What Hawaii Employers Need to Know About Tax Reform

It hasn’t even been a year since President Trump Signed the Tax Cuts and Jobs Act, but it looks like we’re not done with tax reform yet. This summer, Congress began discussing a second round of changes, dubbed “Tax Reform 2.0.” While this latest round of changes are still being defined by the legislature, the original Tax Cuts and Jobs Act is already impacting businesses at every level, and Human Resources (HR) is no exception.

Here’s the highlights on what Hawaii employers need to know to get up to speed on tax reform. 

The Basics

The Tax Cuts and Jobs Act is the biggest overhaul of the U.S. tax code in more than three decades. When it finally passed into law after months of debate, the $1.5 trillion package included some major changes to the tax code, including a permanent cut of the corporate tax rate from 35% to 21%, temporary tax cuts for individual taxpayers, a near doubling of the standard deduction, and a repeal of the individual mandate under the Obama-era Affordable Care Act.

What About Employers?

In addition to a number of other changes that affect businesses, the Tax Cuts and Jobs Act will directly impact the area of Human Resources. From family leave to fringe benefits, here are some of the ways that tax reform is changing the way businesses manage their employees.

Tax Credit for Paid Family Leave

Under the Family and Medical Leave Act, employers must provide up to 12 weeks of time-off each year for employees caring for a new baby or an ailing loved one, but it doesn’t require that leave to be paid. Last year’s tax reform adds a new tax credit for employers who voluntarily compensate workers taking family leave. The credit kicks in if employees on FMLA are paid at least 50% of their normal wages. Businesses receive a tax credit equaling 12.5% of what they compensate the employee, with increases for every percentage point they pay above 50% of the normal wage. (The credit is capped at 25%.)

Keep an Eye on Local Laws

But there’s a catch. Remember that bit about FMLA compensation being voluntary? Employers in states where paid leave is mandatory don’t qualify for the credit. Fortunately for employers in Hawaii, paid leave is still voluntary so businesses still qualify for the credit. But that could change. Bills that would have required employers to provide paid family leave failed to make it through the state Legislature in 2018. But lawmakers did pass a bill calling for a study of the plan and its possible impacts, so look for this issue to make another appearance on the legislative agenda next year.

No More Free Lunch?

Right now, employers who provide free meals to workers during their shifts can deduct 100% of the expenses. That will change under the Tax Cuts and Jobs Act. As of January 1, 2018  the deduction will be cut in half, to 50%. And it will go away altogether in 2026. (Employees can still exclude the benefit from their income.)

But the change doesn’t apply to recreational events, like holiday parties and employee picnics. So if your company likes to put on an annual employee appreciation lunch, those bentos are still 100% deductible.

Parking, Entertainment & Other Business Deductions

Employee meals aren’t the only fringe benefit to see a change. As of the first of this year, businesses can no longer deduct the cost of parking and transportation benefits, including van pools, transit, and employee parking. (Although it’s not yet clear whether the change applies to parking lots that are shared by both customers and employees.)

And if you’ve been encouraging employees to close a deal over a round of golf, or woo clients with concert tickets, you may need to re-think those policies. As of this year, you can no longer deduct entertainment expenses, even if you did business at the event.

Employers can still deduct up to 50% of expenses for business-related meals, however, so there’s no reason to cut back on the lunch meetings for now. Finally, if your business recruits an employee from another island, or hires someone from out of state, you may see a change in how moving expenses are handled. Starting this year, reimbursements for moving expenses are included in the employees’ wages.

Tax Reform 2.0

While the 2017 tax overhaul leaves a lot for employers to take in, more changes may be on the horizon. Earlier this summer, the U.S. House of Representatives Ways and Means Committee released a framework for what representatives are calling “Tax Reform 2.0.”

The two-page document doesn’t offer much in the way of specifics, other than pledging to make individual tax cuts permanent. But it does indicate that businesses will be included in the update, with a special focus on supporting innovation and entrepreneurship by helping new businesses write off more of their start-up costs. 

What will that mean for HR and local employers? Stay tuned to find out.

6 Things to Keep in Mind When Delivering Employee Feedback

Being a great leader means giving feedback that inspires growth and improves performance. It’s both essential to an employee’s individual growth and development but also to the health and well-being of your company. Contrary to what you might believe, employees find incredible value in receiving feedback from managers and other leaders. In fact, almost 60% of employees and 72% of employees under 30 want feedback from their bosses daily or weekly, according to a report by PricewaterhouseCoopers.

However, this doesn’t mean that giving feedback is easy—especially if it’s negative feedback. It can be very tough to do. Many managers worry that employees will take feedback the wrong way, or feel undervalued by the organization. That’s why, more often than not, it can seem easier to uphold the status quo and simply give employees a pat on the back.

