Strategies To Help Businesses Comply With Canadain Privacy Laws

Privacy and data security are becoming an area of significant concern for both businesses and individuals. It is important you understand the laws and your obligations in this area to reduce and mitigate risks.

Overview Of The Privacy Regime in Canada

The Personal Information Protection and Electronic Documents Act, SC 2000, c 5 (PIPEDA) is Canada’s federal privacy law for private sector businesses. It sets out the ground rules for how businesses must handle personal information.

PIPEDA requires businesses to obtain a person’s consent when they collect, use or disclose personal information in the course of commercial activity.

Commercial activity is defined as “any particular transaction, act, or conduct, or any regular course of conduct that is of a commercial character, including the selling, bartering or leasing of donor, membership or other fundraising lists” [s.2(1)]. What constitutes commercial activity depends on the facts.

For example, a court-appointed trustee-in-bankruptcy who collects personal information to administer a bankruptcy was found to engage in commercial activity because it received remuneration for administering the bankruptcy [PIPEDA case summary 2006-336]. Similarly, a non-profit daycare that was subsidized by a municipal government was found to engage in commercial activity because it received payment for child care services [PIPEDA case summary 2005-309].

Some organizations may be exempt from PIPEDA in provinces that have enacted their own privacy legislation that is substantially similar to PIPEDA.

To date, Quebec, Alberta and B.C. have enacted provincial privacy legislation that is deemed substantially similar to PIPEDA. Nevertheless, PIPEDA continues to apply to international and inter-provincial transfers of personal information by private-sector businesses in those provinces.

PERSONAL INFORMATION

Personal information is defined as “information about an identifiable individual” [s.2(1)]. This includes both factual and subjective information about a person.

Factual personal information includes information such as a person’s name, address, phone number, email address, ID numbers, and more sensitive information such as credit card information and financial information. Subjective personal information includes information such as a person’s opinions, evaluations and comments.

Canadian courts have interpreted personal information so broadly that it also includes information that does not alone identify an individual but when combined with other information, does identify an individual.

PIPEDA’S 10 FAIR INFORMATION PRINCIPLES

Businesses subject to PIPEDA must follow a code for the protection of personal information. The code consists of 10 fair information principles that are set out in Schedule 1 of PIPEDA.

In addition to requirements around how to collect personal information, the fair information principles require businesses to appoint a chief privacy officer who is responsible for the business’ compliance with PIPEDA, make their personal information handling policies publicly available, and allow individuals access to their personal information.

The fair information principles also require businesses to adopt security safeguards appropriate to the sensitivity of the information.

For example, more robust security measures must be put in place to protect sensitive personal information such as financial information and medical records whereas less stringent security measures may be adopted to protect basic personal information such as name and email address.

COMPLIANCE STRATEGIES FOR BUSINESSES

The following six strategies will help businesses comply with their obligations under PIPEDA.

  1. Develop a privacy policy and post it on your website.

    Businesses should develop a comprehensive privacy policy that sets out in detail what personal information it collects, why it collects it, how it uses it and to whom it discloses it.

    This privacy policy should also address other items such as what security measures are in place to protect personal information and whether the information is transferred across borders. The privacy policy is an outward public-facing document that informs your clients and customers about how you manage their personal information.
  2. Develop a privacy management program and train your employees.

    A privacy management program is an internal “how-to” manual for businesses and their employees. It sets out in detail the policies, practices and procedures the business must adopt in order to comply with its privacy policy. In addition, businesses should train their employees on their privacy management programs.
  3. Develop a data breach response plan that complies with PIPEDA’s new breach reporting requirements.

    On November 1, 2018, PIPEDA’s new mandatory breach recording and record-keeping requirements came into effect. These new provisions impose requirements on businesses to keep track of every “breach of security safeguards” and report significant ones to the Office of the Privacy Commissioner of Canada and individuals affected by the breach.

    In order to comply with these requirements, businesses should develop a data breach response plan, which acts as the company’s “playbook” in the event of a data breach.
  4. Adopt appropriate security measures and ensure data security is up-to-date.

    Businesses should adopt security measures that are appropriate to the sensitivity of personal information. Businesses should also ensure that all data security is up-to-date.

    This may include, for example, ensuring all critical security patches are applied as soon as possible or within a reasonable period of time.
  5. Obtain express consent whenever you can.

    While PIPEDA allows businesses to rely on an individual’s implied consent to the collection, use and disclosure of personal information in appropriate circumstances, businesses should nevertheless obtain an individual’s express, written consent where possible and maintain a record of that consent in order to avoid any ambiguity in the consent process.
  6. Conduct a periodic review of your personal information handling practices and policies.

    Businesses should review their privacy policies and personal information handling practices annually to ensure they are up-to-date or make any amendments as necessary.

In the age where privacy breaches are splashed across the media, it is important for businesses, both big and small, to ensure they have appropriate privacy practices in place. This not only complies with the law but also demonstrates to clients and customers that you care about the personal data they entrust you with.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

The High Costs of Equipment And Vehicles

The high cost of equipment demands that owner-managers have an in-depth understanding of the cost of owning and maintaining specific types of equipment, to ensure that it contributes to a positive return on investment. Factoring the significant costs of equipment ownership into a pricing formula could increase your sales figures and at the same time, help you understand where you can reduce present and future costs – and improve your bottom line.

Businesses spend a great deal of time reviewing salary and wages, both to control cost and to determine billing rates when providing estimates or billing clients.

