Business Magazine - December 2018 by MBA Business Magazine

Dec ember201 8

What does the economic forecast look like for 2019? What are the real facts and figures behind Erie’s economic outlook, and what impact will foreign steel tariffs have in the year ahead? Who are the real winners and losers, and what could be the lasting effect of a trade war? Join us as local economist Ken Louie, Ph.D., director of the Economic Research Institute of Erie (ERIE) and associate professor of Economics at Penn State Behrend, and David N. Taylor, president and chief executive officer of the Pennsylvania Manufacturers’ Association, the statewide trade organization representing the manufacturing sector in Pennsylvania’s public policy process, provide an in-depth look at these timely topics and more, during this dynamic luncheon presentation. Target Audience: Small to mid-size employers of all industries and any company doing business in the aluminum, steel, foreign auto, tool or machine parts markets. PRESENTED BY:

BUSINESS

VOL. XXXI NO. 12 | DECEMBER 2018

MAGAZINE

2019 ECONOMIC FORECAST

EXPERTS EXPLAIN THE STATISTICS, TRENDS THAT MAY IMPACT THE NEW YEAR

SPOTLIGHT Q&A:

PMA PRESIDENT DAVID TAYLOR BREAKS DOWN TARIFFS, TRADE

SPECIAL SECTION:

CELEBRATE THE SEASON WITH OUR HOLIDAY GIFT GUIDE

FEATURES FEATURE STORY | WHAT’S INSIDE

A Season of Giving Ways to keep your employees engaged and motivated during the holidays.

COVER STORY | LOCAL PROFILE

Economic Forecast Penn State Behrend economists Ken Louie, Ph.D., and Val Vlad, Ph.D., of the Economic Research Institute of Erie (ERIE), explain the statistics and trends that are worth watching as we head into 2019.

SPOTLIGHT Q&A | VIEWPOINT

David Taylor, president and chief executive officer of the Pennsylvania Manufacturers’ Association, breaks down the topic of tariffs and trade in the new year.

EDITORIAL HEALTH MATTERS | WELLNESS

DEPARTMENTS

SPECIAL SECTION

BUSINESS BUZZ

EVENTS & EXTRAS

PEOPLE BUZZ

WHAT’S NEW

See exclusive coverage of the Association’s sixth annual HR & Employment Law Conference in Erie.

LEGAL BRIEF | SALE

AWARDS AND PROMOTIONS

HR CONNECTION

HR Q&A

WORKPLACE TRENDS

GET ANSWERS

How to manage workplace well-being by integrating leave of absences and employee assistance programs. Jim Kinville, M.A. and Linda Croushore, M.Ed.

READ ON THE GO! For the most current Business Magazine updates, visit mbabizmag.com

Why a “do it right” approach to letters of intent is important for any purchase of a business. James R. Walczak

ON THE HILL | ECONOMIC DEVELOPMENT

Guest columnists Matt Wachter and Tim Wachter explain why opportunity is knocking for the City of Erie, especially when it comes to opportunity zones.

2018 GIFT GUIDE Executive Editor Karen Torres ktorres@mbausa.org Contributing Writers Linda Croushore, M.Ed. Jim Kinville, M.A. Matt Wachter Tim Wachter James R. Walczak

Photography iStock Photography Additional Photography Casey Naylon Brigette Davitt Design, Production & Printing Printing Concepts Inc. printcon@erie.net

Advertising Sales Frank Mehler 814/833-3200 fmehler@mbausa.org

Find some new ideas to help celebrate your employees and customers this holiday season.

TRAINING CATALOG | INSERT

David Thornburg 814/833-3200 dthornburg@mbausa.org

Learn about the upcoming professional development training courses available at the Manufacturer & Business Association.

On the Cover: Penn State Behrend professors Ken Louie, Ph.D. and Val Vlad, Ph.D., economists at the Research Institute of Erie (ERIE), explain why it seems we’re playing a game of Monopoly when it comes to the 2019 economic outlook. See page 4 for full story. Mission Statement: The Manufacturer & Business

Association is dedicated to providing information and services to its members that will assist them in the pursuit of their business and community interests. – Board of Governors

Manufacturer & Business Association 2171 West 38th Street | Erie, Pa. 16508 814/833-3200 or 800/815-2660 www.mbausa.org

© Copyright 2018 by the Manufacturer & Business Association. All rights reserved. Reproduction or use of editorial, pictorial or advertisements created for use in the Business Magazine, in any manner, without written permission from the publisher, is prohibited. Unsolicited manuscripts cannot be returned unless accompanied by a properly addressed envelope bearing sufficient postage. The magazine accepts no responsibility for unsolicited manuscripts or artwork. The Business Magazine and Manufacturer & Business Association do not specifically endorse any of the products or practices described in the magazine. The Business Magazine is published monthly by the Manufacturer & Business Association, 2171 West 38th Street, Erie, Pa. 16508. Phone: 814/833-3200 or 800/815-2660.

mbabizmag.com • DECEMBER 2018

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© 2018 Citizens Financial Group, Inc. All rights reserved. Citizens Commercial Banking is a brand name of Citizens Bank, N.A. and Citizens Bank of Pennsylvania. Member FDIC. 897456_CMAV4108L_ManufacturersMagazineAnnualReportAd

A Season of Giving

FEATURE STORY | WHAT’S INSIDE

WAYS TO KEEP YOUR TEAM ENGAGED, MOTIVATED DURING THE HOLIDAYS Although the holidays can be a hectic time for employers trying to wrap up deadlines and balance busy schedules, it can also be a good time to pause and reflect on the achievements of the past year by showing appreciation for your team while also finding ways to keep them engaged and motivated for the year ahead.

According to experts, here are some ways to help your organization finish strong in 2018 while ramping up for 2019: Celebrate Successes According to a recent article published in Forbes, workers who feel appreciated are less likely to be disengaged and unmotivated. The research points to a University of Pennsylvania study that examined employees who were tasked with making fundraising calls. The result: Employees who were thanked and felt a sense of appreciation from their leaders made 50 percent more fundraising calls than their unappreciated counterparts. “Since employees are likely to feel more stressed this time of year, showing them that they are appreciated might be the gentle push they need to prevent them from becoming disengaged and unmotivated,” the article states. “Employers should genuinely thank employees for a job well done.” Encourage a Healthy Workplace Experts point out that one of the best ways to keep employees productive is to maintain a clean office and educate employees on the risk of spreading illnesses. According to the Forbes report, this can be anything from ensuring shared office spaces — such as meeting

rooms, break rooms and kitchens — are thoroughly cleaned on a regular basis to encouraging employees to stay home when they are sick. Employers also can help reduce stress in the workplace during the holiday season by allowing flexible hours, communicating about deadlines and promoting positivity. Communicate With more employees using paid time off, an effective communication plan is essential in keeping employees in the loop. Experts suggest having a weekly or monthly meeting during the holiday season to make sure everyone knows who is in charge of certain responsibilities and discuss which days teammates are taking time off. In fact, “a good leader will recognize the holidays in order to keep employees productive, engaged and healthy,” experts state. “While it may be a cause of some distraction around the office, the holiday season is actually a great time to celebrate employees and initiate new wellness goals to end the year strong.”

What’s Inside In this edition of the Business Magazine, our goal is to help your organization plan for what’s ahead. On the following pages, you’ll hear from Penn State Erie economists Ken Louie, Ph.D. and Val Vlad, Ph.D. on the statistics and trends that may impact the business outlook for 2019. In addition, we’ll talk with David Taylor, president and chief executive officer of the Pennsylvania Manufacturers’ Association, as he breaks down the steel and aluminum tariffs, as well as trade deals, that may impact employers here in the Keystone State. Plus, be sure to view our Holiday Gift Guide for ways to celebrate the season with your employees and clients, and check out the MBA’s latest Training Catalog to see how we can help you prepare your team for new roles and responsibilities in the new year!

