SBJ 09-2012 by The Southern Illinoisan

SEPTEMBER 2012

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SPECIAL REPORT

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Making a statement: The new athletic fields completed this summer for Du Quoin and Pinckneyville high schools are comparable to the big-city fields of prestigious private high schools. But the new fields in Southern Illinois are part of a trend in smalltown America of making a statement about their quality of life. Artificial turf fields and state-of-the-art tracks in small-town schools are being used to attract families and build communities. Page 6

From bad to worse: Unemployment increased in all 18 counties of Southern Illinois during the month of May, the last month for which complete statistics are available. The tough news followed a rugged April, in which unemployment increased in 12 of 18 counties. The biggest jumps for May were reported in Jackson County, 2.3 percent, and Pope County, 2.2 percent. In other indicators, gasoline prices jumped nearly 30 cents per gallon from July to August, while the number of air passengers at Williamson County Regional Airport dropped 2 percent in June from the same month in 2011. Pages 12-13

EMPLOYMENT LAW What will you do? When a trusted and valuable employee suddenly turns bad, it is shocking and terrible at the same time. It can even send an employer into a state of panic. The first step is to slow down. The key here is to not panic. Keep a calm head and don’t put off dealing with the situation, though you may be tempted to ignore it. It is best to deal with the problem as soon as possible, or the situation will worsen. Page 11

Southern Illinoisan. Contact us via mail at 710 N. Illinois Ave., Carbondale, IL 62901, or at P. O. Box 2108, Carbondale, IL 62903. Also reach us on the Web at www.sbj.biz and via email at SBJ@thesouthern.com. The Journal is published 12 times per year monthly, and mailed to businesses, community development leaders, chambers of commerce members and other professionals in Southern Illinois. Copyright 2011 by

Who is in the news? Find out who has been hired, who has been promoted or who has received an award for efforts in business. Make sure you check out our newest ‘Faces in the News’ collection of business portraits and learn more of achievements and honors in regional businesses. If you know of a business or person who deserves special recognition for advanced training, a unique honor or a business expansion, please let us know at sbj@thesouthern.com. Pages 16-19

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SEPTEMBER 2012

SOUTHERN BUSINESS JOURNAL

Cover Story Four myths of Southern Illinois agribusiness BY LES O’DELL

SBJ CORRESPONDENT

If you buy into the Hollywood perception of agriculture, it’s easy to consider the industry as one comprised of men in bib overalls, driving tractors in fields of corn. Yet, in Southern Illinois, agriculture is big business, ripe with misconceptions and myths. Myth No. 1: ‘Agriculture is farming —just sows and cows and plows.’ Sure, agriculture in Southern Illinois includes the raising of livestock including cattle and hogs as well as traditional field crops, such as corn, soybeans and wheat, but our region is much more diverse. “It’s much more than what people usually think of,” explains Silvia Secchi, SEE COVER / PAGE 4

JOEL HAWKSLEY / SBJ

Gabrielle Barratta, 8, leads Thunder across a field at Giant City Stables. The recent drought has left their pastures dormant, requiring them to purchase four months more hay than usual.

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Cover Story Find more business news at www.sbj.biz. assistant professor of agribusiness economics at SIU Carbondale. “I think Southern Illinois is an excellent place where you can see a lot of the interactions and diversity of agriculture. We are much more diverse here than even other parts of Illinois. We have orchards, the wine trail, forestry and specialty crops.” The area is known for fruit and vegetable production, often on small farms. Peaches, apples, peppers, pickles and more are grown in Southern Illinois. There are even catfish and shrimp farms in the region. “Many of these specialty crop producers are selling their products at farmers markets or shipping them all over the world,” says John Pike, educator with the University of Illinois Extension Service. Secchi says all of those products are a part of agriculture. “When you think about it all, there is a lot of value added, all of which starts with production agriculture and much of which ends up on your table or car. Actual farming is a small part, but it is the foundation upon which everything is built.” She explains that food processors such as Gilster-Mary Lee Corp., which has its headquarters in Chester, is one example of a company within agriculture. Many other companies of all sizes are part of the transportation, input, processing and retailing aspects of agriculture. “When you look at the industry, it’s everything from field to fork and everything in between,” says Carol Bennett, manager of the Johnson County Farm Bureau. Myth No. 2: ‘Agriculture is not big in Southern Illinois.’ Not so, Secchi says. “Sure, the impact of agriculture in Southern Illinois is much smaller than it is in other parts of the state, but when you consider all of the tourism with people coming here for the wine trails, the horses, the wildlife and the outdoors, the specialty markets, the support industries and production agriculture, it is an increasing niche for this region,” she explains. Pike says it all adds up to be a significant part of the area’s economy.

AARON EISENHAUER / SBJ

David Petty drives a tractor and trailer through the peach trees at Rendleman Orchards in Alto Pass. The hot, dry weather has helped intensify the flavor in this year's crop of peaches.

