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Five tips for employee
well-being
surveys that work

08.24.22

Read this if you are working on a well-being program at your organization. 

When looking to develop or enhance well-being programs at work, many organizations don’t know where to start. A well-being survey is a smart first step to solidify your organization’s approach to supporting a thriving workforce. An effectively designed well-being survey will not only provide valuable insights to the needs of your workforce, it will also be repeatable so you can measure the success of your well-being efforts over time. Here are five tips to help you create a successful well-being survey.  

  1. Include questions about organizational culture. It is unlikely you will engage every single employee with well-being programs and benefits. Some people just like to do their own thing. However, organizational culture is something that influences everyone and is the ultimate source of empowerment for employee well-being. Including at least a couple of questions that assess how effectively your workplace culture promotes well-being will give you the broadest sense of whether you are on the right track with your well-being efforts. 
  2. Carefully consider wording. There is a big difference between the question “How well does our organization support your well-being?” and “How satisfied are you with our organization’s support for your well-being?” For instance, an organization may invest heavily in mental health, but that support may not be resonating with employees. The second question will provide clear insights into how well the organization’s well-being efforts are connecting with employee needs. 
  3. Have a strategy to promote engagement. Your survey response rate can be influenced by who sends the survey and who sends the survey reminder. While it may be logical for the survey to come from Human Resources, we suggest having the survey come from either the Chief Executive Officer or Chief Operations Officer (or equivalent). This signifies that your organization views well-being as a business strategy. Survey reminders tend to be most effective when sent from department managers. This reinforces the messaging about well-being being a business strategy and signifies commitment at all levels of leadership. 
  4. Include space for open comments. Multiple choice and basic ranking questions can help keep a survey direct and are easy to respond to. They also provide data that is easier to analyze and compare year over year. However, it’s not possible to anticipate every need with multiple choice questions, and some of the best suggestions and ideas, as well as some of the most constructive remarks, will come in the form of open commentary. 
  5. Keep it anonymous but collect some demographic data. An anonymous survey will not only result in more candid feedback, but it will also avoid inadvertently collecting personal health information that may be disclosed (particularly in open comments). Having optional questions to self-identify department, office, or work arrangement (hybrid, remote, in person) can help identify high-risk groups ('high risk' meaning those who have a low perception of their well-being and the organizational culture). Making these questions optional reduces the risk that an employee will abandon the survey due to fear of being identified based on demographic responses (e.g., an employee who is the only remote employee in their department). 

A well-designed well-being survey can serve as a launchpad for a transformational well-being initiative, especially if your organization is prepared to report and act on results. For more information on how your organization can create and deliver a well-being survey, or if you have other well-being program questions specific to your organization, please contact our Well-being consulting team. We’re here to help.

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Read this if you are interested in building a thriving workforce.

As businesses across the country continue to struggle to find and keep employees during the pandemic-influenced Great Resignation, it is time to build a workplace that sends a clear message to employees: “We care about you as a person. We trust you to do great work. Your well-being matters.” 

Many leaders and HR teams will send communications that emphasize the importance of people and the value of well-being. Despite this messaging, many organizations are missing opportunities to make well-being a natural part of day-to-day operations. The resulting disconnect between messaging and reality can result in employee frustration, disengagement, and cynicism. We’ve compiled a list of some of the most common workplace factors that can disrupt an organization’s intentions to build a strong well-being culture. 

Negative influences on building a strong well-being culture

 


Overcoming the challenges to your well-being goals takes time. And while it is natural for organizations to think of employee well-being as the responsibility of human resources and leadership, in reality well-being is a product of every part of the employee experience. In other words, it’s everyone’s job.

Well-being program considerations

Understanding the pain points for employees is an essential element of any successful well-being program, even if those pain points exist outside the domain of traditional well-being and wellness programs. Here are some things to consider:

  • Find out what matters to your employees, as every organization is different. Use surveys, interviews, and focus groups to understand priorities and do something meaningful with what you learn.
  • Make a plan to address operational challenges. Put simply, outdated technology and inefficient business processes stress employees out.
  • Assess your well-being strategy to identify strengths, gaps, and opportunities for improvement.
  • Develop and implement a strategic well-being plan that aligns with your organizational culture and goals. 
  • In the midst of planning a big system implementation of organizational change? Consider ways to integrate well-being as part of high-stress initiatives. 