HAPPY HOLIDAYS

mbabizmag.com • DECEMBER 2018

COVER STORY | LOCAL PROFILE

2019 ECONOMIC FORECAST Experts Explain the Statistics, Trends That May Impact the New Year

The U.S. economy is a lot like Monopoly. Spending. Saving. Do Not Pass Go. Navigating the board game is part strategy and roll of the dice. So, when it comes to the economic outlook for the year ahead, there is always room for chance. Here, Penn State Behrend professors Ken Louie, Ph.D. and Val Vlad, Ph.D., economists at the Economic Research Institute of Erie (ERIE), examine the statistics and trends that may impact the economy in 2019 – which, as of now, is looking like more of the same, mixed with a hint of cautious optimism.

In fact, although Federal Reserve Chairman Jerome Powell recently described the U.S. economic outlook as “remarkably positive” and Chicago Fed chief executive Charles Evans said he expects the outlook to remain good for “quite some time,” local economists are reluctant to call the projected U.S. GDP (gross domestic product) growth rate of 2 percent to 3 percent as “remarkable.” “The outlook is as good as a short-run snapshot: The economy experienced a few quarters of good economic performance,” Vlad explains. “But, for the U.S. economy to function ‘normally,’ a sustained growth rate of at least 3 percent is needed.” Val Vlad, Ph.D.

“The national economy is still doing well,” explains Louie, director of ERIE, “but we have to exercise care in navigating through some possible headwinds, such as rising interest rates, additional tariffs, changes in health-care policy, etc. Monopoly is a Ken Louie, Ph.D. good way to capture the state of the economic environment since it signals the potential for rising prosperity, and the ‘Do Not Pass Go’ warning may be a good way to indicate that caution is, nevertheless, still needed.”

DECEMBER 2018 • mbabizmag.com

Source: U.S. Bureau of Economic Analysis

And, although the United States recovered from the recent recession, economists say it still suffers from insufficient economic growth. According to Vlad, the period from 2006 to 2017 went on record as the longest period (12 years) with less than 3-percent growth. In 2010, the Bureau of Economic Analysis characterized a similar situation as without precedent in the last 85 years (see Graph 1). “For the first half of 2018, the economy had grown at a normal rate,” Vlad continues, “but two quarters of normality is not enough to reverse a long-run trend of underperformance and justify using the expression ‘remarkably positive.’ ” To put it in perspective, local economists say: Here in the United States, “We’ve been popping champagne all the way since 2013 by focusing on a few positives and neglecting the scary skeletons in the closet: lack of economic growth, the highest debt/GDP ratio since World War II, an aging population and our connection with a world economy,” just to name a few. A cautious approach may seem rather dispiriting, given that the current labor market is quite strong with unemployment below 4 percent, its lowest level in 18 years. It’s a rate that, according to Vlad, will stay in the 4 percent to 5 percent range for the next five years, which is below the natural rate (5.5 percent). “But, that should be taken with a pinch of salt because there are some other aspects that must be considered when analyzing the labor market: labor force participation rate, underemployed people, discouraged workers,” he says. “Moreover, if unemployment is below the natural rate (5.5 percent), we should see strong pressure on real wages to go up. But, we don’t see that, which means that there might be some ‘leakages’ in the link between production and employment.” Still, many employers remain upbeat. The National Federation of Independent Business’ small business optimism index hit the highest level in the survey’s 45year history in August. Small businesses are planning to hire more workers, raise compensation for current employees, and spend more on capital investments according to the index — a trend local economists agree with. “It is much better to be optimistic and start building things from the bottom up than waiting for some policy miracle or some government help,” explains Vlad. “The future belongs to local initiatives and strategic partnerships: building the economy from the bottom up; relying on the growing role of small communities in pursuing innovation-led growth.”

Local Outlook

For communities like Erie, Pennsylvania, however, economists say there is room for improvement in terms

of economic growth. “Unfortunately,” states Louie, “Erie continues to lag behind the state and the nation in terms of aggregate measures of economic performance such as total output growth, unemployment, income and poverty.” According to ERIE’s research, in 2017, the real value of goods and services (or gross domestic product) produced by Erie County stood at $9.7 billion, which represented a slight decline of 0.8 percent compared to the previous year. In contrast, real output grew during the same period by 1.8 percent in Pennsylvania and by 2.2 percent in the nation as a whole. Erie’s unemployment rate continues to be higher than that in the state and the nation. As of August, the seasonally adjusted unemployment rate was 4.3 percent in Erie, 4.1 percent in Pennsylvania and 3.9 percent in the United States. “The good news is that Erie did experience a modest 0.3-percent increase in employment year-over-year in August,” says Louie. “Although this was less than the 1.3-percent employment growth during the same period for the nation as a whole, it was higher than the 0.1-percent growth in Pennsylvania.” On the income front, the latest one-year estimates by the U.S. Census Bureau indicate that real median household income in 2017 was lower in Erie ($50,614) compared to the state ($59,195) and nation ($60,336). The latest one-year estimates from the Census Bureau reveal that the poverty rate in Erie County inched >

Who are the real winners and losers in our region when it comes to tariffs and trade policies in 2019? Louie: “Assuming the steel and aluminum tariffs remain in place, the winners in our region are likely to be companies in sectors such as primary metal manufacturing. The losers from the tariffs are likely to be companies that use steel or aluminum, including those in machinery manufacturing; electrical equipment, appliance and component manufacturing; and transportation equipment manufacturing. In addition, consumers, as well as firms that purchase machinery, equipment, or appliances and components, are also likely to be harmed due to the higher prices of these final products as a result of the tariffs.” Vlad: “From a macroeconomic perspective, there are more losers than winners. The whole real economy is the biggest loser. There is a short-run illusion that tariffs will benefit the economy, but over the long-run, the direct costs will exceed the benefits. We have to think also about the indirect costs (externalities) associated with increasing trade restrictions (retaliation, slow growth in a globalized economy, lack of policy and economic collaboration, policies that are not harmonized across borders, etc.).”

mbabizmag.com • DECEMBER 2018

The Tax Cuts and Jobs Act (TCJA), passed in December 2017, made several significant changes to the individual income tax. How much of an impact do you expect the TCJA will have on the economy in 2019? Vlad: “According to a recent study by the Brookings Institution, the TCJA is expected to stimulate the economy in the near term but have a relatively small effect on U.S. gross domestic product (GDP) in the long term. Earlier this year, we did see some of the positive effects of the TCJA, which lowered corporate tax rates to 21 percent from 35 percent. For example, in the first quarter, after-tax corporate profits rose by 8.7 percent. And in the second quarter, real GDP rose by 4.2 percent. However, it’s unclear whether these positive trends can be sustained during the remainder of 2018 and into 2019. One reason why the expansionary effects may gradually be diminished is the impact of the TCJA on the federal budget deficit. Since the TCJA will reduce federal revenue, this will increase federal borrowing and in all likelihood raise interest rates and, hence, the cost of capital. The higher interest rates may serve to offset some of the stimulating effects from the lower taxes. Consequently, the TCJA’s impact on the economy may be relatively small in 2019.”

up slightly to 16 percent in 2017 from 15.9 percent in 2016. In contrast, during the same period, the poverty rate fell slightly to 12.5 percent from 12.9 percent in Pennsylvania, and to 12.3 percent from 12.7 percent in the United States as a whole. According to ERIE, one sector of the local economy that may face challenges in 2019 is retail trade. “With relentless expansion of internet commerce, the local retail sector is likely to continue to face increased competition from online vendors,” adds Louie. “Local retail employment fell by 2 percent (300 jobs) year-overyear in August, although the upcoming holiday season may provide a brief boost.” In addition, the local manufacturing sector has faced significant challenges in terms of job growth, and this is likely to continue in 2019. Employment in Erie’s manufacturing sector fell by 1.6 percent (300 jobs) yearover-year in August. “While many factors have played a role,” states Louie, “perhaps two of the most important reasons behind the manufacturing sector’s difficulties have been rapid technological change and increased competitive pressure due to globalization.” As ERIE reports, one potentially bright spot for local manufacturers is the continued strength of the national economy, which grew at an annual rate of 4.2 percent in the second quarter. Median household income at the national level also has increased for a third consecutive year, reaching a record $61,372 in 2017.