‘Actual farming is a small part, but it is the foundation upon which everything is built.’ SILVIA SECCHI ASSISTANT PROFESSOR OF AGRIBUSINESS ECONOMICS AT SIU CARBONDALE

“A lot of development continues to be made across agriculture. We see more vineyards and specialty crop production here than you would in other places in the Midwest. Add it all in with the agritourism and it’s a significant impact, maybe in the tens of millions of dollars in addition to what’s captured in commodities.” Case in point: A 2007 study on the Illinois wine and wine grapes industry found a $319 million impact, including providing for more than 2,000 full-time equivalent jobs. Many of those wineries are located in Southern Illinois. The impact of wineries and other forms of agriculture has a multiplier effect, Secchi says. “If a farmer has a couple of good years and he builds a new house, he’s going to pay more property tax on that house, and that is going to affect the local school district,” she says. “The same goes for land values. If a farmer has a good year and buys a new tractor or truck, that affects the local dealer who then spends the money again.”

Myth No. 3: ‘Agriculture is huge corporate farms.’ “I don’t think there are two corporately owned farms in the whole state,” Pike says, speaking of the perception that large companies own and operate farms. He says he thinks it’s a misconception stemming from the way some agricultural input providers advertise. “I think some of the non-farming public drives through the country and sees a Dekalb or Monsanto or Asgow sign near a field and they think that it’s the company farming that ground. In reality it’s just a matter of a company signing a field where their seed was used, just like a plumber putting a sign in the front yard of a house he’s working on,” he says. Pike says it is not uncommon for farms to be incorporated by a family as a means of estate and tax planning. He says although there are a few farms in the region of more than 10,000 acres, usually owned and operated by several related families, the average Southern Illinois farm is about 300 acres and many of the farmers are part time.

Myth No. 4: ‘Farming is not a business.’ Secchi says farmers are business people and their operations are not much different than local retailers. “The skills farmers have to have to be successful are very similar to the local businessman,” she says. “Farmers are entrepreneurs, and they have to know how to deal with risk. They use very sophisticated financial instruments and management techniques, plus they have to deal with risks like the weather that many businesses don’t have to deal with.” Farmers have to understand economics and marketing, as well as the laws of supply and demand, she says. They also must carefully balance assets and cash flow, Pike adds. “Agriculture is very capital intensive,” he says. “A lot of assets are in equipment and land. That money isn’t easily available, and those assets don’t guarantee a profit.” LES O’DELL of Carbondale is a regular contributor to Southern Business Journal and The Southern Illinoisan.

SEPTEMBER 2012

Drought price tag could be worse The widespread and sustained drought of 2012 will affect both farmers and consumers’ pocketbooks in the coming months, local experts say. While shoppers may find higher prices on everything from cereals to fuel, farmers are facing a reduction in their annual income. But it could be worse. “Probably about 80 percent of the acres in Southern Illinois are covered by some sort of crop insurance,” Cheri Lange of Farm Credit Services in Red Bud said. “For those farmers with insurance, they should be able to break even or come out slightly above break even for the year.” She said the most popular form of crop insurance is called a revenue protection plan in which the farmer’s own historical production data is used to calculate an average yield. When production does not meet that benchmark, insurance coverage kicks in, guaranteeing the producer 50 to 85 percent of average revenue from his crop, using an average of current market commodity prices as a base. Lange said since commodity prices are high, farmers with coverage should not see drastic losses, although they may have to wait longer than normal for money, as the claims process could take several months. “We can’t begin processing claims until after harvest, then we start,” she said. “Typically, the payouts will come by the end of the year, or maybe even in January.” “The drought is a major, major issue this year because a lot of our farmers have lost their crop, and even though they have insurance, it will still be hurtful,” Silvia Secchi, assistant professor of agribusiness economics at SIU Carbondale, said. Consumers have no insurance plans to protect them from high prices. “You’re going to see higher food prices, no doubt about it,” Lange added, explaining that much of the nation’s corn crop is used for livestock feed. With less available corn, the price of feed is higher. “That means meat prices are going to go up and so is everything else in the store.” The increase may not even be apparent until sometime in 2013. Lange added that the drought’s impact will be felt all across the economy, especially in rural areas. “While the nation went through an economic downturn, agriculture has been a bright spot,” Lange said. “Fewer bushels means that farmers may not be spending as much money, and farmers are always good for the economy because they’re always reinvesting in their operation.” — LES O’DELL

SOUTHERN BUSINESS JOURNAL

SEPTEMBER 2012

Special Report Illinois schools create community asset in athletic field upgrades BY JAMESON SHELEY SBJ CONTRIBUTOR

