BIZGrowth Strategies
We hope your Summer is off to a great start. It’s a good time to shut out the noise and get back to business basics. In this issue, you’ll learn about direct and indirect costs in workers’ comp, three valuable tax incentives, pension plan de-risking strategies, five essential strategic planning frameworks, optimizing your benefits communication strategy, leveraging AI for HR processes and more!
Exploring Direct & Indirect Costs in Workers’ Compensation
Understanding the complexity of workers’ compensation can be daunting as claims are often associated with a variety of anticipated and unexpected costs. To help protect your organization, we break down workers’ compensation expenses to help you manage risk effectively and provide strategies to reduce costs.
Overview of Direct Workers’ Compensation Costs
Expenses covered by your workers’ compensation insurance include:
Summary of Indirect Workers’ Compensation Costs
Unexpected costs that aren’t compensated by your workers’ compensation policy include:
Reducing Workers’ Compensation Costs
Dedicated employers can experience benefits from controlling direct and indirect costs, such as:
Is your business truly safeguarded against risks? Download our comprehensive Health and Safety Checklist now to ensure every potential hazard is addressed.
The challenges of workers’ compensation can be overwhelming, but with the right strategies in place, you can effectively manage and reduce both direct and indirect costs. By investing in robust safety programs, proactively managing claims and implementing effective return-to-work initiatives, your organization can mitigate risks and foster a safer, more productive work environment.
High inflation and interest rates are squeezing real estate profits, making it critical for real estate and construction professionals to leverage available tax credits and deductions to offset costs and improve cash flow.
This article explores three key tax incentives — 179D, 45L and the Rehabilitation Credit — that can offer substantial benefits. These incentives not only enhance financial stability but also promote energy efficiency and the preservation of historic properties.
1. Go Green and Save with the 179D Deduction
The Energy-Efficient Commercial Buildings Tax Deduction, known as 179D, provides a tax break for installing energy saving features, such as lighting systems, heating and cooling (HVAC) and building insulation. The Inflation Reduction Act (IRA), which became effective in 2023, more than doubled this deduction to a maximum of $5.65 per square foot for 2024.
Benefits Beyond the Tax Break
The 179D deduction is available to commercial building developers, owners, designers and contractors. Building owners installing energy-efficient equipment in new constructions or renovations qualify. For tax exempt properties, designers like architects and engineers can benefit. Certification by a qualified expert is required to ensure the energy-efficiency measures meet the standards. Prevailing wage standards must also be met.
2. 45L Tax Credit: A Silver Lining for Residential Developers
Rising interest rates have made financing for residential projects difficult. However, thanks to an expansion to the program from the IRA, the 45L Energy Efficiency Home Credit offers a bright spot. This credit provides builders of energy-efficient homes and apartments with a tax break, ranging from $1,000 to $5,000 per unit.
Key Points
3. Breathe New Life into History with the Rehabilitation Credit
The Rehabilitation Credit for historic preservation presents an attractive opportunity for businesses exploring relocation or innovative spaces for their evolving office needs. Eligible historical properties may qualify for a 20% credit on certain rehabilitation expenses. This credit applies to construction costs related to structural features like walls, floors and stairs while typically excluding other elements like cabinets, sidewalks and pavement.
What Makes it Attractive?
Changes From the 2017 Tax Cuts and Jobs Act
Boosting Your Bottom Line
The 179D, 45L and Rehabilitation tax incentives are cost-saving tools to help real estate and construction professionals navigate a challenging economic climate. They offer significant financial relief, enhance property value and marketability and promote sustainability. By taking advantage of these incentives, real estate professionals, architects and designers can weather the storm and emerge stronger.
Interested in exploring these tax incentives for your business? Connect with us today.
CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly traded and privately held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).
Pension Plan Risks & De-risking Strategies
Funding defined benefit plans can be challenging, especially during times of economic volatility. For many companies, a pension plan is one of the largest items on the corporate balance sheet, but it is not a core component of the business.
Defined benefit plan sponsors have the opportunity to improve both corporate and plan financial statements and reduce Pension Benefit Guaranty Corporation (PBGC) premiums by adopting programs to reduce risk in their pension plans.
So what risks are plan sponsors facing, and what can be done to mitigate these risks?
Risks of Pension Plans
Sponsors of defined benefit plans face many risks, including:
De-risking Strategies
The only way to truly eliminate long-term risk is to terminate the plan. However, termination is a long, complicated and expensive process. When plan termination is not feasible, there are several ways to mitigate risk by reducing the size, costs or volatility of your pension plan. Taking these steps now can make plan termination easier and less expensive later.