But, when given with thoughtful consideration, feedback can be a valuable tool that helps employees learn and flourish in new ways. And, as they develop and grow individually, their performance improvements can have real business and customer impact too. That’s why it’s important that you make the effort—it also shows that you care about your employee’s growth and development.

So to get you started, here are 6 tips on how to give feedback that’s productive, constructive, and actionable in the workplace.

1. Set Expectations

No one likes to be surprised, so don’t surprise your employees with a feedback meeting without their knowledge. If you want to give one-on-one feedback to an employee, give them a heads up. Let them know what the purpose of the meeting is and what you want to talk about. This will limit the chances that they’ll get defensive, and can help them to prepare and reflect on their own performance ahead of your discussion.

2. Write it Down

Before you give feedback to an employee, you should have a clear idea of what you’re going to say. To help deliver the messages you wish to convey, write it down and be specific. This is a critical step in the feedback process. Not only will this help you articulate, gather and organize your thoughts constructively, but this record of feedback can be a helpful reference point when you deliver your critiques.

3. Give Specific Examples

When giving feedback, it’s easy to be general, offering up platitudes such as “you need to show more initiative” or “you need to be more detailed.” However, these vague suggestions are difficult for an employee to parse and are easy to brush off. Instead, give specific examples of a time when an employee could’ve been more detailed, such as when they turned in a report with incomplete information.

4. Strike a Balance

Criticism from managers can be tough to swallow so making sure to share positive comments as well is important in the feedback process. Positive comments can be as simple as “I agree with you” or “that’s a terrific idea.” According to research, the proper praise-to-criticism ratio is 6:1. That is, for every negative review, the average employee ideally needs 6 positive pieces of feedback.

5. Ask Questions

If you have feedback to give, it can be tempting to lay everything out. But truly good feedback is a two-way conversation and it’s important to listen to what employees have to say. Ask employees what they think about their performance, about areas in which they accel, how they would like to improve, and how they see you helping them get there. Similarly, you should be open and prepared to receive constructive feedback from them yourself.

6. Help Employees with an Action Plan

Feedback is useless unless it can be acted upon. As a manager and leader, it’s your responsibility to help your employees think through goal-oriented action plans so they can leverage your feedback to improve. Have a discussion with your employee about what changes you expect to see and collaborate with them on an action plan to address key issues or behaviors. An action plan should also include appropriate next steps, milestones, or check-ins, ensuring that both employees and managers stay on top of feedback and progress.

The Gift of Feedback

When done correctly and thoughtfully, feedback can be a gift. It can help employees improve in their roles, grow into their careers, and add more value to your organization long-term. Remember, it’s about leveraging your expertise and experiences to help someone else gain valuable insights about themselves and their work.

“Honesty is a very expensive gift; just don’t expect it from cheap people”

Giving and receiving feedback also helps to build healthy company cultures and can help your organization identify what’s working (and what’s not) so that you can make improvements time over time. If you want to invest more in your people and business, giving feedback is a good place to start.

This post is part of a special blog series on ‘Building a Healthy Feedback Culture' in support of ProService’s Growth Series event taking place on September 19, 2018 . Offered exclusively to ProService clients and special guests, the Growth Series are interactive learning experiences that feature industry-leading speakers and networking opportunities that will inspire and provide tools for business leaders to take their organizations to the next level. To register, please visit our event page and register with code GS2018.

Why You Need to Concentrate on Customer Experience

No matter what type of business you manage, your customers’ experience is an important part of marketing. More likely than not, the way they experience your product and/or service can actually make or break your marketing efforts to new buyers.

Just think about the last time you asked your co-worker, family, or even social media friends for a lunch spot recommendation or a product review before purchasing the latest tech gadget. You probably didn’t have to think too far back.

In fact, according to BrightLocal’s Local Consumer Review Survey, 85% of consumers trust online reviews as much as personal recommendations. Today, especially with the prevalence of online reviews and ratings, it’s more critical than ever to provide your customers with an exceptional experience.

Before we jump ahead, let’s back up and define customer experience. Customer experience is your customers’ perception of how your brand treats them. Your brand’s style and tone, communication methods, service and support, and even company culture, can affect customer behaviors. Simply put: if customers like your brand and continue to like you, they are going to continue to do business with you and recommend you to the others.

And there’s no real difference whether you’re a mom and pop shop or a Fortune 500 company; concentrating on customer experience to drive new revenue is crucial for success, especially in Hawaii where word-of-mouth is key. Here are 4 factors to focus on:

1. A positive customer experience increases retention and loyalty

Customer loyalty is important for business success. Even though most of us know this, the numbers may surprise even the most well-informed marketers. Did you know by increasing customer retention rates slightly, by just 5%, can actually increase profits by 25% to 95%? And if that’s not motivating enough, a study by Oracle found that 74% of senior business executives believe that customer experience impacts the willingness of a customer to be a loyal advocate for your brand. Typically, positive word-of-mouth results in a compound effect of new buyers.

