churn in a vicious cycle. State unemployment insurance coffers have scraped bottom; most states already have begun borrowing from the federal government to pay the benefits they’re guaranteed to receive. Those loans are interest free for a while. But when the grace period expires – and it almost surely will before states can pay back the money – interest begins to accrue. This creates the fiscal Cerberus states will find themselves unable to slay.
First, they must pay interest. Second, they must pay back the principal, a huge percentage of their operating budget. Third, they must replenish their own unemployment insurance funds depleted by the extended recession. To do that, they’ll have to cut social services and entitlements, such as reducing the size of unemployment checks or making qualification more strict (fat chance). Or, they’ll have to trim their own workforce. This would include policy analysts, middle managers, supervisors and other pencil pushers. Or, they can increase the taxes on company payrolls. In fact, if a state can’t pay back the federal money in a timely fashion, the tax rates on all that state’s businesses would go up to begin repayment.
According to CNN Money, “The median increase will be 27.5 percent. And employers in places such as Hawaii and Florida could see levies skyrocket more than three-fold.”
Higher taxes of any kind mean companies have less money with which to hire new employees. Moreover, higher employment taxes on those very employees would be a deterrent to hiring. States are contemplating raising the amount of each employee’s base pay that is subject to taxation, raising the rate at which that base pay is taxed, or a combination of both methods to increase revenue. This, on top of the other taxes that states have already burdened businesses with, as they try to deal with budget shortfalls in other entitlements.
One consequence of this disincentive to hire could be a growing demand for temporary/contract labor workers. “Temps” always have been seen as a way for employers – especially construction and manufacturing companies – to cope with fluctuating workloads. They bring in more people when they receive a large or unusual order or win several building contracts at the same time, stretching their full-time people too thin. When the project ends, the temporary workers go away, without the need to layoff loyal, longtime employees.
In fact, the temporary employment sector is seen as a leading indicator of where the economy is headed. The use of temporary employees declined sharply in the fourth quarter of 2007 - even in the retail sector at the beginning of the traditionally busy holiday period; it was a harbinger of our current recession.
On the flip side, temporary staff and field worker use sees an uptick as the economy improves. Companies don’t trust their good fortune and don’t want to commit to recruiting, hiring, and training new employees just to have to lay them off if the good times don’t last. This is a very real possibility in the construction industry, which is lagging other sectors as the economy tries to turn the corner.
Even programs designed to alleviate the short-term crunch are destined to create even larger problems in the future. States can receive federal stimulus money for use in paying unemployment benefits, but to get the money, they must liberalize their rules for who is eligible, possibly including part-time workers and workers who quit their jobs to take care of family obligations. Most states made qualification more restrictive in the 1980s in the wake of the last serious recession. So what’s the solution?
Maybe the federal government will extend the grace period so the loans to states won’t begin accruing interest until much later. Maybe Washington could forgive a portion of the principle, but such a provision likely would come with more demands to liberalize state unemployment eligibility and increase benefits, which we don’t need. That, of course, would necessitate another round of business taxes to pay for the influx of people receiving compensation when the next round of unemployment hits. That, in turn, means businesses would be more apprehensive to hire and incur the tax - even in good times, therefore extending the jobless recovery.
Honestly, as a business owner, one of my primary concerns is maintaining or reducing the costs to run my business. I hope the politicians keep that in mind when they “solve” this problem.
Even if the economy suddenly became robust and all signs pointed to two decades of steady growth, the lingering effects of prolonged and rampant unemployment would continue to churn in a vicious cycle. State unemployment insurance coffers have scraped bottom; most states already have begun borrowing from the federal government to pay the benefits they’re guaranteed to receive. Those loans are interest free for a while. But when the grace period expires – and it almost surely will before states can pay back the money – interest begins to accrue. This creates the fiscal Cerberus states will find themselves unable to slay.
First, they must pay interest. Second, they must pay back the principal, a huge percentage of their operating budget. Third, they must replenish their own unemployment insurance funds depleted by the extended recession. To do that, they’ll have to cut social services and entitlements, such as reducing the size of unemployment checks or making qualification more strict (fat chance). Or, they’ll have to trim their own workforce. This would include policy analysts, middle managers, supervisors and other pencil pushers. Or, they can increase the taxes on company payrolls. In fact, if a state can’t pay back the federal money in a timely fashion, the tax rates on all that state’s businesses would go up to begin repayment.
According to CNN Money, “The median increase will be 27.5 percent. And employers in places such as Hawaii and Florida could see levies skyrocket more than three-fold.”
