How to Set up a Wellness Plan

Workplace wellness doesn’t have to mean on-site gyms and in-house personal trainers. Small companies may be able to encourage healthy living and offer compelling perks to employees without spending a lot of money and time putting together a plan.

For a small company, the payoff can be big: Many employers report that healthier employees show up to work more often, are more productive, and visit the doctor less frequently. The payoff is also big for employees — and that should be your focus when implementing your program. The program is for them, not something you’re doing to them to reduce your insurance costs. Having the right attitude and getting everyone involved in a positive way is a good first step.

Here are five tips for small companies that want to get started with wellness at work.

1. Clean out the vending machines. Strip out the cookies and candy bars, and replace them with healthier snacks such as granola bars and reduced-fat or low-calorie treats.

2. Invest in pedometers. For just a few dollars each, you can buy pedometers for your employees. Pass them out and encourage staffers to keep track of the number of daily steps, walking a few extra each day. You can even start a walking competition at work. Ask your insurance provider. Some offer pedometers for free.

3. Give employees fast-food facts. Did you know that a Burger King Whopper with cheese packs 770 calories and 48 grams of fat? Your employees might not know, either. Create a pocket guide to help employees make informed decisions for themselves and their families when they run through the drive-through window after work. You can aggregate information available on most major fast-food chains’ Web sites. Or, check a Web site like

4. Offer health-risk assessments. Employees who complete assessments may find risk factors and then be able to take steps to head off health threats. For $5 to $15 per employee, your insurance company or a third-party vendor may be able to provide personal online assessments — usually 80 to 120 questions — based on a user’s family health history, eating habits and physical activity.

Be sure to make assessments voluntary and confidential, and assure employees that the results won’t be shared with anyone. Offer two free movie tickets or another token to entice employees to complete the assessment.

5. Review claims.
When it’s time to renew your company’s health insurance, look at your claims data. If you know many employees have blood-pressure problems, considering bringing in speakers to talk about managing it or screeners from a local hospital or clinic.
But you may not need to review claims data to spot opportunities for taking preventative steps. If, for instance, a lot of employees are men in their 50s, you might want to consider covering prostate screenings.

– Companies that want to take a bigger step toward employee wellness may want to try an employee contest or challenge, a friendly competition that may pit groups of employees against one another. The format is a natural fit for small companies, where the camaraderie can lend itself to teamwork and competitive spirit.

Developing such contests can be time-consuming and expensive. But they can pay off with healthier employees and lower health-care costs. For example, at one small company, employees team up and also individually earn $3 for every 1% of body weight they lose. At the end of a quarter, each member of the winning team receives as much as $50 and second-place-team members a little less.

Another company offers an optional wellness program in which employees participate in a nine-month contest and earn points by completing health and fitness challenges. The grand prize: $1,500 toward exercise equipment or a gym membership, in addition to a $1,500 spa package and $500 cash.

Employee Retention – How to Retain Employees

Hiring employees is just a start to creating a strong work force. Next, you have to keep them. High employee turnover costs business owners in time and productivity. Try these tactics to retain your employees.

Offer a competitive benefits package that fits your employees’ needs. Providing health insurance, life insurance and a retirement-savings plan is essential in retaining employees. But other perks, such as flextime and the option of telecommuting, go a long way to show employees you are willing to accommodate their outside lives.

Provide some small perks. Free bagels on Fridays and dry-cleaning pickup and delivery may seem insignificant to you, but if they help employees better manage their lives, they’ll appreciate it and may be more likely to stick around.

Use contests and incentives to help keep workers motivated and feeling rewarded. Done right, these kinds of programs can keep employees focused and excited about their jobs.

Conduct “stay” interviews. In addition to performing exit interviews to learn why employees are leaving, consider asking longer-tenured employees why they stay. Ask questions such as: Why did you come to work here? Why have you stayed? What would make you leave? And what are your nonnegotiable issues? What about your managers? What would you change or improve? Then use that information to strengthen your employee-retention strategies.

Promote from within whenever possible. And give employees a clear path of advancement. Employees will become frustrated and may stop trying if they see no clear future for themselves at your company.

Foster employee development. This could be training to learn a new job skill or tuition reimbursement to help further your employee’s education.

Create open communication between employees and management. Hold regular meetings in which employees can offer ideas and ask questions. Have an open-door policy that encourages employees to speak frankly with their managers without fear of repercussion.

Get managers involved. Require your managers to spend time coaching employees, helping good performers move to new positions and minimizing poor performance.

