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Monthly Archives: March 2018

5 Ways to Reduce Overhead Expenses

Overhead expenses are all costs on an income statement excluding direct labour, direct materials and direct expenses. Overhead expenses often include fees related to things like accounting, advertising, insurance, interest, rent, repairs, supplies, telephone bills, travel expenditures and utilities.

These expenses can add up quickly and have a major impact on the profitability of your business. In order to save money and improve your finances, consider the following tips for reducing overhead:

  1. Be cost-effective about travel. Travel expenses eat up a budget quickly, especially for smaller organizations. To reduce these costs, consider holding teleconferences instead of flying in off-site employees. Whenever possible, book travel months in advance in order to save.
  2. Switch your business communications programs. Internal communications services such as Skype or Google Voice can greatly reduce your phone bill. Be sure to conduct thorough research and choose the option that best fits your needs.
  3. Negotiate rents, as rent is often one of the highest costs for businesses. Thankfully, costs can be reduced by negotiating with your landlord or by moving to a less expensive building.
  4. Be mindful about utility costs. Electricity and other utility costs can add up quickly, but there are some ways to cut back. LED bulbs use 70 to 90 per cent less energy than incandescent bulbs. In addition, electronics plugged into outlets use energy even if they’re not charging. Consider plugging computers and other electronics into power strips and completely shutting them off at the end of the workday.
  5. Rent equipment. Renting reduces upfront investments and lets you upgrade equipment easily. What’s more, renting equipment can also result in maintenance and repair savings.

© Zywave, Inc. All rights reserved

Avoiding Construction Defect Claims

Construction defect claims are a common risk architects, engineers and contractors face with every project they take on. A construction defect claim occurs when a building system or component fails and is often the result of improper installation, design or material selection.

Not only are these claims incredibly costly to correct and defend, they can also damage your reputation and negatively impact future opportunities. To protect your firm from a construction defect claim and manage your overall risk, consider doing the following:

  • Keep up with current building codes and standards.
  • Follow manufacturer guidelines for every product you use. Be sure to examine warranties and understand the limitations of the materials you use in construction projects.
  • Pre-qualify the subcontractors you hire. Above all, ensure that the individuals and organizations you choose to partner with have the proper credentials, experience and skills to deliver a quality finished product.
  • Seek legal counsel to ensure that all of your contracts are airtight and protect you against errors committed by outside parties.
  • Document the construction process. This will ensure that you have a solid record of materials and practices used during a project, which will come in handy in the event of a claim.
  • Implement a quality assurance/quality control program (QA/QC). QA/QC programs provide a set of standards that ensure a project is built correctly or performs as designed.

In general, the best way to avoid a construction defect claim is through quality construction. Be sure to work only with architects, engineers and contractors who have good reputations and track records. In addition, plan and perform work in the correct sequence and with proper supervision.

Keeping in mind the above tips will ensure that your projects run smoothly and are completed to a high standard of quality.

© Zywave, Inc. All rights reserved

Preventing Workplace Violence

As with most other risks, prevention of workplace violence begins with planning. It is easier to persuade managers to focus on the problem after a violent act has taken place than it is to get them to act before anything has happened. The more difficult the decision to plan in advance, the more logical it is. Any organization, large or small, will be more able to spot potential dangers and defuse them before violence develops and will be able to manage a crisis if its executives have considered the issue beforehand and have prepared policies, practices and structures to deal with it.

Forming a Workplace Violence Strategy

In forming an effective workplace violence strategy, important principles include:

  • There must be support from the top. If a company’s senior executives are not truly committed to a preventive program, it is unlikely to be effectively implemented.
  • There is no one-size-fits-all strategy. Effective plans may share a number of features, but a good plan must be tailored to the needs, resources and circumstances of a particular employer and a particular work force.
  • A plan should be proactive, not reactive.
  • A plan should take into account the workplace culture: work atmosphere, relationships, traditional management styles, etc. If there are elements in that culture that appear to foster a toxic climate—tolerance of bullying or intimidation, lack of trust among workers or between workers and management, high levels of stress, frustration and anger, poor communication, inconsistent discipline and erratic enforcement of company policies—these should be called to the attention of top executives for remedial action.
  • Planning for and responding to workplace violence calls for expertise from a number of perspectives. A workplace violence prevention plan will be most effective if it is based on a multidisciplinary team approach.
  • Managers should take an active role in communicating the workplace violence policy to employees. They must be alert to warning signs and know the violence prevention plan and response. They must also seek advice and assistance when there are indications of a problem.
  • Practise your plan. No matter how thorough or well-conceived, preparation won’t do any good if an emergency happens and no one remembers or carries out what was planned. Training exercises must include senior executives who will be making decisions in a real incident. Exercises must be followed by careful evaluation and changes to fix whatever weaknesses have been revealed.
  • Re-evaluate, rethink and revise. Policies and practices should not be set in stone. Personnel, work environments, business conditions and society all change and evolve. A prevention program must change and evolve with them.

The components of a workplace violence prevention program can include:

  • A statement of the employer’s violence policy and complementary policies such as those regulating harassment and drug and alcohol use
  • A physical security survey and assessment of premises
  • Procedures for addressing threats and threatening behaviour
  • Designation and training of an incident response team
  • Access to outside resources, such as threat assessment professionals
  • Training of different management and employee groups
  • Crisis response measures
  • Consistent enforcement of behavioural standards, including effective disciplinary procedures.

Written Workplace Violence Policy Statement

Here an employer sets the standard for acceptable workplace behaviour. The statement should affirm the company’s commitment to a safe workplace, employees’ obligation to behave appropriately on the job and the employer’s commitment to take action on any employee’s complaint regarding harassing, threatening and violent behaviour. The statement should be in writing and distributed to employees at all levels.

In defining acts that will not be tolerated, the statement should make clear that not just physical violence but threats, bullying, harassment and possession of weapons are against company policy and are prohibited.

Preventive Practices

Preventive measures can include pre-employment screening, identifying problem situations and risk factors and security preparations:

  • Pre-employment Screening. Identifying and screening out potentially violent people before hiring is an obvious means of preventing workplace violence. Pre-employment screening practices must, however, be consistent with privacy protections and antidiscrimination laws.

A thorough background check can be expensive and time-consuming. The depth of pre-employment scrutiny will vary according to the level and sensitivity of the job being filled, the policies and resources of the prospective employer and possibly differing legal requirements in different provinces. However, as an applicant is examined, the following can raise red flags:

  • A history of drug or alcohol abuse
  • Past conflicts (especially if violence was involved) with co-workers
  • Past convictions for violent crimes

Other red flags can include a defensive, hostile attitude, a history of frequent job changes and a tendency to blame others for problems.

Identifying Problem Situations and Risk Factors of Current Employees

Problem situations—circumstances that may heighten the risk of violence—can involve a particular event or employee, or the workplace as a whole.

No “profile” or litmus test exists to indicate whether an employee might become violent. Instead, it is important for employers and employees alike to remain alert to problematic behaviour that, in combination, could point to possible violence. No one behaviour in and of itself suggests a greater potential for violence, but all must be looked at in totality.

Risk factors at times associated with potential violence include personality conflicts (between co-workers or between worker and supervisor), a mishandled termination or other disciplinary action, bringing weapons onto a work site, drug or alcohol use on the job or a grudge over a real or imagined grievance. Risks can also stem from an employee’s personal circumstances—breakup of a marriage or romantic relationship, other family conflicts, financial or legal problems or emotional disturbance.

Other problematic behaviour can include, but is not limited to:

  • Increasing belligerence
  • Ominous, specific threats
  • Hypersensitivity to criticism
  • Recent acquisition of/fascination with weapons
  • Apparent obsession with a supervisor, co-worker or employee grievance.
  • Preoccupation with violent themes
  • Interest in recently publicized violent events
  • Outbursts of anger
  • Extreme disorganization
  • Noticeable changes in behaviour
  • Homicidal/suicidal comments or threats

Though a suicide threat may not be heard as threatening to others, it is nonetheless a serious danger sign. Some extreme violent acts are in fact suicidal—wounding or killing someone else in the expectation of being killed, a phenomenon known in law enforcement as “suicide by cop.” In addition, many workplace shootings often end in suicide by the offender.


