JUNE 2016 June 13th Sales Roundtable
June 17th
June 17th
Annual Meeting
Premier Event!
"...with ED”
Mark Hogan, Secretary & CEO, Wisconsin Economic Development Corp.
"Moving Wisconsin Business Forward" "JETS...with ED” Open Format Discussion
Join Executive Director Steve Kohlmann & tour 128th Air Refueling Wing
Inside This Issue:
HANNEMAN: FINAL OVERTIME RULE ISSUED BY DOL
JURKEN: ILLUSORY SUPERIORITY AND YOUR ABOVE AVERAGE TEAM IN CHINA
SEROKA: DO YOUR SALESPEOPLE BELIEVE IN YOUR BRAND?
Networking matters
At AT&T, we know that making connections is critical to success. In Wisconsin and across the nation, we link businesses with their customers and the world through our wireless network with access to the nation’s largest Wi-fi network. It’s just another way we help our customers stay connected. AT&T is proud to support the Independent Business Association of Wisconsin.
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IBAW thanks AT&T for it’s continued sponsorship.
IBAW MEDIA LINK The Future of MPS: Kooyenga and Teachers’ Union Clash
Executive Director Steve Kohlmann
_________________________________________________________
Representative Dale Kooyenga and Milwaukee Teachers Union Executive Director Lauren Baker clash over the future of public education in Milwaukee.
President Jim Leef ITU AbsorbTech Secretary Dan Hansen Waukesha State Bank President Elect 2015-16 Craig Coursin Stier Construction VP. State & National Programs Charles Fry Baird Treasurer Casey Malek Sikich
To watch, click here Video courtesy of MacIver Institute
Directors Ann Barry Hanneman Simandl Law Group S.C
Experiment on Unequal Pay _________________________________________________________
Frans de Waal’s TED Talk shows what happens when an unequal pay factor is introduced into an experiment.
John Weber Hypneumat Jeff Hoffman Boerke Co. Richard Blomquist Blomquist Benefits Lisa Mauer Rickert Industries Tom Boelkow BSI Design, Build, Furnish Robert Gross Gross Automation
To watch, click here. IBAW Mission: To advance business prosperity through insightful programming, executive networking and member-driven public policy and advocacy.
Friday, June 17th, 2016 ANNUAL MEETING!
“Moving Wisconsin Business Forward” Mark Hogan, Secretary & CEO, Wisconsin Economic Development Corporation As Wisconsin’s lead economic development agency, with more than 600 regional and local partners, the Wisconsin Economic Development Corporation (WEDC) fosters the cooperation necessary to support sustainable business growth and job creation. WEDC's model is customer-service focused and aligns with the needs of businesses.
Registration now open! Click here. IBAW Members: $32.00 Guests: $42.00 Includes plated breakfast • Attire: Business Professional
LOCATION
THE WISCONSIN CLUB 900 W. WISCONSIN AVE. MILWAUKEE
7:00 AM
REGISTRATION & NETWORKING
7:30 AM
BREAKFAST & PROGRAM
9:00 AM
PROGRAM ENDS
Friday, June17th - Jets...with ED 3:00 pm - 5:00 pm Location: 128th Air Refueling Wing, 1919 East Grange Ave. Milwaukee
E FRE
T! N E EV
Join IBAW Executive Director, Steve Kohlmann June 17th at 3:00 pm for a private function at the 128th Air Refueling Wing. We’ll get an exclusive tour of the 128th Refueling Wing facility PLUS tour the jets that keep America’s fighters refueled and fighting. Beer and brats served after the tour courtesy of the 128th Air Refueling Wing. Guests welcome!
Registration now open! Click here.
Summer Doldrums? I Don’t Think So. Steve Kohlmann, IBAW Executive Director Sumer has arrived. As I write this it’s a gorgeous weekend. White puffy clouds are overhead, the temperature is perfect and it’s starting to feel like summer. It’s early morning and I’m sitting in our screen room enjoying a cup of coffee, listening to Rickie Lee Jones on Pandora and utilizing the full functionality of a laptop with WIFI. The birds are singing and there’s a gentle breeze blowing. The only thing that could be better is having a Margarita and I suspect that will be coming later this evening. Because we’re coming into a Wisconsin summer you might think this would be a time where activities at IBAW might experience a ‘summer slow down’. After all, it’s not uncommon for people to take advantage of the short (but beautiful) Wisconsin summers to go golfing, fishing, bicycling or the countless other things we have to cram into our all to short weather window of opportunity. But there’s a lot of things cooking on the IBAW grill over the next several months and we are running at full speed. Believe it or not, I’m already looking at events for November and December. Here’s what we have on deck for the next few months: June 13th - Sales Roundtable - Open Format. If you or your sales team are not attending the monthly Sales Roundtable, you’re missing an incredible opportunity to gain more sales & marketing knowledge. The Sales Roundtable is open only to IBAW members but it’s a FREE benefit of your membership! June 17th IBAW Annual Meeting Mark Hogan, Secretary and CEO of the Wisconsin Economic Development Corporation will be our featured speaker and we’ll be awarding our “Legislator of the Year Award”. June 17th 3:00 pm - 5:00 pm. “ JETS...with ED” Also the 17th we’ll be kicking off a new event call “...With ED” which will be taking place from 3:00 pm to 5:00 pm. We’ll be having “JETS...With ED” at the 128th Air Refueling Wing. We’ll be taking a tour of their facilities and touring the super tankers that keep America’s fighters fueled and in the air. Afterwards, the 128th will refuel us with free brats and beer. This is a free event and you don’t event have to be an IBAW member to join us. Homeland Security rules will be in place so you do have to register in advance - walk in’s will not be honored. July 8th Business Behind the Scenes - Amazon Fulfillment Center I’ve been working on this tour for over a year. Amazon doesn’t open their doors very often but IBAW has once again pulled it off. Get an inside look at the incredible logistics and all it takes to fulfill Amazon orders in the midwest. Bring your walking shoes...it’s BIG! July 15th - Monthly Meeting Ismael “Izzy” Bonilla, the new director of Mitchell International Airport, will make one of his first public appearances to share his vision and thoughts about the future of our airport. Will there be any expansion to get the flying public to more cities with a direct flight? Will Mitchell International be able to avoid the long lines for security that other airports are experiencing? So as you can see, things are hopping! Join us!