Next to wages, vehicle and equipment ownership and operations are among the higher-expense items within a profit-and-loss statement. Yet, very few businesses monitor the cost of owning and operating vehicles or equipment. Instead, they may simply fold it into the price of doing business without analyzing it further.

Whether your business needs a front-end loader costing just south of $500,000, or a working truck in the $90k to $100k range, analyzing the cost and contributions that these assets make to the business may contribute to a more satisfying bottom line.

To better understand the benefits of job costing each piece of equipment, consider this advice:

This information in turn provides a basis for quoting jobs, as well as documentation you can use if you’re considering future equipment purchases.

  • Consider recording the cost of powering the equipment. Whether the source of power is fossil fuel or electricity, knowing the operation costs is a major consideration in an energy-expensive world.
  • Downtime of all equipment should also be recorded. Knowing how many hours equipment is out-of-commission due to mechanical failure is essential to:
  • Understand the cost of repairing the equipment.
  • Determine the lost opportunity cost because equipment cannot be used.
  • Establish whether that brand of equipment meets job requirements.
  • Compare the downtime to that of similar equipment, so you can analyze based on hard numbers which is the most reliable or usable piece of equipment.
  • Purchasing equipment usually requires financing. Interest is a cost of ownership and, as such, should
  • be recorded for each specific piece of equipment. Factoring interest costs into the operational cost of the equipment forces management to consider whether charge-out rates need to increase, or whether leasing or renting is a better alternative to the cost of ownership.
  • Consider extended warranty cost as part of the cost of operating equipment. If extended warranty is included, you as an owner-manager may wish to consider extending the useful life of the equipment to align with the extended warranty period, which will help you cost jobs or hire out equipment.
  • Finally, be sure to record revenue earned using the equipment based upon the predetermined hourly charge-out rate. Knowing whether the equipment is paying for itself helps determine whether your business should purchase additional equipment, sell the existing equipment or rent similar equipment in the future.

JOB COSTING

Establishing an asset-specific costing process is not as difficult as you might think. Most quality bookkeeping systems will have a job-costing module that already allows posting of expenses and/or revenues for reference purposes. If your software does not have this kind of module, you could also build a spreadsheet to record the cost and revenue attributed to specific assets.

The hard part is to ensure that all employees are trained to record the additional required information. For instance, when an in-house mechanic repairs a specific piece of equipment, the time spent on the repair should be documented to allow posting to the job cost for that equipment.

Bookkeepers must also be able to identify the invoice associated with the cost of parts for that specific equipment repair, for their job-cost posting. Each business will need to adapt its procedures to accommodate its software.

Naturally, all the recordkeeping in the world will not benefit the bottom line if management does not review, on a regular basis, the results of their decision to rent or lease an asset.

Reviewing this data allows management to:

  • Determine whether usage of equipment dictates that the business will need a replacement earlier than suggested.
  • Consider whether the asset is bringing an advantage to the business.
  • Compare similar equipment to determine which brand is less costly to maintain in future.
  • Determine whether your employees have a possible bias towards a specific piece of equipment that may sway future purchase decisions.

Using a fact-filled approach will help you arrive at decisions about acquiring future equipment to be purchased and related cash-flow requirements. It will also help your business take action to ensure that financial data, corporate records, and lines of credit are up-to-date, so you’ll be able to secure financing for any future replacement assets.

Learn more about how to read and understand financial statements in How to Read Financial Statements: A Guide for Business Owners.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

The Path To Automation

Automating an owner-managed business entails more than purchasing a new piece of equipment. The most successful transition requires a careful analysis of existing production process, an understanding of where and when change is required, staged rather than wholesale transition, targeting repetitive employee tasks that can be automated, integration of production changes with business systems, involvement of employees and outside experts and owner metamorphosis from micromanager to business manager.

Ready To Take The Path To Automation?

Small businesses need to increase their operational efficiencies if they are to compete with goods imported from countries with lower labour and manufacturing costs. The road to competitive manufacturing may just rest with those who are automating their existing businesses.

Automating any business is not as simple as buying the latest widget-maker; rather, it’s a process that will guarantee a return on that money spent on automating and provide those efficiencies throughout the process rather than just in one area.

ANALYZE YOUR CURRENT PROCESS

As an owner-manager, you should implement a time and motion study to determine areas that are needed to improve work methods. The process review should examine each stage of the manual production process and highlight those areas and processes that are burdened with high labour and resource use.

It is best to document your process utilizing flow charts and written descriptions, as this will allow for management, workers and outside suppliers to evaluate how to improve on it. Consider among other items:

  • the stages of production
  • number of times a product is moved or inserted
  • time each stage of your process takes

You’ll also need to build in time in your review for interaction with other departments, inventory retrieval and discussions with outside suppliers – all of which will help you gather more information as you analyze your processes.

CHANGE GRADUALLY

When studies arrive at recommendations, there is often a rush to implement the entire process simultaneously. Taking on implementation in small, planned steps is a more favourable approach to avoid larger capital expenditure, employee trepidation, or longer training, meaning a break in cycles and thus the possibility of missing customer expectations.

Upgrading to automated equipment in an area currently saddled with excessive manual requirements provides a focal point for employees, to help them see advantages and gain insight about additional changes that can be incorporated into your vision.