2. Facilitating two-way conversations online and offline

Whether you’re interacting with your clients via social media or across the checkout counter, it’s important to listen and truly hear what they are saying. Be sure to take into account what type of feedback you’re getting and how you can shape your strategy to best accommodate your client’s wants and needs. For example, you can easily track Facebook posts and shares to see how and why customers are interacting with your brand. But you can additionally reach out to your customer base with simple surveys, emails, or website forms to gather more structured insight. The goal should always be the same: listen and take notes. Communicating with your customers, fans, and followers is the best way to optimize your customer experience strategy and continue generating positive word-of-mouth.

3.  Predicting behavior by understanding your customer experience

By tracking trends such as website and social analytics, purchasing cycles, referral sources companies can start predicting behavior and be in the right place at the right time. Before scheduling your next email, find out if a certain customer segment is more likely to read email first thing in the morning or right before bed. If you know that your potential buyer is email-averse, don’t hesitate to pick up the phone. After all, ease of use and convenient content is preferred by people today.

4. Unlocking the ability to leverage personalized marketing

Personalized marketing today is more than using your customers’ names when you email them. It involves getting to know your buyer personas intimately and trusting the data you collect. And the relationship shouldn't end at the point of purchase use personalized marketing initiatives throughout the customer journey as you engage with brand ambassadors who want to share your product and services. For example, if you segment your customer loyalty program by your buyer personas, you can continue to personalize campaigns, messaging, and incentives to the specific interests and motivations of each type of ambassador whether your goal is repeat purchases or referral activity.

Across industries, improving customer experience is important in order to increase retention, satisfaction, and sales. Positive customer experience can easily foster a deeper commitment to your brand. So it’s no surprise that one-in-five marketers sees customer experience as the most exciting opportunity they’re pursuing this year. As you head into end of year planning and beyond, what steps can you take to improve your customers’ experience?

How to Re-Energize Your Team

A happy workforce is a productive workforce. Employees who are happy tend to work better, stay at their jobs longer, and produce higher quality results than those that are unhappy at work. And the benefits don’t end there. High-performing employees lead to tangible benefits for their employers.

In fact, one study created a hypothetical portfolio of publicly-traded companies based on the Fortune “100 Best Companies to Work For” list and found that it substantially outperformed the market overall. And not just marginally. This portfolio of best companies provided nearly 3X the return than their counterparts. So whether you’re the one responsible for cultivating a happy workforce, or the one in charge of strengthening your bottom line — improving employee emotional well-being is an important goal to rally around.

Let’s take a look at how to re-energize your team and boost employee happiness.

Take breaks

Encouraging your employees to take regular breaks is crucial for maximizing productivity. Whether it’s walking to grab coffee from a nearby cafe or playing a round of ping-pong, focusing your energy on a different activity — even just for a few minutes — is a quick and easy way to recharge before diving back in. In fact, research shows the top 10% of productive employees tend to take breaks.

Company culture and perception can also play a large role in taking breaks. For example, it may be difficult for employees to pause and take a breather if their boss relentlessly powers through their work day. It’s for this reason that employees — at all levels — should take a few minutes to mentally detach from their work and restore the energy it takes to work more productively.

Create intentional spaces

Take a moment and picture your office or worksite breakroom. Do you have one? If you do, maybe it doubles as a conference room one day and a training space the next. Regardless of what identity crisis your breakroom is going through, creating a designated place for recharging is important for both encouraging employees to take breaks and boosting morale as well.

Without breaking the bank, employers can take simple steps to improve their breakroom experience. For example, provide an on-site coffee bar, keep a well-stocked pantry with healthy snacks and beverages, arrange comfortable furniture to maximize socializing, or even add a little greenery to your space.

Most importantly, try to keep the breakroom void of work-related technology. Employees might have a hard time relaxing in a space that hosts a large monitor displaying the team’s monthly sales goals. Being reminded of work doesn’t relieve stress and employees won’t fully recharge or maximize the usefulness of a quick break.

Bring wellness to your team

Is stress hurting engagement? Or is complacency damaging your office culture? Developing a worksite wellness program is a step in the right direction when it comes to re-energizing your team. For many companies, employee wellness programs have even become a way to attract top talent.

According to The Mindfulness Center, “worksite wellness programs are a smart investment in the health and productivity of employees. Comprehensive worksite wellness programs have proven to lower health care and insurance costs, improve employee morale, decrease absenteeism, improve productivity and realize a positive return on investment.”

