The Reason

by +Matt Bagell 

(Financial Contributor for Humareso)

As a financial planner, I run into the same question all the time when talking to a business owner, hr specialist or controller.  Which retirement plan should we set up for our company?  They always seem to be leaning towards a solution but are not sure what the full details are with regard to the various plan options.  

You just need to know one simple thing; what is "The Reason" for creating one for your company.

Let's face it.  Some business owners are extremely interested in putting a lot of money away for retirement and taking advantage of as many tax deductions as possible.   In a perfect world, a business owner could do this while receiving a tax break from the government at the same time without limitations.  Unfortunately, there are caps to what you can do and it depends on what plan you choose.  On the other hand, a business may be solely focused on enhancing the benefits they are offering to their employees.  The company may see a retirement plan as a way of keeping their employees around and also attracting new ones as well.  

I could bore you with all of the details that go along with a SEP IRA, Simple IRA, and 401k plan but if anything else you have to first realize that these plans allow contributions to increase to a level much higher than an individual IRA.  In 2015, the traditional IRA contribution limits are $5,500 and $6,500 if age 50 or older.  The limit allows for a decent contribution but a business retirement plan such as a SEP IRA allows for contributions up to $52,000 in 2015. Now that is a huge difference.  If you put that amount against a 30% tax bracket, you would receive over $15,000 in tax savings in just this year alone. If your company has many employees or is likely to grow, a 401k/ Profit sharing plan might be more suitable.  You will have the flexibility to decide if you want to invest more or less each year and can limit the benefits provided to the employees based on actuarial testing.  

There are many factors that affect how a retirement plan will work including the age of employees, the number of employees, the salaries of employees and the contribution amount of the employer(s). This is why a decision should not be rushed.  A Simple IRA plan, for example, does not allow for higher contribution limits compared to other business plans but the out of pocket cost is less for the employer to set up. 

Retirement plans are great ways to really improve your company.  The business owner(s) can really take advantage of putting money away and the employees are also set up to come along for the ride. Think about it. When else does the government hook you up with a discount on taxes for saving your own money. By the way, they also let your money grow tax free before withdrawals. Not a bad situation if you are able to contribute steadily throughout your working career.

So, first start with "The Reason" you are considering a plan. From there, it will be a lot easier to figure out what fits your company's needs.

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Don't Fear the Reaper

Go to @twitter and search for #leadership and plan on spending the next four days with no sleep reading what’s there.  Oh, and that won’t give you enough time to finish.  We are a leadership-sensitive business community.  Books, articles, chats, posts, etc. are aplenty regarding the need for, the stability desired in and the call for leadership.  It’s needed in business, at home, in our houses of worship, for our town little league programs, for our school boards and beyond.

The marketplace is ravenous for leadership-directed material.  I have been known to write about it.  I have been known to coach leaders on leadership.  I lead one of the premier HR consulting firms – Humareso.  I like leadership.

Sadly, however, over the past decade, I hear many complaining that our need for leadership is thwarted by a lack of desire for people to step into leadership.  Let me be clearer.  We’ve all experienced leaders who had no business being in positions of leadership.  They were cruel, cold, uninspiring, lacked vision or narcissistic.  Many couldn’t manage their way out of a paper bag let alone lead anyone anywhere (ok, so I have some strong feelings about bad leaders, I know).

Perhaps because of those bad leaders, we have many who could perform the role of leader who won’t do it.  They’ve seen the bloody battle that erupts around leaders.  They see the accolades, sure, but they see the bathroom wall writing, too.  It’s a reputation-killer in our society to be a leader.  Can we honestly blame people for not wanting to lead?

Or perhaps it’s Marvel’s fault.  We hold up high the myth of the super hero who can come in and lead effectively with character and right action.  Those movies are blockbusters, but do they set us up to think that all leadership should look like Captain America?  It’s a fantasy.  Could it be that our fascination with that genre impacts our willingness to jump into leadership?  Could be.

So what do businesses do?  They are so starved for leadership that money and willingness become tied together.  Begging someone to lead and paying that person handsomely is our charge to motivate.  I agree that our leadership should be compensated for the skill sets, aptitudes and knowledge they possess.  However, if we bypass those qualities in favor of willingness to hold a position, we belittle the intention of leadership.  Instead of influencers towards mission, we box bodies into short-term, high-paying figureheads.   That doesn’t seem too appealing. 

If someone has some of the qualities necessary to build upon for a leadership role, it’s our job to help coach them into the role, not scare them off.  Promoting people because you can is not a successful succession plan.  True leadership is of a different path.  Leadership is about influence, yes, but deeper than that, a leader inspires others to push and reach for their excellence individually and corporately.  A leader rallies people toward a challenge or lasting goal.

One of our passions is to ridicule and belittle our leadership.  We leave them little room to grow from their mistakes.  The title of leader does not and should not imply perfection.  No one fully arrives once given a role like that.  Regardless of your political persuasion, look at the way we’ve beaten up our last six presidents (and please, don’t send me any articles as to why Bush or Obama or Clinton are more awful than others).  I wouldn’t want any of my kids to be president, and that’s a sad statement.

If I were president, I would receive a barrage of criticism just like they did.  And while that’s on a grand scale, the smaller version is just as powerful in our workplaces.  It’s why we struggle to find people willing to step up.  And so our succession plans move from who is able to who is willing.  There is a vast difference between the two.

Some of you reading this know I am talking to you.  You know that you have the ability to lead, but won’t jump in.  You’ve seen how other leaders have been devoured by their own.  I know it’s not pretty.  Leadership, however, is a privilege that costs.  It’s not that you will become a leader and now be free from ridicule because you’ll have them read this blog.  That’s not what will work.

What will work is your relentless pursuit of excellence, your drive to encourage those you lead towards the mission and your creative exuberance towards the vision.  Some will not like to see this type of person leading them.  It’s too active, too forward thinking, too expectant.  I would say that’s too bad for them.  You are made from deeper and richer stuff.  Don’t fear leadership and what might come with taking it; rather, fear what a lack of leadership will do for a spirit such as yours. 

How Can I Be Sure?

by +Victorio Milian 

I get approached regularly with requests for career advice. I get asked all sorts of questions but they tend to be variations on the following:

• How do I break into Human Resources?
• How do I use social media to build my brand?
• What help can you give me to find a job?
• Victorio, why are you so cool?

I admit that the last one, while my favorite, is false! The others aren't.

I can sympathize; I've been in that position, one where I felt clueless about an important question I needed answers to, or a choice that I needed to make. As a result, I do my best to help people out. Usually I start with an email exchange and then if they're comfortable we'll move on to a phone conversation. If they live or plan to be in New York City then we can meet in person. Through this process of communication I've helped people figure out next steps in their professional lives, as well as developed some great relationships.

As I mentioned, I've felt clueless. I still feel that way sometimes. I don't have all of the answers, nor do I want to. Having challenging questions to answer is part of the learning process as a professional. For me, it drives me to better understand and articulate my passion for Human Resources, along with how I can support my clients in the best possible fashion.

I also recognize that, while I consider myself smart, capable, and creative, I'm not the smartest, most capable, or creative Human Resources professional in the world. As Bill Joy, computer scientist and co-founder of Sun Microsystems, once said:

“No matter how many smart people there are within your firm, remember that there are far more smart people outside your firm.”

It's important to remember this. Even if you yourself are an expert in your respective field, there are others out there just as capable, if not more so. And in this era where top talent and resources can be accessed from almost anywhere, it pays to recognize when to reach beyond your known environment for advice and expertise.

This is part of what leaders do--gather intelligence, as well as assess its quality and relevance to the issue at hand, in order to make informed decisions. Without the ability to ask, as well as the willingness to reach out to those within and outside a person's comfort zone, people may not have the relevant insight, perspective, or information necessary to make good decisions.

Competitive advantage can come from timely access to information and expertise, not necessarily being the source of it. Approaching people for help isn't a sign of weakness, neither is asking questions. When done correctly, it demonstrates an ability to seek out and make quality decisions based on the best information available.

How do you ask for help?

What You Need

It cracks me up when an employee approaches me to tell me what he/she needs.  I know it shouldn’t, but sometimes it’s just too funny.  I got to be a part of a company once when someone asked for a nap each day, paid.  Funny, right?  Funnier still?  He got it.  Contextually, you can see why I crack up.  I have been asked for more money, more time off, more time on, to move another employee out of a department, to fire an employee who annoys others, to tell the CEO he/she stinks, to tap phone lines, to read emails, to reduce payroll across the board and not tell employees about the check changes in advance, to… You get the idea.  Craziness. 

Most times, I laugh.  I get up from my seat while laughing.  Place my hand nicely on the shoulder of the requester and laugh as I slightly escort the person out of my area.  I don’t respond verbally.  Just laughter.  I do this because if I let myself say what I would want to say, I would be out of a job.

What I know will help to alleviate many of these situations, though not all, is the connection to basic needs.  People have needs.  In the workplace, what can we do about it?  Ideally, we can address them and set them up for success.  It takes a little work.  It might undo a culture completely.  It might cause everyone to see how unhealthy things have been.  So what?  Productivity improvements are connected to the people we employ.  Set up standards that allow for goals to be achieved while motivating staff and meeting their needs, and you would be a hero.

So, what do people really want?

• Collaboration – the ability to work with others. Relationship is a natural desire of humans.  Some love it more than others, but we’re all wired for it.  Creativity, ingenuity and resourcefulness are enhanced through collaborative efforts
• Invested Leadership – seeing the leaders of the organization take an interest in the goings-on of a work group and/or an individual contributor.  A manager of a small group of employees portrays an understanding of the culture of leadership every day.  Leadership is to take a vested interest in the people it employs.  This gives employees an understanding of fit and of connection to the mission
• Viability in Advancement – is there really a chance to advance in the organization?  We often say that there is, but employees figure out rather quickly whether that’s going to be true or not.  The real trajectory within an organization should be evaluated.  Providing a path for real advancement in usage of skill sets, knowledge and relationship motivates an employee towards a sense of purpose
• Compensation – salary, commission, bonus, PTO, benefits, retirement, etc. are a reality of living.  Our staff have homes, apartments, significant others, families, a social life, vacations, holidays for which to pay and enjoy.  Compensation allows an employee to handle some of the bottom levels of Maslow’s hierarchy of needs so that the more analytical level is addressed
• Impact – simply, is what an employee doing impacting the purpose of the group?  When we challenge the status quo and (re-)introduce the concept of impact, we wake people up.  What each employee does allows a product to be delivered, a service to be given, or a resource to be offered while changing processes, enhancing knowledge and keeping the lights on!  The line worker who is placing four screws on the same piece on the assembly line is a superstar.  Those four screws hold something significant together.  No task or role is small

If you’re a leader, not matter how small your charge, sit with this list and evaluate what’s going on at your company.  Now evaluate what you are doing to move towards meeting these needs.  Be practical.

And I would be remiss not to point out that there is a grand difference between need and want.  An employee might ask for what he/she wants and try to cloak it as a need.  Rip the sheet off of that want.  Expose it.  Time off is a need.  Six weeks of vacation a year is a want.  Just because someone asks for it, doesn’t make it a need.

There are days I need people to leave me alone.  And then I am reminded that is a want.  So, now what?  Oh, I know.  I will rephrase it.  “I want people to leave me alone some days.”  That’s better.  Now, what do I do about the HR career and people thing?  Crap.

One Thing Leads to Another

As a parent, I have the articles and books that speak to the importance of structure in raising kids.  Some of it goes really far (like posting schedules of what’s going to happen every minute of the day…I need a little spontaneity!), but overall, the intention is clear.  If my kids don’t understand process, boundary and authority, it will prove to be a difficult life for them.  They will fight against “the man” most of their lives and waste the great talents they have.

In the workplace, structure is just as imperative.  Have you ever worked for a company that is a bit of a free-for-all?  Holy guacamole, is that frustrating or what?  I mean, who is getting stuff done?  I’ve watched employees meander from one cubicle to another discussing all sorts of stuff, whether work related or not, as if life is one big latte.  Even the professionals at Google and URBN have structure, people!  Not everyone is walking around with a dog, a cappuccino and a copy of “The Fountainhead” while wearing Toms (if you’re walking around work like that as you read this, um…sorry).

Process points to purpose.  Giving structure in various areas of duty, responsibility and performance shows care.  Employees want to know they fit and are contributing.  Honestly, they don’t really want to wander.  It does no one any good if an employee lacks the structure to do his/her job.  Further, it actually dumbs down the skill set he/she has.  Without practice and use, it will atrophy and weaken.

 

In high school, I was on the track team.  My favorite event to compete in was the long jump.  While I cannot say that I was the best on the team (because that would be a lie), I can say that I practiced daily.  I ran down the long jump runway into a pit of sand dozens of times each day.  I practiced sprinting so that my speed improved to catapult me further in my jump.  I practiced on hurdles so that my “ups” would improve for takeoff from the long jump board.  I lifted weights and stretched to strengthen those muscles needed for the in-air motion to extend my jump distance.  And I knew to do this because my coach gave me structure.  He led me and my teammates through the process of working out, through drills, through conditioning…in the cold, in the heat…daily.

Without the cliché, anything worth striving for has to be practiced and pursued consistently.  Michael Phelps didn’t just happen to win all of those Olympic medals because he has a few good weeks over 12 years.  He devoted himself to the structure needed to win.  Our staff has to be invested in similarly.  We need to have process in place for skill improvement, for discipline, for praise, for critique, for job enlargement, for job enrichment.  We can lead them through the structure of career advancement within our organizations.  We can offer resources to help them handle the processes better.

Having structure is not the enemy.  Having purposeless structure, however, is demotivating and can lead an organization to think the structure is the enemy.  What is the structure like where you are?  Does it need improvement?  Is it just not known and so a different tactic for communication has to happen?  Are staff members afraid to offer some process improvement?  Do they even know how to report improvement suggestions?

Perhaps you can take time this weekend while you are working out to think through one area that needs structure or needs it enhanced or needs it communicated better.  Yeah, I know, I am making an assumption that you’ll workout this weekend.  Maybe I am pushing you a bit.  Maybe it’s time for this structure to be placed into your life.  Maybe I will find myself back on the track this weekend working on my long jump skills.  Maybe.