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Weighing Your Options: Promoting vs Hiring Externally

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Business people, hand shake and success in meeting, support and applause, hiring or onboarding with team. Collaboration, shaking hands and congratulations, promotion and achievement with diversityIt’s a quite common dilemma to figure out if you need to hire externally or promote from within to see improvement with your business. There are benefits to both. We will now go over the pros and cons to each side.

Hiring Externally 

Pros 

  • Can help a company gain new perspectives – Oftentimes, hiring a new candidate will allow businesses to gain new ideas that they would not have gotten internally. These hires could be from a different industry and their ideas could make a difference. They also might see flaws in your business model that you were too close to see. The external hires could help improve your business due to their original distance.
  • Gives you more people to consider –  When looking at a pool of candidates for a job, you are able to have a wider pool of people when hiring externally. If you hire internally, it’s going to be a smaller pool. You also could be exposed to people of higher skill sets than the employees you currently have on your team.
  • No conflict within the existing team – Employees in your business will not feel like they are competing for a position if it is already announced to be an external hire joining the team. This makes the environment calmer and you don’t need to worry about any potential conflict.

Cons 

  • More time and money searching – It can take a while to set up the hiring platforms and advertisements saying that you are looking to hire. If the need for a person is immediate, it will be hard to fill it right away due to the time setting up the logistics.
  • You don’t get all the information from their resume – At the end of the day, you only have a few interviews to be able to determine whether or not this person is good for the job. You can look at references but there still can be uncertainty with the offer.
  • You don’t know for certain that they will fit into the office dynamic – When people interview, they are on their best behavior and talk up their abilities and strengths. You can never be certain that they will fit in with your employees and your pace of work. You don’t know their true personality and how well that will mesh with the office environment.

Promoting from Within

Pros 

  • Positive morale for staff – Hiring from within shows that an employee’s work is valued and they will be rewarded for their time going above and beyond expectations. This will also show other employees that if they work hard, they could be promoted in the future. If the promotion is for a managerial role, people can feel more comfortable that they know who they will be working with than an outside recruit.
  • Keep your costs down – Internal recruits will save you money because you don’t need to spend money on external recruiting. You will not need to spend money on sites promoting your position.
  • You know the candidate – Interviews can be much more relaxed when you know the applicants from personally working with them. This allows you to skip the awkwardness of a first interview and ask them what they hope to contribute in the new position.

Cons

  • Stuck in an endless loop of filling positions – You probably will now need to fill in your promoted employee’s position unless they are just getting a promotion of responsibilities rather than a completely different title. This can be frustrating because you probably would have to hire an external candidate to end the repetition of hiring to fill.
  • Lack of change – You are keeping the same ideas that have been in your office already. This may promote a sense of conformity with ideas. The culture will continue to be the same because there is nothing causing a change. You just may lack some originality due to promoting and not hiring externally.
  • Competition between workers – People may become competitive with a position opening up. If employees don’t like the person who gets the promotion, they may leave because they don’t feel properly supported. They also may leave because they don’t feel valued if someone with less experience in the company gets the promotion instead of them.

Overall, consider your employees and the need within your organization to determine whether or not it would be more beneficial to promote or hire externally.

Projects That Add to the Value of Your Home

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Middle aged couple at home planning living room designYou only have to look at the number of home remodeling shows on television to understand just how many people enjoy watching others upgrade their living spaces. These popular home remodeling shows have inspired many people to try their own hands at various remodeling projects.

If you are interested in having work done on your living space or doing it yourself, you should understand that some remodeling and construction projects will enhance the value of your home as well as its appearance. Other remodeling projects may be on your wish list and make you happy but won’t materially affect the value of your home.

What projects will add to the value of your home? According to the “2023 Cost vs. Value Report” conducted by Remodeling, a leading trade publication/platform, the top five renovations that increase — or come close to increasing — home value are as follows:

HVAC Conversion

Switching out your fossil-fuel burning furnace to a more environmentally friendly alternative — an electric heat pump — is an expensive undertaking but easily recoups its cost. Typically, the cost of converting a 2,000-square-foot home to an electric heat pump is estimated to be $17,747, but the report notes that it adds about $18,366 to the home’s resale value — a 103.5% return on the investment.