DECEMBER 2018 • mbabizmag.com

“The strength of the U.S. economy is likely to have a positive effect on local manufacturers that sell their products across the country,” Louie says.

Growing Sectors

Economists say another sector that is seeing an uptick is the local construction industry, which is likely to remain strong in 2019, especially with the large-scale building projects in the downtown area. Furthermore, employment in the mining, logging and construction sector increased by 6.8 percent (300 jobs) in August compared to a year ago. According to ERIE, the education and health services sector also continues to be robust, with employment growing by 2.5 percent (700 jobs) year-over-year in August. With 28,400 jobs, this continues to be the largest local sector in terms of employment. Continued investments by the Lake Erie College of Osteopathic Medicine (LECOM) and other local colleges and universities, as well as by the two major local medical centers, are likely to keep this sector strong. With the ongoing development of the Erie Bayfront, the leisure and hospitality sector is expected to improve, as well. Experts say employment in this sector expanded by 6.4 percent (1,000 jobs) in August compared to a year ago. “We are likely to see the local economy continue on a relatively stable trajectory in the near term, with slow overall growth and a fragile labor market,” states Louie. “However, the many initiatives that are underway to revitalize the local economy may begin to produce some noticeable results over a longer time horizon. With the completion of major investment projects by local companies, such as Erie Insurance and Velocity Network, the gradual expansion of the Erie Innovation District, and continued development of the Bayfront, we are likely to see improved performance of the local economy beyond 2019.” For the most current information from the Economic Research Institute of Erie (ERIE), visit http://eriedata.bd.psu.edu.

Are there are any other key economic trends that we should be mindful of for 2019? Louie: “It will be important to watch other policy measures that may be taken in 2019. For example, the Fed’s monetary policy stance and the resulting decisions regarding shortterm interest rates can have significant effects on the economy. Likewise, it will be important to watch whether the trade war with some of our major trading partners will intensify in 2019. Finally, it will be important to watch for any major regulatory changes that may affect household and business decisions.” Vlad: “Year 2019 will be in many economic aspects very similar to 2018.”

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DECEMBER 2018 • mbabizmag.com

SPOTLIGHT Q&A| VIEWPOINT

A Breakdown on Tariffs andTrade While the new U.S.-Mexico-Canada Agreement (USMCA), formerly known as NAFTA, addresses a variety of trade issues, one thing that’s still left unattended are the U.S. tariffs on steel and aluminum. Here, David Taylor, president and chief executive officer of the Pennsylvania Manufacturers’ Association (PMA), shares his expertise and his insights on the Trump administration’s recent trade policies and the impact on employers in 2019. The PMA is a statewide trade organization that represents the manufacturing sector in Pennsylvania’s public policy process. Please provide a snapshot of your membership base and your organization’s mission. PMA’s mission is competitiveness. We want to make it the smart business decision for people to choose to locate, expand, invest and hire in Pennsylvania rather than one of our competitor states. To that end, we work to advance a pro-growth agenda in Harrisburg to attack the baseline cost of creating and keeping jobs in the Commonwealth. In particular, we are focused on restraining state government spending, enacting progrowth business tax relief, reforming the regulatory burden, limiting lawsuit abuse and building the workforce. While we represent the entire manufacturing sector, our flagship members are Pennsylvania’s largest and most notable manufacturers, including U.S. Steel, Merck, Boeing, PPG Industries and The Hershey Company. You are presently in your 22nd year with the PMA and a highly sought-after guest and commentator on policy issues. In your expertise, how important is the discussion on steel and aluminum tariffs right now and in the coming year? The discussion on steel and aluminum tariffs is exceptionally important and will remain so, because this issue represents the larger debate on the role of our federal government in defending American employers and employees in international trade. Please understand that PMA is pro-trade and that we agree that American manufacturers must bear the full challenge of competing and earning customers in the global marketplace. At the same time, we believe that markets should be governed by profit and loss. When the governments of our foreign competitors — especially non-market economies like

China — subsidize their domestic producers, distort the global marketplace, and otherwise subvert the market function, our government has a responsibility to step in and defend America’s economic interests. Industrial metals will be the arena where that larger battle will be won or lost in America’s domestic policy debate. In May, the White House announced tariffs of 25 percent on steel imports and 10 percent on aluminum from the European Union, Canada and Mexico. The goal was to make foreign imports more expensive, and thus more comparative in cost to American-made steel, driving more domestic demand back to U.S. producers. In your opinion, are the tariffs working? Has the president gone far enough on his promise to help out the steel industry? The early signs for American steelmakers seem positive, but it will take time to sort things through. Again, Americans should insist on market-based competition with friendly nations whose economies conform to profit/loss market principles. Chinese steel is heavily subsidized by the dictatorship in Beijing, whether through free land, free energy, bank loans that never need to be repaid, etc. Overproduction of raw steel by China — the amount produced beyond the ability of the nation’s economy to consume it in a year — is greater than total steel production in the United States. Furthermore, that subsidized raw steel is then used as inputs in other countries and/or disguised by transshipment through third countries to evade nation-of-origin reporting. This is a global challenge, which is why it requires a globally-applied American response. The Trump administration must maintain its resolve and see this challenge through to a satisfactory conclusion, no matter how long it takes.

When it comes to these tariffs, who do you believe are the real winners and losers, particularly manufacturers here in Pennsylvania? For steel and aluminum consumers, there will be shocks to their supply chains and increases in the costs of their inputs. While no one likes to see higher prices, these costs are only rising to the actual non-subsidized market costs of these commodities. If we believe in free enterprise, we must insist that markets be governed by profit and loss. The artificially low prices for consumers have come at the cost of jobs and earnings for producers. Because industrial metals are foundational to the rest of our manufacturing economy, the United States must not allow these critical industries to be stripped away by the subsidized industrial policies of foreign governments. Despite the new USMCA, the president said key U.S. trade partners would still not be exempted from U.S. steel and aluminum tariffs. Do you see this changing any time soon and why? I certainly hope so. Alienating our allies— especially Canada, our close ally and largest trading partner — is a major blunder that undermines our ability to confront bad actors like the dictatorship in Beijing. Canada has not been part of the practices we seek to end, and, considering the high degree of integration between the Canadian and U.S. economies, Canada should never have been treated this way. Is there anything you would like to add? Manufacturing is the engine that drives Pennsylvania’s economy, adding $86 billion in value every year, employing over a halfmillion Pennsylvanians on the plant floor, and sustaining millions of additional Pennsylvania jobs in supply chains, distribution networks and vendors of industrial services.

mbabizmag.com • DECEMBER 2018

UN COM MON is CHANGING MEDICINE AS WE KNOW IT.

Uncommon is daring to question the established way. At UPMC, we’re transforming health care, one fearless idea at a time. Welcome to change.

UPMCNext.com

HEALTH MATTERS | WELLNESS

Managing Workplace Well-Being Integrating Leave of Absences, Employee Assistance Programs

Each employee’s original EAP care manager makes a follow-up call 30 days later to review the employee’s needs and provide additional support if appropriate. Types of Services Used By speaking with the EAP care manager, employees are able to determine services that will best assist them throughout their leave. The types of services used by those who accepted assistance varied but show the diverse concerns and issues these employees experience as they go through the leave process. The services most utilized were referrals to the Institute on Aging, general counseling, child care, legal services and financial consultations.

Jim Kinville, M.A., is the senior director for Life Solutions EAP.