Communicate your business’s mission. Feeling connected to the organization’s goals is one way to keep employees mentally and emotionally tied to your company.

Offer financial rewards. Consider offering stock options or other financial awards for employees who meet performance goals and stay for a predetermined time period, say, three or five years. Also, provide meaningful annual raises. Nothing dashes employee enthusiasm more than a paltry raise. If you can afford it, give more to your top performers. Or, if you don’t want to be stuck with large permanent increases, create a bonus structure where employees can earn an annual bonus if they meet prespecified performance goals.

Make sure employees know what you expect of them. It may seem basic, but often in small companies, employees have a wide breadth of responsibilities. If they don’t know exactly what their jobs entail and what you need from them, they can’t perform up to standard, and morale can begin to dip.

Hire a human-resources professional. If your company is nearing 100 employees, consider hiring a human-resources director to oversee and streamline your employee structure and processes. Putting one person in charge of managing employee benefits, perks, reviews and related tasks takes a huge load off of you and makes sure employees are treated fairly. HR managers are also more up to date on employment laws and trends. They can set up various programs and perks you may not have known existed.

How to Save on Health Insurance

Providing health-insurance benefits is key to employee retention, but rising costs can make this a challenge for small-business owners. Here are six options that may be able to help keep costs down.

1. A high-deductible health plan combined with a health savings account (HSA). This approach helps keep spending in check because it puts the onus on the user to think about cost. HSAs allow individuals with high-deductible health insurance plans to use employee pretax money to pay for uncovered medical costs and carry over unused funds to future years. You can require employees to fund the account, or fund it yourself.

Health reimbursement accounts (HRAs) are also often coupled with high-deductible insurance plans. In an HRA, employers set aside money to reimburse employees’ deductibles or qualified out-of-pocket medical expenses up to a predetermined amount. Employees can generally roll unused money over from year to year, though the money technically belongs to the employer.

2. Purchasing cooperatives.
Small companies can gain bargaining power with insurers by banding together in health-insurance purchasing cooperatives. Each cooperative is structured differently, and whether it offers better insurance rates than businesses could get on the open market often depends on local insurance-underwriting laws.

One cooperative for New York City businesses, for example, offers members a choice of 35 health plans. Though the insurance itself isn’t discounted, members get extras, such as free access to health-insurance consultation and dental benefits they otherwise wouldn’t be eligible for or would have to pay a lot for on their own.

3. Company wellness programs.
Wellness initiatives run the gamut from offering employees free gym memberships to providing healthy snacks in the company kitchen and health screenings that can result in lower insurance payments for employees.

These programs can help lower a company’s insurance costs by creating more health awareness among employees and thus encourage them to take better care of themselves. A growing crop of programs is also available online. Such services, for example, may offer customized nutrition advice, meal-planning tools and fitness plans, and cost just a few dollars per employee per month.

4. Flexible-spending debit cards. Flexible-spending accounts(FSAs) allow workers to pay for medical expenses that aren’t covered by health insurance with pretax dollars.

Employees can use the specialized debit cards to pay for co-pays or over-the-counter medication not covered by their insurer. The money is automatically deducted from the pretax funds employees have set aside. The cards typically cost $1 or $2 per month per employee, but some FSA vendors package them into their offerings.

5. Disease management. Disease management aims to minimize the effects of a disease, usually a chronic illness or condition, such as diabetes or asthma, through screenings and preventive care. One employee’s extended hospital stay or major health complication can be a huge financial burden for a small company with limited financial resources. To prevent such expenses, some small businesses are adopting disease-management programs staffed by nurses who work with employees to better manage and treat their chronic illnesses. Some insurers offer this service, or you can find it offered through third-party providers.

6. Nurse hot lines. Unnecessary emergency room and urgent care-center visits by employees are an expensive cost to employers. Curb these costs by asking workers with minor medical issues and questions to call a nurse first. Nurse hot-line programs are often sold through insurers and benefits administrators or to businesses directly.

How to Hire Your First Employees

Entrepreneurs preparing to hire their first employees should proceed with caution. It’s costly to commit to an employee’s salary and benefits. And what start-up can afford to have even one employee who isn’t working to full capacity? Firing an employee can mean not only severance pay (and sometimes litigation), but also time and resources devoted to finding a replacement.

The first questions start-ups typically wrestle with are whom to hire, when and where to find good candidates. The following is a rundown of some basics.