G N I T R SPO
T O O H CLAY S
RECAP We are just off the heals of our 2nd Annual Sporting Clay Shoot which was a HUGE success. We doubled the size from last year with 82 participants. Everyone had a great time and we had a significant group of new shooters participate. It was great fun and we even beat out the rain! Thanks to all of our event sponsors who participated. We learned a lot to improve the event for next year. This event will be back next year!
Bruce Nelson of Nelco Electric was the big winner of the $500 gift card for Wisconsin Firearms Training Center. “I’m going to use it to buy that Kimber pistol that I’ve always wanted!”
Coolest thing we saw - a stroller repurposed as a gun toting carrier (not authorized for mall use).
Illusory Superiority and Your Above Average Team in China Joe Jurken, Principle & Senior Partner, The ABC Group
“87% of MBA students at Stanford University in 2001 rated their academic performance as above the median relative to their graduating class.”
As great of an institution as Stanford University is, I find it hard to believe that somehow these bright minds have redefined mathematics as we know it, to allow 87% of their class to be more proficient than the median performance of their peers. This study, and countless others over the years, continues to demonstrate that human beings routinely overestimate their intelligence, work performance, and even driving skills. So why does this matter? Well in many cases, the only negative impact our inflated sense of self may lead to is fewer “likes” on social media than we expected, or a fender bender as we try to parallel park in a space too small. For those managing organizations however, this cognitive bias can, and does have serious implications on a company’s profitability and longterm prospects. Specifically, when looking at companies with teams in Asia, I routinely hear executives praise their foreign staff as though they were worthy of riding triumphantly into Rome in a gilded chariot. Frequent honors awarded in absentia include being the best country manager, a best-in-class sourcing office, and the only manufacturer in all of China sophisticated enough to supply their company. Whether it is willful ignorance or the ill effects of illusory superiority bias at play, these beliefs are causing many businesses to miss out on opportunities to improve supply-chain efficiency, reduce management expenses, and create more profitable and resilient organizations. To mitigate this powerful and blinding force, business leaders should accept three uncomfortable truths: 1
Not every company can have the best team in China, and more likely than not, your team is not the best (Unless of course you are headquartered in Lake Wobegon) Given diminishing marginal returns, the quest for perfection is not only unattainable, but also quite foolish. Only through a critical examination can you accurately identify your team’s strengths and weakness. In doing so, it is perfectly reasonable to determine that your team is not the best, but is very proficient at certain functions such as product development or sourcing a key product category, and conversely may struggle with project management or continuous improvement. Remember, it is not about trying to have the best team in China, but rather the best team in China for what you want to achieve. This can best be accomplished with a staff that possesses a diverse set of skills.
2
Most teams in China readily accept proposed improvements, but few can actually implement real change on their own. Ever had an Asian supplier tell you they could make a product per your specifications only to later find out they were not positioned to do so? Maybe they lied to gain your business, or perhaps they genuinely wanted to meet your expectations but were simply unable to do so. The same sentiment can be applied to foreign teams in Asia. Whether struggling with communication or accomplishing key objectives in a timely fashion, do not be surprised if when confronted, a team in China acknowledges performance shortcomings, vows to improve, but you still end up facing the same issue months later. Unfortunately, more often than not, a foreign staff’s performance is
largely attributed to the personnel that comprise that team. In turn, if a staff does not meet your expectations, do not be surprised if those individuals are not capable of championing real substantive change.
3
No business is too large or sophisticated to not make improvements in China. “Simplicity is genius”, Einstein once opined. Seeing that this humble patent clerk’s Theory of Relativity is still valid a century after being published, perhaps business leaders should take heed. Whether managing a joint venture, a sourcing/sales office, or a supplychain extending into a dozen countries, all companies can embrace change regardless of size. While structural improvements can often be painful to implement in the short-run, the long-term costs associated with inaction usually far exceed any temporary discomfort. And remember, “Nothing is particularly hard if you divide it into small jobs.”-Henry Ford
At the end of the day, for the vast majority of companies, one’s Asian operations are not scrutinized on a day-to-day basis, and when examined are more often focused on anecdotal feedback. For those comfortable with their overseas business, consider for a moment taking a more pragmatic approach to assessing your global organization, as doing so may lead to building upon your competitive advantages while less in-touch competitors pontificate about their best-in-class foreign teams and how they have bigger hands than the next guy. Joe Jurken is the Founder and Senior Partner of The ABC Group, whose mission is to assist US companies more effectively import and export product throughout Southeast Asia. Having traveled to China well over 200 times and with 25+ years of in-market experience, Joe and The ABC Group have created a business model that provides cost-effective access to experienced on-the-ground professionals in China for US importers and exporters alike. Mr. Jurken can be emailed by clicking here.