A 2013 study by the Integrated Benefits Institute (IBI) reported that the prevalence of depression among workers is close to 20 percent and that more than 60 percent of these depressed employees go untreated. At the same time, 97 percent of employees who file a leave claim for depression also report other comorbid conditions. The impact of depression and other conditions may be amplified when employees are on leave caring for family members that need them. At a minimum, there are emotional, financial and lifestyle implications for these employees. For employers, the IBI study estimated the yearly cost in lost work time and medical treatments at $62,000 per 100 employees. In an internal analysis of its parent company, WorkPartners discovered that employees who took a leave of absence were 5 percent more likely to

Linda Croushore, M.Ed., is the senior director of Disability Services at UPMC.

suffer depression than they were before taking the leave. To combat this and associated costs, a program was implemented to engage employees on leaves of absence with the Life Solutions employee assistance program (EAP), providing them the resources they need to help them manage the range of life challenges they may be facing. The program includes employees who are calling in to request a leave to care for a spouse, child and/or parent. The leave intake specialists process the leaves as normal and then, near the end of the interaction, warm-transfer the employee to a live phone connection with the EAP provider. Next, the EAP care manager engages the employee in a conversation, giving the employee information on services that may assist the employee based on the details of the individual situation.

Most individuals using leave need to manage multiple issues. EAP care managers report they have helped to address nine or more different areas of need related to health, emotional issues, work-life balance, financial, legal and more. In fact, it is rare that someone only has one specific area of need. Care managers have assisted with linkages to other programs, such as wellness coaching and complex case management. Findings While the results of the program consider a number of variables (type of leave, leave circumstances, etc.) that are still being studied to fully determine the effect of EAP programs on leave duration, some key results include: • All employees who were transferred to the EAP accepted the initial services for a 100-percent engagement rate. An informational flier was sent to all callers who agreed to receive it. • Care managers reported there were no complaints about the offer of free services through the EAP. • Of the employees who were transferred to the EAP, 12 percent accepted services beyond the initial warm transfer. • Employees who used the extra support experienced leave durations that were, on average, four days shorter than those who did not use the support. For more information, visit www.lifesolutionsforyou.com. mbabizmag.com • DECEMBER 2018

BUSINESS BUZZ | WHAT’S NEW CENTER FOR BRANDING AND STRATEGIC COMMUNICATION OFFICIALLY OPEN FOR BUSINESS

After months of renovations, Edinboro University’s Center for Branding and Strategic Communication is officially open for business — small businesses that is. Part of the Northwest Pennsylvania Innovation Beehive Network, a collaborative initiative between Edinboro, Penn State Behrend, Gannon University and Mercyhurst University, the Center for Branding and Strategic Communication provides free assistance to regional entrepreneurs and organizations in areas such as public relations, advertising, graphic design, web design and social media management. Although the center has already served 12 clients since January, Edinboro University showcased the recently completed high-tech branding lab, as well as student-produced products, at a ribbon-cutting ceremony and reception on October 25. “The University’s overwhelming support in transforming this space into a fully-functioning multidisciplinary agency has resulted in a number of meaningful collaborative projects with equal benefit to the students and clients involved,” said Brigette Davitt, the center’s creative director, in a press release. Enhancements to the facility include a mural created by Davitt and state-of-the-art computer hardware and software, cameras, 3-D printers and other equipment >

Photo Courtesy of Edinboro University/Brigette Davitt

The Center for Branding and Strategic Communication provides free assistance to regional entrepreneurs and organizations in areas such as public relations, advertising, graphic design, web design and social media management. Shown here is the center’s video crew at the Sarah A. Reed Children’s Center.

with applications in web and graphic design, digital video production and other areas. The center has assisted clients on projects that included graphic and web design, video production and comprehensive public relations campaigns. Five faculty members, two alumni and 60 students were engaged in the work. In addition, the Beehive employs several undergraduate students and provides graduate assistantships and stipends for up to four graduate students all working to develop

innovative and collaborative creative projects. “Not only are our students connecting with clients and gaining real world experience through this important initiative, they are making a positive impact on the economic development of the Northwest Pennsylvania region,” said Tony Peyronel, Ph.D., executive director of the Center for Branding and Strategic Communication. For more information, contact Dr. Peyronel at 814/732-2166 or email apeyronel@edinboro.edu.

HBKS WEALTH ADVISORS EARNS HONORS AMONG INDEPENDENT INVESTMENT FIRMS

HBKS® Wealth Advisors (HBKS) recently announced that it has been named to the 2018 edition of the Financial Times 300 Top Registered Investment Advisers. The list recognizes top independent RIA firms from across the United States. This is the fifth annual FT 300 list and the fifth appearance on the list for HBKS, the wealth management business of HBK CPAs & Consultants (HBK). The Top 300 is produced independently by the Financial Times in collaboration with Ignites Research, a subsidiary of the Financial Times that provides business intelligence on the asset management industry. RIA firms that apply for the list have met a minimum set of criteria. Applicants are then graded on six factors: assets under management (AUM); AUM growth rate; years in existence; advanced industry credentials of the firm’s advisers; online accessibility; and compliance records. There are no fees or other considerations required of RIAs that apply for the FT 300. The final FT 300 represents an impressive cohort of elite RIA firms, as the “average” practice in this year’s list has been in existence for over 22 years and manages $4 billion in assets. The FT 300 Top RIAs hail from 38 states and Washington, D.C. HBKS is the wealth management business of HBK CPAs & Consultants (HBK), offering the collective intelligence of more than 400 professionals in a wide range of tax, accounting, audit, business advisory, valuation, financial planning, wealth management and support services from 12 offices in Pennsylvania, Ohio, New Jersey, New York and Florida. As an RIA, HBKS operates in accordance with the highest ethical standards and according to the strictest interpretation of fiduciary responsibility. For more information, visit www.ft.com/reports/300-top-investment-advisers.

DECEMBER 2018 • mbabizmag.com

TRAINING SCHEDULE LEARN IT TODAY. APPLY IT TOMORROW.

JANUARY ▪ FEBRUARY ▪ MARCH 2019

MANUFAC

2019

JANUARY

CLASS LOCATIONS All courses are held at the MBA Conference Center in Erie, unless otherwise noted. Franklin:

Franklin Industrial & Commercial Development Authority, Emerging Technology Center, 191 Howard Street

Meadville: Holiday Inn Express 18240 Conneaut Lake Road Pittsburgh: SMC Business Councils 600 Cranberry Woods Drive, Suite 190 St. Marys:

Community Education Council 4 Erie Avenue, Suite 200

* Handicap access and parking available at all sites.

LEADERSHIP CERTIFIED SUPERVISORY SKILLS SERIES Course II 1/22 and 1/29 Course I (Pittsburgh) 1/9 and 1/10 Course II (Pittsburgh) 1/30 and 1/31 Course III 1/3 and 1/10 Course IV 1/31 and 2/7 Course V 1/2 and 1/9 Course V (Meadville) 1/17 and 1/24 LEADERSHIP FOR TEAM LEADERS CERTIFICATE SERIES Course I 1/16 Course II 1/30 Course IV 1/8 Course V 1/29 INFLUENCE & PERSUASION (p.m. only)

ONSITE TRAINING CONVENIENCE: Let our expert instructors bring the training you need, when you need it, where you need it. CUSTOMIZED PROGRAMS: From full-day to halfday programs, we will tailor any program to fit your specific needs. FOCUSED INTERACTION: Group training discussions focus on the key topic areas specific to your company’s environment.

1/10

MARKETING/COMMUNICATIONS PR BOOT CAMP (a.m. only)

1/14

MARKETING PLANNING (p.m. only)

1/14

THE ART OF SPEAKING (a.m. only)

1/18

WORKPLACE COMMUNICATION SKILLS

1/25

QUALITY LEAN OPERATIONS (Three days)

1/22, 2/19 and 3/19

SIX SIGMA – GREEN BELT (Three days) 1/23, 2/20 and 3/20

SAFETY ONE-DAY FOOD SAFETY CERTIFICATION

1/21

INDUSTRIAL FORKLIFT: TRAIN THE TRAINER (a.m. only) 1/9

* A.M. classes run 8 a.m. to noon, and P.M. classes run 12:30 p.m. to 4:30 p.m., unless otherwise noted. Cancellation/No-Show Policy: If notice is four business days or more, a full refund will be made. If notice is less than four business days, or if you do not show up for the class, no refund will be made. NOTE: You may substitute another individual from your organization at any time and at no cost.