If you were blindfolded and dropped off at the new athletic fields completed this summer for Du Quoin and Pinckneyville high schools, your first instinct upon Sheley removing the blindfold would be that you are at a prestigious private high school in a major urban area. Instead, it’s small town America making a statement about its quality of life. Colleges and private high schools have long used athletic facilities to recruit students. Now, rural communities are turning to artificial turf fields and state-of-the-art tracks in their schools to attract families. But, it’s more than just expressing quality of life. For all schools, athletic facilities are being upgraded to optimize real estate assets, which is especially important for landlocked schools. A typical natural grass field may be used only 12 to 15 times a year to avoid wear and tear on the field; however, an artificial turf field has unlimited use for practice, JV games, cheerleading, band and other school functions. It reduces the need to allocate so much land for multiple practice fields. Schools also can generate revenue by renting them for multiple functions. With artificial turf fields costing up to $1 million and premier polyurethane tracks running as much as $600,000, schools need to make smart decisions in not only choosing the type of turf and track surfaces, but also the installation process and maintenance. Here’s a primer.

Turf and track types Selecting artificial turf is like purchasing carpet. There are many

different levels of quality. A less expensive product will not last as long as a more expensive product. Turf design duplicates the bounce of the ball on natural turf, so field hockey, lacrosse, baseball, soccer and football fields will be different. Additionally, highly specialized sports, like field hockey, require a shock pad underneath the surface to cushion it — a more expensive proposition than sand and rubber infill used for multi-purpose fields. A turf’s life span can range from five to 12 years, depending on the type of turf installed, level of usage, quality of the base and diligence of maintenance. So, schools should consider the cost of replacing the turf — typically about 50 to 60 percent of the original cost of the entire project. A $750,000 artificial turf can cost about $450,000 to replace if it has a properly constructed base that can be reused. As for tracks, the size will be determined by the events the school anticipates hosting. Du Quoin and Pinckneyville selected eight-lane tracks suitable for regional or sectional events. Some schools opt for six-lane tracks sufficient for dual league track meets. More than 90 percent of schools opt for polyurethane surfaces generally composed of a black mat with a structural spray coating. It should have a life span of 20 years with a re-spray coating every five years. There are more expensive systems, but no matter what installation is chosen, reputable installers should follow proper manufacturers’ guidelines for the amount of materials required for the track system. This can be confirmed in the bill of lading.

Construction process Most schools want upgrades performed when school is out during the summer, sometimes putting off construction until mid-June to accommodate the use of facilities for graduation ceremonies. When planning

PROVIDED

Colleges and private high schools have long used athletic facilities to recruit students. Now, rural communities such as Pinckneyville, (top), and Du Quoin are turning to artificial turf fields and state-of-the-art tracks to attract families.

SEPTEMBER 2012

SOUTHERN BUSINESS JOURNAL

Special Report an upgrade, schools should first consider that it can take up to five months from the time a school commits to the project to putting the first shovel into the ground. This is largely because of the design schedule and permit review process. Engineers and designers need three to four months just to create a final plan to price for contractors. Projects then need to be bid in late winter to early spring for schools planning a summer installation. Permitting can include approval from multiple agencies, including the state department of natural resources, the local sewer district, other state, county and municipal offices, and, in some cases, levee districts. Permitting invariably encounters storm water management, water quality, erosion control and other environmental issues.

Find more business news at www.sbj.biz. Meanwhile, design and engineering requires a thorough evaluation of site selection and site geometry (so the surface fits the site), mapping of existing utilities, storm water retention and water quality concerns before finalizing construction bid documents. Once projects start (typically in June), the timeline for completion can shrink even further if a school wants the field ready for August practice. A lot of things have to go right, especially weather, if a new field or track is going to be installed in 45 days. Construction firms vary in handling a compressed schedule, but the best outcomes start with working closely with schools to manage the

schedule and expectations, while planning each step of the project long before construction is started. A lot of overtime and weekend work will add to the cost of the project.

Maintenance Maintaining artificial turf is easier and less expensive than natural turf, which requires irrigation, seeding, aerating, fertilizing and replacement of damaged turf. Artificial turf needs to be groomed to fluff the blades, have debris removed and swept twice a month under heavy use and once a quarter with lighter use. Seam repairs are also occasionally required. Many schools pay for these costs by renting their fields. Meanwhile, a new rubberized track stays in good condition for five to seven years before requiring a resurfacing coat. The track

should have a total life span of 15 to 25 years, depending on the type installed. Community school budgets are tight, but administrators can find long-term value in upgrading athletic surfaces. They just need to make smart decisions on turf and track surfaces and understand construction timelines and maintenance costs. Be nimble, like an athlete, in your decision making and you’ll have the community asset you seek. JAMESON SHELEY, CFB-S, CTB is a certified field builder and certified track builder and project manager for St. Louisbased Byrne & Jones Sports, which for more than three decades has installed more than 1,000 athletic surfaces. More information can be found at www.byrneandjones sports.com.

