Archive for the ‘: small business formation, future economic growth, bell weather of economy, economists, warning note, low financing rates, business formation slowed, startups, less small companies today, John Schlag’ Category

Flex, Remote Workers — Should Your Business Be Using Them

July 17, 2016

When JetBlue Airways Corporation first launched, many if not most of its reservation personnel operated from their own homes.

This highly successful approach reduced start-up costs and worked until more centralized operations were installed as it grew much larger.

For years the typical worker sat at a desk under the watchful eyes of a manager. But much like Jet Blue’s initial workforce, tomorrow’s employee may be miles away working in their home and/or not the standard Monday through Friday 9 am to 5 pm schedule.

While the jury is still out as to the overall effectiveness from such an approach, there are compelling reasons companies are considering flex and/or remote workers.

  • Bigger, more diverse pool of talent for a larger geographic area to choose from
  • No need to relocate employee
  • Less time commuting leads to fuller work days
  • Happier workers, reduces attrition and enhances quality of work
  • Accommodating a worker’s schedule nurtures loyalty and increase productivity
  • May not have to pay benefits, if not full-time jobs
  • Provides ability to adapt to seasonal, cyclical, and growth needs of the business
  • Workers spend more time working, less time commuting
  • Save money: real estate, parking, capital to run the business, etc.

Employees benefit in some of the following ways:

  • Flexible schedule: not everyone is productive during the same time of day, this allows them to work the hours they prefer and/or what fits their lifestyle
  • Saving money: commuting expenses, out-of-home meals, work wardrobe, child- and/or elder-care
  • Feel more in control of work life
  • Way to keep working while balancing other commitments
  • Less exposure to others’ illnesses and sick days off
  • Fewer days off for personal reasons such as errands, deliveries, appointments
  • Fewer office politics to deal with
  • Limiting in-person contact causes employees to make the most of their time on conference calls and in meetings
  • Inspiration to others seeking work

No matter how one feels about these matters, some clear trends are emerging that should be considered by leaders of all sizes.  They include:

  • Job sharing and telecommuting is on the rise
  • At-home employees continue to rise
  • Most organizations are not monitoring their ROI when it comes to flexible work
  • Moving full-time positions to non-full-time workers (contingent workers)
  • Online communities developing to support these types of workers
  • Millennials are the largest generation in the work force; they prefer to telecommute ad flexible work options
  • Flexible work positively impacts health, providing more time to exercise

Mitigating against these trends are:

  • Not all employees adjust well to remote or flexible work
  • It is harder to mentor and train remote and flexible workers
  • Company culture may weaken because personal relationships and contact between staff members is limited
  • Harder to schedule in-person meetings with a group
  • Communication becomes primarily digital, losing the body language communication can lead to communication being strained and miss-communications via email and text
  • Workers may feel more isolated
  • People who tend to overwork may struggle with work/life balance if working at home
  • Need for worker to have at-home dedicated work space suitable for their personal productivity
  • Technological issues are more detrimental and can isolate remote employees
  • Workers’ comp and other liability issues can be associate with remote work
  • Remote work can also be a way to avoid third-party child- or elder-care costs, causing less productivity
  • Lack of interactive feedback may lead to less creative ideas and brainstorming


Company leaders should consider all of these factors when thinking about future employment practices for their organizations.

There may be different answers for different companies. Find the best answer for your company.

Small Businesses Formations Slowing? A Warning About Future Economic Growth

March 13, 2016

For much of the past 50 years small businesses formation has been a bell weather of how the economy would behave over the next 12 months.

Today, some economists are striking a warning note.

Despite low financing rates and better tools for managing an enterprise, small business formation has slowed during the past six years.

In fact, there are 70,000 less small companies today than in 2010 according to John Schlagenhauf, a former congressional economic advisor.

This statistic is jarring considering recent surveys by Intuit and other respected sounders say small business leaders are optimistic about the future.

However, some other trends support his thesis and our own research points to this trend. After reading about Schlegenhauf’s number, our company Information Strategies, Inc. went back to its database of seven million plus companies and surveyed a representative sample of firms in business five or more years.

Normally, a company in business for five or more years has an average life of 10-plus annual cycles. Of the 1,300 surveyed 1,227 were still functioning.  Research determined 46 were acquired or morphed into new entities but 27 or 2.1% were no longer in business. According to economists, the normal attrition rate in a similar grouping should have been 1.5%.

Then too, computer equipment forecasts along with other startups associated goods and services have been cut, another indication formation numbers are not increasing.

But there are factors at work today that did not exist or were not as pervasive affecting many small businesses.  They include:

  1. Greater federal, state, and local regulations affecting many small business. In particular financial, environmental, and wage regulations.
  2. Obamacare has had a particularly negative affect on many small companies.
  3. Many companies used up their cash and other resources surviving the recession and are still waiting for economic good times which have not come back.
  4. Generational changes in entrepreneurship has meant many younger sons and daughters do not want a small business and its 24/7 management requirements.
  5. The concept of the sharing economy with thousands of independent contractors fighting for business in such industries as taxis, art direction, IT maintenance has reduced the number of full-time businesses.

Since the first surveys were done more than 40 years ago, small business formation has always exceeded closures. This new data, if accurate, should be a warning about the economy because as most everyone concedes small business is the economic driver of our economy.