These de-risking strategies can be tailored to your company’s unique goals, objectives and risk profile. However, be aware that there are specific rules that must be followed for plan freezes, lump sum windows and annuity purchases.
Investment advisory services provided through CBIZ Investment Advisory Services, LLC, a registered investment adviser and a wholly owned subsidiary of CBIZ, Inc.
Third-party administration, actuarial and other consulting services offered through CBIZ Benefits & Insurance Services, Inc.
5 Essential Strategic Planning Frameworks for Today’s Leaders
Effective strategic planning transforms organizational goals into actionable plans, ensuring sustained competitiveness and success. A framework to guide your strategic decisions provides a structured approach to analyzing complex business environments, enabling you to make informed, focused decisions.
Here are five essential strategic planning frameworks for today’s leaders.
1. SWOT Analysis
SWOT analysis is a straightforward tool to identify internal strengths and weaknesses, as well as external opportunities and threats. It provides a comprehensive view of internal and external factors that can impact the organization.
When to Use:
2. Balanced Scorecard (BSC)
The balanced scorecard expands beyond traditional financial metrics to include performance indicators across four perspectives: financial, business process, customer and organizational capacity. It’s used to develop metrics and set performance targets to collect and analyze throughout the year. To ensure its effectiveness, distribute the scorecard throughout your organization and ensure consistent reporting of metrics.
When to Use:
3. PESTLE
PESTLE analysis examines the macro-environmental factors affecting an organization: political, economic, social, technological, legal and environmental. It helps in understanding the broader context in which the organization operates. This framework aids in risk management by helping you predict oncoming shifts in the market and develop strategies to adapt. Use this framework to accompany your SWOT analysis for a complete overview of your business.
When to Use:
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4. Porter’s Five Forces
Understand the competitive dynamics to get ahead with Michael Porter's Five Forces framework. It analyzes competitive forces within an industry: the threat of new entrants, the bargaining power of suppliers, the bargaining power of customers, the threat of substitute products or services, and the intensity of competitive rivalry. While this framework can overlook unique competitive scenarios, it serves as a reliable tool to help guide companies through industry-specific challenges.
When to Use:
5. Blue Ocean Strategy
The blue ocean strategy emphasizes innovation and differentiation to identify and capitalize on uncharted market spaces. The heart of this strategy is the four actions framework, which encourages companies to ask these key questions to reconfigure value elements in their industry.
When to Use:
These frameworks provide structured methodologies for analyzing the internal and external environment, setting objectives and developing actionable plans. From leadership roles to managers to project leads, structured planning transforms your thinking from reactive to a proactive partner in success.
Connect with one of our experts to learn how your business can optimize success utilizing these frameworks.
3 Steps to Build a More Effective Benefits Communication Strategy
How can you ensure your employees fully understand the value of your carefully curated benefits package? The answer lies in effective communication. The following steps — audit, develop and evaluate — will help you optimize your employee communications strategy to improve employee awareness of and participation in your benefits plan.
Audit Your Current Communications Strategy
Auditing involves looking at your current communications strategy through a critical lens. What are you doing well? Where is there room for improvement? The goal is to identify the key pain points that need to be addressed.
We recommend talking to your employees to get their feedback, evaluating your existing benefits-related content and identifying any gaps in your current communication channels.
Your workforce is likely generationally diverse and comprised of employees with varying levels of comfort with technology and vastly different communication preferences, so your communications strategy should include a healthy mix of digital and print outreach.
Develop Your Year-round Communications Plan
Once you’ve identified key pain points in your current communications strategy, it’s time to outline how you’re going to address them. Keep in mind that consistency is crucial. It’s important to deliver a steady stream of content throughout the year to keep employees informed leading up to, during and after open enrollment.
Consider creating a communications calendar to keep track of what content will be developed and provided to employees throughout the year. This can help ensure you’re delivering the right information to your workforce at the right time.
Create & Deliver Impactful Content
Once you’ve determined the “when,” it’s time to address the “what.” What content will you develop and what channels will you leverage?
Creating a variety of engaging, branded materials will help you present a cohesive, thoughtful message that resonates with your employees. Consider developing a digital benefits guide, an interactive benefits website, custom videos and eye-catching print materials.