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Friday, July 8th - Business Behind the Scenes: Amazon Fulfillment Center 10:00 am - 12:00 pm Open only to IBAW members.
BIG It’s
Final Overtime Rule Issued By Department of Labor The Increased Cost of Overtime Will Affect Most Employers Ann Barry Hanneman, Simandl Law Group, S.C.
The U.S. Department of Labor (DOL) released its Final Rule addressing the new requirements of the white collar exemptions to the Fair Labor Standards Act (FLSA). This Rule updates the FLSA’s overtime regulations for executive, administrative and professional employees (also known as “white collar” exemptions), but does not make any changes to the outside sales or computer professional exemptions. This long-anticipated Final Rule comes in response to President Obama’s Presidential Memorandum on March 13, 2014, directing the DOL to modernize the regulations that define “white collar” workers for purposes of exemption from the FLSA’s minimum wage and overtime requirements. Following the release of the proposed regulations and a comment period which generated 247,068 comments, the Final Rule was released on May 18, 2016. The Final Rule takes effect on December 1, 2016, leaving time for employers to prepare for and comply with the new regulations. The significant changes to the current white collar exemptions are: (1) an increase in the salary level test from $23,660 to $47,476 annually (from $455 per week to $913 per week); (2) an increase in the salary level test for highly compensated employees from $100,000 to $134,004 annually; (3) automatic increases in the salary level test every three years beginning January 1, 2020; and (4) the allowance of nondiscretionary bonuses, commissions and other incentive payments (not including discretionary bonuses) paid at least quarterly to count towards a maximum of ten percent of the standard weekly salary level test. Of note was the fact that the DOL did not change the duties test, even though the DOL requested comments on that topic. There was a limited exception noted with respect to the effective enforcement date of December 1, 2016. Applicable to providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds, the DOL issued an unpublished Non-Enforcement Policy. For such providers, the DOL will not enforce the updated salary threshold from December 1, 2016 through March 17, 2019. Instead, during this nonenforcement period, the DOL will engage in outreach and assistance efforts to providers of services covered under the NonEnforcement Policy.
Background of Overtime Requirements under the FLSA The FLSA provides for minimum wage and overtime pay requirements for employees covered under the FLSA. Section 13(a) of the FLSA exempts from these minimum wage and overtime protections any employee in a bona fide executive, administrative or professional capacity (the “white collar” exemptions) and outside sales and computer employees. To qualify for a white collar exemption, each of the following tests must be met: (1) the employee must be paid a predetermined and fixed salary (“salary basis test”); (2) the amount of salary paid must meet a minimum specified amount (“salary level test”); and (3) the employee’s job duties must primarily involve executive, administrative or professional duties as defined by the regulations (“duties test”). Additionally, the FLSA exempts “Highly Compensated Employees” that earn a fixed salary or fee at a level set by the DOL, that perform primarily office or non-manual work and that regularly and customarily perform at least one of the duties of an executive, administrative or professional employee.
Highlights of the Final Rule Salary Level Test and Automatic Update. The DOL’s Final Rule raises the salary level test from $23,660 annually ($455 per week) to $47,476 annually ($913 per week) for a full-year worker. The Final Rule tied the new minimum salary level to the 40th percentile of all salaried employees in the lowest-wage region of the country’s five Census Regions – Northeast, Southeast, Midwest, Southwest and West. Of the five regions, the Southeast currently has the lowest wages. The Final Rule also raised the Highly Compensated Employee salary level from $100,000 to $134,004 annually, which is based on the 90th percentile of earnings for full-time salaried workers in the United States without regard to regional differences. The Final Rule also includes an automatic update to the salary level to take place every three years. The first update will take effect on January 1, 2020, with a likely increase to approximately $51,168 annually ($984 per week) and the salary level of the Highly Compensated Employee is likely to raise to $147,524. The DOL will publish the updated rates at least 150 days prior to their effective date. Nondiscretionary Bonuses and Incentive Payments. For the first time, the Final Rule allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to a maximum of 10 percent of the standard weekly salary level test, provided these forms of compensation are paid at least quarterly. Currently, such bonuses are only included in calculating total annual compensation under the Highly Compensated Employee test. Allowing employers to satisfy a portion of the salary level with bonuses and incentive payments may, to some extent, lessen the financial burden of the salary level increase. Additionally, the DOL also permits a “catch-up” payment at the end of each quarter for the wages to reach the required salary level. This may also serve to decrease the administrative burden on employers and ensure that exempt employees receive the compensation to which they are entitled. The DOL did not consider changing the exclusion of board, lodging, or other facilities from the salary calculation or expanding the salary level test calculation to include discretionary bonuses, payments for medical, disability or life insurance, or contributions to retirement plans or other fringe benefits. Job Duties Test. The Final Rule does not include a revision to the job duties test. The proposed rule asked for comment on the inclusion of a specified amount of time spent for primary duties (e.g. 50% requirement like California law) to qualify as an exempt employee. However, employers should assure compliance with the current duties test before finalizing any employee classification as the duties test still must be met, even if the new salary test is met. Non-Profit Entities and Educational Institutions. During the comment period prior to the release of the Final Rule, the concern was raised by non-profit entities that the new salary test would negatively impact non-profits as they typically pay lower salaries than for-profit employers and the impact of an increase in salary may threaten their viability. Nonetheless, the Final Rule treats non-profit employers the same as for-profit employers and refused to create a special salary level or an extended phase-in period for non-profits. Therefore, unless a non-profit exclusively provides charitable services or its annual gross volume of sales made or business done is less than $500,000, it is a covered enterprise under the FLSA and will be held to the same standards as for-profit employers. Further, employees of non-profits not covered on an enterprise basis may still be entitled to FLSA protections if they are individually engaged in interstate commerce or in the production of goods for interstate commerce, or in any closely-related process or occupation directly essential to such production. Examples of activities that may result in individual coverage include making/receiving interstate phone calls or shipping materials to another state. The Final Rule also failed to create a carve-out for educational institutions. Preschools, elementary and secondary schools, and institutions of higher education are covered by the FLSA, and nothing in the Final Rule changes that coverage. However, special provisions apply to many personnel at these institutions that make them overtime-exempt. Although the
white collar exemptions expressly apply to an “employee employed in the capacity of academic administrative personnel or teacher,” the salary level and salary basis requirements do not apply to bona fide teachers. Accordingly, the increase in the standard salary level in this Final Rule will not affect the overtime eligibility of bona fide teachers.