Does your organization’s messaging about well-being line up with the employee experience? Have questions or need ideas about your specific situation? Contact our well-being consulting team. We’re here to help.

Article
Workplace well-being: More than words and good intentions

What are the top three areas of improvement right now for your business? In this third article of our series, we will focus on how to increase business value by aligning values, decreasing risk, and improving what we call the “four C’s”: human capital, structural capital, social capital, and consumer capital.

To back up for a minute, value acceleration is the process of helping clients increase the value of their business and build liquidity into their lives. Previously, we looked at the Discover stage, in which business owners take inventory of their personal, financial, and business goals and assemble information into a prioritized action plan. Here, we are going to focus on the Prepare stage of the value acceleration process.

Aligning values may sound like an abstract concept, but it has a real world impact on business performance and profitability. For example, if a business has multiple owners with different future plans, the company can be pulled in two competing directions. Another example of poor alignment would be if a shareholder’s business plans (such as expanding the asset base to drive revenue) compete with personal plans (such as pulling money out of the business to fund retirement). Friction creates problems. The first step in the Prepare stage is therefore to reduce friction by aligning values.

Reducing risk

Personal risk creates business risk, and business risk creates personal risk. For example, if a business owner suddenly needs cash to fund unexpected medical bills, planned business expansion may be delayed to provide liquidity to the owner. If a key employee unexpectedly quits, the business owner may have to carve time away from their personal life to juggle new responsibilities. 

Business owners should therefore seek to reduce risk in their personal lives, (e.g., life insurance, use of wills, time management planning) and in their business, (e.g., employee contracts, customer contracts, supplier and customer diversification).

Intangible value and the four C's

Now more than ever, the value of a business is driven by intangible value rather than tangible asset value. One study found that intangible asset value made up 87% of S&P 500 market value in 2015 (up from 17% in 1975). Therefore, we look at how to increase business value by increasing intangible asset value and, specifically, the four C’s of intangible asset value: human capital, structural capital, social capital, and consumer capital. 

Here are two ways you can increase intangible asset value. First of all, do a cost-benefit analysis before implementing any strategies to boost intangible asset value. Second, to avoid employee burnout, break planned improvements into 90-day increments with specific targets.

At BerryDunn, we often diagram company performance on the underlying drivers of the 4 C’s (below). We use this tool to identify and assess the areas for greatest potential improvements:

By aligning values, decreasing risk, and improving the four C’s, business owners can achieve a spike in cash flow and business value, and obtain liquidity to fund their plans outside of their business.

If you are interested in learning more about value acceleration, please contact the business valuation services team. We would be happy to meet with you, answer any questions you may have, and provide you with information on upcoming value acceleration presentations.

Article
The four C's: Value acceleration series part three (of five)

Read this if your company is a benefit plan sponsor.

While plan sponsors have been able to amend their 401(k) plans to include a post-tax deferral contribution called Roth for more than a decade, only 86% of plan sponsors have made it available to participants, according to the Plan Sponsor Council of America. Meanwhile, despite the potential benefits of such plans, just a quarter of participants who have access to the Roth 401(k) option use it. Plan sponsors may want to consider adding a Roth 401(k) option to their lineup because of the potential tax benefits and other advantages for plan participants.

A well-designed Roth 401(k) may be an attractive option for many plan participants, and it is important for plan sponsors considering such a feature to design the plan with the needs of their workforce in mind. It is also critical to clearly communicate the differences from the pre-tax option, specific timing rules required, and the tax-free growth it offers. Additionally, plan sponsors should be mindful of potential administrative costs and other compliance requirements in connection with allowing the Roth option.

Roth 401(k)s: The basics

A Roth is a separate contribution source within a 401(k) or 403(b) plan that differs from traditional retirement accounts because it allows participants to contribute post-tax dollars. Since participants pay taxes on these contributions before they are invested in the account, plan participants may make qualified withdrawals of Roth monies on a tax-free basis, and their accounts grow tax-free as well.

Participants of any income level may participate in a Roth 401(k) and may contribute a maximum of $20,500 in 2022—the same limit as a pre-tax 401(k). Contributions and earnings in a Roth 401(k) may be withdrawn without paying taxes and penalties if participants are at least 59½ and it’s been at least five years since the first Roth contribution was made to the plan. Participants may make catch-up contributions after age 50, and they may split their contributions between Roth and pre-tax. Similar to pre-tax 401(k) accounts, Roth 401(k) assets are considered when determining minimum distributions required at age 72, or 70 ½ if they reached that age by Jan. 1, 2020.

