the
Leading
Advice and information to help
PublishEd bY Postlethwaite & netterville you manage your business
Stay for the
CLimb
Enable star
performers to
reach for success
and longevity
voLUme 9 n iSSUe 2
Winter 2009
PLUS:
2009 trends
Winning proposals
Winter
voLUme 9
iSSUe 2
The Leading Edge
2009
Advice and
information
to help
you manage
your business
2 VOluME 9 n issuE 2 n wintEr 2009
the
Leading
VOLUME 9 n ISSUE 2 n WInTER 2 0 09 contents
The Leading Edge
www.LeadingEdgealliance.com
The Leading Edge alliance is an international
professional association of independently
features
owned accounting and consulting firms. The
Leading Edge alliance enables member firms
to access the resources of a multibillion-dollar
4 Stay for the climb
global professional services organization, Enable star performers to reach for
providing business development, professional
training and education, and peer-to-peer success and longevity
networking opportunities nationally and
globally, around the corner and around the
world. 13 new business often hinges
Members are top quality firms who are very on an exceptional proposal
successful, have deep client relationships, and
strong ties to the community. The alliance Experts offer insight and tips to
provides members with an unbeatable combi-
nation: the comprehensive size and scope of winning that next project
a large multinational company while offering
their clients the continuity, consistency and
quality service of a local firm. 14 2009: What’s ahead and
Member firms have access to the best and what’s behind for businesses,
brightest teams of business advisors – a peer-
to-peer connection that provides the right consumers and more
business solutions for clients.
To find out more about the alliance contact
Karen Kehl-Rose, president, at (630) 513-9814
or kkr@The-LEa.com.
Leading Edge advisory Committee
departments
Linda Watson
Brady Ware 9 news and information
Marshall Lehman from our firm
Lurie Besikof Lapidus & Co., LLP
Jen Lemanski
Pannell Kerr forster of Texas, P.C. 16 top 10 misconceptions of
gary Voth
Pannell Kerr forster of Texas, P.C.
doing business in Canada
Karen Kehl-Rose
The Leading Edge alliance
18 in a nutshell: Q&a
in affiliation with Wise group
Chris DeSantis responds to your
ann M. gynn
Editor workplace dilemmas
natasha fletcher, amanda horvath,
Crystal Madrilejos, Stacy Vickroy
art directors 19 the Leading edge alliance
andrea Jager
graphic designer
The Leading Edge is published four times per year by
Wise group, 812 huron Road, Suite 201, Cleveland, Ohio,
44115, (216) 523-1212, faX (216) 241-5458. Periodicals
postage paid at Cleveland, Ohio.
IRS Treasury Regulations require us to inform you that
any tax advice contained in the body of this com-
munication was not intended or written to be used,
and cannot be used, by the recipient for the purpose
of avoiding penalties that may be imposed under the Winner 2006 AGD award for publication design
Internal Revenue Code or applicable state or local tax
law provisions.
ThE LEadIng EdgE 3
CLIMB
Stay for the
cover
I
Enable star f the Pareto Theory applies to the
workplace, then 80 percent of the
office but was the top producer. Management
wanted help because it was concerned he was
performers organization’s results come from 20
percent of the employees.
always in the office.
Yet, Stevens says, if management had
to reach for
Since many experts note that star focused on the best practice approach, it would
contributors are more likely to depart than not have been concerned, especially given
average or poor-performing employees, that other sales representatives were out of the
success the impact on companies can be big.
“High-impact workers are often
office 88 percent of the time but only achieved
60 percent of their quota.
and longevity more susceptible to being poached by
a competitor in a downturn,” warns Ed
Boswell, CEO of The Forum Corp., whose
give reaSonS
clients include Fortune 1000 businesses. Price offers three reasons why top performers
By ann M. gynn Ron Price, an expert in workplace stay with a company:
behavior, says most top performers leave • Competitive, performance-based compensa-
because they see their company as being an tion (and that’s not just money)
obstacle to their continued growth instead of a • Meaningful work that stretches them profes-
catalyst. sionally (they love to achieve)
Just given the bottom line impact of • Supportive relationships (they need to feel
departing employees—$3,500 for a minimum valued as human beings in addition to
wage hourly worker to 400 percent of a top being recognized for performance)
executive’s salary—having a star-performer- “There’s no reason why everyone in a
retention strategy makes sense all around. company can’t be rewarded this way in
“Companies that want to hold on to their top proportion to their roles, responsibilities and
performers should start asking questions 12 to results,” Price says. “When this is systemized
18 months ahead of job tenure thresholds— in a company, the underperformers decide to
two, five, 10 and 15 years—to make sure leave on their own and the average performers
they understand why a top performer would find a level of contribution that, while not
consider making a change,” says Price, founder making them a superstar, provides good
and CEO of Price Associates. employment and stability for the company. And
Drew Stevens, an organizational the top performers see the sky as the limit.”
development specialist, says organizations need Price explains that keeping the stars without
to make sure they focus on the best practices alienating the rest of the employees is doable.
of top performers. In his doctoral research, When alienation does happen, it’s because a
92 percent of firms seeking assistance for company emphasizes one area over another,
employee performance issues failed to do that. such as excessive compensation, or follows
He tells of one organization that sought narrow definitions of what a top performer is
assistance for an employee performance so all contribution areas and corporate values
issue—a sales representative who never left the are not recognized.
ThE LEadIng EdgE 5
cover
ThEy don’T juST
identify the right CULtUre month that he would receive a nickel-an-hour
wanT To Enjoy ThEir
raise (he was earning about $1.25 an hour). work, ThEy wanT
To bE paSSionaTE
Terri Herren of The Herren Dimension says “Immediately, I was hooked,” he says today,
if companies want to embrace the idea of 30-plus years later and having spent most of
cultivating top performers, they first must
decide if a performance-based culture is in
his career at McDonald’s, rising to the level of
regional vice president. Most recently, Facella
abouT iT.
their best interest strategically. authored Everything I Know About Business I
“While knowledge-based industries tend Learned at McDonald’s.
to place more emphasis on performance and He points to a Gallup study that showed 65 Osborne explains that in the accounting
continuous improvement, it can be achieved percent of American workers reported that they industry, one of the biggest HR challenges is
in any industry and in all sizes of companies,” did not receive recognition within the previous finding the person with two to five years of
says Herren, who has worked more than 25 year—and other reports show that frequently experience. Thus, keeping staff with similar
years in organizational and human resource the No. 1 reason employees cite for departure experience is a must.
development. “It starts with company leaders is that they don’t feel appreciated. Ryan D. Istre, audit senior manager at PKF
committing to a performance-based culture as McDonald’s understands that data—and of Texas, a Leading Edge Alliance firm, says
a strategic business objective.” right from the start, Facella saw the company everyone always considers other opportunities.