INTEGRATE PRODUCTION WITH BUSINESS REQUIREMENTS

You can augment the production efficiencies implemented on the floor by looking at their online tools to create efficiencies for equipment software updates, ordering requirements, production costing and numbers to meet sales. Combining physical production with management and financing requirements allows for economies of scale and a better bottom line.

ELIMINATE REPETITIVENESS

The ability to relieve workers of repetitive tasks creates a positive environment for both managers and employees. Machines can carry out repetitive tasks without risking the issues that surface when people do them.

Consider medical conditions (such as carpal tunnel syndrome), poor-quality production, tired workers who can’t work to 100% capacity and are injured when concentration decreases. All these areas affect production costs and your bottom line.

INVOLVE EMPLOYEES

While managers may see automation as a positive for the business, employees may see it as one step closer to the exit door and unemployment. You may be able to assuage employees’ concerns with the likelihood of less overtime, better product production or enhanced customer service, but it is still up to you to determine how these changes will affect your employees.

To reduce attrition through modernization, management should – in conjunction with the path to automation – establish a plan for increasing market share, diversifying products or eliminating products or services that are suffering a loss. In the final analysis, if it is not possible to keep all employees, you must lay out a plan to reduce the wage burden.

HIRE EXPERTS

In all walks of life, we implement ideas without knowing how they will work. When they malfunction, we call an expert.

The same process should apply when automating and integrating support systems. Call in the experts to set up the systems, train your employees and work with them until they are sufficiently accomplished
to work on their own.

Naturally, you keep the experts on-call once the system is up and running, to ensure not only that they can help coach you along but also that any available updates are installed promptly.

WORK WITH YOUR TEAM

Transitions take time. Be understanding of employees adapting to new processes, be patient with experts that can’t meet deadlines or if a supplier may not understand your needs while seizing the opportunity to provide information to customers about the positive changes that are on the horizon. Use this opportunity to determine if changes resulting from the upgrade may affect their operation and how you can alleviate their concerns.

ADJUST YOUR MANAGEMENT STYLE

Automating the manufacturing process and its support systems should encourage managers to micromanage processes less than before. Firstly, employees have been trained on the new systems; secondly, experts are available to handle glitches within the process.

When automation reduces managers’ need to be as directly involved, it should grant them the ability to work towards building the business and strengthening their relationships with new or potential customers through visits to existing clients or improved networking.

Further, less need to micromanage allows more time to review the interrelationship between productivity and profitability by product line and to gain insight into how to further improve corporate performance.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

8 Reasons Why Clients Leave (And How To Retain Them!)

Creating a loyal customer base is about more than providing products and services. Business needs to consider all the issues that may impact customer loyalty while ensuring that they understand customer expectations and proactively address them to avoid bigger problems down the road.

8 Reasons Why Clients Leave

Owner-managers work hard to build a client base. So losing a client, especially in situations where they’ve established a rapport, is especially hard. Examining why customers leave may shed light on areas that your business needs to improve on.

1. OVERPRICED

Clients that go elsewhere often cite cost as a reason for no longer wanting to conduct business with a company.

Consider that clients are cost-sensitive and will search the internet to determine whether your pricing is competitive.

Certainly, internet comparison does not always consider the additional service, product quality or add-ons that your firm provides. That said, a good business practice would suggest that reviewing what the competition is doing would help be prepared, should cost become an issue with clients.

2. COMPLACENCY

Maybe the competition provides more up-to-date products, services or ideas. Perhaps your business became complacent with the product or services provided and you failed to see that the client was moving in a different direction and needed to be helped to understand the value of what you offer.

Even if your company provides different levels of competence and product, if sales representatives or marketing material do not provide insight on what you have to offer, they may not see a future with your business.

3. CUSTOMER SERVICE

There are times when everyone acts out of character or accidentally offends someone. If it is brought to your attention that a company representative may have a bad customer attitude, ensure that the client can explain the issue, the employee and the circumstance, and deal with it immediately.

4. DELIVERY SERVICE

Same-day delivery, next-day delivery, delivery to their location, on-time delivery … everyone wants what they want now – or even yesterday. Slow response to client needs is a sure way to guarantee that the client will seek different suppliers.

If a product is not available, or delivery time will be delayed, it is important to contact the client immediately, outline the issues, the steps taken to resolve the issue, and the expected results.

Clients have expectations of goods or services that fit their needs; when they fail to materialize, unexpected rescheduling of equipment and personnel means additional cost to the client.

However, clients can accept changes to products or timetables if they understand the underlying reasons, but they will find unexpected and unexplained delays intolerable. And remember, making promises that cannot be kept is a no-no.

5. RETURN POLICIES

Sometimes consumers purchase a product, only to determine that it’s not what they wanted.

Naturally, this may create issues as to whether the product can be returned. To avoid any misunderstanding, ensure that the client is well-informed about the product or service, especially its limitations. Make sure they know whether the product or service is suitable for their purposes and provide an unequivocal statement about the return policy.

Certainly, customers may be unhappy if they order something that doesn’t meet their expectations even after a comprehensive explanation. But, if you’ve informed them as outlined here, they must then accept responsibility for their decision.

6. BAD PRODUCT

Aim to never provide a product that is defective in its design. Certainly, warranties and arrangements to repair defective products reassure the consumer, but in the final analysis, the costs of downtime and delays caused by defective products far outweigh the price of the equipment or the warranty.

Fixing an occasional problem or providing a temporary workaround when a defect occurs is an expectation that clients will accept – but they will not tolerate regular breakdowns.