Only employee elective deferrals may be contributed post-tax into Roth 401(k) accounts. Employer contributions made by the plan sponsor, such as matching and profit sharing, are always pre-tax contributions. If the plan allows, participants may convert pre-tax 401(k) assets into a Roth account, but it is critical to remember that doing so triggers taxable income and participants must be prepared to pay any required tax. In addition, plan sponsors must be careful to offer Roth 401(k)s equally to all participants rather than just a select group of employees.

Qualified distributions from a designated Roth account are excluded from gross income. A qualified distribution is one that occurs at least five years after the year of the employee’s first designated Roth contribution (counting the first year as part of the five) and is made on or after age 59½, on account of the employee’s disability, or on or after the employee’s death. Non-qualified distributions will be subject to tax on the earnings portion only, and the 10% penalty on early withdrawals may apply to the part of the distribution that is included in gross income. Participants may take out loans if permitted in the plan document. 

First steps for plan sponsors

A common misconception among plan sponsors is that a Roth offering requires a completely different investment vehicle. The feature is simply an added contribution option; therefore, no separate product is needed.

When considering the addition of a Roth 401(k) option, it is important for plan sponsors to check with service providers to determine whether payroll may be set up properly to add a separate deduction for the participant. Plan sponsors may also need to consider guidelines for conversions, withdrawals, loans, and other features associated with the Roth contribution source to ensure the plan document is prepared and followed accurately.

Education is an important component of any new plan feature or offering. Plan sponsors should check with service providers to see how they may help to explain the feature and optimize its rollout for the plan. One-on-one meetings with participants may be very helpful in educating them about a Roth account.

A word about conversions

If permitted by the plan document, participants may convert pre-tax 401(k) plan assets (deferrals and employer contributions) to the Roth source within their plan account. The plan document may allow for entire account conversions or just a stated portion. When assets are converted, participants must pay income taxes on the converted amount, and the additional 10% early withdrawal tax won’t apply to the rollover. Plan sponsors should educate participants on the benefits of converting to the Roth inside the company 401(k).

Collaborate with the right service providers to educate your participants

The right service providers may review your current plan design, set up accounts properly, actively engage and educate your participants, and offer financial planning based on individual circumstances to show how design features like a Roth account may benefit their situation. If you would like to start the conversation about adding a Roth option or enhancing your participant education program, contact our employee benefits team. We are here to help. 

Article
Plan sponsor alert: Roth 401(k) remains underutilized despite potential benefits

Read this if you are a Maine business or pay taxes in Maine.

Maine Revenue Services has created the new Maine Tax Portal, which makes paying, filing, and managing your state taxes faster, more efficient, convenient, and accessible. The portal replaces a number of outdated services and can be used for a number of tax filings, including:

  • Corporate income tax
  • Estate tax
  • Healthcare provider tax
  • Insurance premium tax
  • Withholding
  • Sales and use tax
  • Service provider tax
  • Pass-through entity withholding
  • BETR

The Maine Tax Portal is being rolled out in four phases, with two of the four phases already completed. Most tax filings for both businesses and individuals are now available. A complete listing can be found on maine.gov. Instructional videos and FAQs can also be found on this site.

In an effort to educate businesses and individuals on the use of the new portal, Maine Revenue Services has been hosting various training sessions. The upcoming schedule can be found on maine.gov

Article
New Maine Tax Portal: What you need to know

This is our second of five articles addressing the many aspects of business valuation. In the first article, we presented an overview of the three stages of the value acceleration process (Discover, Prepare, and Decide). In this article we are going to look more closely at the Discover stage of the process.

In the Discover stage, business owners take inventory of their personal, financial, and business goals, noting ways to increase alignment and reduce risk. The objective of the Discover stage is to gather data and assemble information into a prioritized action plan, using the following general framework.

Every client we have talked to so far has plans and priorities outside of their business. Accordingly, the first topic in the Discover stage is to explore your personal plans and how they may affect business goals and operations. What do you want to do next in your personal life? How will you get it done?

Another area to explore is your personal financial plan, and how this interacts with your personal goals and business plans. What do you currently have? How much do you need to fund your other goals?