What position to fill first will differ for each company, depending on industry, location and the skills of the founders. Entrepreneurs must boil down their staffing plan to a handful of people who can get the company’s product or service to market. High-level executives aren’t usually hired until the company has seen some significant growth. For example, you don’t need a vice president of marketing or sales before there’s a product. In a tech company, an acting chief executive officer and a chief technology officer usually suffice.

It’s also worth stopping to think: Do you really need to hire someone? Many services can be outsourced or done by free-lancers. This work may include accounting, manufacturing, Web-site design, marketing and public relations — even administrative assistants can be hired on a “virtual” basis now online.

Deciding what tasks to outsource and what to hire an employee for may come down to whether the work lies within your business’s main areas of strength and whether that function is needed on a regular basis. What’s more, vendors often have more knowledge and experience than someone you can afford to hire.

When it comes to whom to hire, small companies often do best with flexible candidates who are used to smaller environments. In many cases, the ideal candidate can operate with a great deal of autonomy and doesn’t require hand-holding.

It might be tempting to hire candidates with big-business credentials, but they’re often not a good fit. In a big company, there are rules, regulations and processes to do everything. In a small company, there often are no set jobs and everyone may do a bit of everything.

One selling point for some is that small businesses are typically less bureaucratic and employees typically have more breadth in their jobs than they usually do in big companies. Leaders tend to have closer relationships with employees and often treat them like family. Another potential attraction: the potential for high growth.

An entrepreneur’s best bet for finding employees usually is networking. Ask for referrals from your friends, industry colleagues and advisers, such as your accountant, attorney, board members and organization members. If one of your advisers or colleagues recommends somebody, they’ve done some of your employee screening work already. Start-ups typically find their first 10 or 15 employees this way.

And when new hires comes on board, you’ve widened the candidate pool with their own Rolodexes. If an employee recommends someone, there’s a much higher likelihood that person will be successful in the job. Why? Candidates get a much more honest perspective of the company, and in most cases an employee is going to recommend only someone he or she thinks will be successful, to avoid tarnishing his or her own reputation. Put a bounty out there for employee referrals. It’s easy, and it’s inexpensive.

But no matter how well-connected the employees are, eventually the internal network becomes exhausted.

At that point, consider niche online job boards. Big job boards like, while they have advantages, can bring an unmanageable deluge of resumes. A small operation isn’t likely to have the time or resources to sort through all of them. Smaller niche sites can narrow your interested applicants to those in your industry or area.

Also keep an eye on popular blogs and Web sites in your industry. Some offer a place for help-wanted postings. Local newspapers and trade publications may also be useful sources, depending on your needs.

Employment agencies and head hunters can help you find employees from entry-level to executive. Recruiters do all your legwork — for a fee, of course — and are particularly useful if you are hiring a top-level executive.

How to Attract Talent to a Small Company

Big businesses woo job candidates by offering a bevy of benefits, brand-name recognition and maybe even a Starbucks in the lobby. How can small businesses compete for top talent?

The first step is realizing the advantages small businesses have over big businesses. For starters:

– Small businesses are typically less bureaucratic and have closer relationships between leadership and employees.

– In many cases, employees typically have more breadth in their jobs than they usually do in big companies, where people tend to specialize more.

– Many entrepreneurs treat their work force as if it’s an extension of their family.

– Small companies often offer more flexibility, more job diversity and the possibility of high growth.

– They frequently tailor a job to deal with employees’ individual needs. For example, a small business might be more willing than a big company to allow an employee who wants to work from home on Fridays to telecommute that one day a week.

It can be a challenge to find good candidates for a new business, usually an inherently risky venture. As a business owner, you must find a way to persuade a successful individual with a secure job to come work for you. Hiring managers at small companies without big human-resources departments often struggle with getting their message across to the talent they want to attract. It’s important to convey the success of their enterprise and figure out what aspects of their company to emphasize to appeal to candidates.

Entrepreneurs have to make a compelling business case for why a candidate should come work there. If you’re hiring an executive, that person is usually going to want equity in exchange for the risk. For a middle manager, you have to convey that your company has staying power. For entry-level workers, you should show that there are opportunities for growth. Big companies, even when downsizing, usually have more job openings. Regardless of the type of employee, you’ll need to show how their skills can contribute to the success of the business.

Networking can solve a lot of your recruiting problems. If one of your contacts refers a candidate to you, chances are good that they’ve done some of selling work already. For the same reason, offer rewards for employee referrals. Candidates who come in through these referrals usually have a more accurate picture of the company than those who come in through ads, and in most cases employees recommend only people they think will be a good match.