The Impact of the Final Rule These new salary requirements will apply to the FLSA’s executive, administrative, and professional exemptions starting December 1, 2016. Employees that do not meet the new salary requirements when the Final Rule becomes effective will no longer qualify for one of these exemptions, which means they will have to be paid overtime compensation when they actually work more than 40 hours in a workweek. As the effect of these changes may be more drastic in certain businesses, employers need to assess the operational impact of the changes. Employers must immediately begin to assess the impact of the new salary level test upon their workforce. For those employees that will lose exempt status because they are paid a salary less than $47,476, decisions about their pay status moving forward must be implemented by the Final Rule’s effective date. Employers must assess whether to provide additional salary to make up the difference between an employee’s current salary and $47,476 to retain their exempt status or whether to reclassify an employee as non-exempt, recognizing that overtime rates would apply. Care should be taken in developing communications around these changes to avoid morale issues that can result from these changes. Furthermore, beyond an employee’s pay structure, the impact of a change in classification must be assessed, taking into consideration whether the employees’ current benefits will change as a result of a loss of exempt status and/or whether an employee will now be eligible for coverage under a collective bargaining agreement (if non-supervisory). In addition, employers need to consider recordkeeping requirements so that steps can be put in place to track hours worked including overtime hours worked beyond 40 hours in a workweek. To reduce workload and to assess alternatives for controlling overtime costs, employers can also consider hiring additional non-exempt employees. Policies including requiring advance approval for overtime work or the consideration of a fluctuating workweek method for calculating hours should also be explored to minimize exposure. No doubt, the Final Overtime Rule will greatly impact how small businesses operate. As a result, small business employers must carefully consider their available options and should consult legal counsel, if needed, to assure compliance as we all know the costs of overtime can add up quickly.
Upcoming Breakfast Briefing
Employer Limits on Hiring and Disciplining Employees Significant Pitfalls in the Operation of Your Business Friday, June 10, 2016 Country Springs Hotel 2810 Golf Road, Waukesha, WI 53187 8:15 a.m. to 10:30 a.m.
THE FINAL OVERTIME RULE WILL BE ADDRESSED In light of the May 18, 2016 release of DOL's Overtime Final Rule, the presenters will address the DOL Rule on exempt employee status requirements and compliance tips at this Breakfast Briefing. Please visit our website to see our latest Client Alert on the legal obligations imposed upon employers.
Two hot topics that continue to be the focus of recent employment litigation will be addressed at Simandl Law Group's June Breakfast Briefing. In the last few years, there have been an increasing number of lawsuits filed under the Fair Credit Reporting Act (FCRA) and an increasing number of unfair labor charges pursued under the National Labor Relations Act (NLRA) against nonunion employers for maintaining and enforcing employee conduct policies. This new generation of liability underscores how important it is that all employers are aware not only of the legal issues, but how to minimize liability. In this briefing, we will highlight these issues and provide practical tips for businesses to minimize legal exposure to these types of claims. The NLRA: The impact of the NLRA on both unionized and nonunionized employers has dramatically expanded as employer policies continue to be challenged as violations of Section 7 of the NLRA. Recent National Labor Relations Board decisions addressing an employer's ability to maintain and enforce conduct rules underscore the legal risk employers take for violating the NLRA when such actions may be viewed as interfering with the Section 7 rights employees have to engage in protected and concerted activities. Is it: 1. Illegal to tell employees their employment is "at will"? 2. Illegal to discipline an employee for disrupting a safety meeting? 3. Illegal to discipline an employee for insubordination to a supervisor? We will discuss how broadly the scope of Section 7 may apply under such circumstances and offer practical solutions to avoid unfair labor practice charges. The FCRA: The increasing numbers of class action lawsuits filed under FCRA highlight the importance of technical compliance with this law when employers have third parties conduct background checks of applicants. It happens more often than not that an employee is excluded from employment consideration because of a bad background check without further communication with the employee as to why. Is that okay? Compliance with the disclosure requirements and adverse action requirements have been the subject of many legal claims. To prevent your business from becoming the next class action target, employers must be aware of the FCRA requirements and be in a position to know what steps to take to maintain compliance. We will address the compliance issues giving rise to these actions and discuss the steps that employers can take right now to minimize legal exposure.