7. TRANSITION

People are averse to change, whether that change is hardware, software or personnel. Thus, if you are planning on revamping the production line, engaging software programmers, or refreshing customer contacts, ensure that the transition is seamless. For instance:

  • If bringing on a new product line or breaking your connection with longtime suppliers, ensure your clients know that you will still support their needs.
  • If changing the operating software platform, ensure testing and all glitches are resolved before updating the software, provide training sessions for the client, minimize the downtime for the client system, by installing when the client’s need for the system is at its lowest.
  • Your employees who make customer contact should become familiar with your client contacts, order history for the last number of years, equipment or material at the client’s site, and the personnel they will be working with. Whenever possible, arrange for replacement personnel to shadow with the regular contact person.

8. ONLINE CRITIQUES

Product or service reviews from online sites can be a make-or-break for business products or services. It is rewarding to see a good review, but one negative review published online can place a product in the trash or destroy a business overnight. Today, social media can destroy years of research, development and marketing with negative comments not only on the product or service but also on the personnel within or owners of the organization.

Most readers of corporate online critiques are skeptical about the authenticity of good reviews. Thus, owner-managers should not be complacent and assume that all consumers are pleased with the product or service provided. It is important to develop, monitor, and improve the business acumen within an organization.

You and your employees must fully understand that every action that you take while on the job – and in many cases, off the clock – will reflect how consumers react to the company they represent.

Presenting a negative image not only impacts the employee; it also has the potential to negatively impact the well-being of the company and its other employees.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Bartering, Taxation, And The Internet

The normal procedure for business transactions follows the tried-and-true method of selling a product or service and recording the income. The income earned is taxable as earned income. Rather than use the traditional approach, many individuals and businesses may decide to barter their products or services.

Did you know that good business practice would suggest that you treat all barter and internet transactions as you would normal business transactions?

If you ever face a CRA audit, it will help spare your corporation, proprietorship or partnership the inconvenience of a long, laborious tax audit and potential penalties and interest – or even being convicted for tax evasion.

Bartering occurs when individuals conduct a transaction for goods or services without using a recognized medium of exchange such as money. Undoubtedly, most sellers who involve themselves in barter transactions are unaware that they are required to report the value of the transaction. And, there may be some who use bartering to circumvent corporate or individual income tax and GST/PST.

When bartering transactions occur in the normal course of business, there are effectively two transactions that must be considered:

  • The first transaction is the value of the service or product that is provided to the customer.
    • For example: if your business sells bricks, the value of those bricks should be included in the seller’s business income. Further, the HST/GST and PST (if applicable) must be added to the value assigned to those bricks, then it should be reported and submitted.

Note that this assumes that the individual providing the product or service has already reached or surpassed the small supplier threshold of $30,000 with sufficient “conditions.” You can review these requirements on the CRA website.

  • The second transaction to record is the assigned cost to the goods or services received in exchange for the product you have provided.
    • Assuming that the person or business with whom you are bartering is an HST/GST registrant, it may be possible to record and claim the Input Tax Credit (ITC). If that provider does not provide their GST number, you will have to record the assigned cost as an expense and cannot claim the ITC.

There may be situations when the barter transaction may be considered the sale of capital property. In this case, the transaction may give rise to a capital gain. Your CPA will be able to provide guidance on these transactions.

INTERNET SALES

Bartering has been around since before the advent of currency, but the ability to barter has been enhanced and overshadowed with the advent of the internet, providing access to millions of opportunities to not only barter but also to sell goods or services.

For those who have used the internet to conduct what may be construed as business transactions – whether innocently or intentionally – the CRA believes that there are enough transactions not being reported that are negatively affecting its treasury.

Consider that the CRA court-ordered eBay Canada to release the following account information and sales data of Canadian residents who conducted transactions on its online selling site:

  • sales of more than $20,000 and at least 24 sales transactions in any of the calendar years 2006, 2007 or 2008, (irrespective of membership in eBay’s PowerSeller program), or
  • sales of more than $100,000 in any of the calendar years 2006, 2007 or 2008, regardless of the number of sales transactions..

Given this court order, any Canadian-resident eBay seller who meets these sales thresholds will have the following information released to CRA: full name, user ID, mailing address, billing address, telephone number, fax number, email address, and the selling prices (high bids) of the items

If your transactions meet the above criteria, a wise business decision would include contacting your local CPA and determining the need for voluntary disclosure to prevent penalties and interest, should the CRA carry out an audit.

The following information is required for voluntary disclosure:

  • name, social insurance number (SIN) and date of birth of each member of the family
  • if a business, the names of the principals of the partnership or the shareholders of the corporation,
  • along with their SIN.
  • the last personal tax returns that were filed for the individual and family members
  • the date that the eBay business started
  • if the business is a sole proprietorship, partnership or corporation: the business number
  • for a corporation, the articles of incorporation and the provincial corporate tax number
  • Financial statements, whether for incorporated companies or for sole proprietorships or partnerships, should be available to establish whether eBay income was reported when filing returns.
  • Tax returns should be available to support the financial data that indicates whether eBay income was reported.
  • For corporations or sole proprietors that are registered for GST/HST, all returns filed with the CRA from the date eBay transactions began should be made available. (If the taxpayer exceeded the threshold for registering, the CRA may retroactively register the corporation or individual.)
  • bank accounts showing all transactions through platforms such as PayPal
  • Sales income and expenses that may offset recorded income and therefore affect HST/GST/ITC should be made available. Expenses that may be allowable are those that are necessary to earn income. (It is advisable to review your expenses with your CPA.)