HUMAN RESOURCES LEVEL I - HR ESSENTIAL CERTIFICATE SERIES Interviewing & Hiring (a.m. only)

1/22

ADVANCED - HR ESSENTIAL CERTIFICATE SERIES FMLA & ADA (a.m. only) 1/24

CTURER & BUSINESS ASSOCIATION

TRAINING SCHEDULE FEBRUARY

MARCH

LEADERSHIP

CERTIFIED SUPERVISORY SKILLS SERIES Course I (St. Marys) 2/6 and 2/7 Course II (St. Marys) 2/27 and 2/28 Course III 2/19 and 2/26 Course III (Pittsburgh) 2/20 and 2/21 Course V 2/28 and 3/7

CERTIFIED SUPERVISORY SKILLS SERIES Course I 3/6 and 3/13 Course I (Franklin) 3/5 and 3/12 Course III (St. Marys) 3/27 and 3/28 Course IV 3/19 and 3/26 Course IV (Pittsburgh) 3/6 and 3/7

LEADERSHIP FOR TEAM LEADERS CERTIFICATE SERIES Course III 2/13 Course IV 2/27 ORGANIZED & EFFICIENT (p.m. only)

2/4

MOTIVATING YOUR EMPLOYEES (a.m. only)

2/5

TOP ESSENTIAL SKILLS FOR SUPERVISORS (Pittsburgh)

2/5

BUILDING TEAMS (a.m. only)

2/11

MARKETING/COMMUNICATIONS WRITING TO WOW! (p.m. only)

2/1

INTRO TO SOCIAL MEDIA (a.m. only)

2/8

DIGITAL MARKETING & SEO (p.m. only)

2/8

DEVELOPING WEBSITE CONTENT (p.m. only) PRESENTATION SKILLS (a.m. only)

2/21 2/22 and 3/1

QUALITY STATISTICS FOR THE NON-STATISTICIAN (a.m. only) 2/19

SAFETY ONE-DAY FOOD SAFETY CERTIFICATION

2/18

ONE-DAY FOOD SAFETY CERTIFICATION (Pittsburgh)

2/4

HUMAN RESOURCES LEVEL I - HR ESSENTIAL CERTIFICATE SERIES Compensation & Benefits (a.m. only)

2/12

ADVANCED - HR ESSENTIAL CERTIFICATE SERIES Job Descriptions & Reasonable Accommodations (a.m. only) 2/14

LEADERSHIP FOR TEAM LEADERS CERTIFICATE SERIES Course V 3/13 CUSTOMER SERVICE (p.m. only)

3/1

FINANCE FOR THE NON-FINANCIAL MANAGER

3/7

WOMEN IN LEADERSHIP

3/8

MOTIVATE YOUR EMPLOYEES (Pittsburgh, a.m. only)

3/12

WORKPLACE CIVILITY (Pittsburgh, p.m. only)

3/12

LEADING CHANGE (p.m. only)

3/14

DIFFICULT CONVERSATIONS (p.m. only)

3/21

QUALITY MEASUREMENT SYSTEM ANALYSIS (a.m. only)

3/19

SAFETY ONE-DAY FOOD SAFETY CERTIFICATION NEW EMPLOYEE SAFETY ORIENTATION (a.m. only)

3/18 3/6

HUMAN RESOURCES LEVEL I - HR ESSENTIAL CERTIFICATE SERIES Employment Law (a.m. only)

3/12

ADVANCED - HR ESSENTIAL CERTIFICATE SERIES Handbooks (a.m. only) 3/14

COMPUTER TRAINING Learn the coolest tips and tricks to the latest computer applications available today. Classes can be taken individually or as part of a certificate series.

• Access Level I 2/19 • Excel Level I 1/29, 2/26, 2/28, 3/26 or 3/28 • Excel Level II 1/8, 2/5, 3/5 or 3/7 • Excel Level III 1/15, 2/12 or 3/12 • Microsoft Word – Core Essentials 2/21 • Microsoft Word – Long Documents 3/21 • OneNote 3/21 • PowerPoint – Core Essentials 2/21 • Word Level I 1/22

CERTIFIED SUPERVISORY SKILLS TRAINING 25 YEARS 10,000 GRADUATES THROUGH THE MBA Thank You... for selecting the Manufacturer & Business Association as your preferred

training provider! Our Certified Supervisory Skills series is considered one of the premier employee leadership programs in the region for businesses of every size and type. COMING SOON TO A TRAINING FACILITY NEAR YOU!

To request this program in your area or to schedule a class onsite at your facility, please contact Patty Welther at 800/815-2660, 814/833-3200 or Pwelther@mbausa.org. Visit mbausa.org to view upcoming public offerings.

PEOPLE BUZZ | AWARDS AND PROMOTIONS HBKS WEALTH ADVISORS RECOGNIZES NEW PRINCIPALS

HBKS® Wealth Advisors (HBKS®) recently announced that Brittany Taylor, Brian Mallette and Tom Taranto have been named principals in their respective offices. Taylor takes a holistic approach to helping her clients preserve and grow wealth through comprehensive investment and wealth protection planning. Her client base is characterized by mostly long-term collaborative relationships with individuals in or near retirement and their families. Taylor started with the firm in 2001 and earned her bachelor’s degree in business management and finance from Mercyhurst University. Her professional education includes the Certified Financial Planner® designation. She also maintains Life and Health Insurance licenses. Mallette joined HBKS® in June of 2008. He has worked with team members Dan Baer and Brent Wauterlek on client relationships and asset management. His focus has been on the construction of customized asset allocations, as well as portfolio analysis

and risk management, with the goal of delivering portfolios that meet each client’s unique needs. He also oversees the trade executions for the team. He has a background in real estate finance. He earned his B.S. in economics from the Whittemore School of Business at the University of New Hampshire. He is a Certified Financial Planner® and has acquired additional certification by earning his FINRA Series 65 Licensure. He is a GAIN member of the Leadership Collier Foundation in Naples. Taranto has been with HBKS® since 2011. He has extensive experience working with high net-worth families on comprehensive financial planning, estate planning, insurance planning and asset management services. He earned his B.S. in business administration in marketing and logistics from The Ohio State University’s Fisher College of Business and M.A. in higher education administration, also from The Ohio State University. He is a Certified Financial Planner™ and an Accredited Investment Fiduciary®. He has also acquired his Life, Annuity and Health Insurance licenses. He is a member of the Financial Planning Association (FPA).

G.W. BECKER NAMES REGIONAL SALES MANAGER FOR EAST COAST REGION

G.W. Becker, Inc., a custom design manufacturer of overhead cranes in North America based in Hermitage, Pennsylvania, recently announced the hiring of Fred Pokrywka for the position of regional sales manager, East Coast Region. In this role, Pokrywka is responsible for continual profitable sales growth by creating new strategic business relationships, establishing and expanding a sales network and working directly with major accounts. With more than 26 years of experience in the crane and hoist industry, Pokrywka recently spent the previous two years with Williamson & Wilmer, Inc. as a regional sales manager specializing in large federal, state and local government contracts for cranes and lifting equipment, as well as private industrial crane sales. Prior to that, he spent 24 years in various positions with ACCO Material Handling Solutions.

G.W. BECKER, INC. HIRES

MANUFACTURERS HAVE CYBER EXPOSURES Liability for Loss of CONFIDENTIAL Customer Information… you may be liable for damages incurred by your customers for the loss of drawings, specifications, unique formulas or recipes from your systems. You may also be liable for damages to your customers if access into their network is due to a link through your network or if your system transmits a virus to a third party’s system and their data is destroyed. Are you the weakest IT security link in the supply chain? Cyber Liability Insurance may provide you protection from these types of losses. Corporate Data, Personnel Data, and Privacy Notifications… you can’t just apologize for an event. You need to respond and there are 50 state laws with which you may need to comply. Cyber insurance will help you with the cost to comply with regulatory notifications and remedies. Cyber insurance breach response and notification coverage (with the technical help of a Breach Coach provided by the insurer) may help keep you out of litigation. Regulatory coverage may be available for state, federal, foreign and privacy related regulations. Lost Income and Operating Expense from a Security or Data Breach… hackers have been known to attack industrial control systems and cause breakdowns of machinery! What if you are compromised via a vendor’s computer system? If your operations or manufacturing processes are dependent on a network, the lost income and the extra expenses needed to recover lost production due to a network cyberattack or cyber extortion scheme can be significant. Again, cyber insurance may provide you a remedy for the financial impact of such losses.