If you’re looking for a more budget-friendly route, there are many mobile apps and digital solutions that can provide frameworks in order to boost employee wellness, mindfulness and overall emotional health. Some of our favorites include FitBit Health Solutions for physical activity challenges, Headspace for meditation, or Bonusly for new ways to launch employee recognition and gratitude programs.

Clean up and get organized

Last but not least, our surroundings can play a major role in our productivity. Set aside a fifteen minute block of time for your team to file away those papers that have been piling up, declutter their desks, throw away garbage, and wipe down their workstations.

And don’t forget virtual cleaning as well. Keeping shared drives organized, implementing tools that can automate repetitive work, and updating software provide the same benefits as physical organization. Dedicating some time to cleaning and organizing can help you work more energetically for the rest of the day.

Employee happiness can drive business outcomes. Giving your team the time and tools necessary to recharge and re-energize is an important factor in overall employee attraction, retention and engagement.

9 Questions to Ask Employees to Gain Actionable Feedback

Annual planning for next year is upon us. As you make decisions for the coming year, you’ll want to have a crystal clear understanding about where your employees stand. What do they think is working? What needs improvement?

In order to understand your employees’ perspective, you have to collect feedback. Whether you solicit feedback in one-on-one conversations or via a company-wide survey, they're several questions that can help you unpack what’s most important to your team.

Today, we’re sharing 9 questions you should be asking your employees as you head into annual planning season. These questions are qualitative and open-ended, as answers are most likely to result in new discoveries.

Let's get started.

Business Questions:

1. What processes can be fixed or improved?

This question gets at what you ultimately want to know: what can you do to make things better for both your business and the employees you serve? When you listen to the feedback, look for common trends and their root challenges.

On top of specific processes themselves that need improvement, there may be a few underlying things – such as chain of communication, clarity around product quality and/or service standards, or alignment of employee expectations – that can provide further insight into what’s working and what’s not.

2. Provide one idea that can improve our product or service?

Sometimes the best ideas come from unlikely sources. If you’re soliciting feedback from your employees, find out what they think the company should be doing to improve its offerings. Encourage employees to separate their ideas from their current role. What could the company do to improve as a whole?

3. If you ran the company, what’s one thing that you would do differently?

This is another way to deliver an open-ended question that encourages employees to share what’s on their mind and how they would go about making changes. Employees’ answers can be telling – you’re likely to find out if they’re satisfied with the company culture thanks to this question. Furthermore, framing a question in this way encourages employees to be more solutions-oriented and can naturally lead to a conversation on ownership for implementing their suggestions.

Leadership & Communication Questions:

4. In what ways can communication between leadership, managers or staff be improved?

Are you transparent with your employees? You may think you are, but many employees may feel as though management is completely opaque. When management makes a decision, even if it’s an unpopular one, employees deserve an explanation.

5. How can we do a better job of delivering constructive feedback?

Are your employees receiving adequate feedback? Afterall, feedback works best when it goes both ways. That’s why you need to understand if your employees are receiving feedback from their managers. This is especially important since many employees do not receive adequate feedback from their managers, and about two-thirds of managers are uncomfortable giving feedback to employees.

6. How safe do you feel bringing up business or employee related issues with your manager?

This question gets at the heart of what it means to have a feedback-driven culture. If employees don’t feel safe and secure sharing their issues, then it’s unlikely they’re feeling good about their work as well. If many of your employees don’t feel comfortable giving feedback to their manager, this is an area that will require further investigation to discover root causes and to remedy the situation.

Introspective, Employee-Focused Questions:

7. What is the business doing, or can be doing to make you more successful?

As a leader, it’s your job to remove roadblocks for employees. But how can you help them if you don’t know what these roadblocks are? Try asking employees what’s holding them back from success so that you can make plans to remove what’s getting in the way.

8. Provide one idea how the company can affirm your contributions and make you feel more valued at work. Are we doing a good job or is this an area that needs improvement?

Many employees don’t feel they are valued by their organization. If this is the case, you’re likely to see low employee engagement and a high turnover rate. it’s essential that you know and understand this so you can ameliorate the situation.

9. What’s one thing we could do to make you enjoy working here more?

If you’re looking for ideas from your employees, this is a good question to ask. After all, they may have ideas on improvements that are easy to implement. But you’ll never know what you can do to make things better unless you ask.

This post is part of a special blog series on ‘Building a Healthy Feedback Culture' in support of ProService’s Growth Series event taking place on September 19, 2018 . Offered exclusively to ProService clients and special guests, the Growth Series are interactive learning experiences that feature industry-leading speakers and networking opportunities that will inspire and provide tools for business leaders to take their organizations to the next level. To register, please visit our event page and register with code GS2018.