The court order issued to eBay defined the time frame for the information that the CRA was seeking to audit. Canadian taxpayers should not conclude that they have avoided an audit because they have not received
a notice of audit.

If your eBay account meets the criteria discussed above, contact your CPA and discuss the possibility of submitting information to the CRA under the Voluntary Disclosures Program (VDP).

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

The High Cost Of Stress

Stress response was meant to be a temporary reaction to a life-threatening situation, but unfortunately, more and more employees are finding that the stress of everyday living combined with on-the-job stress is having an impact on their lives.

“Stress generally refers to two things: the psychological perception of pressure, on the one hand, and the body’s response to it, on the other, which involves multiple systems, from metabolism to muscles to memory. Through hormonal signalling, the perception of danger sets off an automatic response system, known as the fight-or-flight response, that prepares all animals to meet a challenge or flee from it.”

Psychology Today

Stress Within The Workplace

Owner-managers may not be able to control an employee’s personal life stress. However, they must be sensitive to stress points that trigger employees’ unhappiness, both within and outside the workplace environment and work towards assuaging the stress points.

Stress within the workplace is an expensive hidden cost to the employer:

  • Absenteeism increases create higher payroll cost.
  • Productivity is reduced when employees are absent.
  • Illness, both physical and mental in nature, drive up the cost of health premiums.
  • Employee turnover results in higher training cost and lost productivity.
  • Costly litigation may result if employees challenge the dismissal.
  • Individuals under stress may have reduced ability to make critical decisions, as their thought process
  • is clouded with personal issues that lead to errors.
  • Interpersonal skills may deteriorate, as individuals under stress may not filter comments, thereby offending co-workers or clients.
  • Other workers are negatively impacted thereby reducing effectiveness and creating job dissatisfaction.

REDUCING EMPLOYEE ON-THE-JOB STRESS

Identifying and counteracting on-the-job stress is not an easy task for the owner-manager. Perhaps the best approach is for the owner-manager to put themselves in the worker’s position to try to understand the stress points of the job.

It is not suggested that management needs to become an “Undercover Boss” as depicted on the television series, but adopting the concept certainly would help management identify stress points within a job classification and better enable them to address the areas that require attention.

Consider these practices to help your employees reduce their stress on the job:

  • Have an open-door policy with the assurance of confidentiality that allows employees to discuss workplace-related issues as well as personal issues that are causing anxiety. (Only 23% of Canadian workers had enough confidence to approach management and seek help with stress issues.)
  • Address job-related problems and or employee concerns (bereavement, divorce, illness, moving home and financial) in a timely fashion. An individual’s stress is an overlay of personal and work-related problems and not understanding and working with the employee to address issues amplifies their stress level.
  • Ensure that managers know how to reprimand and provide constructive criticism without humiliating or degrading employees.
  • Never tolerate aggressive physical, emotional or vocal bullying tactics.
  • Institute empathy and interpersonal skills training for all employees.
  • Prepare employees for changes in the work environment or upcoming projects through dialogue. Management receives feedback and thus a means of judging the demands that will be placed upon employees, available employee skills, project hours and timeline required. This, in turn, will assist in normalizing the project into a manageable process and thereby reduce stress.
  • Owner-managers want employees that work as hard for the company as they do. Ensure that employees do not take on more than they can handle. Encourage employees to take coffee breaks, lunch breaks, full vacation and statutory holidays to allow time to let go of workplace responsibilities.
  • Provide training in time management that educates employees not only to manage their time but also to recognize that taking on multiple projects that cannot be completed within given time frames leads to poor job performance, anxiety and stress.
  • Monitor employees and management to make more effective use of time. Spending time on non-essentials tasks when a major project is underway creates anxiety and stress. Focusing on what is important directs employees to what is the priority.
  • Ensure that upper management and team leaders can vent their concerns by having regular meetings to discuss concerns about projects, employees or management issues. Second-in-command individuals are unable to discuss issues with employees and thus need a means to express frustration and anxiety that they may be feeling about the job.
  • Reward employees by letting them know their work is valued and appreciated. Regular reviews, and not just for raises, are required to let employees know when they are doing well and when there is need to modify their approach, or to gain more experience, additional training or education.
  • Involve employees’ spouses and children so they have an appreciation of job functions, environment, and co-workers and thereby have a better understanding of what goes on during the workday. Consider family days, bring your child to work days or company events to create a family environment.

Canadian statistics indicate that 500,000 Canadians miss work each week from stress-related issues. Forty-seven percent of individuals indicate that work is the most stressful part of their life.

Consider that work-related stress costs the Canadian workplace approximately $20 billion per year – isn’t it time that your business made every effort to reduce stress within the workplace and positively enhance the bottom line?

Disclaimer:
Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Maintaining Safety In The Workplace

It is the owner and manager’s responsibility to ensure that the workplace is safe for employees or subcontractors.

Not only does safety protect the worker from injury or death, but a consistent record of safety also lowers payment to WorkSafeBC and lessens the cost to employers by ensuring that injuries to workers are minimized to guarantee that quality workers are not prevented from performing an essential company task.

Management should take it upon themselves to conduct personalized workplace walkarounds to identify areas that may potentially pose a safety hazard and determine whether safety procedures that have been put in place or mandated by safety boards are working as they should.