How to Hire a Health-Insurance Broker or Agent

Insurance agents and brokers can help a business owner sort through the array of health insurance plans available to find one that fits the needs and budget of a company. While some people research their options on their own, many others find the process daunting and can benefit from some professional assistance. Deciding who will help you choose an insurance plan is an important first step.

Here’s a rundown of points to consider before hiring an insurance professional, including the differences between brokers and agents.

Choose a professional with a good reputation in the industry, so ask for referrals from companies similar to yours in size and scope. Check references, as well as licenses and registrations. You can check a broker or agent’s disciplinary record by calling your state insurance commissioner’s consumer hotline. Ask if they’ve ever been sued by a client. While there is no central clearinghouse for this kind of information, you can take the extra step of doing a Web search on their names to see if anything turns up.

Services vary from one insurance professional to another — there’s no standard level, type or number to look for. Make sure you’ll get the kind of support your company may need, such as nontraditional work hours or different language on service help lines.

Learn whether he o she is knowledgeable about the type of products you need. Ask for examples of those that he or she has experience in. Some consultants focus solely on retirement plans, while some don’t work with them at all. You’ll want to know if a product isn’t mentioned because it’s inappropriate for your business or because his or her company doesn’t offer it. Another consideration: Are most of a firm’s systems designed primarily for large firms? If so, a small-business owner’s needs often may not be met, so it may be wise to look elsewhere.

Find out whether you’d have a dedicated account manager. With larger organizations, you may want a contact who is familiar with your company to avoid having to work with multiple representatives, retelling your story repeatedly. A professional operating on his own may not offer the level of service of a larger firm with someone focused on your account.

It’s a good idea to ask how renewals are handled. You’ll want to avoid being surprised by a renewal notice at the last minute. Ideally, the insurance renewal process would start 90 to 120 days before the renewal date with a strategic-planning meeting to set goals for the year. Once you decide on a plan, review it annually with your agent or broker to make sure it remains relevant to your company’s needs.

Should you hire a broker or a captive agent? Here’s a rundown of the two types of insurance sellers.

Brokers are independent, selling for multiple companies, and typically can provide more options and a broader view of the marketplace. Brokers will work with you to evaluate the major insurance carriers in your area on plan designs and cost. Don’t look for just the lowest premiums. Consider the breadth of the network to make sure all the employees have access to in-network physicians, and whether the carriers have good relationships with physicians.

Keep in mind that brokers often are paid on commission by the insurance company, which could be reflected in the premiums. But some brokers instead take a flat fee from an employer, such as a payment based on the number of employees and months covered.

Captive agents typically sell only one product or company. They often have a close relationship with their home office, which generally gives them more leverage to make plan changes. Their offerings also can cost less and they have access to markets that others may not have, such as workers’ compensation insurance in certain industries.

Agents are typically paid by the insurers, so the business isn’t charged for their services. If you decide to work with an agent, talk to more than one to find out what different carriers offer.

One idea popular with agents is an employee-elect arrangement, which allows small companies to choose from the gamut of a carrier’s plans. In the past, small employers could offer only one or two plans to their workers. They sometimes felt obligated to pick the most comprehensive — and expensive — plan, so that employees with greater health needs had enough coverage. But as insurers try to build market share by bestowing big-business options on small companies, there is more to choose from. Employees who need less coverage can opt for cheaper programs, thus reducing premiums.

How to Shop for a Bank

Choosing a bank for your business involves more than opening a new account at your personal bank or picking the branch office nearest your company. You need to understand what services you require and how much they cost. Ideally you’ll find a banker who will take the time to walk you through how to solve a problem, so you can go back to running your business. Still, some business owners may spend more time shopping for a $300 laser printer than they would shopping for a bank.

Here are a few issues to keep in mind when you look for a banker:

– Does your local banker have lending authority? What’s the largest loan he or she can approve without checking with higher ups? Relationship managers at community-based banks often have more discretion than those at a unit of a big institution and they may consider small-business lending to be their bread and butter. But lately, the distinctions between “large” and “small” banks have blurred with the industry’s consolidation. Many community banks have undergone mergers that now allow them to offer a wider range of services. Banks of all sizes are emphasizing improved customer service, having discovered that many customers still like face-to-face service at branches versus conducting all transactions online.

– Smaller, regionally focused banks may be better because they know local market conditions. They often provide more one-on-one access to a loan officer and put more emphasis on a borrower’s character rather than just applying a credit-score model. And they can be more flexible during tough times, such as covering overdrawn accounts without imposing stiff penalties.