Garage Door Replacement

A new garage door definitely enhances a home’s curb appeal and easily recoups its initial cost. The report found that removing and disposing a 16- by 7-foot garage door and replacing it with four-section doors with heavy galvanized steel tracks would cost $4,302 on average but would boost the home’s resale value by $4,418, a 102.7% return on investment.

Manufactured Stone Veneer

Stone veneer has grown in popularity amongst homeowners looking to craft a warm and welcoming feel to their homes’ exterior. It costs an estimated $10,925 to install 36 linear feet of sills, 40 linear feet of corners, an address block, and other materials, including water-resistant and corrosion-resistant barriers. However, homeowners will recoup 102.3% of the project’s cost if they put their home on the market.

Replacing an Entry Door

New front doors can help improve a home’s energy efficiency as well as enhance its appearance. Replacing an old entry door with a new steel one will cost an average of $2,214 but will increase your home’s resale value by $2,235, recouping 102.9% of its original cost.

Replacing Siding

Replacing a home’s siding is an expensive undertaking, but it is one project that delivers immediate eye appeal. New siding refreshes a house’s appearance and adds to the neighborhood’s overall desirability. The report looked at the costs of installing both fiber-cement siding and vinyl siding. It found that the average cost of installing 1,250 square feet with fiber-cement siding would run a homeowner $19,361. The homeowner would expect to recoup 88.5% of the cost of the project, or $17,129. Installing new vinyl siding would be less costly than fiber-cement siding. Siding for a 1,250-square-foot house would cost an estimated $16,348, and the homeowner could expect to get back around 94.7% of that total cost at resale.

Be aware that labor costs vary from state to state and from community to community. The cost of materials fluctuates, sometimes considerably, depending on inflation, supply chain issues, and other economic and political forces.

An HSA Can Also Be Used to Save for Retirement

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HSA, health savings account symbol. Wooden cubes with words 'HSA, health savings account'. Stethoscope. Wooden background. Medical and HSA, health savings account concept. Copy space.Health savings accounts (HSAs) were created as a savings vehicle to help people pay out-of-pocket medical expenses. If qualified, you can establish an HSA in much the same way you establish a traditional savings account or an individual retirement account. You can open one with a lump-sum payment or through regular contributions, usually through paycheck deductions.

What makes HSAs appealing is that they offer several valuable tax-saving features. For example, your contributions are excluded from deductible income, all account earnings accumulate tax free, and, as long as the medical expenses paid with HSA savings are “qualified” expenses for you, your spouse, or your dependents, withdrawals from HSAs are tax free also. It is these tax savings features plus the ability to invest contributions in longer term assets that can make HSAs viable as alternative retirement savings vehicles.

Before looking into how HSAs can be used to save for retirement, it can be helpful to explain how they actually work.

The Rules on Contributions

The maximum family contribution for 2024 is $8,300 plus a $1,000 maximum catch-up contribution for participants who are age 55 or more. For self-only coverage, the maximum contribution for 2024 is $4,150 plus a $1,000 catch-up contribution for those participants age 55 or more. The limits will be adjusted for inflation in future years. An individual’s employer or family member may contribute as long as the total contribution amount does not exceed the annual limit.

Investing Contributions

As a participant in an HSA, you have the choice of keeping contributions in cash or investing them in other assets, such as stock and bond mutual funds.* Money not spent on qualified expenses during the year is rolled over for subsequent years. If you are in fairly good health and underutilize medical and health services, you could potentially build up a relatively large balance in the HSA account over several years.

Making HSAs Work as Retirement Savings Vehicles

If you currently maximize contributions to all tax-favored retirement accounts and also save in taxable accounts, you could treat the HSA as one more option to increase your savings and do so in a tax-favored way. Essentially, you would treat the HSA as a retirement savings account and allow the assets in the account to accumulate for as long as possible while paying out-of-pocket medical costs with taxable funds. Of course, this approach does not work if you cannot fully fund all your tax-advantaged retirement savings vehicles.