With such a commitment, companies also encourage employees early and often after But doing so just made him realize how lucky
must devote their resources to developing iterating what was expected of the individual, he was. “They never gave me reason to look
processes and education, she says. “Retaining what goals were set for the store, etc. elsewhere,” he says.
top performers is a critical competitive When employees set a record for an Upon college graduation in 2000, Istre
advantage.” hour or a day at a store, the manager might began as an associate. Within two years he was
Sure, she says, a company can treat all compensate the crew with time-and-a-half for promoted to senior associate, then manager,
employees the same, but that’s like a teacher that hour or day. McDonald’s corporate office and last year became a senior manager.
giving all students the same grade because also recognizes staff, licensees and vendors— Opportunities for advancement and a pleasant
they show up for class. Performance is not presenting almost two dozen distinct awards atmosphere that feels like a family—where
rewarded. annually. All employee ranks are eligible for the everyone knows everyone’s name and
“Top performers want to work for companies President’s Award, which is given to the top executives have open-door policies—are
that provide greater recognition and rewards 1 percent in the company. The winners are attributes that have helped him decide on his
to them versus other employees who just show given stock options and flown to Chicago future. “I don’t plan on going anywhere else,”
up for work,” Herren says. along with their significant others for a Istre says.
special dinner. Facella says it’s important to SS&G has next generation leadership
aPPreCiate recognize and include the person behind the classes, which brings together both senior and
and reCognize winner too for his or her support. relatively new directors as well as some of the
“We do it with fanfare,” Facella notes. up-and-coming managers and senior associates.
Shortly after he started working at a
But fanfare doesn’t have to mean big, expen- SS&G encourages its experienced directors
McDonald’s front counter, Paul Facella was
sive gestures. “It can be as simple as shaking to take less-experienced staff when visiting
asked by the general manager to come to a
hands and saying congratulations,” he says. clients and prospects, so they, too, have the
corner of the store. There, all his co-workers
opportunity to get exposure and see how
had gathered and the manager announced
Facella had done such a good job in his first offer earLy exeCUtive things operate in the field.
oPPortUnitieS Osborne says it’s important to realize that
the same plan won’t work for everyone—some
Involve younger staff members in leadership might want more opportunities to work
and development activities, says Rebecca directly with clients, others might prefer to
Osborne, director of human resources at focus on business operations or training fellow
SS&G Financial Services, a Leading Edge employees. “Help get them involved in those
Alliance firm. things that they like doing,” she says.
By leading and helping the firm develop, the
employees know their voices are valued and
they can learn more about all the opportunities fULfiLL a PaSSion
and potential within the organization at an “Great employees are not mercenaries,”
early stage in their careers. says Richard Chang, who operates his own
6 VOLUME 9 n ISSUE 2 n WInTER 2009
performance-improvement consulting, training
and publishing firm. His clients include
It’s about the money AND…
Fidelity Investment, Universal Studios and Sure, money matters. Every employee wants a paycheck. Top performers, however, want
Black & Decker. more than financial compensation—they want their work to connect to something more
“What great employees crave most is to meaningful and bigger than themselves.
be part of something exciting, something “They need to see that their performance isn’t just recognized by a series of weekly
that moves them,” he says. “They want to be checks, which could be replaced by a competitor,” says john baker, speaker and founder
involved in work that challenges their abilities of rEady Thinking, a leadership and development firm.
and pushes them to reach their potential.”
Great employees are passionate about their he offers these two examples as case studies:
work—they perform at a higher level because
they are committed to their organizations
and derive greater satisfaction from their job,
Scenario 1
Chang says. ProbLem: a top underwriter, jenny was one of her firm’s most trusted
“They don’t just want to enjoy their work, performers. her loyalty to her job, though, was suspect. whispers of her
they want to be passionate about it,” he says. interviewing with rival firms echoed in the halls. Comments she made in passing
Chang says passion-driven organizations win led others to suspect her tenure was tenuous.
the loyalty of their top employees by giving SoLUtion: jenny’s boss sat down with her to put forth a new vision of what
them freedom. “You can have systems in place jenny was to accomplish at work. instead of just recommending a certain piece
to control the implementation of ideas, but of business be accepted or denied, she was given final decision authority over
you must be certain not to compromise the new business acceptance.
enthusiasm, creativity and hard work that
make them possible in the first place.” in studying the situation, the manager learned that the management committee
He explains that this perspective provides already accepted jenny’s recommendations 99 percent of the time. So he
an edge over the competition. “Encourage thought why not make her a business owner, not just an underwriter.
employees to explore their passions and build reSULt: jenny saw herself not as a cog in the machine and someone with
upon them both inside and outside of work,” transferrable skills, but rather an instrumental part of an executive team trying
Chang says. to grow business. jenny’s attitude turned around. her asides became less
In his own company, he found individual caustic and more positive. recruiters would call, only to be disregarded.
passions suffering—and it led Chang to move
Scenario 2
employees to better align their positions with
their passions. A desktop publisher with a
passion for competition was happier and more
ProbLem: pete was the no. 1 sales producer in his region, but his effort was
productive in a sales position that allowed him
pretty much mailed in. he would come into the office at 10 a.m., arrive late to
to exercise that aspect of his nature.
meetings, cut out early for 18 holes of golf. Still, his territory was almost always
“Such changes are invaluable in ensuring
the top of the chart in terms of meeting and exceeding quarterly targets. other
that talented employees remain enthusiastic
sales people thought he was toxic to the team, and his remarks about easily
and productive—even if this means you have
finding a job across the street got on everyone’s nerves.
another job to fill,” Chang says.
SoLUtion: pete’s boss put him on a 90-day performance plan. at the end of that
time, pete would either turn around his work habits and attitude or be fired. The
embraCe mULti-faCetS conversation hit pete like a thunderbolt and he stormed out of the office. pete’s
Employees are not one-dimensional, says Susan boss explained that his job was to make his sales staff better and that he owed
Wilson Solovic, CEO and co-founder of SBTV. pete direct feedback that pete could do more in sales and as a leader.
com, a video news information destination for
small businesses. reSULt: pete stewed. but after awhile, he stayed with the firm and acted
“We hire people to do a ‘job’ and that job differently. he surpassed his old sales records and began teaching others his
requires certain skills and abilities. It’s easy methods. pete moved from the person to be avoided to something of a mentor.
to forget that often employees have multiple Looking back, pete said that leaders committed to making him better, not just
talents,” she says. “When you can tap into accommodating his laziness, were the type of leaders who deserved loyalty.
continued on page 8
ThE LEadIng EdgE 7
cover
Derailed? Get BACk oN trACk
continued from page 7
those talents, not only do you create a more
engaged and energized employee, but you also
bonnie hagemann, CEo of Executive development associates, has researched the enhance opportunities for your business.”
issues involved with top performers. She offers the top five areas of concern. At SBTV.com, Solovic hired a production
manager for the technical side of the business.
Later, she learned the new manager had started
his career on-air and soon he was contributing
derailment back-on-track as an anchor/reporter in addition to his
issues solutions primary responsibilities.
“Identifying employees’ hidden talents
Lack of communication. when increase feedback and communication requires creating an environment where
responses to requests aren’t given, to surface the problem and take employees feel comfortable allowing them to
engagement decreases. Employees no action. you don’t want to learn about be discovered,” Solovic says. She offers these
longer go above and beyond. the employee’s problem the day she suggestions:
or he resigns. Get close to them early • Host a company social outing that offers
on. if you are proactive in employees’ employees the opportunity to demonstrate
development, you won’t be surprised. or share more about their interests, back-
ground and experience.
personal issues and outside stressors. put together a plan of action and • Bring in creativity consultants who use exer-
nine out of 10 times, derailment is management controls. cises and conversations that unveil employ-
related to personal issues. ees’ hidden abilities.
no follow-through on provide coaching. rotate aSSignmentS
responsibilities/assignments.