The third leg of the value acceleration “three-legged stool” is business goals. How much can the business contribute to your other goals? How much do you need from your business? What are the strengths and weaknesses of your business? How do these compare to other businesses? How can business value be enhanced? A business valuation can help you to answer these questions.

A business valuation can clarify the standing of your business regarding the qualities buyers find attractive. Relevant business attractiveness factors include the following:

  • Market factors, such as barriers to entry, competitive advantages, market leadership, economic prosperity, and market growth
  • Forecast factors, such as potential profit and revenue growth, revenue stream predictability, and whether or not revenue comes from recurring sources
  • Business factors, such as years of operation, management strength, customer loyalty, branding, customer database, intellectual property/technology, staff contracts, location, business owner reliance, marketing systems, and business systems

Your company’s performance in these areas may lead to a gap between what your business is worth and what it could be worth. Armed with the information from this assessment, you can prepare a plan to address this “value gap” and look toward your plans for the future.

If you are interested in learning more about value acceleration, please contact the business valuation services team. We would be happy to meet with you, answer any questions you may have, and provide you with information on upcoming value acceleration presentations.

Next up in our value acceleration series is all about what we call the four C's of the value acceleration process. 

Article
The discover stage: Value acceleration series part two (of five)

This is the first article in our five-article series that reviews the art and science of business valuation. The series is based on an in-person program we offer from time to time.  

Did you know that just 12 months after selling, three out of four business owners surveyed “profoundly regretted” their decision? Situations like these highlight the importance of the value acceleration process, which focuses on increasing value and aligning business, personal, and financial goals. Through this process, business owners will be better prepared for business transitions, and therefore be significantly more satisfied with their decisions.

Here is a high-level overview of the value acceleration process. This process has three stages, diagrammed here:

The Discover stage is also called the “triggering event.” This is where business owners take inventory of their situation, focusing on risk reduction and alignment of their business, personal, and financial goals. The information gleaned in this stage is then compiled into a prioritized action plan utilized in future stages.

In the Prepare stage, business owners follow through on business improvement and personal/financial planning action items formed in the discover stage. Examples of action items include the following:

  • Addressing weaknesses identified in the Discover stage, in the business, or in personal financial planning
  • Protecting value through planning documents and making sure appropriate insurance is in place
  • Analyzing and prioritizing projects to improve the value of the business, as identified in Discover stage
  • Developing strategies to increase liquidity and retirement savings

The last stage in the process is the Decide stage. At this point, business owners choose between continuing to drive additional value into the business or to sell it.

Through the value acceleration process, we help business owners build value into their businesses and liquidity into their lives.

If you are interested in learning more about value acceleration, please contact the business valuation services team. We would be happy to meet with you, answer any questions you may have, and provide you with information on upcoming value acceleration presentations.

Read more! In our next installment of the value acceleration blog series, we cover the Discover stage.

Article
The process: Value acceleration series part one (of five)

On November 8, 2022, Massachusetts voters approved a constitutional amendment to alter the state’s flat 5% income tax to add a 4% surtax on annual income exceeding $1 million. The so-called “millionaires tax,” also referred to as the “Fair Share Amendment,” is effective for tax years beginning on or after Jan. 1, 2023. The annual income level subject to the surtax would be adjusted yearly to reflect increases in the cost of living.

This measure is expected to bring in revenue of between $1.2 and $2 billion annually. The proceeds from the increased tax collections will support state budgets in the areas of education, roads, bridges, and public transportation. The measure passed with 52% voter support and is the sixth attempt to change the state’s flat income tax rate since 1962. This amendment is expected to affect about 0.6% of the state’s population, or about 20,000 taxpayers.

If you expect your income to exceed $1 million in 2023 and have questions regarding the recent legislation, please contact a member of our state and local tax team.

Article
Massachusetts voters pass "Millionaires tax"

The Pennsylvania Commonwealth Court (one of Pennsylvania’s appellate-level courts) has unanimously ruled that the Pennsylvania Department of Revenue (the Department) could not assert nexus against out-of-state online businesses that sell merchandise through Amazon’s Fulfillment by Amazon (FBA) program. (Online Merchants Guild v. Hassell, Commonwealth Court of Pennsylvania, No. 179 M.D. 2021, September 9, 2022).