Employee training on ways to respond to and report incidents of workplace violence is necessary, but not a sufficient condition for prevention of workplace violence. Training should increase awareness of workplace violence risks, emphasize the importance of adhering to protective administrative controls and encourage employees to immediately report any suspicious or threatening behaviour. While training is only one component of a successful comprehensive workplace violence prevention program, preventive adjustments by management are equally important.

© Zywave, Inc. All rights reserved

Highlights from the 2018-19 Federal Budget

The Liberal government recently released its 2018-19 federal budget, which is largely aligned with Finance Minister Bill Morneau’s forecast from October 2017. Overall, the budget aims to narrow the deficit to $18.1 billion; however, there is no target date for a return to balance. The fiscal plan heavily emphasizes gender equality while scaling back $7.2 billion of the government’s infrastructure program.

Businesses and individuals should be aware of major budgetary items, as some changes could have a significant impact moving forward. Major takeaways include the following:

  • The deficit—The budget notes that the federal deficit will be $18.1 billion in 2018-19. This figure includes a $3 billion risk adjustment buffer and will likely decline slowly over the next several years.
  • Parental leave—The government is proposing a $1.2 billion investment over five years to create a five-week “use-it-or-lose-it” incentive for new fathers to take parental leave. The benefit would increase employment insurance (EI) parental leave to a maximum of 40 weeks in cases where the second parent agrees to take at least five weeks off. The budget also allocates $90 million over three years to ensure that claimants continue to receive timely and accurate benefit payments. Other EI changes of note include the following:
    • -Employees will now be able to work while receiving EI benefits. This is especially helpful for those looking to return to work progressively.
    • -The government will re-examine phone and online services for the Canada Revenue Agency, the Canadian Border Services Agency and the EI program in hopes of improving them overall.
  • Tax changes—The 2018-19 budget includes a number of tax-related provisions, including the following:
    • -There will be a gradual reduction in access to small business tax rates, particularly for corporations with significant passive investments. When companies earn between $50,000 and $150,000 in a given year from passive investments, a reduced amount of their active business income will be eligible for the small business tax rate (9 per cent starting in 2019).
    • -New measures will limit tax advantages for larger, private corporations. Together with restrictions on income sprinkling, this change will add $925 million annually to government reserves by 2022.
    • -New rules will prevent banks and other financial institutions from gaining a tax advantage through artificial losses. This is expected to generate $560 million by 2022.
  • Canada Workers Benefit—The budget proposes a revamped tax credit program to increase the take-home pay of low-income workers. This program, which begins in 2019, will be known as the Canada Workers Benefit and is designed to increase maximum benefits as well as raise the income level at which benefits are phased out. Under the Canada Workers Benefit, a single parent or couple earning $25,000 a year could receive as much as $717 more from the program in 2019 than in 2018.
  • Gender equality—In order to promote equality, new funding is included in the budget to encourage both parents to share in parental leave. In addition, the budget emphasizes proactive pay equity legislation. This includes a $3 million investment over five years for pay transparency measures aimed at closing the wage gap among federal workers and in federally regulated sectors.
  • Infrastructure—While the government has said infrastructure spending is the key to boosting Canada’s growth rate, $7.2 billion will be moved out of the previous year’s budget to fund other departmental spending. Chief among the reallocated dollars, the government announced a $4 billion investment in benefits for veterans. Despite scaling back, the government will resume infrastructure spending in the 2019-20 year when the government projects $1.4 billion in additional spending across three different programs.
  • National drug program—The 2018-19 budget sets aside funds to establish the Advisory Council on the Implementation of National Pharmacare. This council will be led by Eric Hoskins, a former Ontario health minister, and will explore the pros and cons of a national drug program. Experts estimate that the government’s plan to provide Canadians with drug coverage could cost $20.4 billion annually.
  • Research, science and innovation—To encourage innovation, the budget includes a $4 billion investment in Canada’s research system. These funds will be used to give scientists and researchers access to new tools, technology and facilities. As part of this investment, the government is looking to simplify its innovation programs and create a simple system for entrepreneurs to receive guidance.
  • Cyber security—The budget allocates $508 million through 2022-24 to create a new Canadian Centre for Cyber Security.

In general, the 2018-19 budget continues the government’s focus on building the middle class. To learn more about the federal budget, click here.

© Zywave, Inc. All rights reserved



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