Boswell says providing development
experiences and encouraging rotational
Maturity issues, including poor Find a suitable spot for individual if
assignments have been shown to increase
self-control, lack of self-awareness, she or he has a strong history or track
retention of key players by 15 percent.
low or under-developed emotional record. Cut losses for individuals new
“Rotational assignments move leaders from
intelligence. to the organization.
one area of the company to another to stretch
themselves, develop new talents, develop
Character issues such as ego, Cut losses and move on.
cross-functional skills, groom them for higher
self-serving attitude and lack of
positions, expose them to other functional
integrity.
areas and help them acquire a holistic sense of
the company,” Boswell explains.
The Forum worked with a global consumer
products company that sought to develop its
leaders, including implementing rotational
assignments. So, Boswell says, a marketing
executive might have worked in finance,
learning about the budgeting process. As a
result the marketing executive developed
cross-functional skills and applied them,
such as building better customer awareness
(marketing) into the budget planning process
(finance).
“When designed well, these experiences
can also develop awareness of innovation,
storytelling, communicating, scenario planning
and networking. All of those skills benefit
both the company and the individual,”
Boswell says. e
8 VOLUME 9 n ISSUE 2 n WInTER 2009
PoStLethWaite & netterviLLe
VOluME 9 n issuE 2
A Professional Accounting Corporation
wintEr 2009
$700 billion bailout: What does it do for you?
t he Emergency Economic
Stabilization Act of 2008
(EESA), designed to address the
the patch—$45,000, $33,750 and
$22,500, respectively.
The patch also expands the
extensions benefiting
individuals
current U.S. credit crisis, has been AMT income ranges over which
Some other important tax breaks
for individuals that expired in thE “rEscuE”
act alsO
the subject of much debate and the exemptions phase out and
2007 have now been extended
criticism. At the time this article only partial exemptions are avail-
through 2009:
was written, the effects of the bill
on the economy were not yet clear.
able. The 2008 phase-out ranges
are now $150,000 to $429,800
The state and local sales ExtEnds and
ExPands a
tax deduction. It allows you to
Regardless of whether the bill con- for married filing jointly, $112,500
deduct state and local sales taxes
tributes to solving the economic to $297,300 for singles and heads
crisis, the “rescue” act also extends of households, and $75,000
rather than state and local income
taxes. It primarily benefits those MultitudE Of
tax brEaks
and expands a multitude of tax to $214,900 for married fil-
living in states with no income
breaks for individuals and busi- ing separately. The exemption is
tax but may also benefit taxpayers
nesses that had already expired or completely phased out if AMT
who live in low-income-tax states
were set to expire after this year, income exceeds the top of the
or who purchase major items dur-
including many energy-related applicable range.
ing the year, such as cars or boats.
incentives. In addition, it provides Additionally, the act extends
The qualified tuition deduc-
relief for natural disaster victims in a provision through 2008 that • The additional standard deduc-
tion. It allows eligible taxpayers to
the Midwest, Louisiana and Texas. allows certain nonrefundable per- tion for real property taxes for
deduct up to $4,000 of qualified
sonal tax credits to provide a ben- nonitemizers (up to $1,000 for
higher education tuition and fees
amt relief for individuals efit against the AMT, such as the joint filers, $500 for single fil-
“above the line,” which means,
dependent care credit, the Hope ers) that was provided earlier
Perhaps the most significant tax unlike an itemized deduction,
credit and the Lifetime Learning this year under the Housing
provision affecting individuals is it reduces your adjusted gross
credit. (The child credit and and Economic Recovery Act.
the extension of alternative mini- income (AGI). But this deduc-
the adoption credit are already Plus, EESA extends through
mum tax (AMT) relief. The AMT tion is limited to $2,000 for joint
allowed for AMT purposes under 2012 a provision that generally
is a separate tax system that lim- filers with AGIs of $130,000 to
previous law.) allows homeowners to avoid pay-
its some deductions and doesn’t $160,000 ($65,000 to $80,000
EESA also provides more relief ing federal income taxes on debt
permit others—you must pay the for single filers) and is unavailable
to many taxpayers whose incentive forgiveness received in connection
AMT if your AMT liability exceeds to taxpayers with higher AGIs.
stock option (ISO) exercises have with a foreclosure or a mortgage
your regular tax liability. Unlike the Taxpayers ineligible for educa-
made them subject to the AMT. workout on a principal residence.
regular tax system, the AMT system tion credits may be eligible for
It abates unpaid AMT liability,
isn’t regularly adjusted for inflation. this deduction.
as well as interest and penalties,
Additional breaks that have extensions benefiting
So if Congress hadn’t acted, many
middle class taxpayers would have
generated by ISO exercises before
been extended through 2009 businesses
2008. It also increases the amount
had to pay AMT for 2008. include: Here are some of the more sig-
of refundable long-term AMT
EESA provides a one-year • The provision allowing taxpay- nificant breaks for businesses that
credit for AMT paid in past years.
“patch” that increases the AMT ers age 70½ or older to make EESA has extended through 2009
For calendar years 2008 through
exemption. For married couples tax-free distributions from their and, in some cases, expanded:
2012, eligible taxpayers can now
filing jointly, the 2008 exemp- IRAs (up to $100,000 annually) Research and development
claim 50 percent—up from 20
tion is $69,950. For singles and to tax-exempt charities, (R&D) credit. Generally, it’s equal
percent—of their unused credit.
heads of households, it’s $46,200, • The above-the-line deduc- to 20 percent of qualified research
Despite these AMT-related pro-
and for married filing separately, tion for certain out-of-pocket expenses in excess of a certain
visions, many taxpayers will con-
it’s $34,975. These amounts are expenses (up to $250) of ele- amount based on the company’s
tinue to be subject to this addi-
up slightly from 2007, but sig- mentary and secondary school historical activity. But businesses
tional tax until more substantial
nificantly higher than what they teachers, and
changes are made. continued on page 10
would have been for 2008 without
thE lEading EdgE 9
PoStLethWaite & netterviLLe
A Professional Accounting Corporation
$700 billion bailout:
What does it do for you?
What happens to
continued from page 9
unused gift cards?
can instead take the alternative
simplified credit (ASC), equal to
• a modified energy-efficient
appliance credit,
d uring a survey regarding the 2008 holiday season, 55 percent of
responding consumers told the National Retail Federation that
they wanted a gift card as a gift. However, it is likely that a large por-
12 percent (14 percent for 2009) • a new credit for qualified plug-
tion of consumers who actually receive gifts cards will not use them.
of qualified research expenses in electric drive motor vehicles,
In fact, according to a 2007 Consumer Reports survey, 27 percent of
exceeding 50 percent of the pre- • a new transportation fringe
gift-card recipients hadn’t used all their cards.
vious three tax years’ average benefit for bicycle commuters,
What happens to unused gift cards? Consumers tend to assume that
expenses. • an extended energy-efficient
the company profits from unused gift cards, but this is not always the
Accelerated depreciation commercial buildings deduc-
case. Laws vary from state to state, but in some states, gift cards are
for leasehold and restaurant tion,
subject to escheat laws. Escheat laws serve the purpose of providing
improvements. This provision • an accelerated recovery period
a process to unite lost or abandoned property with its rightful owner.
allows a shortened recovery for depreciation of smart meters
According to a 2006 survey conducted by the National Association of
period of 15 years—rather than 39 and smart grid systems, and
Unclaimed Property Administrators, states controlled roughly $33 bil-
years—for qualified leasehold and • a special depreciation allowance
lion of various unclaimed property, managed more than 117 million
restaurant improvements (gener- for certain reuse and recycling
accounts, and returned more than $1.7 billion in property.1
ally those made by the lessor property.