It’s an evolving and complex issue that at a minimum is worthy of a discussion… why not give us a call or drop us a line.

Commercial, Industrial, Institutional & Construction

Property, Liability, Cyber, Workers’ Compensation & Contract Surety Insurance Agents Lloyd’s London Correspondents & Correspondent Brokers Worldwide 123 West 9th Street Erie, PA 16501 814-452-3200 www.imcerie.com john.bloomstine@imcerie.com

“The Bloomstines”

mbabizmag.com • DECEMBER 2018

FAMILIAR FACES IN NEW PLACES

We are pleased to announce that Attorneys Jim McDonald, Gary Eiben, Tom Buseck and Brian Cressman, formerly of the McDonald Group, have joined the law firm of MacDonald, Illig, Jones & Britton LLP at 100 State Street. 100 State Street, Suite 700, Erie, PA 16507 (814) 870-7600 www.MacDonaldIllig.com Business Law · Litigation · Real Estate · Insurance · Environmental Tax · Trusts & Estates · Labor & Employment · Health Care Bankruptcy & Creditors’ Rights · Emerging Technologies · Construction Family Law · Government Services & Public Finance · Project Finance Law

LEGAL BRIEF | SALE

Letters of Intent: The Basics

James R. Walczak is partner at MacDonald Illig Attorneys. He concentrates his practice in the areas of corporate governance, business transactions and finance, and creditors’ rights. He acts in the capacity of general counsel for a number of business, nonprofit and governmental organizations, providing legal advice on corporate, transactional and tax matters. There are several steps in the sale or purchase of a business. Once the parties have agreed upon the essential terms of the transaction, the first step should be a well thought-out and carefully drafted letter of intent (“LOI”). An LOI signifies that the parties are serious about concluding a transaction. It sets forth the principal terms, conditions and contingencies applicable to the transaction. It establishes the process for moving forward, the expected timeline for consummating the transaction, and the obligations which will be binding upon the

parties during the process of negotiating a definitive agreement. LOIs are often characterized as “nonbinding.” This label is misleading. Virtually every LOI contains some “binding” provisions. And the LOI is the keystone upon which the final, definitive agreement will be built. In short, “non-binding” does not mean “not important!” Four Parts of an LOI An LOI generally consists of four parts: 1) a preamble; 2) non-binding provisions; 3) binding provisions; and 4) a conclusion. The preamble should identify the parties and the nature of the transaction. It should clearly indicate that the LOI is intended to be non-binding, except for those provisions that are identified as binding. It should expressly state that neither party is obligated to proceed with the transaction until there is an executed definitive agreement, which is satisfactory to each party, in each party’s sole discretion. The non-binding provisions should cover the essentials of the transaction and any other items that the parties think to be particularly important. Common nonbinding provisions include: 1) the legal structure of the transaction (stock sale vs. asset sale); 2) included and excluded assets; 3) price and price adjustment mechanisms,

such as working capital adjustments; and 4) payment terms, including amounts to be escrowed. Any other elements that the parties deem to be critical should be included in the non-binding provisions. The binding provisions lay out the expected timeline for negotiating and consummating the transaction and the legally binding obligations of the parties during that process. Common binding provisions include: 1) the due diligence process and limitations thereon; 2) “no shop” obligation (seller will not seek or entertain other offers while the LOI remains in effect); 3) confidentiality, including the existence of the LOI and ongoing negotiations; 4) the conditions/process for termination of the LOI; 5) obligations surviving termination; 6) who has the obligation to pay expenses; and 7) governing law. Other binding provisions, which are also seen, include: 1) limitations/prohibitions on the ability of the buyer to contact employees, customers and suppliers of the seller; and 2) limitations of liability for any breach of the binding provisions of the LOI. The final part of an LOI should be a simple conclusion, which reiterates that the LOI is non-binding (except for those provisions identified as binding), and that neither party shall have any obligation to proceed with the transaction until the parties have agreed upon and executed a mutually satisfactory definitive agreement. Lastly, the LOI should have a place for the other party to accept and sign the LOI. The LOI also should indicate a date when the offer of the LOI will terminate if it is not accepted. Overall, it must be remembered that, legally, an LOI is a contract. Accordingly, it has both important legal and non-legal ramifications. It should always be prepared in consultation with legal counsel. It must likewise be remembered that an LOI is critical to the satisfactory negotiation and consummation of a transaction. The time and effort taken to “do it right” almost always pays off in the end in a big way. For more information, contact James Walczak at jwalczak@mijb.com or 814/870-7763. mbabizmag.com • DECEMBER 2018

Attract, Develop, and Retain Talented Employees

Helping manufacturers implement strategy that enhances and supports a desirable company culture.

(814) 217-6060 www.nwirc.org

The Wm. T. Spaeder Co., Inc. 1602 East 18th Street Erie, PA 16510 PA#012152

DECEMBER 2018 â&#x20AC;˘ mbabizmag.com

814.456.7014

www. wmtspaeder .com

ON THE HILL | ECONOMIC DEVELOPMENT

Opportunity is Knocking for the City of Erie Matt Wachter is the vice president of Finance and Development of the Erie Downtown Development Corporation. He is a transactional tax attorney by training, and Villanova LL.M. (Tax) and KPMG M&A Tax alumnus. Tim Wachter is a shareholder at the Knox Law firm and lead at Knox Law Public Strategies. He is a member of the Governmental, Public Finance & Bonds and Business & Tax Practice Groups at the firm. The statement we’re about to make may appear radical, revolutionary and downright unbelievable — but, it’s true. The City of Erie is uniquely positioned for investment — and able to compete (like never before) for capital, not just regionally, but on the national stage (like never before). Why? Opportunity Zones — an ingenious federal tax incentive and concept of Sean Parker (Yes, the Sean Parker of Napster and Facebook portrayed by Justin Timberlake in “The Social Network”). The most exciting part? Erie has created and launched arguably the nation’s first Opportunity Zone Investment Prospectus and public/private sector initiative to promote investment through the creation

of the “Flagship Opportunity Zone Development Company.” What’s an Opportunity Zone? Opportunity Zones are a collection of lowincome census tracts designated by each governor. The designation was permitted by the Tax Cuts and Jobs Act of 2017, and gives investors tax incentives to justify risking capital in challenging investment markets. Investors must have capital gains to invest to benefit under the tax incentive, and investment will be made via “Opportunity Funds,” either by professionally managed investment vehicles or entities self-formed, certified and managed by individual investors. What Types of Investments Qualify? Real estate and business entities located in Opportunity Zones are generally eligible for investment. Federal Treasury Regulations will provide additional detail about qualifying investments, however, generally: • Opportunity Funds may generally hold an interest in real estate located in Opportunity Zones (either directly or through business entities) and develop real estate properties; • Opportunity Funds may generally invest in business entities located in Opportunity Zones (think start-up technology companies in business accelerators or incubators); and, • Investments may either be for an original use or must meet certain “substantial improvement” follow-up investments. How Does it Work? An investor is given three tax benefits when investing capital gains into an Opportunity Zone, namely: 1) temporary tax deferral, 2) basis “step-up,” and 3) tax avoidance.