Remember, each person’s situation is different and you will benefit from discussing this option — and other retirement savings options — with an experienced financial professional

The Many Types of Investment Risk

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Risk assessment, analyze potential danger level, measure money loss acceptable for investing, control or limit loss concept, businessman investor stand on stack of risk boxes measure his assessment.It is important for investors to understand that every investment has its own set of risks. One key to successful investing is to recognize the different types of risks that could be a threat to one’s financial well-being and to take steps to minimize their impact. What follows is an overview of the primary forms of investment risk as well as some tips on how to minimize that risk.

Market Risk

This is the risk that the prices of securities may fall due to external factors such as world events, economic changes, or investors’ expectations and outlook. Stock investors are more likely to be impacted by this form of risk than fixed-income investors.

Inflation Risk

Also known as purchasing power risk, this is the risk that is connected to the uncertainty over the future purchasing power of the income and principal of an investment. When prices rise (inflation), purchasing power typically falls. Historically, stocks have been less impacted by this type of risk since they have been able to appreciate in price at a faster rate than the rate of inflation. Typically, lower yielding cash equivalents are more likely to be affected by a rise in inflation.

Interest Rate Risk

When interest rates move up and down, bond prices change. When interest rates move up, newly issued bonds will generally pay a higher interest rate than similar, older bonds. What happens next is that the market of existing bonds falls because there is less demand for them. In other words, they lose market value. The opposite happens when interest rates fall: Older, previously issued bonds will pay higher rates of interest than newly issued bonds, making the older bonds more appealing to investors. The bottom line is that falling interest rates are generally beneficial to bond owners.

Maturity Risk

Since it is impossible to predict how the financial markets will perform in the future, long-term bonds are generally considered to be riskier investments than short-term bonds. This type of risk is known as maturity risk. Issuers of long-term bonds attempt to compensate for the additional risk by offering higher yields.

Credit Risk

Credit risk is the risk that a bond issuer will be unable to pay interest on the bonds it issued or repay principal when the bonds mature. Rating services, such as Moody’s Investor Services and Standard & Poor’s, carefully investigate the financial health of a bond issuer in order to alert investors to the risks of a particular issue. The rating services rate municipal bonds, corporate bonds, and international bonds. They do not rate Treasury bonds since the assumption is that they are solid, backed by the full faith and credit of the federal government. The rating services rate bond quality according to a system that employs letters and numbers, with AAA or aaa indicating the highest quality issues and CCC or ccc and below indicating poor quality issues that could default.

Credit ratings influence the interest rate an issuer must pay in order to sell its bonds. However, credit ratings are opinions about credit risk. Even though credit ratings are forward looking in that they assess the impact of foreseeable future events and can be useful to investors, they are not a guarantee that an investment will pay out or that an issuer will not default.

Currency Risk

Changes in currency exchange rates will have an impact on returns from overseas investments. For example, when the dollar rises in value in relation to the Euro, the return on a fund that holds a large number of stocks in European businesses is reduced when the Euros are converted to U.S. dollars. The opposite occurs when the dollar falls in value in relation to the Euro.

All investments have risks. Before buying a security, understand that the key to investing success is balancing risk. You can do this by having a well-diversified portfolio and an asset allocation strategy based on your risk tolerance and the number of years until you retire.

Diversification helps you manage risk by spreading your assets among a broad mix of different investments. When you do this, you are taking advantage of the fact that securities usually don’t move in the same direction at the same time. When some investments drop in value, others may rise or remain unchanged, offsetting to some degree those investments that lose value. Of course, diversification does not ensure a profit or protect against loss in a declining market.

Be sure to talk to your financial professional for insights on how you can balance risk in your investment portfolio.

Tips for Managing your Business’s Online Reputation

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In the current social media landscape, it’s important to manage your business online and maintain a positive online reputation with the general public.

What is Online Reputation Management

Online reputation management is all about how you are perceived by the internet. People use the internet to check out your reviews and social media to see if your business is right for them. Having an online presence can help your business be susceptible to reviews and positive feedback. Online reputation management is monitoring the reviews that previous clients have stated. These reviews are trusted by the public, and your responses to these reviews also can help or hurt your online reputation.

Online reputation management is becoming increasingly more important in daily life for business owners. This refers to the widespread opinion the general public has about your business. Shared experiences about your business create a general pattern that will influence people whether or not you are the right company for them.

Why Should You Care About Your Online Reputation?

You only get one chance at a first impression and that becomes your reputation. In today’s digital world, people can make their first impression about your business without even entering your establishment. Your online reputation is based on people trusting online reviews. If you have negative reviews, a prospective client can mentally cross off your business because online reviews are seen as credible with your client giving their honest opinion. If there is a pattern with reviews and no sense of management, your online reputation is in trouble. Having good reviews, however, can help your business gain traction. If most clients love you, why won’t new customers? Online trust is very important and a huge key to your success.

A reputation is very difficult to fix if it becomes tarnished. In today’s world, social media runs rampant. Many individuals are able to create platforms that gather traction. If your business becomes a topic of discussion, many people can share both good and bad interactions they have had with you. This can influence people listening to either engage with or avoid your business. Having a positive reputation can benefit your business because most businesses utilize referrals to gain more customers.

User-generated content is becoming increasingly popular on the internet. People trust other people and their opinions. A quick google search is not cutting it anymore. The gray area of what is genuine and what is paid advertising makes it hard for people to trust companies. User-generated content is seen as a third-party endorsement where normal people talk honestly about companies which can help business if it’s positive content. This essentially is the new wave of “word of mouth” but digitized.

5 Tips for Online Reputation Management

  • Look at Current Reviews – Take a look at the existing online reviews for your business and see what your average rating is and what is the most popular review website. Look to see if there are any reviews that you can respond to. After understanding what people are saying about your business, you can develop an online reputation plan.
  • Reply Honestly to Reviews – Respond to every review like it is a conversation. Thank the people with the positive reviews. For negative reviews, apologize about the negative experience and ask for them to elaborate with you by scheduling a phone call.
  • Ask For Feedback – Ask trusted customers to give you feedback on how your business could improve, as well as internal employees. Showing that you care about their opinion will generate a positive reaction. Ask for people to give you reviews online so more people will come to you.
  • Use Your Social Media Accounts – Have an active social media and respond to your audience. Having a presence on social media shows that you are with the current time. Engage with your audience and create personalized content for your field.
  • Don’t Get Discouraged – There can always be a random bad review. As long as you look attentive and try to address it with the individual, there is nothing to worry about. Just try to have the best attitude while talking to customers, both face-to-face and online.

And to My Executor, I Leave My Passwords

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Senior mature grey-haired businesswoman teach on paper documents young male employee in office. Diverse friendly teammates talk about work, discuss project, intern make notes and share ideas.What would the consequences be if, after your death, no one could access the information you have stored electronically? If you’ve protected your accounts or files with passwords, it could easily happen.

Computers have changed the way we manage our personal and financial — and often, our professional — lives. And they’ve also created new challenges for estate planning. Consider, for example, an Internet business left in limbo because the owner made no provision for accessing accounts. Running the business — or even making customers and creditors aware of the situation — would be problematic without access to the owner’s digital records.

But business accounts and records aren’t the only potential casualties. Personal e-mail, address books, photo libraries, and financial information are also at risk of being lost if the decedent hasn’t shared passwords or designated someone in his or her will to have access to the records.

The legal treatment of digital assets remains a problem for the courts. Meanwhile, it’s important to revise your estate planning documents to include passwords and authorize access to your online and other protected computer data.

A Checklist for Your Digital Assets

  • Determine what and how valuable your digital assets are.
  • Give your executor or personal representative instructions for locating them.
  • Share your passwords with the person you’ve designated to have access, and/or include a list with your estate documents.
  • Instruct your representative to delete files containing sensitive information.
  • Make provisions to renew business URLs after your death, so they won’t be lost.
  • Plan for the disposal or transfer of digital assets just as you would for tangible assets.