Louisiana’s Department of Treasury is responsible for collecting
or the lessee to the interior of a Contractors may benefit from
and distributing unclaimed personal property to its rightful claimer.
nonresidential building more than breaks for qualified green building
According to its Web site, “unclaimed property is any intangible per-
three years after the building was and sustainable design projects.
sonal property, held or owing in the ordinary course of a holder’s busi-
placed in service).
ness, that has remained unclaimed by the owner for a certain number
EESA also expands the provi- natural disaster relief of years.”
sion to cover certain:
For certain areas in the Midwest Since its inception in 1972, Louisiana has collected more than $250
• new construction for qualified
damaged by floods, tornadoes million in unclaimed property, and has refunded $65 million to its
restaurant property, and
and severe storms earlier this year, rightful owner. Sources of unclaimed property include:
• improvements to retail space.
EESA provides many tax incen- • savings and checking accounts
These expansions apply only
tives that are similar to the relief • uncashed payroll or cashiers checks
to property placed in service after
provided in the Gulf Opportunity • money orders and travelers checks
Dec. 31, 2008, and before Jan. 1,
(GO) Zone after Hurricanes • certificates of deposit
2010.
Katrina, Rita and Wilma. It also • customer deposits or overpayments
Enhanced deduction for food,
extends certain GO Zone relief • paid-up life insurance policies
book and computer donations.
provisions. • health and accident insurance payments
Businesses can take a deduction
EESA provides more limited • uncashed death benefit checks
for more than their cost of certain
relief for the Hurricane Ike disas- • gift certificates and Christmas club accounts
contributions of food to charity
ter area, but it expands national • stocks and dividends
and of books and computer equip-
disaster relief overall, generally for • utility deposits
ment to qualifying schools. The
natural disasters occurring after • oil and gas royalty payments
deduction is equal to cost plus
Dec. 31, 2007, and before Jan. 1, In Louisiana, owners have three years to use a gift card until the
one-half of any increase in value,
2010. law requires that be turned over to the state as unclaimed property.
not to exceed double the cost. The
Some states reduce the value of the card to 60 percent, but Louisiana
items contributed must be used by
how will eeSa affect you? requires 100 percent of the card value be returned to its rightful
the charity for its exempt purpose.
owner. However, when it comes to unused gift cards, the money paid
EESA is one of the largest tax
for the card is seldom united with the gift card owner. This is because
energy incentives acts in recent years and may
gift cards are easily transferable and difficult to track. Therefore,
significantly affect your tax liabil-
EESA extends many energy-related unclaimed gift card money often goes into the state’s general fund.
ity in a variety of ways. If you
tax provisions and adds some new To find out if you have any unclaimed property, including gift cards
have any questions about this or
tax incentives. There are breaks for that have been properly recorded and reported, visit the Louisiana
other tax laws, as well as strate-
both individuals and businesses, Department of Treasury at www.treasury.state.la.us. e
gies you might implement to
including:
minimize your taxes for 2008 and
• an extended credit for nonbusi-
beyond, contact a Postlethwaite &
ness energy property, 1
“Understanding the Impact of State Escheat Laws,” Charles Owen
Netterville tax professional. e
Kile Jr. and Tricia S. Wall, December 2008.
10 VOluME 9 n issuE 2 n wintEr 2009
PoStLethWaite & netterviLLe
A Professional Accounting Corporation
What will President obama mean for your taxes?
by william c. Potter, cPa, Jd
W hile it is unclear exactly what
will happen under a new pres-
idential administration, one thing
impact to individuals
President-elect Obama cam-
will renew the 10, 15, 25, and 28
percent individual tax rates cre-
ated by EGTRRA but set to expire
social security tax may increase, par-
ticularly for individuals making over
$250,000. Since the tax is capped at
paigned on a middle class tax cut.
is certain: President-elect Barack after 2010. Additionally, Obama $106,800 for 2009, this could mean
While campaigning, he frequently
Obama’s tax policies are entirely is in favor of a new refundable tax an additional 12.4 percent tax on
communicated to voters that no
different than the tax policies of the credit designed to offset the first amounts above $250,000.
family earning less than $250,000
Bush administration. And while the $8,100 in payroll taxes for lower Capital gains and dividend taxes
($200,000 for individuals) would
current economic crisis could affect and middle-income taxpayers. will also likely increase for higher-
see an increase in their tax obliga-
Obama’s tax agenda, at least in the The “Making Work Pay” tax credit income taxpayers. A 20 percent
tion. Taxpayers earning more than
short term, taxpayers should be would likely be capped at $500 capital gains and dividend tax for
these amounts would pay more
prepared for changes at some point per wage earner. taxpayers in the top two income
in taxes.
during the next four years. Because the federal government brackets has been proposed.
How does the middle class tax
has a budget deficit of $454 bil-
cut work? It is likely that Obama
lion, Obama’s middle class tax cuts impact to businesses
have to be offset by an increase
According to the Tax Policy
in revenues. One likely scenario
Center, Obama’s proposals would
is that the 33 and 35 percent tax
raise business-related taxes by a
rates would revert to the Clinton-
net $770 billion over 10 years.
era rates of 36 and 39.6 percent,
However, the president-elect has
respectively. In addition, Obama
also appeared to endorse lowering
has proposed restoring the person-
the U.S. corporate tax rate, which
al exemption phase-out and item-
is currently the second highest in
ized deduction limitation for fami-
the industrialized world. It is also
lies earning more than $250,000
likely that an Obama administra-
($200,000 for individuals).
tion will push tax incentives that
Another scenario is that the
encourage the development of
amount of earned income subject to
alternative energy sources. e
First-time home buyer tax credit
by william c. Potter, cPa, Jd
t he First-Time Home Buyer Tax Credit is only one of the many
incentives in the Housing and Economic Recovery Act of 2008 (H.R.
3221). This incentive does not affect many of our individual tax clients;
Filing Status maximum
amount of Credit
however, it does have a strong impact on our client’s older children
wanting to buy their first home from April 9, 2008 through July 1, 2009. single $7,500
The first-time home buyer tax credit allows a first-time home buyer to
a repayable tax credit equal to 10 percent of the value of the newly pur- Married filing jointly $7,500
chased home; however, the credit is not to exceed $7,500. Gross income
should not exceed $75,000 for a single homeowner or $150,000 for a
married couple. A first-time homeowner is considered to be anyone who
Married filing separately $3,750
has not had an ownership interest in a principal residence in the three
years prior to making a new home purchase.