Entrepreneur’s Mailbag Strategic planning helps keep an eye on the big picture BY CAVANAUGH L. GRAY SBJ CONTRIBUTOR

Business development work can, at times, be a bit complicated. With so many moving small business parts, owners must know which tools are right for which job. Over time, it Gray became easier to understand the differences between business planning and strategic planning and when it was appropriate to use each one. Strategic plans are more conceptual in nature and produce the overall goals and objectives to be achieved. Business plans, on the other hand, are very specific and responsible for carrying out those goals and objectives. The following is a further examination of strategic planning and how it can benefit your company.

Strategic planning A strategic plan describes how your company executes a chosen strategy. It spells out where an organization is going over the next year, or more, and how it’s going to get there. Typically, a strategic plan is organization-wide or focused on a major function, such as a division or department. A strategic plan focuses the energy, resources and time of everyone in the organization in the same direction. If you are going to implement a strategic plan, be sure to take into account the following: Make sure your strategic plan focuses on helping your organization build a competitive advantage. Use your strategic plan to focus on the right opportunities. Use your strategic plan to help prioritize the company’s financial needs.

Assessing the current situation In developing a strategic plan, a company must answer the questions:

Where are we right now, and what are we up against, both internally and externally? In drafting your strategic plan, remember that the plan is not complete without examining the following: Are there any pressing problems? If so, what is the scope of those problems? Has the company recently missed goals, been unprofitable or experienced little to no growth? What are the contributors to the organization’s current successes or failures? What assumptions are you operating under that could affect the outcome of your business? Finally, what potential risk could you be facing over the coming years? Because I am hard wired as a strategic thinker, it drives me crazy when business strategy is poorly done — as in the case of companies like Kodak or, more recently, Netflix. In 2009, the Lego Group was facing a 5 percent global toy decline. Its strategic plan focused on cutting cost,

creating better partnerships and licensing deals (Star Wars, Indiana Jones and Toy Story), creating a more exciting line of toys, courting more young women and promoting Legos as a fun, systematic and creative way to play. Lego’s strategic plan paid off, allowing the company to identify problems and establish goals and objectives for turning things around. In doing so, Lego was able to realize a 23 percent sales increase during a global toy decline. What’s your strategy? CAVANAUGH L. GRAY (cgray@ecafellc.com) is director of business development for The Entrepreneur Café, LLC and can be reached at 877-511-4820. For more information on developing strategic plans or to read a chapter from his new book, “The Entrepreneurial Spirit Lives: 25 Tales to Help Entrepreneurs Start, Grow, and Succeed in Small Business,” log on to www.ecafellc.com. Follow The Entrepreneur Café, LLC on Twitter @TheECafe and on Facebook for more startup information.

SEPTEMBER 2012

SOUTHERN BUSINESS JOURNAL

Tax Planning Looking at the new estate tax laws

What has happened since 2010 and what could happen in 2013 BY SCOTT MCCLATCHEY SBJ CONTRIBUTOR

With 2013 approaching, many families and their financial, tax and legal consultants are weighing major estate planning decisions. A shortterm window of opportunity may be McClatchey closing. The relatively low estate tax rates we have now may soon disappear, along with one of the largest federal tax breaks available in decades. Estate taxes are at 80-year lows. At the end of 2010, Congress reset the estate, gift and generation-skipping tax rates at 35 percent and raised the lifetime federal gift, estate and GST tax exemptions to $5.12 million until Jan. 1, 2013. Some Capitol Hill legislators want to see these rates retained, even made

permanent. Two other scenarios may be more likely. In the first scenario, the Bush-era tax cuts expire at the end of 2012, and it becomes 2001 all over again. The lifetime estate and gift tax exemptions fall to $1 million, and estate taxes are reset to 55 percent (60 percent for some households). In the second scenario, Congress makes good on President Barak Obama’s request to turn the clock back to 2009: estate taxes reset to a top rate of 45 percent with a $3.5 million personal exemption. (The lifetime gift tax exemption would still fall to $1 million.) The current $5.12 million personal exemption is portable between spouses. This represents a major tax break for wealthy families — an opportunity to transfer significantly greater amounts of wealth without triggering transfer taxes. Currently, executors have an option to transfer an unused portion of a deceased spouse’s $5.12 million lifetime unified gift/estate/GST exemption to a

surviving spouse. So, with this new portability, a married couple can potentially transfer up to $10.24 million of assets without incurring any federal estate tax. In 2013, this portability is scheduled to disappear. Portability is not automatic. When the first spouse passes away, the executor of his or her estate must file a federal estate tax return even if no estate tax is owed. That move formally notifies the IRS that you are transferring the unused or partially used personal exemption to the surviving spouse. This estate tax return is due nine months after the death of the first spouse, with a six-month extension permissible. If some planning needs to be done to bring the value of your taxable estate under $5.12 million (or $10.24 million), your executor could make donations to qualified charities or non-profits on your behalf to lower the taxable value of your estate, although your heirs would consequently be left with less. You can shrink your taxable estate