– Rates charged by large financial institutions “are systematically lower” than those charged by community ones, according to a study cowritten by the National Federation of Independent Business, an advocacy group. Larger banks are more likely to issue corporate credit cards to small businesses, which can be used for financing.

– Is your bank comfortable working with the U.S. Small Business Administration (SBA) loan system? Federally subsidized loans help protect the bank against default, which makes it easier for banks to lend money. SBA loans are available to businesses whose credit histories, cash flows or collateral would be inadequate for them to obtain traditional bank loans, and the SBA typically offers more flexible repayment terms. Larger institutions are likely to make loans backed by the SBA, which lets them accept riskier borrowers.

– What extras are available with your account? Despite stiffer lending procedures, larger banks may offer added benefits such as online services that help save time and money on tax and accounting assistance. These may include sending invoices, collecting payments, payroll and loan applications. Some banks may tie such help to requirements that a business’s employees use direct-deposit channels. But keep in mind that banking is a competitive business, and it rarely takes more than a year for a new product or service to be copied by banks across the country. So trust and being comfortable with a bank can sometimes be more important than a seemingly new product.

Some common small-business banking needs:

Basic Services
• Checking account
• Business savings account
• Credit card
• Deposit-only card
• Discounted employee checking accounts
• Online banking

Lending Services
• Lines of credit
• Term-loans
• Commercial real estate
• Equipment leasing
• SBA loans

Cash Management
• Wire transfers
• Wholesale lockbox
• Merchant services

• Import/export
• Payroll
• Retirement accounts
• Insurance
• Discounts on hotels, shipping, office supplies

Be sure to pin down fees for various services. Some may be bundled, so comparison shopping is a must. They may be negotiable, depending upon your company’s history and size.

– View your banking arrangements as a long-term relationship. Consider not just what you need immediately, but services you may require in 18 to 24 months. You want to find a banker who understands your business and industry, including your creditworthiness and your seasonal borrowing needs. Ideally, your banker will see a customer’s growing business as an opportunity to provide more useful services and will listen if you run into a financial emergency.

Once you’ve established a relationship with a banker, meet with him or her at least once a year and offer an update on your company’s finances. Even so, it’s a good idea to interview branch employees and managers at competing lenders every few years and gauge their willingness to devote time to a single businessperson. Although switching banks can be a hassle, you can let your banker know you’re shopping around.

How to Borrow from Family and Friends

Budding entrepreneurs often turn to a lender that overlooks weak points, provides flexible terms, and offers a dream-come-true interest rate: the Bank of Mom or Dad. Without an established track record, start-ups often have trouble getting a traditional bank loan or funding from venture or angel investors. So after tapping their savings, founders often turn to informal investors, which usually means family members and friends.

Such arrangements combine best wishes, a pay-me-when-you-can attitude, and few expectations of a meaningful return. That might be the most realistic view of family and friends financing. So in many cases, it might be wise to not formalize the loan since doing so can raise expectations that it will be repaid in full.

Many people will opt for a loosely structured deal in which, for example, repayment may start only when a company has reasonable cash flow and can afford to make payments — a position many businesses don’t reach until three to five years down the road, if at all. Such an arrangement doesn’t raise expectations of prompt repayment. But such vagueness can lead to problems and confusion later on, prompting some experts to urge putting into writing whether funds are a loan, a gift or an investment. Still, terms of the agreement need close attention. Failure to collect interest or a repayment might prompt the Internal Revenue Service to decide the “loan” was actually a gift and impose gift tax and other penalties.

Online services, such as Prosper Inc. and Virgin Money, a unit of Virgin Group PLC, offer to structure arrangements between borrowers and individual lenders, who are often relatives or friends. For smaller loans, Virgin Money, for example, provides documentation and a payment schedule. For larger business loans, it will service the loans, send payment reminders and provide year-end reports. A more formal plan for larger loans services the loan — including setting up electronic fund transfers, sending email reminders and providing online account access. It also sends out year-end reports to the borrower and lender. The loans are flexible, usually offering lengthy grace periods and interest rates and payment schedules favorable to the business owner.

Some planners note that family members can provide money as an annual gift, helping reduce the size of an estate subject to taxes. Gifts also ease worries of conventional lenders who might be concerned that family loans could impair their ability to collect. One other thought: Some family members who provide loans or gifts think the funds come attached with the right to have a say or participate in the business. Documentation can spell out such issues.