Repayment for this “non-interest bearing governmental loan” is 15 does not use the residence as his/her primary residence during the loan
years beginning two years after the year in which the home is purchased. repayment period. There are very few conditions in which repayment is
Other stipulations for repayment include an immediate repayment waived; however, extenuating circumstances such as the homeowner’s
should the home be sold before the “loan” is repaid or if the homeowner death, divorce or involuntary conversion can terminate repayment. e
thE lEading EdgE 11
PoStLethWaite & netterviLLe
A Professional Accounting Corporation
irS decreases P&n acquires audit
optional standard and tax divisions of a
mileage rates new orleans-area firm
for 2009
P &N is pleased to announce that the Audit and Tax Divisions of Legier &
Materne, APAC, Consultants and CPAs, will join P&N’s New Orleans-area
i n response to lower gasoline prices, the IRS has
announced a decrease in the optional standard
mileage rates for 2009. The standard mileage
office. “We are very excited to welcome the clients and employees of Legier &
Materne to P&N. Serving all of Greater New Orleans, our new team members
complement our Firm’s commitment to providing exceptional service to our
rate for business miles driven from Jan. 1, 2009, clients. We are proud to add the L&M professionals and clients to our team, as
through Dec. 31, 2009, is 55 cents per mile, a our office tops 80 employees and our firm exceeds 300 employees. We believe
decrease of 3.5 cents over the rate for the second this is a great fit for both firms,” stated Joey Richard, Managing Director of the
half of 2008. The standard mileage rate for medical New Orleans-area locations.
and moving expenses has decreased to 24 cents per The acquisition did not include Legier & Materne’s Forensic Accounting and
mile from 27 cents per mile. The standard mileage Expert Witness Division, which will continue operations as Legier & Company,
rate for charitable purposes, however, remains APAC, in its offices on the 34th Floor of the Energy Centre. e
unchanged at 14 cents per mile. e
P&n welcomes
new director and Coo
P &N is pleased to welcome a new
director to the firm. Randall Plaisance,
CPA, joined P&N as a tax director, while
operations, and individuals in tax planning
and compliance. In total, Plaisance has
more than 30 years of public accounting
Left to right:
randy Plaisance, tax director;
amy mcgimsey, Coo
Eustis Corrigan, CPA is joining the Firm as experience.
an Audit Director and the managing partner Amy Mandart McGimsey has joined the
for the Lafayette market. firm as Chief Operating Officer. Amy has extensive operational and administrative
Randy Plaisance rejoined the firm after more than 20 years of experience. She joins management experience in the financial
a 20-year absence. He brings a wealth of P&N most recently from ICF International, services industry. McGimsey will be
public accounting experience to P&N. where she had responsibilities relating to responsible for the implementation of
He has extensive consulting experience as the implementation of the Road Home strategic goals for the firm, as well as for
well as strong technical abilities serving ,
Program. Prior to ICF McGimsey held the the operational responsibilities of the firm,
a variety of clients including professional position of Vice President of Operations including Marketing, Human Resources,
service firms, construction companies, retail for Aegis Lending Corporation. She has and Administration. e
12 VOluME 9 n issuE 2 n wintEr 2009
operational
new business often hinges on
an exceptional proposal
Experts offer insight and tips to winning that next project
By ann M. gynn
W hether responding to a request for
proposal or submitting a pitch for new
business, the challenges are many but they all
is profit justification, says Frank Rumbauskas,
author of The New York Times bestseller, Never
Cold Call Again, and the follow-up Selling Sucks:
relate to the ultimate question: How do we win How to Stop Selling and Start Getting Prospects to
this new project? Buy. don’t forget
“New business is the lifeblood of any
company. Companies just need to be smart
“You MUST show the prospect how your
solution will put money into his or her pocket. the writing
about business development and submitting It is not enough to sell on features, benefits or “proofread. proofread. proofread,”
proposals,” says Michele Harris, founder and price,” he says. advises author and speaker Sue
CEO of SmartiSolutions, a marketing agency Winning proposals and clients is all about Thompson. “use spell check.
search firm. telling, says Nancy Trent, founder and CEO
She advises that an initial meeting with the of Trent & Company. “Tell them what you’re “There is hardly anything that turns a
prospect, even a conference call, is a must going to tell them, tell them, and tell them client off more than an incorrect street
before a proposal is submitted. “Clients want what you told them,” she says. address, poor syntax, or atrocious
thoughtful ideas about where and how you Many salespeople fail to tell prospects what spelling,” she says.
would take their business,” Harris says. “In they are going to tell them. “The way you
“poor writing and spelling can lead the
submitting a proposal, impress with strategy present your proposal will test the waters
reader to assess you as uneducated,
and ideas over information overload. You don’t for success. It’s all about first impressions,”
unprofessional, or just plain stupid,
need a ton of detail but you do need to dazzle.” Trent says.
especially if your proposal is being
Rose Fass of Fass Forward says showing how She says being prepared for changes with
compared with others,” she says.
you can add value quickly and succinctly is the prospect is a must. Perhaps a new business
critical. “This is more important than price—if pressure has caused the prospect to change al borowski of proposal writing
your potential client can’t see the bottom line course, a new requirement has arisen or Services says knowing the rules of
benefit, they won’t use you no matter how budgets are lower than expected. Or nothing writing and knowing how long it takes
cheap you are,” she says. really has changed but as the decision draws to write a truly effective proposal
Distinguish yourself from your competition. near, cold feet cause the prospect to rethink a are critical to success. among his
Identify what the prospect could get from you position on the campaign. advice, which is found in detail at
that others can’t give—what separates you from Trent says be ready for these challenges www.proposalwritingservices.com:
the pack of other contenders, Fass notes. by delivering a compelling story to get your • Avoid “boilerplate” usage.
Demonstrate knowledge of the prospect’s message across by: • Demonstrate understanding of clients’
industry and the company in particular— • understanding the prospect’s needs better wants, needs and expectations.
mention big accomplishments and big than anyone else. • Be conversational. Don’t write a
challenges that they face, she says. • having products and services that fit like a college term paper.
Raj Khera, CEO of MailerMailer, offers glove for those needs.
proposal writing advice through his blog, • exceeding the prospect’s expectations in “Make it easy for your buyers to skim and
http://blog.mailermailer.com. One recent tip he your specialty field by showing results, still understand your story through your
shared is to make sure the bottom line bid is credibility and reputation with past projects. use of design elements such as graphics,
less than what it would be if you totaled each Lisa Nirell of EnergizeGrowth LLC advises slogans and informative headings,”
line item. “Include a line item called ‘discount,’ that you ensure you are working directly with says dianna booher, author of Rules of
which is the difference between your bottom the economic buyer. “This is the person who Business Grammar: 101 Fast and Easy Ways
line bid price and each line item price total,” can authorize payment or lead the project,” to Correct the Most Common Errors.
he says. “This way, if the customer tries to says the author of EnergizeGrowth NOW: The “a cut-and-paste job won’t do in today’s
reduce price by picking a particular line item, Marketing Guide to a Wealthy Company. “Do environment—particularly when cutting
you can accommodate them but then reduce not waste time writing a proposal for someone and pasting from poor models that have
your discount.” who can say ‘no,’ but can never say ‘yes.’ Your been ‘in the files’ for a decade or so.”