Find more business news at www.sbj.biz. without reducing the lifetime exemption. In 2012, the annual federal gift tax exclusion is set at $13,000. So, you (and your spouse) may gift up to $13,000 each to an unlimited number of individuals in 2012 without reducing your lifetime $5.12 million gift/estate tax exemption. Those gifts can even be made as payments for school expenses (except housing costs) or medical bills. Keep the $13,000 annual exclusion limit in mind. In 2012, gifts in excess of $13,000 per individual do cut into the $5.12 million lifetime exemption dollarfor-dollar. Even so, you still might want to make large gifts of appreciating assets this year. Why? Here’s an illustration. If your gift shares value at $52,000 to a relative, you will draw down your $5.12 million SEE TAX LAWS / PAGE 23

Money Matters Shock analysis can help bond investors anticipate effects of higher interest rates BY MICHAEL P. TISON SBJ CONTRIBUTOR

Tison

Although no one can predict exactly where we are on the path to higher interest rates, that doesn’t stop investors — especially those with substantial bond holdings — from wondering

how their portfolios might be affected if and when rates rise. In that regard, an exercise with the somewhat scary name of a “shock analysis” may be helpful. While the Federal Reserve has pledged to keep interest rates low through 2014, many observers believe the next major move for rates is upward, if only because they are so low now. Like everything else concerning investing, even the experts are often surprised, and it may be the consensus is wrong. It’s also true that bond prices are influenced not only by rates but by a number of factors,

including the financial health and credit rating of the issuers, as well as the everpresent effects of supply and demand. However, when and if interest rates do rise, the principal values of bond portfolios as a whole are likely to decline. A shock analysis — sometimes referred to as a horizon analysis — provides a good starting point for discussions between investors and their advisers about the potential price volatility of fixed income portfolios if interest rates increase. Investors who want to minimize risk, or simply have a better

idea of what to expect, can use the results of a shock analysis to determine if they want to make adjustments to their portfolios or simply sit tight. Either way, running a “what if” scenario will provide useful information that can help guide portfolio decisions. A shock analysis illustrates and quantifies the potential impact of a change in interest rates on a fixed income portion of a diversified portfolio. The report contains specific results for SEE SHOCK ANALYSIS / PAGE 10

SEPTEMBER 2012

SHOCK ANALYSIS FROM PAGE 9

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each individual bond holding, identifying estimated price changes under the chosen scenario — for example, a 1 percent increase in interest rates within the next year. Because the potential effects on each individual bond holding is analyzed, the results can be helpful in determining what specific securities an investor might want to address if portfolio adjustments are deemed necessary. Because the coupon rate, the payout initially pledged by the issuer of a bond, is fixed, bond holders should continue to receive the same amount regardless of what interest rates do. But since principal values and interest rates move inversely, a rise in interest rates typically means a decline in principal values. A shock analysis estimates how potential changes in the principal return (which is assumed to decline by a certain amount if interest rates rise) might combine with the coupon return (which should not be affected by a change in rates). The analysis shows how the total return of the portfolio over a given time period might be affected. It’s important to understand that a shock analysis is not a prediction about the direction of interest rates, nor a guarantee, as to the potential price changes of specific bond holdings under different scenarios. The results of a shock analysis are estimates derived from a mathematical model — the actual impact on the portfolio in question may be different. Other factors can also affect changes in the portfolio holdings. For example, although a shock analysis estimates when a bond will be called prior to maturity, the issuer may or may not actually call (redeem) the bond during the time period in question. Of course, rising interest rates affect many types of investments. While higher rates can be a negative for stock prices, quantifying the impact of interest rates changes on stocks is complex. A discussions with your advisor regarding the possible effects of rising rates on your overall portfolio is a good idea. MICHAEL P. TISON is an investment adviser and registered principal with Raymond James Financial Services Inc., with offices in Harrisburg and Marion. He can be reached at 618-253-4444 or michael.tison@ raymondjames.com.

SEPTEMBER 2012

SOUTHERN BUSINESS JOURNAL

Employment Law The good employee gone bad: What you should do BY ANGELA HOLMES-YOUNG SBJ CONTRIBUTOR

It has happened to all of us. You are at work and feeling like things are good. Your work life is good. Things are moving along well. You look around and realize that you have a great staff Holmes-Young and people are working hard. Then, it happens. Usually, without the slightest warning, something suddenly does not seem right. Can it be true? A good employee, maybe even your best employee, has gone bad. It is shocking and terrible all at the same time. It can even send you into a state of all-out panic. What exactly happened? How does a one-time star performer turn into a slacker? What will you do now? He or she was the one you could count on to do everything right. This employee was the one person who would actually do what needed to be done before you even needed to say something. Now, it is all over, and your once star employee is truly your worst nightmare. Let me start by explaining exactly what I mean when I say that the employee turned bad. An example of an employee going bad might be when your star employee begins gossiping to others, breaking rules or policies, missing work and/or showing up late. Other tell-tale signs could be an employee, with a once stellar attitude, who suddenly turns into a sassy employee ready to complain and whine about everything. Work performance suffers greatly when an employee turns bad. When star performers go bad, they take the rest of the staff with them and bring down morale and productivity. They had previously been both a formal or informal leader, and others are used to following where they lead. So, when the star performer is leading them into a downward spiral of poor morale and slow productivity, everyone follows. It is a dangerous and slippery slope that, left unattended, can be a disaster.