Suppose you sell your business, and you receive significant capital gains (congratulations, you’ve finally sold the business and retired!). Instead of immediately paying federal tax on capital gains, you may roll the investment into an Opportunity Fund and invest into an Opportunity Zone. Payment of the federal capital gains are deferred until December 31, 2026, and are eligible to receive a “stepped-up” basis equal to 15 percent if the investment is held for at least seven years. Arguably, the most tax advantageous incentive, if the underlying investment is held for more than 10 years, is that all of the appreciation will be realized tax free for federal purposes upon a later sale. Opportunity Zones in Erie In the City of Erie, eight census tracts received the designation, including the Central Business District, Innovation District, 12th Street industrial corridor, the entire downtown Central Business District, the waterfront (i.e., the GAF or Bayfront Place Development), SB3 and the Savocchio Business Park. Here’s the exciting part. In Erie, an unprecedented partnership by the public and private sectors resulted in the formation of the Flagship Opportunity Zone Development Company for the purpose of promoting the Erie Opportunity Zones and the Opportunity Zone Investment Prospectus. The collaborators include public leadership (both sides of the aisle) and many of our largest private organizations. Both the Investment Prospectus and development corporation are arguably the first in the nation, and in this day and age, the collaboration and bipartisanship is almost disconcerting. The City of Erie is investor ready, and investors are taking notice. For more information, visit www.erieddc.org.

mbabizmag.com • DECEMBER 2018

Holiday Gift & Planning Guide Employers are always looking for creative ways to say thank you to their clients and employees during the holiday season. Here are a few companies to consider for your celebrations.

Perform a modern-day miracle. Turn your taxes into scholarships. Help to support Catholic education! Receive up to a 90% tax credit on business taxes by giving to the STAR Foundation.

WOOD SIGN WORKSHOPS TO GUIDE YOUR INNER-DIY!

For more information: starfund@ErieRCD.org or 814- 824-1188

Diocese of Erie The Scholarship Organization for Catholic Schools in the Diocese of Erie

NOW BOOKING TEAM BUILDING EVENTS & HOLIDAY PARTIES To book: Email us at erie@boardandbrush.com

3330 WEST 26TH ST • UNIT #20 ERIE, PA • 16506 • (814)392-3500 BOARDANDBRUSH.COM/ERIE

MUST SEE. SMELL. TASTE.

Proud To Be One Of Erie’s Destinations.

1525 WEST 8 STREET, ERIE, PA 16505 • 814-452-1933 • ROMOLOCHOCOLATES.COM

DECEMBER 2018 • mbabizmag.com

GIVE THE ULTIMATE GIFT

this Holiday Season!

BUY ONE GET ONE 1/2 OFF T H E U LT I M AT E G I F T C A R D S A L E ! THANKSGIVING thru CHRISTMAS DAY Buy Online at ULTIMATEGIFTCARD.NET or at any Erie, Meadville, Warren, PA or Clymer, NY location

The Conference Center at the Manufacturer & Business Association You need it. You want it. We’ve got it. You’ll love the choice of flexible meeting rooms all equipped with WiFi, flat-screen TVs and laptops. And our onsite business center with phone, fax, copier and computer, plus complimentary breakfast, beverages and afternoon snacks, maximizes convenience for you and your guests!

So relax, you’ve come to the right place. Contact Norm Zymm at 814/833-3200 or 800/815-2660, email nzymm@mbausa.org or visit Google at https://goo.gl/Hxz2ou for our virtual tour!

mbabizmag.com • DECEMBER 2018

8500 Oliver Road • Erie, PA 16509

Discover new career opportunities through industry specific and customized training. The Regional Career & Technical Center is a leading provider of quality career and technical training programs for adults. We offer a variety of courses, affordable tuition and convenient class schedules.

*TIA/WIOA APPROVED CLASSES* Term III classes begin the week of January 14. Register for classes December 3 – January 4.

Visit www.rctcerie.org for a complete course schedule or call 814.464.8601 for more information.

NOW! RIDE the e, TAKE ROUTE 3! The RCTC is a division of the Erie County Technical School, an equal opportunity educational institution.

Vision plans that make your eyes light up. VBA plans with exclusive rates now available to MBA Members Customize your coverage to be as unique as your eyes with more frame and lens choices, comprehensive eye exams made easy, and a wide provider network. • • •

Rates starting as low as $3.48 for an individual No participation requirements for groups of two or more Plans can be contributory or noncontributory

For more information, contact your broker or the Manufacturer & Business Association at 814-833-3200.

DECEMBER 2018 • mbabizmag.com

HR CONNECTION | WORKPLACE TRENDS SURVEY SHOWS IMPACT OF #METOO MOVEMENT ON THE WORKPLACE

One year ago, the news of Harvey Weinstein broke and the #MeToo movement sparked a nationwide conversation. Since then, one-third of executives have altered their actions to avoid behaviors that could be perceived as sexual harassment, according to data from the Society for Human Resource Management (SHRM).

Ancillary Benefits Can Help Fill Gaps With health insurance premiums continuing to rise as we head into 2019, more small businesses have opted to stop offering health insurance. Yet, employees who are happy with their insurance plans are more likely to stick around and report overall job satisfaction. Offering ancillary benefits can help fill that gap. Best of all, these plans can often be provided at little or no cost to the employer — a great way to ring in the new year! Purchasing these benefits at a group level is more affordable because: • As group insurance, the risk is spread through a large population, which keeps premiums lower. • If you have a Section 125 plan, premiums are paid with pre-tax dollars. • The cost can either be covered by the employer or employee. Thanks to the Manufacturer & Business Association’s (MBA) long-term partnerships with industry-leading insurance carriers, MBA members can enjoy exclusive access to premium benefit plans at highly competitive rates! Available plans include: Vision Members with at least two participants can add vision benefits through VBA Insurance with rates starting as low as $3.48 for an employee! This flexible plan can be employer or employee-paid.

These changes in behavior have resulted as executives witness how sexual harassment affects staff and the company’s bottom line. They rate the biggest impacts as: • Decreased morale (cited by 23 percent), • Decreased engagement (23 percent), • Decreased productivity (18 percent), • Increased hostile work environment (15 percent), and • Increased turnover (13 percent). And while 72 percent of employees said they were satisfied with their company’s efforts to stop sexual harassment in the workplace, more than one-third still believe their workplace fosters sexual harassment. “The fact that some workplace cultures still foster sexual harassment says there is more work to be done,” said Johnny C. Taylor, Jr., SHRM-SCP, president and CEO of SHRM. “We need a rules-plus approach — organizations need policies and training, but it is the education piece that creates culture change. When you have employees who know how to define, identify and report sexual harassment, everyone can work together to root out sexual harassment in the workplace.”

STUDY: UNITED STATES ON TRACK TO ADD 8 MILLION MORE JOBS

Dental The MBA offers exclusive plans through Delta Dental at discounted rates — including a plan that covers adult orthodontics — for groups with two or more employees. Best of all, there is “no waiting period” for coverage or treatment! Life, Short-Term And Long-Term Disability MBA members with groups as small as two can select from various Aetna life and disability coverage options that offer no medical underwriting, no waiting periods, and that include flat rates, as well as salary rates. Workers’ Compensation MBA members have access to workers’ compensation insurance through our partner Eastern Alliance Insurance Group (EAIG), which offers the potential of a group policyholder dividend reimbursement for all participants, including small groups!

A recent study from CareerBuilder points to a continued hollowing effect in the labor market where high-wage and low-wage job growth is eclipsing middle-wage job growth by a significant margin. Based on extensive analysis of historical and current labor market trends, the U.S. is expected to add 8,310,003 jobs (5.08 percent growth) from 2018 to 2023 — only one-fourth of these jobs will fall within the middlewage category. Factored into the total job growth is an expected loss of 369,879 jobs over the same time period, with middle-wage occupations experiencing the majority of the decline. High-wage and low-wage occupations are expected to have the highest net job growth from 2018 to 2023 at 5.71 percent and 5.69 percent, respectively.

For more information on the Manufacturer & Business Association-sponsored ancillary benefit plans, contact your broker or contact me at 814/833-3200 or mdamico@mbausa.org.

