How to transform your HR
function into a strategic partner
Probably your most prized — and significant — investment is in the
people you employ. A major slice of your organization’s capital is
consumed by employee recruiting and retention, compensation and
benefits, training and development, and other HR programs. Consequently,
the HR function is continually under fire by executive management and
shareholders to quantify the return on human capital investments.
HR departments have long struggled to produce quantifiable data to
justify business cases for HR programs and resources. As a result,
management and shareholders have generally labeled them as cost centers.
To be viewed, however, as a strategic, more valued function, HR
departments need to establish meaningful metrics for measuring
performance and link them to overall company business goals.
In effect, establishing and applying HR metrics goes beyond simply
collecting data, such as employee benefits costs or employee
satisfaction and turnover rates. What really counts is how you make use
of the data. Metrics should provide a framework for continually
improving the performance and efficiency of your HR programs and
practices.
To ensure you’re focused on capturing and analyzing truly meaningful
data, gather input from your shareholders, management team and
employees. For example, rather than simply calculating employee turnover
rates, ask employees why they are leaving and have them provide ideas on
how the company can improve during exit interviews or through follow-up
surveys. Using this feedback, you can more readily justify improvements,
such as a more competitive compensation and benefits package or career
development and training program.
Lastly, leverage the resources of your finance department to help frame
data in the context that your executives and shareholders understand,
including assessing the costs vs. the benefits of recommended
improvements and overall return on investment.
LTC
insurance premium deduction for 2005
Insured’s age at close of tax
year Eligible premium deduction
40 or younger $270
41 to 50
$510
51 to 60
$1,020
61 to 70
$2,720
71 or older
$3,400
Source: U.S. Internal Revenue Code
The AMT’s growing impact
on the middle class
In 1969, Congress discovered that 155 high-income taxpayers paid no
income taxes, so it created the alternative minimum tax (AMT). Since
then, as a result of inflation, lower regular income tax rates and other
factors, an increasing number of middle-class taxpayers are affected by
the tax.
Tax preference items that trigger AMT need not be sophisticated tax
shelters. On the contrary, some of the most common causes of AMT
liability are:
- Incentive stock
options,
- State and local taxes,
- Personal and
dependency exemptions,
- Miscellaneous itemized
deductions such as unreimbursed employee business, tax preparation
and investment expenses,
- Interest on second
mortgages,
- Medical expenses, and
- Private activity
municipal bond interest (bonds issued after Aug. 7, 1986).
By next year, 63% of
taxpayers with incomes between $100,000 and $200,000 will be liable for
the AMT, according to the Tax Policy Center. And the AMT will affect
“virtually all upper-middle-class taxpayers with two or more kids,” the
organization predicts, unless Congress changes the system.
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Outsourcing HR function can
boost efficiency and performance
If you’re
like most business owners, you’re always looking for ways to
reduce your operating costs while improving performance.
Many businesses have found the best way to achieve these
goals is to outsource non-core business functions, such as
payroll and benefits administration. This article shows you
how to outsource numerous HR functions, and the pros and
cons of doing so. A sidebar article discusses how you can
transform your HR function into a strategic partner by
establishing meaningful metrics for measuring performance
and then linking them to your company’s goals.
Read more
Should you take the
plunge?
Why it can pay to bank online
Online banking is not new. But many people still shy away
from it, perhaps because of much-publicized problems with
security and accessibility early on. Things have changed
since those days and online banking can save you time and
money. This brief article discusses the advantages of online
banking, from unlimited access to your account information
to leverage tools, such as account aggregation and portfolio
management programs, to being able to identify fraudulent
activities quickly and, thus, speeding up the recovery of
losses.
Read more
Benefiting your staff and
your business with LTC insurance
More than 50% of Americans will need some form of long-term
care (LTC) at some point in their lives, according to the
2004 MetLife Market Survey of Nursing Home and Home Care
Costs. But LTC is expensive and many people worry that they
won’t be able to afford LTC if they need it — either for
themselves or for a spouse or parent — or that the expense
will deplete assets they had set aside to finance a
comfortable retirement or to provide for their children. LTC
insurance is one way you can protect yourself against these
risks. And it can benefit your business if you offer it to
employees. This article explains the tax considerations of
LTC insurance for businesses and individuals.
Read more
Don’t get caught in a
dead end
Avoid the AMT trap by knowing your options
At the height of the late-’90s stock-market boom, incentive
stock options (ISOs) made a lot of people rich — at least on
paper. But when the bubble burst, many of these overnight
tycoons were hit with huge tax bills on income they never
received. The culprit was the alternative minimum tax (AMT).
When you exercise ISOs, you don’t realize any income for
regular tax purposes. But if the options are large enough,
they may trigger the AMT. You’ll owe taxes on the “bargain
element” — the excess of the stock’s exercise-date value
over what you paid for it — even if the stock’s value
plummets later on. This article looks at how stock options
and the AMT work so you can avoid unintended taxes.
Read more
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