Going through a job site or the manufacturing factory also allows management to assess if the project or floor managers, as well as employees, are following safety practices that have been mandated. After all, corporate safety manuals may mandate wearing safety glasses or a safety harness, but employees may disregard the mandate for sake of comfort or expediency.

Conduct Thorough Safety Inspection

A proper safety inspection should be planned. However, notifying department heads that a safety inspection is imminent provides a forewarning that may set up a utopian result that a surprise walk-around could not mimic.

Regardless of whether the walkaround is a surprise or a joint effort with department heads, owner-managers may wish to consider the following:

As a precursor, management should take courses that help them identify safety issues on the job. Many courses are offered both by provincial/federal and private sectors, but should cover the outline provided by the Canadian Centre for Occupational Health and Safety:

  • Introduction to Health and Safety Training for Managers
  • Safety Principles and Risk Management
  • Legislation
  • Hazard Recognition and Control
  • Emergency Preparedness and Fire Prevention
  • Occupational Hygiene
  • Ergonomics
  • Workplace Inspection and Accident Investigation
  • Program Development and Implementation

Management should also familiarize themselves with the project or department to understand what equipment is used, the stage of development, the number of workers on-site, and who has oversight for the project or department. Ensure you complete a thorough safety review by completing the following:

  • Review previous safety inspections and reports that were provided in-house or by outside agencies.
  • Review WorkSafeBC injury claims for the last few years.
  • Review WorkSafeBC billings for the last few years. Not only will this provide insight into the type of injury and wherein the process injury occurred; it also indicates the cost associated with accidents and by default motivates a business to continue safety efforts to reduce cost.
    • If specific areas are constantly targeted or found deficient, review these areas to see if appropriate changes have been made. Determine the areas that are to be inspected and the safety equipment that is needed. Ensure that you are knowledgeable about the necessary safety equipment and how to wear it. Your credibility is on the line. You won’t be taken seriously if you are not projecting the need for personal safety.
  • Engage workers that have been injured on the job. Find out why they were injured and what steps have been taken, both by the company and individually, to improve workplace safety.
    • Ask if there are additional safety issues that the employee feels would enhance safety within their working environment. Make it plain to the employee that this is not a witch hunt to lay blame, but rather that, as a concerned employer, you are always interested in ensuring the welfare of employees within the workplace environment.
  • Observe workers in action.
    • Are they lifting the above-suggested guidelines?
    • Is the job repetitive and monotonous?
  • As with all reviews, it is imperative that notes be taken as you progress through the review to capitalize on the issues while they are fresh. Notes should identify the issues, observations and potential solutions for later review.
  • There are areas of safety concern that even a novice should be able to identify. If you have taken a safety inspection course it should be easy to spot tripping hazards, blocked or locked exits, frayed or exposed wires, slippery floors, missing machine guards, shoddy housekeeping, or equipment that is long in the tooth and may not meet standards. Further, if walls are damaged or doors dented, it implies that drivers are not as diligent as they should be. Such lack of diligence may endanger not only the operator of the equipment but the workers as well.
  • If employees are not using company-mandated safety equipment, ask for an explanation. Explain to them that not only are they jeopardizing their own safety, they also risk putting fellow employees and the company at risk should the company be shut down or face fines that will complicate future cash flow. It would seem appropriate at that moment to insist that the worker wear the clothing or remove them from the floor to establish your commitment to safety.
  • Observe workers as they perform their job.
    • Do they lift heavy objects?
    • Do they stand/sit in positions that are not compatible with the machinery they are operating?
    • Are they performing repetitive motions?
  • When necessary take pictures to document issues for future reference.

POST-INSPECTION FOLLOW UP

Post-inspection follow-up is important to establishing your credibility as an employer committed to improving any identified safety issues.

Once the review is completed the impetus for change must be continued. Identified weaknesses should be categorized and accompanied with a plan establishing corrective action to be taken, the timeline for the changes, and potential costs for implementing the safety procedures.

If it is not possible to make wholesale changes – as complex issues require further investigation or engineering studies to achieve completion – management will have to determine what intermediary safety changes must be made to minimize potential injury.

Not only will this step maintain worker safety, but it will also provide evidence that the company was aware of the issue and was taking positive steps to correct the safety concern initially identified.

Feedback to employees showing what was determined as a result of your safety walk-around, and what process is being put in place to address concerns that may have arisen, provides confidence to employees that your company is committed to ensuring they can go home injury-free after their shift.

Owner-managers recognize their legal and moral responsibilities to provide a safe work environment for all employees. As such management involvement in identifying and correcting issues that may compromise the integrity of the workplace and negatively impact both the financial and public perception of their organization is of paramount importance.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Self-Directed Investments

Fundamentally, there are four avenues that the average Canadian may consider over their lifetime:

  • Registered Retirement Savings Plan (RRSP)
  • Registered Retirement Income Fund (RRIF)
  • Tax-Free Savings Account (TFSA)
  • Non-Registered Investment Account (NRIA)

The first three account types are registered with taxation authorities and as such are accompanied by rules and regulations that must be followed to obtain specific tax advantages or to avoid penalties for non-compliance.

The NRIA is not encumbered by the requirements of the registered accounts and about the only requirement is to ensure that the CRA receives full disclosure of income earned, capital gains or losses and administration fees that may be incurred throughout the calendar year.