STEM-related occupations (science, technology, engineering and math) will continue to dominate fastgrowing occupations. For the purposes of this study, CareerBuilder defined low-wage jobs as those that pay $14.17 or less per hour; middle-wage jobs as $14.18-$23.59 per hour; and high-wage jobs as $23.24 per hour.

Melissa Damico

“Technology innovation is moving at an unprecedented rate and is rapidly redefining the occupations and skills required in the job market,” said Irina Novoselsky, CEO of CareerBuilder. “Most of the fastest-growing occupations have a technical component to them. Employers will need to play a greater role in providing competency-based training to the workforce.”

is the manager of Client Services at the Manufacturer & Business Association. Contact her at 814/833-3200 or mdamico@mbausa.org.

mbabizmag.com • DECEMBER 2018

HR Q&A | GET ANSWERS IS IT TRUE I CAN NO LONGER ASK ABOUT CRIMINAL HISTORY ON MY EMPLOYMENT APPLICATIONS?

The answer to this question depends on where you are located. There are some states and cities, including Erie, Pennsylvania, that have made it an unlawful discriminatory practice for an employer to make any inquiry regarding or to require any person to disclose or reveal any criminal convictions during the application for employment. The inclusion of such inquiry on an application shall be unlawful, and applicants shall be told they need not answer the inquiry. The application process shall begin when the applicant inquires of the employment and shall end when the employer has extended a conditional offer of employment. If an applicant voluntarily discloses information regarding his or her criminal conviction during the application process, the employer may discuss the criminal conviction disclosed by the applicant at that time. An employer shall give notice to prospective applicants of their intent to conduct a criminal background check after any conditional offer is made, provided that such notice shall be concise, accurate, made in good faith and shall state that any consideration of the background check will be tailored to the requirements of the job.

WHAT CAN I DO IF AN EMPLOYEE’S DISABILITY CREATES AN UNSAFE SITUATION?

An employer may require that an individual not pose a “direct threat” to the health or safety of himself or herself or others. A health or safety risk can only be considered if it is a significant risk of substantial harm. Employers cannot deny an employment opportunity merely because of a slightly increased risk. An assessment of “direct threat” must be strictly based on valid medical analyses and/or other objective evidence, and not on speculation.

Market Pricing: What Works Best for Setting Your Salary Structure? Market pricing is the process of setting wage structures based on gathering, analyzing and comparing job salary survey data from wages paid in the external market. Organizations use market pricing to establish pay structures and rates for jobs that are market driven, such as information technology jobs. Another use for market pricing is to follow market rate changes and then adjust your organization’s rates accordingly. Many companies are adopting some type of market pricing as a replacement for more traditional job evaluation strategies. Often, market pricing is used in combination with one or more of these traditional job evaluation strategies. Pure market pricing has certain limitations that are hard to overlook. By using a pure externally based employee-pay scheme, an organization will tend to underplay internal equity. The result is a lack of job parity between positions that would otherwise have similar rank and pay. So, where can organizations turn for compensation information? There are multiple sources: the Manufacturer & Business Association (MBA), staffing companies, print sources (such as magazines or newsletters), and even competitors.

For example, an employer cannot assume that a person with cerebral palsy who has restricted manual dexterity cannot work in a laboratory because he or she will pose a risk of breaking vessels with dangerous contents. The abilities or limitations of a particular individual with cerebral palsy must be evaluated.

A high percentage of organizations also purchase salary surveys on an annual basis. They pay for this compensation information because of the benefits derived from it.

Like any qualification standard, this requirement must apply to all applicants and employees, not just to people with disabilities.

Keep in mind: The basis of all surveys is to compare what is similar, rather than what is different. It’s important to use multiple sources of market pricing to make your compensation decisions.

If an individual appears to pose a direct threat because of a disability, the employer must first try to eliminate or reduce the risk to an acceptable level with reasonable accommodation. If an effective accommodation cannot be found, the employer may refuse to hire an applicant or discharge an employee who poses a direct threat.

It’s also common for organizations to participate in surveys by sharing their own salary data — and getting a percentage discount on the completed survey results. This type of survey (where multiple companies share compensation data) is a standard type survey. As a member of the MBA, if you participate in our Regional Wage & Salary/Increase Survey, you receive the results at no charge!

For more information on the MBA’s Regional Wage & Salary/Increase Survey, contact the HR Services Division at hrservices@mbausa.org.

Stacey Bruce, SPHR, SHRM-SCP,

is the director of HR Services at the Manufacturer & Business Association. Contact her at 814/833-3200, 800/815-2660 or sbruce@mbausa.org.

DECEMBER 2018 • mbabizmag.com

Bob Crossey, DO Premier Medical Associates True Performer

True Performers know data is at the heart of prevention. As part of our True Performance program, we’re helping Dr. Bob Crossey keep his patients healthy. In fact, by using our data he’s able to identify warning signs for congestive heart failure and get ahead of emergencies. Because of doctors like Bob, to date, this program has avoided $180 million in emergency room visits and hospital stays.*

There’s value in that. See how True Performance is helping providers improve care through data and incentives. Download the ebook at HighmarkTruePerformer.com.

True Performance results:

13% fewer emergency room visits 16% fewer hospital admissions $180 million in costs avoided

*Based on reduction in hospital costs for patients with True Performance doctors compared to those without from January 2017 to July 2017. Highmark Blue Cross Blue Shield is an independent licensee of the Blue Cross and Blue Shield Association.

CS212415

ATHENA PowerLink Supports

Erie Small Business

CASSA FAMILY CHIROPRACTIC

If you are or know of a woman owned business that would benefit from the Athena Powelink Program Please contact Linda Stevenson at ATHENAerie.stevenson@gmail.com

EVENTS & EXTRAS | NETWORKING & MORE

Human resource professionals from around the region came together for a full day of thought-provoking presentations and networking opportunities during the Manufacturer & Business Association’s (MBA) sixth annual Human Resources & Employment Law Conference on October 24 at the Association’s Conference Center in Erie. To view photos of the event, visit www.mbausa.org. The 2018 conference was made possible thanks to the generous support of its sponsors. The event was presented by the MBA and sponsored by ECCA Payroll, GoErie.com | Erie Times-News, the HR Certification Institute, VBA, Waddell & Reed and Widget Financial.

HR professionals were welcomed to this year’s annual HR & Empl oyment Law Conference held on October 24. Next year’s conference is scheduled for Octob er 23.

Earl Suttle, Ph.D., founder and CEO of Leadership Success Intern ational, shared an engaging and energ etic presentation on “Enjoying Excellence (Becoming the Greatest You Can Be)” in the MBA Founders Room .

rence, enjoying registered for this year’s confe Approximately 75 participants the latest ing more from vendors about learn and s ssion discu ative inform ssionals. resources available for HR profe

Attorney Dan Miller from MacDonald Illig Attorneys shared some updates on employment law. Tracy Daggett, PHR, manager of Professional Development Training Services at the MBA, discussed “Promoting Workplace Civility.”

Tony Lee, vice president of Editorial for the Society for Human Resource Management, talked about the “Key Elements of a Successful Acquisition Strategy.”

Patty Welther (left), manager of Member Engagement at the MBA, presented the grand prize raffle basket to winner Cindy Luke from Bates Collision.

mbabizmag.com • DECEMBER 2018

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UPMC Health Plan received the highest score in Pennsylvania in the J.D. Power 2016-2018 U.S. Member Health Plan Satisfaction Studies of customers’ satisfaction with their commercial health plan. Visit jdpower.com. Nondiscrimination statement UPMC Health Plan1 complies with applicable federal civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability, sex, sexual orientation, gender identity, or gender expression. 1 UPMC Health Plan is the marketing name used to refer to the following companies, which are licensed to issue individual and group health insurance products or which provide third party administration services for group health plans: UPMC Health Network Inc., UPMC Health Options Inc., UPMC Health Coverage Inc., UPMC Health Plan Inc., UPMC Health Benefits Inc., UPMC for You Inc., and/or UPMC Benefit Management Services Inc.

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