FOR MORE INFORMATION OR TO REGISTER www.simandlhrlaw.com/legal-events.html
Want to Be Successful? Quit Overthinking Steve Tobak, Author & Managing Partner, Invisor Consulting This article originally appeared on Entrepreneur.com
“The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.” - Ecclesiastes 1:9 When you’ve been around as long as I have, you can look back over your life and note the events that changed your perspective and influenced how things turned out for you. They’re called turning points. They’re few and far between, and with good reason. Too many and your life would be one big chaotic mess. Of maybe five or six major turning points that truly influenced the outcome for me, one stands apart. And I’m going to share it with you because it just might make a real difference for you, as it did for me. I’m not exactly a bible scholar, but I do have a thing for the simple poetic wisdom of the Book of Ecclesiastes. I actually have my own versions of some of its key messages that I recite from time to time, including this one: The longer you live and the wiser you become, the more you’ll realize how little you know … and how little it matters. Yes, I do realize I’m no poet. It can’t be helped. Anyway, I was introduced to Ecclesiastes at a time when I needed to learn an important lesson – that all the knowledge and achievements in the world don’t add up to beans if you can’t enjoy or at least experience the precious moments that you’re here. Soon enough, it will all be over, and you don’t get to take anything with you. My problem was that I’d spent a good part of my life distracted by questions like, Why am I here? and What’s my purpose in life? The day I decided to stop searching for answers and simply experience life was a big turning point. Ironically, that was when the answers came. When I quit overthinking and focused simply doing and being. Like me, I see many of you spending God knows how much time searching for answers to distracting questions like, How to be successful? How to be happy? How to be rich? How to be famous? How to be more productive? How to be less anxious? How to be [fill in the blank]? Here’s the thing. Someday, you may very well look back at your life and realize you’ve found the answers you sought, but like me, you’ll also realize that you didn’t find them by asking a lot of questions. I know that sounds like a paradox, so let me explain. The truth is, life is very basic. You’re born with survival instincts. You learn trial and error at an early age (walking and such). In school they teach you how to reason (hopefully). From there you go out and experience and make choices. You gain confidence from good ones, and learn lessons from bad ones. Rinse and repeat. That little snapshot of life reveals the four key elements that matter most in determining how things turn out for you: Instincts, smarts, experience, and choices. Of course there are other factors: characteristics, talents, skills, behavior, and luck, to name a few. But here’s what everyone seems to have trouble understanding, these days. “Happy,” “successful,” “rich,” and “famous” are all outcomes that are determined by all the other factors I just talked about. If you want to achieve positive outcomes, you’d be wise to trust your instincts, think logically, gain experience, and make good choices. And trust me when I tell you, there are no shortcuts to the outcome. The sooner you realize that and quit searching for them – the sooner you quit overthinking and focus simply on doing and being – the sooner you’ll achieve the outcome you’re looking for.
I bet I know what some of you are thinking. You hear what I’m saying, but you think It’s different now. What with social media, the blogosphere, self-help books, seminars, and all that, I bet you think the answers are out there. Well, I’m here to tell you that they’re not. On second thought, don’t just take my word for it. Here’s a little wisdom, courtesy of Ecclesiastes 1:9, “The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.” It means that things are not different now. They’re the same as they’ve always been. It would be tragic if some of you spent your entire lives without realizing how true that is. All I can say is, I’m glad I learned that lesson sooner, rather than later.
Who helped WISCONSIN BUSINESS advance the most last year?
While political candidates spend your contributions on media attack ads, mailers or robo calls, IBAW invests contributions to help businesses like yours. Our monthly meetings, sales roundtable discussions, white papers, web development or video messaging keeps you, your business - and your team - informed, updated and inspired. Last year, IBAW tackled issues such as workforce development, employee retention, restrictive business regulations, sales, marketing, human resources, leadership, manufacturing logistics, and Wisconsin exporting. Your support of IBAW through membership, sponsorship and other financial contributions helps Wisconsin business at a grass roots level.
THANK YOU!
SALES ROUNDTABLE
Even if you're seasoned in sales, learn what other professionals are doing and some new techniques and skills you might be missing. This is open to anyone at an IBAW member company who would like to share their real world challenges and most successful strategies for growing business. This Roundtable is meant to serve as a confidential means to learn from your peers in other industries and to help others learn from your experience – good and bad.
Click HERE to register for the next roundtable.
The IBAW Legislative Team
Mike Kuhn Jeff Hoffman
Charles Fry
The IBAW Legislative Team keeps our members up to date and informed on business issues coming out of Madison and Washington D.C..
G r e g Ly o n s
Ann Barry Hanneman
Do Your Salespeople Believe in Your Brand? Scott Seroka, Seroka Brand Development
A successful salesperson is one who believes in himself, as well as in the product or service he is selling. If this second component is missing, your company has a problem. A company can recruit a top-performing sales team, but if the brand is perceived as low value, or doesn’t measure up to or surpass the competition in some way in the minds of its salespeople, the company will never grow to its full potential. If you suspect this may be an issue at your company, consider taking the following steps with your salespeople to determine how to create a brand your entire company can believe in.
1. Ask each of them to explain how they feel about what they are selling. This can be an intimidating question, so to ensure candid feedback, let them know that you need to know so that you can make their job easier and help them win more business. If your salespeople are in any way incentivized based on their sales, they will be more than happy to share their thoughts with you.
2. Seek their opinions on how your company supports their efforts with things such as: Training – What does your training program look like? Do you have one? Does your brand provide your salespeople with a tiebreaker that repositions your competitors as second best? Innovation – Is your company keeping up with, falling behind, or surpassing competitors? Research and development Quality of service provided by anyone who touches the customer (service technicians, customer service, delivery, timeliness of follow up, competency of people handling issues/complaints, etc.) Marketing (website, sales materials, collateral, public relations, trade show presence, videos, social media, etc.)