Many taxpayers that have one or more of these investment vehicles relinquish management of such to institutional investors, not realizing that all these investments can be placed into a self-directed investment vehicle within their financial institution or investment firm.

ADVANTAGES OF SELF-DIRECTED INVESTMENTS

  • Lower cost per trade. Most institutions will allow trades, buying and selling, for approximately $10.00
  • per trade transaction.
  • Investors can make trades online quickly and efficiently without the need to contact your broker.
  • Most self-directed trade sites provide information about the investment. Reports show important information that includes, to mention a few areas:
    • balance sheets, income statements, cash flow statements quarterly or year to date
    • history of dividend payments
    • high and low market value of the investment for not only the current but past years
    • other investors’ analyses of the company and, in some situations. a rating of whether to buy,
    • sell or hold the investment
    • current news updates on the company
  • The investor has control of the investment rather than leaving the decisions in the hands of an investment firm or another individual.
  • The investor is not locked into specific investment vehicles such as Mutual Funds, Exchange Traded Funds, specific individual stocks, bonds or GICs that may be an institutional investor’s approach.

Some financial institutions offer a “play” account wherein you can practice trading using their software to become accustomed to how the system works and also gain insight into how well the investments would have done if you had invested.

Many financial institutions aid investors wanting to self-direct their investments.

DISADVANTAGES OF SELF-DIRECTED INVESTMENTS

  • An unsophisticated investor may not have sufficient knowledge to determine the appropriate investment decisions considering factors such as their age, portfolio diversification, and risk tolerance.
  • Familiarity with the investments that are allowed and not allowed in registered investment vehicles is required.
  • Investments in foreign jurisdictions may become problematic if foreign tax authorities require registration or reporting in their country.
  • Investors may not be familiar with tax requirements.
  • Record keeping is essential for non-registered investments as taxation authorities need to know the buy price, sale price, commissions, dividends, income, capital gains, capital losses, and administrative cost. Some online brokerages may provide this reporting for their investors.
  • A starting portfolio with low investment may not offer a return on investment comparable to an investment firm that can comingle smaller amounts to create a large investment portfolio.
  • A minimum deposit amount may be required to open a self-directed account.
  • Financial investors may charge an annual fee. These fees may be hidden in the RRSP or TFSA investment vehicles. These fees are not tax-deductible but simply reduce the overall amount that is available for investment. Similarly, within an NRIA, the more that it costs to administer or complete trades, the less that is available for investment growth. Investment fees within an NRIA are tax-deductible.

OTHER CONSIDERATIONS

  • The transfer of all four investment categories from a managed portfolio into a self-directed portfolio in kind is permissible. Many investments held in a managed portfolio can simply be transferred over to a self-directed account without the need to liquidate and repurchase. Some investments can only be held in a managed portfolio and accordingly would have to be liquidated. Generally, there are no tax implications of liquidating assets held in an RRSP or TFSA (as long as the funds are not withdrawn from the account). Naturally, you must stay within the confines of a financial institution. You may be charged an administration fee. Most online brokerages cover the fees for transferring your investments.
  • Investors must determine if they want interest, dividend or capital gain growth in their investment. Unlike dividends and interest growth, the capital appreciation of a stock compared to its original cost does not necessarily result in an increase in cash, unless the stock is sold. Accordingly, if an investor chooses to hold stock and its value subsequently decrease, that money is no longer available to invest.
  • A capital loss within a registered vehicle is not tax-deductible. It merely reduces the amount of the investment when the stock is sold.
  • A capital loss on an NRIA under normal circumstances can only be used to offset capital gains, though these losses may be carried back or forward to other taxation years.
  • There are limitations on investments that can be made in registered accounts. The CRA considers these investments to be qualified investments. Investors should be familiar with investments by visiting the CRA website and referring to the publication Income Tax Folio S3-F10-C1, Qualified Investments-RRSPs, RESPs, RRIFs, RDSPs, and TFSAs. Failure to follow the rules and investing in non-qualified investments could result in a tax of 50% of the fair value of the investment at the time it was purchased or became non-qualified.
  • An investor could choose a company for its dividend potential. However, if the market value drops below the original cost, the dividend income may not be sufficient to make up the capital loss.
  • Investors must determine whether they are going to purchase and hold or actively trade. The CRA has been cracking down on TFSA abuses where investors have been allegedly running a trading business in these accounts.
  • You can invest in debt obligations, mortgages, precious metals, warrants and options, securities on designated stock exchanges, money and deposits with Canadian banks, trust companies and credit unions (GICs). However, before making an investment outside designated stock exchanges or GICs, ensure you understand the requirements and restrictions.
  • You cannot invest in digital currency.

Converting a managed investment vehicle to a self-directed vehicle is not for everyone. Those who are anxious about their ability to take on the responsibility for their retirement nest egg may not mind paying a management fee and thus are best to stay with a managed account. Others who feel confident in their investment prowess may determine that the risk of self-investing is more than offset by the potential increase in their portfolio value that they may realize by investing the administration fees they did not have to pay.

Disclaimer:
Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Clear Expectations

Avisar’s people are always looking for ways to improve the firm. Case in point, our managing partner, Bernie Zacharias, came across an article on LinkedIn recently that he felt resonated with Avisar’s culture; Clear Expectations Help People Meet Your Standards. Avisar’s partners have incredibly high standards and they constantly challenge their team to get a little bit closer to perfection with every client interaction – and the team accepts this challenge head-on.