The most important value to demonstrate proposal will gather dust.” e
ThE LEadIng EdgE 13
forecast
2009 What’s ahead and what’s behind
for businesses, consumers and more
a
s 2009 begins, forecasters and trend experts share their insight and predictions about what lies ahead. And this time, unlike in many recent
years, their comments all reflect the impact of the economic troubles.
new behaviors adopted time for turnaround government promotes green
“Change is good—even when it means tem- Turnaround consultants and financial advisors E. Bruce Harrison, author of Corporate Greening
porary losses—and ups and downs happen,” will continue to face an abundance of work 2.0, says despite congressional preoccupa-
says Judith Lederman, president of a strategic but a paucity of options to save businesses tion with economic recovery, Congress will
marketing firm and former market analyst with stifled by a credit crunch, according to the enable legislation that mandates stronger green/
a leading consumer publication. Turnaround Management Association. energy initiatives for business. The cooperation
“A plummeting stock market does not mean The organization’s annual Trend Watch poll between Capitol Hill and the White House will
that consumers need less; it just means that released last fall shows about three-quarters of energize the initiatives.
the buying patterns are likely to change and respondents report engagements and revenue Public companies in the United States must
spending will decrease,” she says. “Businesses up at least 10 percent in 2008 over the previ- prepare for election-year political pledges to
that are going to succeed are going to have to ous year. The same number anticipates further convert to a long life. Standards, rules, inspec-
target strategically, lower prices, appeal to bar- revenue growth this year, with most expecting tions, compliance deadlines and lawsuits will
gain-hunting attitudes and stay aware of what increases of up to 25 percent. follow the corporate-greening pattern set in
people are most likely to buy.” Manufacturing (62 percent), construction 1970 when the Environmental Protection
Lederman offers her consumer behavior pre- (46 percent) and distribution (45 percent) Agency opened its doors, Harrison notes.
dictions: were the top industries in which turnaround
• Clothing—Consumers are holding off on professionals were working. More than one in Social media expands business role
making expensive fashion purchases and four respondents said their work also includes
Being relevant in the social media world will
that trend is likely to continue. Consumers retail, real estate, automotive, service busi-
get to the top of more companies’ to-do lists,
will look for durable and classic clothing. nesses and health care.
according to Romji Mahajan, chief marketing
Dry-clean-only tags won’t be as popular, “Not only are more companies in need of
officer of Ascentium Corp.
which may pinch dry cleaners too. turnaround professionals, the new Bankruptcy
Ascentium is finding more of its customers
• Food—Restaurants will suffer in the long Code and the current credit market have
want or need to tie into various social plat-
term as more people analyze their credit card combined such that a significantly higher
forms to give their customers better insight into
bills and come face to face with their restau- percentage of these troubled companies will
consumer demographics and trends. “These
rant expenditures. In grocery stores, cou- have no option other than liquidation,” says
types of platforms enable companies to be
pons will see a resurgence not only among James B. Shein, chair of the TMA Trend Watch
more relevant to younger and more technically
the boomer and older generations who Committee and professor of strategy and man-
savvy consumers who have flocked to sites like
have used them previously, but among the agement at the Kellogg School of Management
MySpace, Facebook and Twitter,” Mahajan says.
younger generations as well. Comfort food, at Northwestern University.
not gourmet cuisine, will be popular again.
• Technology—Online shopping is likely to not just social Web expansion
baby boomers talk exit strategies
experience renewed growth. Mobile market- Paula Lovell, president of Lovell
As the baby boomer generation approaches tra-
ing, such as Twittering, blogging, texting, Communications and past chairman of the
ditional retirement age and rides the economic
will increase to reach the public and let Federal Reserve Bank of Atlanta, agrees that the
roller coaster, more will see uncertainty in their
them know what’s happening. Web is where more businesses will go.
retirement plans. In 2009, more small- and
• Health care—More stress-related illnesses “In 2009, we expect more businesses to
mid-size business owners will recognize the
may come into play but consumers will be turn to social networking, search engines and
need to plan for the future, says Bob O’Hara,
less likely to pay for expensive co-pays on the Web for public relations exposure, driv-
president of O’Hara & Company.
medical tests. Emergency room visits will ing demand for Web sites with effective search
O’Hara, who advises on exit planning, says
increase as the middle class neglects its engine optimization, SEO,” she says.
baby boomer business owners realistically must
health and follows the indigent community As traditional media organizations consoli-
know there will probably be no more peaks in
that uses the ER as a primary care provider. date, the remaining journalists will be required
their business cycle. “Therefore, it is imperative
Lower-cost HMOs are likely to be busier to produce more; thus they will turn to expert
for them to think of the bigger picture now. In
and get more customers than the more sources who are easy to find online.
five or six years when the markets come back,
expensive PPOs.
it will be too late,” he says.
14 VOLUME 9 n ISSUE 2 n WInTER 2009
a pLuMMETinG Steps to watching expenses include:
• planning well in advance to shop for dis-
SToCk MarkET counts and monitor currency fluctuations
for the most favorable exchange rates,
doES noT MEan • using prepaid foreign currency travel cards.
ThaT ConSuMErS More people opt for these electronic forms
of payment over traveler’s checks and cash,
nEEd LESS; iT juST according to a recent industry study,
• using planning tools such as Travelex’s
MEanS ThaT ThE budget calculator (www.cashpassport.com/
buyinG paTTErnS us/budgetcalculator.html) to estimate costs
of trip basics such as food and beverage,
arE LikELy To accommodations, public transportation,
entrance fees, etc.
ChanGE and While travel for business is still required,
SpEndinG wiLL cost containment is a priority for companies,
according to the Association of Corporate
dECrEaSE. Travel Executives.
Christopher Russell, Travelex’s executive vice
president of outsourcing, says business travel
previously was considered a necessary expense
and generally no one scrutinized that belief.
“Businesses that understand and collabo- funding losses for nonprofits “We see that starting to change,” he says.
rate with the Web’s influential social media Nonprofits around the country will see funding “Travel management and travel spending man-
outlets—blogs, Facebook, Twitter and a host cuts for a variety of reasons. The government agement are being discussed in CEO offices
of others—will fare better than those who fail may reduce or eliminate their funding, their and board rooms across the country.”
to grasp the significance of this fundamental endowments took a hit in the stock market
shift,” Lovell says. and their contributors are facing their own eco- fewer dollars spent on off-site meetings
nomic challenges.
Travel managers, directors and others involved
it cost containment for many Dave Kerr, founder and president of Integrity
in planning meetings for their companies say
IT decision-makers across government and House, a substance abuse rehabilitation center
they will be spending less in 2009.
corporate sectors enter the year citing cost con- in New Jersey, says the need continues to be
A Worktopia survey shows that economic
tainment as their top priority, according to a great but the dollars are shrinking.
conditions are tightening companies’ plans
survey by CDW Corp. “The problem of addiction didn’t hear about
to host off-site meetings, including moving
Forty-one percent of respondents cited cost our bad economy,” he says. “Our waiting list
meetings to lower-priced venues and locations
as their top concern. However, 32 percent said is in the hundreds. We probably will see a
where less travel is incurred. More rigorous
investment, new products and technologies funding cut soon and yet somehow we have to
planning also is anticipated.
was their priority for 2009, a five percentage maintain services to 366 addicts in recovery in
Those companies expecting fewer meetings
point increase over 2008. our residential program,” he says.
in 2009 typically are larger organizations with
“Many times, organizational objectives An added economic impact for organizations
more than 2,500 employees. They also are the
are set well in advance, and after navigating like Kerr’s is that graduates of the program
ones who are planning to strategically leverage
through the volatile market conditions that will be competing for employment with hun-
technology to reduce meeting costs.
have become the defining characteristic of dreds of thousands of qualified workers being
“Not surprisingly, larger companies are
2008, IT decision-makers are planning for laid off.
more inclined to utilize a technology-based
2009 by planning for the one element they solution or service provider to source, track
can control—cost,” says CDW Vice President Planning before plane departs and plan their off-site meetings,” according to
Mark Gambill, who handles market insights International travel will still happen, but Worktopia. e
for the company. Americans are opting to control costs better in
2009, according to Travelex.
ThE LEadIng EdgE 15
global
top 10 misconceptions about
doing business in…Canada
By gordon Jessup | fuller Landau
Canada iS a
1
Canadian companies require implemented the federal corporate tax rate will
resident directors. be 15 percent.
MuLTiCuLTuraL
Provincial tax rates have also seen reductions
Canadian companies can be
over the last few years and they range from
incorporated under the jurisdiction of a
a low of 10 percent to a high of 16 percent.
SoCiETy. MorE
province, a territory or the federal government.
Some provinces have announced future tax rate
Each Canadian jurisdiction has enacted its own
cuts, and once fully implemented combined
Business Corporations Act and, while similar,
Than 5 MiLLion each piece of legislation has variations. Most
Canadian jurisdictions require at least one
federal and provincial corporate tax rates will
range between 25 percent and 31 percent.
rESidEnTS LiST
Please note that tax paid to the province is
resident director and many require a majority
not deductible in arriving at federal corporate
of the directors be Canadian. This can be an
taxable income.
ThEir FirST
impediment for foreign businesses wishing to
3
establish a subsidiary in Canada.
Nova Scotia and New Brunswick, however, Canada does not have any
LanGuaGE aS do not require resident directors. By choosing
to incorporate in one of these provinces
incentives for businesses.
Companies undertaking scientific
oThEr Than a foreign business can set up a subsidiary
without the need to find a resident to act as a
research and experimental development
in Canada are eligible to claim federal and
EnGLiSh or
director. These corporations can then register provincial tax credits. The federal government
to do business in other provinces, even though provides a tax credit equal to 20 percent of
they may not have any business activity in their eligible expenditures that is applied against
FrEnCh. province of incorporation. federal income taxes. Several provinces also
provide tax credits for research performed in
2
Canada is a high tax jurisdiction. their province.
Companies that manufacture in Canada also
Traditionally Canada was seen as a high
enjoy tax incentives. Many provinces provide
tax jurisdiction as corporate tax rates
tax credits for manufacturing and processing
often were greater than 40 percent.
undertaken in their jurisdiction. These credits
However, Canadian governments (federal and
reduce the effective corporate tax rate.
provincial) have been successful in balancing
The Canadian entertainment and software
their budgets, and the resulting surpluses have
industries benefit from lucrative film-related
allowed them to reduce tax rates.
tax credits. These tax credits significantly
In the 2008 budget the federal government
reduce the cost of Canadian productions.
announced reductions in the general corporate
tax rate for the next several years. When fully
16 VOLUME 9 n ISSUE 2 n WInTER 2009
4
foreign corporations do not need of the population of Canada lives within 93 than English or French. A significant portion of
to file Canadian tax returns miles of the Canada-U.S. border. the population speaks Chinese, Italian, German
Average winter and summer temperatures and Punjabi. More than 50 percent of the
Canada has an extensive treaty
across Canada vary by location. Winters can people living in Toronto, Canada’s largest city,
network. Following the Organization
be harsh in many regions of the country, were born outside of Canada.
of Economic Co-operation and Development
particularly in the north and Prairie provinces,
9
model treaty, a foreign corporation that is a
where daily average temperatures are near Canada is mostly focused on
resident in a treaty country is exempt from
5°F but can drop below 40°F with severe trade with the United States.
Canadian income taxes on business profits if
wind chills. Southern Ontario experiences
it does not have a permanent establishment While Canada’s primary trading partner
a moderate winter with average daily
in Canada. If the corporation has an is in the United States, in recent
.
temperatures around 14°F Coastal British
establishment in Canada it is subject to tax on years Canada has increased trade with other
Columbia enjoys a temperate climate with a
income earned through that establishment. countries. China has increasingly become an
mild and rainy winter.
Foreign corporations resident in a non- important trading partner. Aside from the
While winters can be cold, summers in
treaty country are subject to tax on income North American Free Trade Agreement that
many parts of Canada can be quite warm.
earned in Canada even if it has no permanent Canada has entered into with Mexico and
Summer high temperatures range from 75 to
establishment. the United States, Canada has entered into
85°F with occasional extreme heat in some
In 1999 Canada adopted rules in its Income similar free trade agreements with Peru, Costa
interior locations exceeding 104°F .
Tax Act that require non-resident companies Rica, Israel, Chile, the European Free Trade
7
that are exempt under a tax treaty to file Association (consisting of Iceland, Norway,
a federal corporation income tax return to Canada’s economy is primarily Liechtenstein and Switzerland) and Columbia.
disclose that they are carrying on business based on resources. By reducing trade barriers Canada has not
in Canada and the basis by which they are Canada is one of the world’s most only opened its doors to the world, it has
claiming exemption from Canadian tax. important suppliers of agricultural opened foreign markets to Canadian-based
Failure to file a required tax return can result products (wheat, canola and other grains) companies. Foreign companies looking to
in penalties being assessed against the non- as well as one of the few developed nations reach into these markets may wish to establish
resident corporation. Many non-resident that are net exporters of energy. Canada has manufacturing operations in Canada to gain
corporations are unaware of this requirement vast deposits of natural gas and oil and is the lower cost access to these markets.
and surprised when assessed non-compliance world’s largest producer of zinc and uranium.
10
penalties of $2,500 for each year of non- It is also a world leader in many other natural Canadians enjoy
compliance. resources such as gold, nickel, aluminum, free health care.
and lead. Yet, with all of these resources the
5
Canada has a nationalized
foreign businesses can sell to Canadian economy is dominated by the service
health care system. The federal
Canadians without concern for industry, which employs about three quarters
government ensures access to health care
Canadian sales taxes. of working Canadians.
through the Canada Health Act. This act provides
Canada has a highly skilled workforce
Canada has a national sales tax, the criteria provinces must meet to be eligible for
and many universities known for their
Goods and Services Tax. Non-residents who are federal transfer payments. Federal transfers are
business, engineering and computer science
carrying on business in Canada are required to important for the provinces because as they are
programs. Companies such as Research In
register, collect and remit this tax. As a value- constitutionally responsible for providing health
Motion, producer of BlackBerry™ wireless
added tax they may be eligible to claim tax care services. Without federal transfers many of
communication, are the product of these
credits for GST that they pay on their inputs. the provinces would be unable to raise sufficient
universities.
Canada collects tax on all importations of funds to operate their health care system.
8
goods. This applies to non-residents that act For the federal government to be in a
as the importer of the goods. Without proper all Canadians speak french. position to provide the necessary transfer
planning the non-resident may be incurring Canada has two official languages, payments to the provinces it must raise
non-recoverable tax when selling goods to English and French. English is spoken significant tax revenues. Canadian individuals
Canadians. by more than 85 percent of Canadians have not experienced the significant tax
and French is spoken by just 30 percent of reductions that corporations have seen in recent
6
Canada’s climate is cold. Canadians. Eighty-five percent of French- years. Universal health care is provided to all
speaking people live in the province of Quebec. Canadians at the cost of higher personal taxes. e
Canada is the second largest country in
Other than Quebec, only New Brunswick has a
the world (only Russia is larger). Much
statement of official bilingualism. If you would like to discuss any of the above in detail or
of this land mass is in the north where would like further advice about setting up business in
Canada is a multicultural society. More than 5
population is sparse. Approximately 75 percent Canada, please contact Gordon Jessup at (416) 645-6508
million residents list their first language as other or gjessup@fullerlandau.com.