Higher taxes of any kind mean companies have less money with which to hire new employees. Moreover, higher employment taxes on those very employees would be a deterrent to hiring. States are contemplating raising the amount of each employee’s base pay that is subject to taxation, raising the rate at which that base pay is taxed, or a combination of both methods to increase revenue. This, on top of the other taxes that states have already burdened businesses with, as they try to deal with budget shortfalls in other entitlements.
One consequence of this disincentive to hire could be a growing demand for temporary/contract labor workers. “Temps” always have been seen as a way for employers – especially construction and manufacturing companies – to cope with fluctuating workloads. They bring in more people when they receive a large or unusual order or win several building contracts at the same time, stretching their full-time people too thin. When the project ends, the temporary workers go away, without the need to layoff loyal, longtime employees.
In fact, the temporary employment sector is seen as a leading indicator of where the economy is headed. The use of temporary employees declined sharply in the fourth quarter of 2007 - even in the retail sector at the beginning of the traditionally busy holiday period; it was a harbinger of our current recession.
On the flip side, temporary staff and field worker use sees an uptick as the economy improves. Companies don’t trust their good fortune and don’t want to commit to recruiting, hiring, and training new employees just to have to lay them off if the good times don’t last. This is a very real possibility in the construction industry, which is lagging other sectors as the economy tries to turn the corner.
Even programs designed to alleviate the short-term crunch are destined to create even larger problems in the future. States can receive federal stimulus money for use in paying unemployment benefits, but to get the money, they must liberalize their rules for who is eligible, possibly including part-time workers and workers who quit their jobs to take care of family obligations. Most states made qualification more restrictive in the 1980s in the wake of the last serious recession. So what’s the solution?
Maybe the federal government will extend the grace period so the loans to states won’t begin accruing interest until much later. Maybe Washington could forgive a portion of the principle, but such a provision likely would come with more demands to liberalize state unemployment eligibility and increase benefits, which we don’t need. That, of course, would necessitate another round of business taxes to pay for the influx of people receiving compensation when the next round of unemployment hits. That, in turn, means businesses would be more apprehensive to hire and incur the tax - even in good times, therefore extending the jobless recovery.
Honestly, as a business owner, one of my primary concerns is maintaining or reducing the costs to run my business. I hope the politicians keep that in mind when they “solve” this problem.
Labels: Commercial, Construction Industry, Industrial
Wednesday, August 11, 2010
Social Networking Media For Your Business
If your company is like many in the construction industry, it may be slow to adopt new technology to its business. While that means you’re not making the most of your communications efforts and public relations initiatives, it also means that it’s probably not too late to gain a significant advantage over your competition.
Just imagine the business your company would enjoy if you were the only builder in your specialty or geographic area to employ value-added engineering, constructability analyses or design-build services. The strategic advantages of social networking are just as great. Even better, the groundwork already has been laid for you, and plenty of vendors, blog hosts and internet service firms are ready and able to help at very low cost. In fact, you probably already have on staff plenty of employees who understand the ins and outs of Flickr, Twitter, Linkedin, You Tube, Facebook and a myriad of other social networking sites and tools who can easily adapt your needs to these social networking media.
The most obvious use of these kinds of sites and services is to extend your company’s public relations endeavors. Slick, 4-color, printed capability brochures are impressive, but they are expensive to produce and, if you’re not careful, can become outdated in a matter of months. Consider the cost savings and immediacy of similar collateral material in an electronic format. When you complete an impressive project or solve a developer’s pressing problem, you can let other potential clients know about it instantaneously, with just a few keystrokes. When you use recycled materials, incorporate methods to reduce waste, use renewable heating, cooling, and lighting resources to mitigate a project’s impact on the environment, you can brag not only in print, but with photos and video.
The construction industry, especially in today’s economic climate, is becoming more competitive all the time. Long gone are the days of the “good ol’ boy network,” where club memberships, handshakes and low bids were the only issues owners considered when choosing their contractor. Perhaps lagging other industries a bit, construction now gets done when contractors can prove to clients they are the best firm to employ because they can save money, time, hassles, and complications. In short, service is the name of the game.
Here are some tips to ensure your public relations program includes social media, networking and other technological innovations to put your company at the forefront when developers are looking for a construction partner:
1. Especially with the growing interest in green construction and environmental stewardship, it is important to keep abreast of concerns the public has over construction projects. Monitor local sites dedicated to these issues – feedback sections on newspaper websites where readers can post their thoughts on news stories about your project, environmental blogs, and – if you’re building a public works project – government watchdog sites. This way, you can find out how the public perceives your project and your employees’ work habits and productivity. You also can post your own responses to these concerns, discussing the efforts you are making to mitigate dust, traffic disruptions, noise and more.
2. Use your own Twitter or Facebook page to publicize these efforts, using video and photography to illustrate your points.