It hasn’t always been this way though. Years ago, before a transition of leadership, it felt like everyone did their own thing and went their own way. Avisar’s clients were being served, but not by a team of like-minded individuals pulling in the same direction. The leadership group saw this and recognized that if they wanted to take Avisar to the next level their team needed direction. The team needed clear expectations. They needed to know what kind of firm the partners wanted Avisar to be and what their client interactions should look like. Each staff member needed to have clearly defined expectations of their role and responsibilities within the firm.

These days, each member of Avisar’s team has a clear understanding of how they can positively impact every interaction with the clients they serve. The partners communicated clear expectations and now, the team is working together to get a little closer to perfection every day.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences

Complacency

Every owner-manager has experienced new employees enthusiastically jumping head-first into the task at hand — only to see that enthusiasm for their job morph into complacency over time.

Complacency on the job not only lessens the performance of an individual employee; it can also lead to accidents or legal issues if workers become used to the status quo and don’t recognize situations that fall outside the normal operational procedures.

Managing complacency is an ongoing process. Can you recognize its symptoms? Social scientists have identified 10 common traits that suggest an individual is complacent at work.

10 Common Traits Of Complacency

  1. An individual may seem disengaged from their work. They may not show enthusiasm for new projects, consistently applying themselves just enough to fill the day until it’s time to pack up for home.
  2. An employee may stop coming up with new ideas or adding their ideas to the project or task at hand, and simply nod in agreement. It might feel as if they don’t want to become involved in the process and are focused only on wanting to get the job done.
  3. If employees have stopped thinking about projects — evidenced perhaps by their not contributing comments or efforts — it’s a sign that they want to distance themselves from the job. This lack of involvement can have a negative impact on their co-workers.
  4. Most people want to be successful and proud of their achievements in the workplace. If you notice that the staff member is no longer interested in learning new job skills or taking courses that enhance existing skills, it’s a sure sign of possible issues.
  5. Individuals have their own style of accomplishing tasks or interacting with clients and fellow employees. If a person loses their sense of identity, they start to doubt how well they work in harmony with others. Thus, they may hesitate to get involved, choosing to withdraw from the process instead.
  6. If you conclude that an employee is not following procedures, not paying attention to detail or constantly making small errors, it implies that they are “resting on their laurels,” and have given up the desire to move beyond their current level of effort. Failing to follow corporate procedures or policies creates risk for the corporate entity that employs them, and reduces a team’s and business’s productivity.
  7. Risk-taking — that is, calculated risk-taking — is a regular part of everyday operations. If employees are not willing to reach out with new ideas or processes, and instead stay with the tried-and-true, it may be a sign that they have lost the desire to accept and deal with change.
  8. Consistently showing up late for work, delaying projects, taking longer-than-normal breaks, or maximizing time off from work is a strong indicator that someone has lost their passion for what they do at the workplace. In essence, they have lost the drive to perform their duties and could be on a downward spiral in terms of job performance.
  9. A disgruntled employee who consistently complains about company process or the job they are doing is often unhappy because the life and work decisions they made have led them to this juncture in their career. Rather than approaching management for other opportunities or accepting that this is their situation, their negative approach risks sowing a toxic and uncomfortable attitude within the broader workplace.
  10. If an employee spends an inordinate amount of time on the Internet, or in the coffee room griping about management or their differences with colleagues, they have likely fallen into a rut in their career. Employees in this stage are not only hurting their own prospects, they will also negatively impact on the morale of younger, more driven employees.

If you’re a manager, understand that complacency in the workplace is engrained in human nature. It is easy in all areas of life to continue on the same path without feeling the need to change. But it’s you who are responsible to keep employees motivated within the work environment, so you can ensure productivity, creativity, efficiency and harmony.

TIPS FOR COMBATTING COMPLACENCY

These practices can be your tools to help manage a complacent employee:

  • Offer incentives based on individual performance. People embrace working towards rewards, whether they are financial (as a bonus), material (think company watch), intangible (time off afterward to acknowledge a tough timeline) or the chance to advance in the future.
  • Provide constructive feedback that acknowledges a job well done — not just for new employees, but also the long-timers that we already expect are doing a good job. If you are dissatisfied with how they handled a process, outline clearly your expectations for improvement.
  • Arrange support if employees are feeling overwhelmed. When necessary, call in other team members to help, or seek temporary outside help. Such an approach not only indicates that you are empathetic to a specific problem but also promotes the concept that each employee has responsibility for other team members.
  • Always have an open-door policy that is highly geared toward engaging the employee’s feedback — whether or not the comments are positive. Moving forward depends on understanding how individual employees see the process and letting them provide input into how they believe things in the company should work. Let’s face it … even managers get complacent with the way things are and can start losing sight of new ideas.
  • Embrace team spirit. Encourage comradery among all employees, where it promotes a work process that builds on everyone’s ideas and contributions. Constantly reinforce the goals of the company and how each employee is an integral part of making it happen.
  • Provide opportunities for training that they feel will enhance their abilities and their value to the company.

Reducing complacency in the workplace is essential to maintain staff motivation and productivity, and to create a positive environment that provides all employees with the opportunity to contribute—not only to the organization but to their individual self-worth. If you want to reduce staff time off and turnover and provide a solid footing for an organization to move forward, use these insights to foster a team environment that encourages employees to meet the challenges at work while receiving constructive feedback and appropriate rewards along the way.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences