Strategies to manage costs

When prices go up and your profitability is under pressure, the last thing you want is to pay for insurance. When your businesses are booming and the reserves are full of money, the insurance company demands are relatively light. But when the storm clouds come rolling across an already darkened sky and there is nothing more than small coin in the registers means the insurance-man comes a-knocking.

Timing is everything, and sadly Insurance companies have very poor timing. They don't do this to be nasty (yeah right!), but rather because the factors that affect their business and encourage lower pricing are stronger in a buoyant economy.

Return To Work Co-ordinators

As in many situations in business, the government regulates. It does so in theory to provide for better outcomes for those less able to control their situations. Workers compensation falls under the control of WorkCover. In the case of medium sized businesses, WorkCover require that any injuries are properly managed by appropriately qualified persons. This goes beyond just trying to look after your injured staff - it actually requires that you adopt a formally structured approach. This can be costly and time consuming.

WorkCover has a statutory requirement that any business that has more than 20 staff or pays more than $50,000 in workers compensation premium must have a Return to Work Co-ordinator. This is not one of those optional roles. WorkCover will fine you if you do not have an appropriately qualified and registered co-ordinator in place. Worse still, if you have a workplace injury or accident and you do not have a co-ordinator, the penalties applied will be much more significant.

A Return to Work Co-ordinator is a person nominated by an employer (this can be a contractor engaged specifically for the role), whose principal purpose is to assist injured workers to return to work in a safe and timely manner. The Return to Work Co-ordinator ensures that the policy and procedures in an employer's return to work program are followed.

Thrive Not Survive

Recessionary times normally ‘surprise’ most business people. It is almost like the recession sneaks up on them and creates the surprise. Very few businesses in the world have themselves financially and strategically set for a recession before it arrives.

There are then five common mistakes made by business people when they implement the consequent change in strategy and adjustments to the business to cope with the economic environment. In outlining these we hope that it helps you to avoid these common pitfalls.

1. Timing
2. Risk Profile
3. Wind/Unwind
4. Macro/Micro
5. Industry Cycle

Five common mistakes; easy to see when you are looking for them; easy to not see if you forget about them. By staying aware of them a business owner / manager can avoid making them and so better manage.

The Personal Touch

In our daily life of emails, sms and blackberries, we often forget the power of a personal connection. When was the last time you made a handwritten note for a client or prospect, and shared a personal thought? It shows you made a personal effort to address something, however insignificant, and demonstrates that you (and your business) cares.

Same goes for your competitors... if they were successful in picking up a lucrative contract or just came out with a great advertisement – pick up the phone and congratulate them. They’ll be stunned that you made the effort and you’ll earn their respect by your actions.

Try it, you’ll feel great and you’ll make someone else shine that day as well.

Standing Down Employees...

During Times of Financial Uncertainty

The current global financial crisis has resulted in businesses experiencing considerable downturns in production levels and reduced revenue. Accordingly, many employers are considering standing down their employees – or shortening the working week - to reduce costs but retain staff. The current legislation (and the new Fair Work Act) allows employers to stand down staff, particularly where there is an express or implied term of a contract permitting the employer to stand down its employees.

In the absence of a contractual term, stand down is permissible during periods of “serious disruption” to the business. However, the Courts are hesitant to include in the definition of ‘serious disruption’, the fact that work just dried up. It is unclear whether they would be more sympathetic when the downturn in business derived from a global economic catastrophe such as we are experiencing. In our view, the courts are likely to view such measures benignly where there is consultation and some measure of notice given.

Ultimately, good faith and a good relationship with staff is the best lubricant through difficult negotiations, such as these.

Budget winds back the clock

Retirement and the age 65 go together like hand and glove. It is the one number most Australians could quote with certainty about our superannuation and pension system. The age 65 has been enshrined in the way we define and plan our working lives. So changing it - albeit slowly and over six years - is a big deal.

The 2009-10 Federal Budget has been developed against a backdrop of the worst economic downturn in 70 years. The collapse in government revenue and the corresponding increase in government debt is staggering both in its speed and size - even if on a relative basis Australia is forecast to come out of the recession in better shape than almost all the other developed world economies.

The most direct change to super is the reduction of salary sacrificed contributions that can be made into super from July 1 this year. This effectively halves the amount that can be concessionally contributed (e.g. via salary sacrifice) to $25,000 for people under 50 with transitional arrangements for those over 50 continuing until 2012 but now capped at $50,000.

The six-week money makeover

Robert Gottliebsen, Eureka Report

The fast approaching end of the financial year provides the ideal time to review finances and maximise some of the opportunities on offer. more > email.

Housing's stronger story

Ron Woods, Eureka Report

Housing finance data shows that housing numbers are improving, suggesting a wider economic recovery is under way. more > email

Look to property’s long-term figures

Monique Wakelin, Eureka Report

While the numerous house price statistics released in recent weeks can provide some insight into market trends, a study of other factors and information provides the real story. more > email

First home buyers – is now the right time?

Smartline Feature Article

Thousands of first home buyers have entered the market in the past few months – but ensuring long-term affordability is an important consideration for all buyers. more > email

RBA Leaves Official Cash Rate Unchanged

At its meeting today, the Board decided to leave the cash rate unchanged at 3.0 per cent.

Statement by Glenn Stevens, Governor Monetary Policy RBA

Evidence has continued to emerge that the global economy is stabilising, after a sharp contraction during the December and March quarters. The considerable economic policy stimulus in train in most countries is helping to contain the downturn, and should support an eventual recovery. The turnaround is clearest in China and some other emerging countries. Recovery in the major countries is likely to take longer to begin and be slower when it does occur. More Email