3. Ask what they are hearing and seeing in the field relative to how your brand stacks up to competitors in areas such as performance, quality, delivery, support, value, and other traits specific to your products. Answers to these questions will define your brand’s reputation.
4. Ask who they believe the “leader” is in your industry, and why. The gap between your brand and the perceived leading brand may be quite large. Or, it could only be a sliver of a difference.
5. Have each salesperson complete a SWOTT (Strength’s Weaknesses, Opportunities, Threats, Trends) form. The feedback you receive will likely be very eye-opening, exposing you to things you are not aware of, or ever thought of. Going through this process will force your salespeople to think in ways they may not have thought before, and your conversations with them will be very enlightening. Plus, they will respect you as a leader for asking the questions which will, in turn, benefit morale. Consider making this process a part of your sales strategy. If you don’t ask the right questions, you’ll never know what is or isn’t working, and we all know how important communication is in any relationship. If your salespeople don’t believe in what they are selling, they may move on to work for a brand they respect, and it could be your formidable competitor.
IBAW Releases Legislative Priorities for 2016 - 2017 On the following pages are IBAW’s Legislative Priorities for 2016 - 2017 released by the IBAW Legislative Committee and the IBAW Board of Directors. These priorities cover both State and National issues from Tax Reform, EPA Regulations, No Minimum Wage Increase and other topics which are of concern to small business owners and entrepreneurs. While the list covers many different topics, it is by no means complete. There are many other issues government is proposing which will hinder small business. Rest assured, the IBAW is vigilant on legislation in Madison and Washington D.C.. Special thanks to the Legislative Committee for their hard work in publishing these issues and to our membership who helped bring forth some of the issues.
The IBAW Legislative Team
Mike Kuhn Jeff Hoffman
Steve Kohlmann
Charles Fry
The IBAW Legislative Team keeps our members up to date and informed on business issues coming out of Madison and Washington D.C..
G r e g Ly o n s
Ann Barry Hanneman
State National 2016-17 Legislative Priorities
Tax Reform DOT Funding EPA Regulations Healthcare Reform Corporate Tax Reform DOL Fiduciary Standard No Minimum Wage Increase
Legislative Priorities 2016 - 17
A Strategic Vision of Sustainable DOT Funding - STATE While the passage of a constitutional amendment in 2014 requiring revenue generated by the use of Wisconsin’s transportation system marginally addressed the structural problems facing our transportation fund, the fact remains that there is a sizable gap between funds available, and funds required for vital infrastructure investment. Budget shortfalls created the suspension of five projects around the state in 2015. Governor Scott Walker had previously asked for $1.3 Billion in bonding, which was negotiated down to a $500 million level with additional money to be released at a future date. The IBAW believe a modern and efficient infrastructure system is the foundation of the state and local economy. Funding our infrastructure development through bonding alone is unsustainable and this alone will not solve the long term challenges facing Wis DOT. While Wis DOT needs to continue to advance efficiencies within its organization and become much more judicious in funding projects, these measures alone are not enough to close the gap. The IBAW is in favor of prioritizing key projects surrounding vital economic hubs in the near term. In the long term, a mix of increased user revenues such as gas taxes, registration fees, and tolling needs to be considered to ensure that Wisconsin’s businesses have access to a robust infrastructure network. Tax Reform - STATE The current administration has made notable strides in increasing the competitiveness of the state income and property tax code for individuals and businesses, however more must be done. According to the Wisconsin Taxpayers Alliance, 35 other states have a more competitive tax code than Wisconsin. Additional national rankings do not look any better. The Institute on Taxation & Economic Policy ranked Wisconsin 43rd and 46th for those at the middle ($50,000) and high ($150,000) income threshold. These two groups encompass many entrepreneurs who are looking to grow the economy. In an increasingly globalized and competitive world a punitive tax policy will continue to present a headwind for job creators making job creation efforts more difficult. The State must continue to advance Tax relief across the board to enhance economic competitiveness.
Wisconsin against the EPA - Part 2 The EPA recently proposed significant changes to carbon levels that will necessarily drive up the cost of energy within the State of Wisconsin and cost consumers and small businesses billions of dollars. The IBAW supports Attorney General Brad Schimel and the State of Wisconsin in the opposition of the “Clean Power Plan” which as estimated by the Public Service Commission of Wisconsin will cost as much as $13 Billion. Wisconsin is heavily dependent on manufacturing, which requires the kind of reliable, affordable energy produced by our clean coal burning power plants. Since 2000 Wisconsin has already invested $11 Billion in reducing our carbon emissions. These repeated attempts by the EPA to impose illegal regulations on state utilities, regulated by the states themselves, are specifically anti-small business. Given that offshoring of manufacturing jobs has been a hot button issue in the 2016 campaign, the United States can assure itself of a continued migration of producers to lower costs areas around the globe should the EPA standards be upheld.
Corporate Tax Reform Eaton Corp, Pfizer, Mylan, Medtronic, and now Johnson Controls. The list of U.S. Companies acquiring foreign corporations and re-domiciling abroad grows seemingly by the month leaving behind at the very least gaping holes in national income tax revenue streams, and more often than not, job losses along the way. This also jeopardizes longstanding relationships of many small businesses that supply and service the corporate entity. It is time Congress and the Executive Branch to recognize the highly competitive global environment that defines the multinational corporate landscape. Directors and Officers of corporations have a fiduciary duty not only to shareholders, but to the business entity itself, and if significant tax savings can be had through an inversion to a country with a lower corporate tax rate such as Ireland at 15%, it should come as no surprise that U.S. Corporations are increasingly considering this alternative. The IBAW supports comprehensive corporate tax reform that puts US employers on a level playing field in a hyper competitive global economy.
Sustainable Healthcare Reform The 2016 Election will present a definitive turning point for healthcare systems across the United States. As a Country, we will choose the path of increased costs and decreased competition that has been the hallmark of “Obama Care” or we will continue to progressively reform the greatest healthcare system in the world. Small businesses are rightfully concerned about the following facts: • Annual premiums for employer-sponsored family health coverage reached $17,545 this year, up 4 percent from last year, with workers on average paying $4,955 towards the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Education Trust 2015 Employer Health Benefits Survey • “Obama Care” Premiums have been kept somewhat in check by Risk corridors and Reinsurance being established for the insurance companies. Taxpayers are currently backstopping the insurance companies for spending more on higher risk customers and these programs both expire on January 1st, 2017. Insurance consumers will then be paying for the increased risk pool. • Plans that were considered noncompliant plans thorough the letter of the law of ACHA were granted a waiver of additional requirements through January 1st,2017. This consumer group is estimated to be nearly 1.5 millions policy holders. The IBAW believes that progressive healthcare reform includes repealing and replacing “Obama Care” . Immediate corrective actions include: • Permanent repeal of the Medical Device Tax • Changing the definition of a Full Time Equivalent Employee (FTE) from 30 hours of work per week to 40 hours of work per week • Allow States to opt out of the ACHA requirements and create a system where consumers that do not have coverage provided by an employer can still qualify for federally funded tax credits if the plan is approved by the State • Allow States to enter into cross State competition for insurance providers U.S. spending on health care increased 5.3 percent last year – topping $3 trillion overall and health care funded by the federal government rose by 11.7 percent, to nearly $844 billion. The path of “Obama Care” is leading to a misallocation of resources and a competitive disadvantage for Small Businesses. Continued
No Increase in Minimum Wage There’s a growing drumbeat by politicians to increase the minimum wage. When government gets involved, politics is the reason and politicians should have no part in determining cost factors of business, especially when it comes to labor. Government mandating business to increase wages will force businesses to slow their growth and to look at other methods of efficiencies. Technological advances have given all employers an ability to forgo entry-level hires in favor of low-maintenance, non-taxed innovative devices and/or software will surly eliminate entry level jobs (order kiosks at McDonalds as an example.) Furthermore, artificially increasing the minimum wage for low skilled workers hinders them for future advancements keeping them in a low skilled / low pay setting. The harm of government mandating a minimum wage increase is evident in the cities of San Francisco and Seattle. A paper by researchers at the American Action Forum* found growth in restaurant employment in cities that raised their minimum wage in 2015 was slower than in their respective states as a whole. Restaurant jobs since the spring of 2015 in Seattle’s metropolitan area have grown a mere 0.6 percent since , while jobs grew by 6 percent across Washington state. Additionally, San Francisco restaurant jobs rose by 1.4 percent compared to 3.4 percent in the surrounding area. (Seattle’s minimum wage rose by more than $1.50 to $11 an hour stepping its way to $15, while San Francisco’s is now $12.25, up from $11.05.) The preliminary data indicates a slowing of restaurant employment growth. The sharp increase in the minimum wage is a likely cause of the stagnation and decline in the Seattle area restaurant jobs this year as compared to Washington state is clear. Business is facing large employment deficits as aging baby boomers leave the workforce to retire. The need to staff - and pay - qualified workers has never been greater as the largest workforce in American history leaves. There’s never been a better time, or bigger demand for an entering a workforce. The IBAW’s position is to let the free market determine how high wages should increase and not the government. Mandating a minimum wage increase to $10 or 15an-hour would put us at undesirable risk, unintended consequences and uncharted waters. * Report by American Action Forum, 2015 Local Minimum Wage Increases and Restaurant Employment Trends, By Ben Gitis November 20, 2015
Opposing the Proposed DOL Fiduciary Standard - NATIONAL The Department of Labor has proposed sweeping changes to the definition of Fiduciary under ERISA dramatically affecting the treatment of 401(k), Simple IRA and Sep IRA plans. Businesses of all size utilize 401(k) plans to attract and retain key talent. Simple and SEP IRA plans are in particular heavily used by small to medium sized independently held businesses. The proposed rule would force investors into advisory or fee based investment solutions entirely eliminating the availability of commission based retirement plans, which tend to be more affordable for consumers. No one would argue that a fiduciary standard is a basic level of service that must be upheld, but these sweeping requirements would inevitably result in an undesirable tradeoff; costs for small businesses and individual investors would increase with a corresponding decrease in access to education and plan choice. We at the IBAW encourage the department of labor to consider the unintended consequences that will impact retirement planning for a small business and individual investors alike.
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Legislative Fix Moving Ahead for Wisconsin’s New Manufacturing & Agricultural Credit Jim Brandenburg, CPA, MST - Sikich LLP
In IBAW meetings and publications in recent years we have introduced you to Wisconsin’s new tax incentive - the Wisconsin Manufacturing and Agriculture Credit (referred to as the “MAC”). The MAC came about in 2011 to provide an incentive for Wisconsin manufacturers and agricultural companies to remain and grow here, and also perhaps to have out-of-state companies move here. It was scheduled to begin in 2013, and when fully phased-in by 2016 it would essentially exempt any Wisconsin manufacturing and agricultural income from Wisconsin income tax. The MAC was championed by Representative Dale Kooyenga and Senator Glenn Grothman in the legislature.
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The MAC, however, had some problems for individual taxpayers when it was drafted and this glitch was recently identified. Here is the issue in a nutshell: the MAC would reduce a taxpayer’s Wisconsin individual income tax, but then would trigger a Wisconsin minimum tax for nearly the same amount. Thus, there may be little, if any, net savings for the MAC in 2013 (a “MAC Attack?”). The legislature is trying to remedy this situation now so that taxpayers can realize the proper tax savings with the MAC on their 2013 Wisconsin individual tax returns.
The IBAW magazine is in need of content, we rely on our members and sponsors to supply us informative articles. The digital magazine is sent out to over 650 contacts statewide and the magazine is parked on the web where, on average, it gets over 1100 views.
Legislative Update: It seems that all key legislative leaders are now on board to correct this issue. It was approved by the legislature’s Joint Finance Committee last week. The Senate and Assembly will be in session in March and voting on final passage for several bills, one of which is this tax bill with the MAC correction. It looks like the legislative timetable will have the bill passed near the middle of the March, before going to the Governor. Thus, a best guess now is that the bill would be enacted into law somewhere in the latter half of March, 2014. MAC Attack Options: For any of our individual taxpayers taking advantage of the MAC, this may present some filings logistics. Here are the possibilities:
1. Best case scenario - in some cases the taxpayer’s share of the MAC for 2013 will be used and not result in a Wisconsin Minimum Tax. A taxpayer in this situation could go ahead and claim the MAC and file their 2013 Wisconsin individual return. There would be no need to wait for the legislation to pass.
Consider writing an article on a timely business related topic to your particular field of business. This is an outstanding opportunity for you and your company to gain exposure and increase your brand awareness to a statewide audience. There is no cost to submitting an article.
2. Next, a taxpayer has generated a MAC for 2013, but it will trigger a Wisconsin Minimum Tax. The taxpayer in this case could wait until the law is changed (and then wait a little for the WDR to update its computer processing systems) and then file their Wisconsin tax return and claim the MAC, and not incur the Wisconsin Minimum Tax. This could present a tight timeline for the April 15 deadline, and you may need to file for an extension.
3. Similar case as #2, but this taxpayer could file their Wisconsin individual return with the MAC, but also incur and pay a Wisconsin Minimum Tax for 2013. Then, once the corrective law is enacted go back and file an amended 2013 Wisconsin tax return to obtain the proper tax benefit of the MAC. You would not need extend, but you would need to amend. We’ll keep you posted as this legislation moves forward. If you have any questions, please contact Jim Brandenburg or Brian Kelley at Sikich, LLP in Brookfield (262)754-9400.
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Meeting Recaps 2014 Wisconsin Manufacturing Knowledge Summit
Power Test
On June 20, 2014 the IBAW partnered with the Tool, Die & Machining Association of Wisconsin (TDMAW) to offer Wisconsin manufacturers and their suppliers a unique look at trends within the industry and to also report on some of the challenges the industry faces in the next 5 years.
Power Test, Inc. is an industry leader in the design, manufacture and implementation of dynamometers and control systems.
Special thanks to the event sponsor, First Business Bank for their efforts in helping organize this event.
For more than 37 years, Power Test has provided specialized test equipment to manufacturers, rebuilding facilities and distributors globally. Our products can be found in use at these facilities in nearly 100 countries on six continents.
Chris Halaska
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Our headquarters and manufacturing operations are located in Sussex, WI with sales representatives worldwide. Our unparalleled customer service is well known throughout the industry. Power Test employs a dedicated staff of talented machinists, fabricators, electronic technicians, assemblers, designers, engineers, software developers, and administrative and customer service personnel. Our exceptional product life and excellent customer service is well known throughout the industry and has made us one of the industryleading dynamometer manufacturers. Our dedication to the customer and to the advances in powertrain component testing keep us there.
Power Test N60 W22700 Silver Spring Drive Sussex, WI 53089 Phone: 262-252-4301
4 Advanced Waste Services Advanced Waste Services is an environmental services company that provides wastewater recycling and other waste and risk elimination services to manufacturers in all industries. Each day, AWS helps hundreds of businesses, both large and small, meet their community and environmental obligations. Annually, we collect, treat and recycle more than 50 million gallons of contaminated wastewater into clean, reusable water and other valuable resources like fuel, steam and electricity. AWS is constantly helping our clients manage, reinvent and improve their sustainability successes. For example, we recently partnered with Forest County Advanced Waste Services Potawatomi Community to help Wisconsin food and beverage manufacturers convert 1126 South 76th Street food waste into clean, green renewable energy. Suite N408B West Allis, WI 53214 Founded in 1993, AWS employs 55 people in the Milwaukee area and a total of 150 people companywide in 5 states. 414-847-7100
Photo Key 1: A full house in the main ballroom of the Wisconsin Club as IBAW & TDMAW members prepare to hear about the state of manufacturing and the challenges the industry faces in the workforce.
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2: David Vetta of First Business Bank delivers opening remarks and highlights the importance of a strong relationship between banking and manufacturing working together for success. 3: New IBAW President, John Weber of Hypneumat addresses the change in IBAW Bylaws and calls for voting in new board officers. 4: Kent Lorenz of Acieta gives the main presentation on “Manufacturing Matters” pointing out the trends on manufacturing now and what to expect in the future. 5: Outgoing IBAW President, Steve Van Lieshout receives his award for his efforts as 2013 - 2014.
6 Photos courtesy of Tim Townsend.
6: IBAW Executive Director, Steve Kohlmann (Left) presents David Drumel with an award for his service on the IBAW board.
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