Find more business news at www.sbj.biz.

‘Weakness of attitude becomes weakness of character.’ ALBERT EINSTEIN

After you recover from the shock of it all, you start to think deeper. What will you do now? How will you and your organization get through it? Maybe, for just a second, you hoped no one would notice; but, it really is too late. The office know-it-all already noticed and has told everyone. You have to deal with it now, but what do you do? The situation can be ignored no longer. Is there any way to rehabilitate this once great employee? Is it worth the effort? Should you sit back and hope this person quits? Here are the true questions. Is it better to act or to do nothing and let the situation solve itself? Slow down. Yes, the situation can be salvaged. The key here is not to panic. Keep a calm head and don’t put off dealing with the situation. Your first instinct will be to completely ignore the situation. Do not do this. Do not put this off or the mess will get bigger. Take action and set a time to talk to this person right away. Maybe there is something that you can do to help this employee that will ultimately correct his or her behavior. Resist the urge to put off talking to the employee because you decide that you can handle this person’s work for awhile yourself. Trust me. You are too busy for that. You do not have time. You should be delegating, not taking on more work from subordinates. This is not a good use of your time. Now that you are thinking clearly, take action. Meet with the employee. Start by explaining to the employee what you are seeing. This includes specifics on exactly what the problem is. You should also include details on what aspect of the job that isn’t being done. I call this step the “What” step. Be as explanatory as you can here. Make sure that the employee understands exactly what is wrong. Next is the “Why” step. Explain to the employee why any of this matters. Explain who else this is affecting, why it is important. Explain why you need this person to do it a certain way, etc. Again, explain as much as you can. Just saying,

“Do it this way because I said so,” or “That is the way we have always done it,” really isn’t the best explanation here. Now is your chance to explain the business condition and process. Take advantage of this time for education. Now, move onto the “How” step. This step is all about explaining how he or she can turn this problem around. I am not suggesting here that you provide all of the answers. Maybe you do, maybe you don’t. It depends on the problem or situation. Maybe the employee needs to solve this alone, with you mentoring or providing guidance. The last step in this coaching model is the “When” step. When will the employee need to make this change? When will you be looking to confirm positive action? When will the results be due? When will the employee be evaluated? Maybe you need to set up a series of timelines or mini-deadlines so everyone is on the same page and you can work to the end goal in steps.

Coaching made simple Step 1: Discuss what the problem or issue is Step 2: Discuss why this is a problem or issue Step 3: Discuss how the employee can/should fix the issue Step 4: Discuss when the employee needs to have the problem or issue fixed Don’t let your star employee fall down in front of you while doing nothing to help. If you talk with the employee and find the root of the problem to be something of a personal nature and/or something happening at home, should you help? Yes, offer support, but only to a degree. There is a fine line between boss and friend. Recommend some services from professionals who can help the employee. Do not encourage the employee to drown his or her sorrows in a bottle of wine at your kitchen table. Don’t be afraid to refer the employee to

ART SERVICES

Work performance suffers greatly when an employee turns bad.

get the help that he or she needs; but, remember your place in the equation. In the end, as humans, we all have stress that will at times manifest itself in the workplace. Use patience to deal with the stress of others. Act quickly to control situations before they get out of hand and cause major workplace issues. Don’t be afraid to refer someone to a trained professional for help with personal issues. Remember to keep the personal matters of your employees confidential. ANGELA HOLMES-YOUNG is vice president of Consulting & Human Resource Services for Your Professional Partners, Inc. in Marion. She consults with clients of all sizes in a variety of human resource areas, while also offering executive coaching and public speaking. Angela can be reached by emailing angela@yourprofessional partners.com, calling 618-969-8800 or on Twitter @A_Holmes_Young.

Retail sales for Southern Illinois cities City Anna Benton Carbondale Carterville Chester Du Quoin Harrisburg Herrin Jonesboro Marion Metropolis Mount Vernon Murphysboro Nashville Pinckneyville Red Bud Sparta Vienna West City West Frankfort REGION ILLINOIS

YTD June 2012

2011

2010

2009

2008

2007

54.7 38.7 264.1 17.5 24.6 29.1 98.1 76.5 5.7 320.3 36.8 237.3 60.3 53.2 17.9 33.2 55.7 17.5 41.4 10.2 $1,492.8 $71,652.3

119.1 86.4 593.5 42.0 55.7 113.5 214.0 154.0 11.4 686.9 84.4 533.6 135.2 110.3 42.3 74.7 128.2 40.1 88.3 122.5 $3,436.1 $154,650.6

120.9 69.5 598.0 42.2 55.3 77.1 195.0 153.4 11.8 683.1 82.0 507.0 130.6 96.6 38.5 75.2 128.5 39.9 87.8 112.4 $3,304.8 $147,232.0

114.5 69.4 565.5 39.9 52.9 100.8 191.9 147.2 12.5 676.0 77.1 476.7 129.1 107.9 37.2 70.1 126.4 37.1 91.9 111.4 $3,235.5 $139,593.2

113.3 71.4 587.7 40.1 51.5 91.9 179.3 135.9 12.4 673.4 75.9 482.8 117.1 101.8 39.0 77.7 130.5 40.5 89.6 111.2 $3,223.0 $237,438.0

112.3 72.4 607.4 40.3 51.7 94.4 173.6 134.4 11.3 662.4 79.8 461.5 94.9 105.2 35.8 73.7 129.5 39.8 82.8 111.4 $3,174.7 $180,162.7

N I L L I Chicago Fed Midwest % change 07-11 Manufacturing Index

6.1% 19.3% 2.3% 4.2% 7.7% 20.2% 23.3% 15.6% 0.9% 3.7% 5.8% 15.6% 42.5% 4.8% 18.2% 1.4% 1.0% 0.8% 6.6% 10.0% 8.2% 14.2%

Alexander Franklin Gallatin Hamilton Hardin Jackson Jefferson Johnson Massac Perry Pope Pulaski Randolph Saline Union Washington White Williamson .,REGION ILLINOIS U.S.

2,960 17,700 2,615 4,243 1,831 29,788 20,060 5,067 7,816 9,410 1,942 2,685 15,222 12,751 7,657 8,604 7,770 34,348 192,469 6,669,081 156,385,000

342 1,968 240 363 201 2,608 1,789 544 786 1,093 208 313 1,400 1,218 876 685 642 3,022 18,298 620,332 13,184,000

June 2012 11.6% 11.1% 9.2% 8.6% 11.0% 8.8% 8.9% 10.7% 10.1% 11.6% 10.7% 11.7% 9.2% 9.6% 11.4% 8.0% 8.3% 8.8% 9.6% 9.3% 8.4%

May 2012 11.1% 9.5% 7.7% 7.0% 9.0% 6.5% 7.7% 8.9% 8.2% 10.2% 8.5% 9.9% 7.9% 7.8% 10.0% 6.7% 6.7% 7.4% 8.4% 8.4% 7.9%

104 103 102

IPMFG June 12 95.8

100 98 94 90 88 86 84

81 80

Unemployment rates for Southern Illinois counties, state and nation Jobless

105

SOURCE: LATEST STATISTICS AVAILABLE FROM THE ILLINOIS DEPARTMENT OF REVENUE. FIGURES ARE IN MILLIONS.

Labor force

The CFMMI is a monthly estimate by major industry of manufacturing output in the Seventh Federal Reserve District states of Illinois, Indiana, Iowa, Michigan and Wisconsin. It is a composite index of 15 manufacturing industries, including auto and steel, that uses electrical power and hours worked data to measure monthly changes in regional activity. It is compared here to the national Industrial Production index for Manufacturing (IPMFG). Base year is 2007. Starting in November 2005, the index excluded the electricity component.

June 2011 14.4% 12.3% 9.1% 7.8% 11.7% 8.6% 8.8% 10.8% 9.5% 10.9% 11.0% 11.4% 8.4% 9.5% 11.6% 7.5% 7.7% 9.1% 10.0% 10.3% 9.3%

SOURCE: ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY, U.S. DEPARTMENT OF LABOR. FIGURES ARE NOT SEASONALLY ADJUSTED.

Change month

0.5 1.6 1.5 1.6 1.0 2.3 1.2 1.8 1.9 1.4 2.2 1.8 1.3 1.8 1.4 1.3 1.6 1.4 1.2 0.8 0.5

Change year

76 74 72

CFMMI June 12 94.1

2.8 1.2 70 0.1 68 0.8 66 0.7 64 N D J F M A M J J A S O N D J F M A M J ’10 ’11 ’12 0.2 0.1 SOURCE: FEDERAL RESERVE BANK OF CHICAGO 0.1 0.6 0.7 0.3 0.3 June 12 June 11 Change 0.8 0.1 MONTHLY TOTALS 0.2 886 904 2.0% 0.5 YTD TOTALS 0.6 0.3 2,591 2,433 6.5% 0.4 2011 2010 Change 1.0 ANNUAL TOTALS 0.9 9,682 7,478 29.5%

Williamson County Regional Airport passengers

I S I N Consumer credit score

10 85 20 10 8 131 53 30 11 58 2 9 75 80 35 25 48 190 880

14 130 27 22 9 148 76 34 18 52 10 18 86 72 37 47 57 179 1,036

693

Region

694

688

State

O R S U of I Flash Index

U. S.

Total cars, trucks sold based on title applications filed. Excludes motorcycles, trailers.