3. Post positive media coverage on your page, and use it to give as many pertinent details as possible about your projects, your company’s culture of social responsibility and environmental stewardship and more. Journalists who can find with little effort much of the background information they require are more likely to view your firm in a positive light, and because much of their work already has been done for them, are more likely to pursue story ideas.
4. Post project pictures on Flickr or other photo-sharing sites, and allow journalists to view them and use them in print and electronic stories.
Other communications, both internal and external, can benefit from social media. If you’re building a LEED-certified project, companies have developed environmental sensors that measure recycling, energy savings and other nature-friendly measures used in your project. These results can be accessed online, in real time. Consider posting these gauges on your website or social networking page.
A social media policy can help your employees and supervisors keep abreast of the happenings in your company, its jobsites and its regional offices. Employees, both office staff and field employees, who are engaged in the company’s activities and decisions have a greater feeling of belonging and engender greater loyalty. Potential employees also can be enticed and recruited through new media. Younger workers, especially, gather large percentages of their daily news and information from the internet, so companies that want to reach them must have a web presence.
Finally, social media also can be used to manage and track bids and sales leads and position your company as the best for certain types of construction and your firm’s executives as experts on issues affecting the industry.
Just imagine the business your company would enjoy if you were the only builder in your specialty or geographic area to employ value-added engineering, constructability analyses or design-build services. The strategic advantages of social networking are just as great. Even better, the groundwork already has been laid for you, and plenty of vendors, blog hosts and internet service firms are ready and able to help at very low cost. In fact, you probably already have on staff plenty of employees who understand the ins and outs of Flickr, Twitter, Linkedin, You Tube, Facebook and a myriad of other social networking sites and tools who can easily adapt your needs to these social networking media.
The most obvious use of these kinds of sites and services is to extend your company’s public relations endeavors. Slick, 4-color, printed capability brochures are impressive, but they are expensive to produce and, if you’re not careful, can become outdated in a matter of months. Consider the cost savings and immediacy of similar collateral material in an electronic format. When you complete an impressive project or solve a developer’s pressing problem, you can let other potential clients know about it instantaneously, with just a few keystrokes. When you use recycled materials, incorporate methods to reduce waste, use renewable heating, cooling, and lighting resources to mitigate a project’s impact on the environment, you can brag not only in print, but with photos and video.
The construction industry, especially in today’s economic climate, is becoming more competitive all the time. Long gone are the days of the “good ol’ boy network,” where club memberships, handshakes and low bids were the only issues owners considered when choosing their contractor. Perhaps lagging other industries a bit, construction now gets done when contractors can prove to clients they are the best firm to employ because they can save money, time, hassles, and complications. In short, service is the name of the game.
Here are some tips to ensure your public relations program includes social media, networking and other technological innovations to put your company at the forefront when developers are looking for a construction partner:
1. Especially with the growing interest in green construction and environmental stewardship, it is important to keep abreast of concerns the public has over construction projects. Monitor local sites dedicated to these issues – feedback sections on newspaper websites where readers can post their thoughts on news stories about your project, environmental blogs, and – if you’re building a public works project – government watchdog sites. This way, you can find out how the public perceives your project and your employees’ work habits and productivity. You also can post your own responses to these concerns, discussing the efforts you are making to mitigate dust, traffic disruptions, noise and more.
2. Use your own Twitter or Facebook page to publicize these efforts, using video and photography to illustrate your points.
3. Post positive media coverage on your page, and use it to give as many pertinent details as possible about your projects, your company’s culture of social responsibility and environmental stewardship and more. Journalists who can find with little effort much of the background information they require are more likely to view your firm in a positive light, and because much of their work already has been done for them, are more likely to pursue story ideas.
4. Post project pictures on Flickr or other photo-sharing sites, and allow journalists to view them and use them in print and electronic stories.
Other communications, both internal and external, can benefit from social media. If you’re building a LEED-certified project, companies have developed environmental sensors that measure recycling, energy savings and other nature-friendly measures used in your project. These results can be accessed online, in real time. Consider posting these gauges on your website or social networking page.
A social media policy can help your employees and supervisors keep abreast of the happenings in your company, its jobsites and its regional offices. Employees, both office staff and field employees, who are engaged in the company’s activities and decisions have a greater feeling of belonging and engender greater loyalty. Potential employees also can be enticed and recruited through new media. Younger workers, especially, gather large percentages of their daily news and information from the internet, so companies that want to reach them must have a web presence.
Finally, social media also can be used to manage and track bids and sales leads and position your company as the best for certain types of construction and your firm’s executives as experts on issues affecting the industry.
Labels: Commercial, Construction Industry, Industrial