Case details 

The Online Merchants Guild case is one of the first state court decisions since the US Supreme Court’s Wayfair decision to apply Due Process Clause nexus to internet sellers. The main issue before the court was whether non-Pennsylvania merchants that sell through Amazon’s FBA program are subject to the sales tax and personal income tax (PIT) provisions of the state’s tax code because Amazon stored their merchandise inventory in warehouses located in Pennsylvania. Fulfillment by Amazon is a service that allows businesses to outsource order fulfillment to Amazon. Businesses send products to Amazon fulfillment centers and when a customer makes a purchase, Amazon picks, packs, and ships the order. Ever since the US Supreme Court’s Quill decision, the Due Process Clause’s “minimum contacts” nexus has only required an out-of-state business to have purposefully availed itself of a state’s market, including purely economic connections with the state. 

Ultimately, the court held that the Department failed to provide sufficient evidence that non-Pennsylvania businesses selling merchandise through the FBA program have sufficient contacts with the state. The court reasoned the connections to the state were shown to be limited to the storage of merchandise by Amazon in one of Amazon’s Pennsylvania warehouses. As such, FBA sellers do not have sufficient contacts with the state such that the Department can mandate they collect and remit sales tax or pay PIT.

While analyzing the specific facts of this case, the court indicated that an FBA seller has no control over its merchandise once Amazon receives the inventory. Applying the Due Process Clause and the so-called stream-of-commerce theory, the court stated that it is “hard pressed to envision how, in these circumstances, an FBA merchant has placed its merchandise in the stream of commerce with the expectation that it would not be purchased by a customer located in [Pennsylvania], or has availed itself of [Pennsylvania’s] protections, opportunities, and services.”

The court also addressed the Department’s authority of its nexus-auditing policy of issuing Business Activity Questionnaires (BAQs) to the FBA sellers. The 2021 BAQ indicates that a business may be subject to tax due to the storage of merchandise in one of Amazon’s Pennsylvania warehouses. The Department argued that the BAQ was merely a “demand for information.” The court disagreed with the Department. The BAQ indicates that “[f]ailure to provide the information requested will result in additional enforcement actions,” language that clearly suggests the existence of pending enforcement actions according to the court. The court was critical of the Department’s arguments, stating that the Department’s statutory investigative powers apply to the records of taxpayers, not individuals or entities the Department suspects may be taxpayers. The court went on to say that the Department does not have “unfettered authority to seek business information from any person or entity it desires for the purpose of determining its status as a taxpayer.”

Insights

  • The Department did not appeal to Pennsylvania’s Supreme Court “as of right” within 30 days. As such, the Commonwealth Court’s precedential opinion will likely be the final word in the nexus saga for Amazon FBA sellers in Pennsylvania, especially due to the fact that Amazon now collects sales tax on Pennsylvania sales. From the Department’s perspective, the outcome of this case is limited to a narrow situation—Amazon FBA sellers. If there is another fact pattern where a business is aware of its inventory in the state, it is possible nexus may be asserted by the state.
  • The tax period at issue in Online Merchants Guild preceded the enactment of Pennsylvania’s marketplace facilitator nexus statute. Although most states’ marketplace facilitator nexus laws have existed for several years, it is possible that other states will continue to attempt to collect sales tax from marketplace sellers for periods before the enactment of those laws.
  • The outcome of this case is limited to sales tax and PIT. It did not address Pennsylvania’s corporate net income tax (CNIT). Pennsylvania’s CNIT imposition statute includes an “owning property in the state” provision. Would the decision under the same fact pattern, but for CNIT purposes, have been different? Without a legislative amendment, businesses should analyze their specific facts and circumstances, apply Pennsylvania’s CNIT rules, and address whether they have nexus in the state for CNIT purposes.
  • This case was originally prompted by a trade association (Online Merchants Guild) in response to a Business Activities Questionnaire (BAQ) request it received as part of the Department of Revenue’s voluntary disclosure program for retailers with inventory in Pennsylvania in 2021. As a result of the decision, we expect the Department to update their administrative guidance on this topic.

Written by Ilya Lipin, Melissa Myers and Zach Lutz. Copyright © 2022 BDO USA, LLP. All rights reserved. www.bdo.com

Article
Pennsylvania: Remote sales via Amazon FBA did not create sales tax and personal income tax nexus.