ThE LEadIng EdgE 17
Q&a
in a nutshell by Chris de Santis
iMpEndinG rETirEMEnTS poSE nEw ChaLLEnGE For CoMpany
Q: our company employs several hundred The retirement age was set at the age it people who work with individuals inside the
people—35 percent of whom will reach was because most people, at the time, didn’t organization to identify resource needs, then
traditional retirement age in the next five live much beyond it and therefore the cost create the project scope and determine its
years. What should we do now to ensure a of carrying people wasn’t burdensome. worth and costs. A budget is created and the
smooth transition? Life expectancies have changed. What isn’t project is posted for bidding by the network
changing are work habits. or passed directly to members of the “alumni.”
Boomers have worked hard all of their The trick is to make the project interesting
lives. I for one do not see them leaving work enough to attract talent.
where they are fully engaged for 10 or more There are any number of ways to retain and
hours a day and suddenly sitting around and attract talent. First off, you will need a talent
gardening, golfing or pursuing any number of bank that identifies all the skills available
leisure activities. While that might be fun for a and who possesses them. Next, you will
short time, it will not meet the needs of a large need incentives. This is why it is important
group of formerly productive individuals. What to highlight the costs of the scoped project.
you will see is a slew of second careers, which Once you know the costs, you can estimate
brings us back to what to do about those the worth of the project to the organization
people retiring. and price it accordingly.
Here is the challenge for savvy businesses. Back to your original concern regarding
If you have a workforce highly dependent on the transition of knowledge. What I didn’t
the intellectual capital of people who are going mention was the value of both mentoring
to retire. If that workplace is finding it hard and knowledge management. If you have a
a: Your question is one that will impact a large or impossible to replace those individuals in good approach to mentoring, then you are
number of companies in the next few years. the interim, then the workplace has to create developing the next generation to take the
The first of the baby boom generation just incentives and structures that entice these reigns of the organization. But, I would argue,
reached the age of Social Security eligibility potential retirees to remain or continue to since we are all living longer and since we all
and soon will reach the traditional retirement contribute in a limited capacity. The challenge want to contribute continuously, expect to see
age of 65. On their heels are another 30 or for most businesses is structure and reward. Alumni Talent Management as an HR function
40 million Boomers. Most businesses are structured around someday soon. Also, because of the difficulty
According to The Economist, there will be a advancement. If you do well, you will in capturing institutional knowledge, expect to
management talent shortage by 2012 that will move up. If you move up you take on see that same talent manager scoping out work
continue for a few subsequent years as more more responsibility. If you take on more and negotiating with the retirees for “gigs.”
and more managers leave the workplace. While responsibility, you will receive greater reward. The good news is that healthy, talented and
this sounds dire, if you look at it in more It is a virtuous cycle, supposedly. energetic people who still wish to be involved
detail, you might see it more as an opportunity The new world order is closer to a loose in making contributions to the organizations
than a threat. network of contracted experts who only do or fields of work they are passionate about
I would first like to start with this issue specific tasks or assignments based on defined will continue to have an opportunity to do so.
of “retirement.” The concept of the golden needs. This contractual arrangement is much The bad news is that retirement dinners will
years in retirement was and remains largely a like outsourcing on a local scale, with a never be the same and that watch you were
construct. It was first marketed to the public core group of full-time employees acting as expecting at your retirement might end up
by the housing developer Dell Webb as a what I would term, “scopists.” Scopists are being a BlackBerry. e
way to sell homes in “Sun City” community
model. The idea stuck and became rooted
in the American psyche. At the time, the
organizational “man” dreamed of the day when do you have a workplace question you want
he or she would be able to say goodbye to answered? What do you want to know to make
work for good. Thus, the concept of retirement work a better place? Send your questions to
became the ultimate brass ring. The reality is a deSantisCP@aol.com to get Chris deSantis’ two
bit different.
cents as to what he thinks you might want to do.
18 VOLUME 9 n ISSUE 2 n WInTER 2009
The members of the Leading Edge alliance
are leaders in many key markets, including:
alabama
albania
hungary
India
Palestine
Panama
the Leading edge alliance is an international professional
afghanistan Indiana Paris association of independently owned accounting and consulting firms. The
argentina Indonesia Peru alliance enables member firms to access the resources of a multibillion-dollar
atlanta Iowa Philadelphia
global professional services organization, providing business development,
australia Ireland Phoenix
austria Israel Philippines professional training and education, and peer-to-peer networking
Bahrain Italy Pittsburgh opportunities nationally and globally, around the corner and around the world.
Baltimore Jordan Poland
Bangladesh Knoxville Providence
Belgium Kenya Puerto Rico Members are top quality firms who are very successful, have deep client
Bolivia Korea Richmond relationships, and strong ties to the community. The alliance provides
Boston Kuwait Reno
Brazil Las Vegas Romania members with an unbeatable combination: the comprehensive size and scope
British Virgin Islands Latvia Russian federation of a large multinational company while offering their clients the continuity,
Buffalo Lebanon San francisco
consistency and quality of service of a local firm. Member firms have access to
Bulgaria London Saudi arabia
Cayman Islands Los angeles Scotland the best and brightest team of business advisors—a peer-to-peer connection
Chicago Luxembourg Seattle that provides the right business solutions for clients.
Chile Macedonia Senegal
China Madison, WI Serbia
Cincinnati Malaysia Singapore
Cleveland Malta Slovakia the Leading edge offers:
Colombia Mauritius Slovenia
Croatia Mexico South Carolina • Access to the best and brightest CPAs and business advisors—a peer-to-peer
Cyprus Miami Spain connection that provides the right solutions for clients.
Czech Republic Michigan Sweden
dallas Minneapolis Switzerland • Innovative, practice-proven strategies for improving performance in
dayton Missouri Taiwan management, business processes, finance, operations, information technology
denver Moldova Thailand and marketing.
dominican Republic Montenegro Tokyo
Ecuador Montreal Toronto • A leading knowledge resource for multi-disciplinary information and
Egypt Morocco Tucson industry-specific expertise responsive to clients’ unique needs.
El Salvador nashville Tunisia
finland nebraska Turkey • The strength and reputation to attract the highest quality team members.
fort Lauderdale netherlands Ukraine
ghana new Orleans United arab • The Alliance offers accounting and consulting services through a global network of
germany new Jersey Emirates firms with more than 15,000 professional staff in more than 430 offices.
greece new York Uruguay
guatemala new Zealand U.S. Virgin Islands • The Leading Edge Alliance offers world-class business advisory expertise and
harrisburg, Pa north Carolina Venezuela experience with innovation, progressiveness and quality.
hartford norway Washington, d.C.
hong Kong Orange County, Ca Vietnam
honolulu Oregon Virginia/West Virginia
houston Pakistan To find out more about The Leading Edge alliance, visit
www.LeadingEdgealliance.com or contact Karen Kehl-
Visit LeadingEdgeAlliance.com for a detailed listing of member firms. Rose, president, at (630) 513-9814 or kkr@The-LEa.com.
ThE LEadIng EdgE 19
prsrt std
u s postage
paid
cleveland oh
8550 United Plaza Blvd. permit no. 1702
Suite 1001
Baton Rouge, Louisiana 70809
(225) 922-4600
www.pncpa.com