It’s also essential to leverage a range of communication channels to ensure effective connection with your various employee groups. A multi-channel communications strategy may involve:
Evaluate the Impact of Your Optimized Strategy
After you’ve implemented your new and improved employee communications strategy, you must critically evaluate the effectiveness of your efforts.
If you’ve taken a digital approach to developing and delivering your employee communications content, you’ll likely have access to a wide range of valuable data analytics that can help identify which content pieces and communication channels were the most and least effective.
In addition to the data, employee feedback will continue to be invaluable as you tweak your approach. Conduct follow-up employee surveys and focus groups after open enrollment to gauge the effectiveness of your new benefits communications.
Once you’ve collected your data and talked to your employees, adjust your communications strategy accordingly. Continuing to improve your benefits communications year after year will help ensure that your organization’s approach is evolving alongside your workforce and the larger business landscape.
Connect with our team at CBIZ Employee Benefits to learn more about building a strong benefits communication strategy.
Revolutionizing HR Practices With AI: The Future is Here
In an always-busy HR environment, where HR professionals juggle resumes, conduct interviews and manage requests, AI can automate tasks, freeing up their time to focus on complex issues and value-add initiatives. By integrating AI, HR operations can become more efficient, allowing the team to perform at their best and enabling a more productive workplace.
The AI Advantage in Talent Acquisition
Recruiting the right candidate can be like finding a needle in a haystack. AI is changing this. One primary way HR professionals use AI is to write job descriptions and customize job postings, but that’s just the beginning.
How AI is Revolutionizing Recruitment
AI-powered Employee Training & Development
AI doesn't just stop at hiring; it extends into employee training and development. By analyzing performance data, AI systems can identify areas where employees need improvement and suggest personalized training programs. Moreover, AI can predict future skill requirements based on industry trends, ensuring the workforce remains competent and agile. It also monitors employee training progression, identifying areas of strength and where support is needed.
Ethical Considerations
Integrating AI in HR practices presents ethical challenges, such as bias, privacy, and transparency. AI algorithms can perpetuate biases if not properly checked, and handling large amounts of sensitive data raises privacy concerns. HR professionals need to address these issues to leverage AI responsibly and create a fair, trustworthy workplace.
Best Practices for Ethical AI Use in HR
Steps to Get Started With AI in HR
AI is about keeping up and leading the way to a more productive and innovative workplace. Successful integration requires thoughtful implementation, focusing on transparency, continuous learning and ethical considerations.
Financial Peace of Mind: Using Annuities to Fund Your Retirement
As retirement approaches, the focus shifts from accumulating savings to ensuring a steady income stream that supports your lifestyle. Annuities have become an increasingly popular choice for many retirees seeking financial peace of mind amid market volatility. Here’s how you can effectively use annuities to fund your retirement.
Estimate Your Costs
Start by envisioning your retirement lifestyle. Consider your plans for living arrangements, daily activities, travel and family priorities. This vision will guide your financial planning and help you determine your needed resources. Next, estimate the cost of this lifestyle. Many aim to replace 70% to 100% of their working income. Begin with a budget that separates essential expenses, such as housing, healthcare and food, from discretionary ones like travel and hobbies. This helps you understand your cash flow needs and plan accordingly.
Diversify Your Income Sources
Your retirement income will likely come from multiple sources, such as Social Security, pensions, savings and investments. To ensure a steady monthly income, consider creating a detailed income plan that includes annuities, which can provide a reliable income stream.
Types of Annuities & Their Benefits
There are different types of annuities, each with its benefits:
Manage Required Minimum Distributions (RMDs)
Required minimum distributions (RMDs) start at age 73, rising to 75 in 2033. Ensure you comply to avoid penalties, which were reduced from 50% to 25% by the SECURE 2.0 Act. Maximize tax advantages by drawing first from taxable accounts, allowing retirement accounts to grow tax deferred. This strategy helps manage your tax liability and preserves your retirement savings.
Seek Professional Advice
Navigating annuities can be complex, so be sure to seek advice from financial advisors who prioritize your interests and understand the evolving annuity market.
Annuities can offer retirees financial stability and peace of mind by providing a guaranteed income stream and protection against market volatility. By understanding the types of annuities and strategically incorporating them into your retirement plan, you can secure a steady, reliable income that supports your desired lifestyle.
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DISCLAIMER: This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. This information is general in nature and may be affected by changes in law or in the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.
Insurance & Risk Management Consultant & AASP Program Manager
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