New vehicle sales Alexander Franklin Gallatin Hamilton Hardin Jackson Jefferson Johnson Massac Perry Pope Pulaski Randolph Saline Union Washington White Williamson REGION

Carterville

SOURCE: EXPERIAN

June 11

686

Credit scores are numeric reflections of financial behavior and credit worthiness and they are based on information included in a credit report. Ranging from 330 to 830, a higher score means a lower credit risk. Scores are from August 2012.

June 12

Change

2011

28.6% 34.6% 29.5% 54.5% 11.1% 11.5% 30.3% 11.8% 38.9% 11.5% 80.0% 50.0% 12.8% 11.1% 5.4% 46.8% 15.8% 6.1% 15.1%

142 1,174 265 279 96 1,482 1,025 392 297 606 96 159 975 1,022 502 583 625 2,060 11,780

2010 126 965 222 236 97 1,320 848 327 269 558 73 129 844 793 486 446 571 1,796 10,097

Change

12.7% 21.7% 19.4% 20.8% 1.0% 12.3% 20.9% 19.9% 10.4% 8.6% 31.5% 23.2% 15.5% 28.9% 3.3% 30.7% 9.5% 14.7% 16.7%

Total units sold, including condominiums

Q2 12 Alexander Franklin Gallatin Hamilton Hardin Jackson Jefferson Johnson Massac Perry Pope Pulaski Randolph Saline Union Williamson ILLINOIS

0 78 5 2 3 98 78 16 38 25 4 3 36 53 24 191 35,116

Q2 11 2 87 5 2 6 96 77 13 24 29 2 5 41 41 14 155 29,529

SOURCE: ILLINOIS ASSOCIATION OF REALTORS

Change

100.0% 10.3% 0.0% 0.0% 50.0% 2.1% 1.3% 23.1% 58.3% 13.8% 100.0% 40.0% 12.2% 29.3% 71.4% 23.2% 18.9%

July 12 102.9

2011 16 283 12 6 14 325 258 66 82 86 10 11 117 148 89 539 103,294

2010 19 259 8 8 8 358 264 78 91 116 8 6 131 122 84 590 103,455

Change

15.8% 9.3% 50.0% 25.0% 75.0% 10.2% 2.3% 15.4% 9.9% 25.9% 20.0% 83.3% 10.7% 21.3 % 6.0% 8.6% 0.2%

’12

’11

’10

SOURCE: INSTITUTE OF GOVERNMENT AND PUBLIC AFFAIRS, UNIVERSITY OF ILLINOIS

Hotel/motel stats

Consumer Price Index

Total amount of revenue generated in Carbondale by hotels and motels for room rentals only.

The CPI measures average price changes of goods and services over time, with a reference base of 100 in 1982-84.To put into context, a current CPI of 194.5 means a market basket of goods and services that cost $100 in 1982-84 now costs $194.50.

June 12 June 11 MONTHLY TOTALS

Change

$756,575

$785,550

3.8%

YTD TOTALS $3,124,633

$3,074,580

2010

1.6%

Change

$28,250 $42,000 $45,000 $51,570 $24,000 $92,500 $95,000 $61,000 $79,500 $48,500 $96,500 $55,000 $69,900 $62,000 $77,500 $100,500 $142,000

226

224

U.S. city average July 12 229.1

222

$7,710,436 <0.01%

MEDIAN SALES PRICE Q2 12 Q2 11 $0 $65,250 $48,000 $189,000 $43,000 $96,500 $84,500 $66,500 $62,000 $61,900 $127,500 $43,000 $81,500 $52,000 $80,250 $116,000 $145,000

230

228

2011 ANNUAL TOTALS $7,706,931

SOURCE: ILLINOIS SECRETARY OF STATE’S OFFICE. LATEST DATA AVAILABLE.

Home sales

108 107 106 105 104 103 102 101 100 99 98 97 96 95 94 93 92 91 90 89 J

The Flash Index is an early indicator of the Illinois economy’s expected performance. It is a weighted average of growth rates in corporate earnings, consumer spending and personal income. An index above 100 indicates expected growth; an index below 100 indicates the economy is contracting.

220

218

216

Change

214

100.0% Midwest urban 55.4% July 12 219.0 6.7% 265.2% 79.2% 4.3% SOURCE: U.S. DEPARTMENT OF LABOR 11.1% 9.0% 22.0% 27.6% Average price per gallon of regular, unleaded 32.1% gas as of August 16 and July 27, 2012. 21.8% Aug 12 July 12 Aug 11 16.6% $3.84 $3.58 $3.57 16.1% Metro East 3.5% Springfield $3.81 $3.47 $3.53 15.4% Illinois $4.06 $3.61 $3.77 $3.71 $3.49 $3.59 2.1% U.S. 212

210

208

S ’11

A ‘12

Prices at the pump

SOURCE: AAA