Stéphanie Nadeau
Senior Advisor | CRHA | Human resources consulting

Workplace health and wellness initiatives have been proven to boost organizational productivity. But how do you get started with them?

Should employers be concerned about their employees’ family problems and parenting issues? Worker productivity is something that matters to all employers. And yet, managers are often hesitant to talk to their teams about their family life because they worry it could be seen as overstepping. At the same time, we know there is a direct correlation between an employee’s state of mind—which is often influenced by their personal life—and their productivity at work.

Of course, it is not up to the employer to intervene in an employee’s family matters and personal problems. Instead, companies can take certain measures to make it easier for staff to reconcile their personal life with their professional responsibilities.

Studies have shown that when companies take steps to support work-life balance, workers are more motivated and satisfied, which increases their productivity and decreases absenteeism. Let’s take a look at the numbers. According to the Healthy Enterprises Group, for every dollar invested in health and wellness initiatives, companies get a return ranging from $1.50 to $3.80. Meanwhile, a Leger survey conducted in January 2019 for Concilivi found that companies that have the family-work balance seal of recognition enjoy a competitive advantage.

The costs associated with a high employee turnover rate, absenteeism and non-productivity are higher than most people realize. That is why it makes sense for companies to adopt a health and wellness program. In fact, there is a tool on the Ordre des conseillers en ressources humaines website that lets you calculate the cost of personnel turnover.

Implementing a workplace health and wellness program

Since piecemeal measures aren’t likely to have a big impact on workers, the benefits for your organization will also be marginal. Instead, you’re better off with a comprehensive approach to wellness in the workplace.

A comprehensive approach

Implementing a comprehensive workplace health and wellness isn’t the sole responsibility of the HR manager or the OHS committee. To be successful, the business owner and entire management team have to get behind the initiative. Ideally, the program should be included in the company’s strategic plan and considered a short- and long-term business objective.

Our firm has created a Workplace Health and Wellness (WHW) approach for businesses. Here is what is involved.

1. Appoint project leaders

Start by identifying a process owner to organize your initiatives. The process owner leads WHW Committee meetings, defines training needs for committee members, coordinates health and wellness activities, and performs follow-ups as needed.

Then appoint a management liaison. In addition to supporting the process owner, they will promote the initiative to the management team, mobilize the managers who have a key role to play and obtain approvals for the various initiatives.

Finally, set up an in-house WHW Committee tasked with selecting and implementing the program initiatives, while taking into account staff suggestions, available resources and the company’s priorities.

2. Conduct a survey

The purpose of the survey is to determine what improvements are needed to support employee wellbeing. The results will give your team a better understanding of your employees’ concerns and guide the company’s subsequent actions. The survey should cover four key topics that are known to have a positive impact on workplace health and wellness.

  • Lifestyle habits and stress management;
  • Work-life balance;
  • Management practices;
  • Work environment.

3. Analyze the results and develop an action plan

You may want to get help from an external firm for this step. A reliable partner will be able to provide you with an objective, efficient and confidential analysis of the survey results. The findings will let you see which health and wellness issues are most important to your employees. Then you will be able to establish clear objectives and develop an action plan to meet your team’s actual needs.

Introducing a cost-effective WHW program

According to a Concilivi study, 77% of organizations have managed to implement work-family life balance measures at low or no cost. Here are some things you can do that don’t require a big investment:

  • Offer flexible or reduced hours when a single parent has their children;
  • Allow employees to trade shifts to accommodate family needs;
  • Allow staff to work remotely or rearrange their schedule when kids are off school for in-service days or during snowstorms;
  • Let employees make up their hours if they need to take time off work and if their job doesn’t allow them to work from home;
  • Allow employees to split their vacation days so they can take days off at the same time as their family;
  • Distribute brochures of local resources for parents of teenagers;
  • Offer flexible schedules to employees who are natural caregivers;
  • Set up an Employee Assistance Program offering assistance with personal issues, support for those with physical/mental health problems, and access to telephone consultations with legal, financial and mental health professionals, etc.

If your workplace health and wellness program is well-designed and tailored to your company’s actual needs, it is sure to have a positive impact on your employees’ state of mind. This in turn will benefit your organization and employer brand. Our advisers can help you get started with a WHW program or strengthen your corporate wellness culture.

We have developed a comprehensive WHW program for businesses of all sizes and across all industries. Our firm is recognized as a provider, ambassador and member of the Healthy Enterprise movement. If you’d like to implement a WHW program for your organization, we have coaches certified by the Healthy Enterprises Group who can guide you. Please contact us if you have any questions.

11 May 2021  |  Written by :

Stéphanie Nadeau is a human resources expert at Raymond Chabot Grant Thornton. Contact her today!

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Eric Dufour
Vice-President, Partner | FCPA, FCA | Management consulting

Financing is a key issue in a business succession project and can make the difference between a successful transition or not.

There are several points for the transferor to consider:

  • Will the asking price ensure the business’s long-term longevity?
  • Will the transferor receive sufficient funds for retirement?
  • Is the transferee’s cash outlay sufficient?
  • Will the transferor have to invest in the financing structure to ensure the transaction’s success?

Balance of sale price

Generally, the transferee’s outlay represents a small portion of the succession plan financing structure (less than 20%) and usually serves to maintain a balanced financial structure. When the overall transaction value is low, this may be sufficient. However, if the value is in the hundreds of thousands, such a low percentage could prove to be a significant obstacle.

The balance of sale price, i.e. the transferor’s financing, then becomes the best solution to complete the financing structure. Often misunderstood, the balance of sale provides flexibility in the financing structure and a means for the transferor to recover the full value of the business during the first years following the transfer.

The transferees’ results must be as good as those of their predecessors, given the high debt level. Flexibility is an undeniable asset in ensuring a successful business transfer. Sound strategic planning that provides for some growth will make it easier to bear the financing burden.

The right choice

In a succession situation, the transferee’s management skills are a major consideration when obtaining financing. For this reason, a gradual transfer is the preferred option. It allows the transferees to gradually gain management experience and confidence and reassures the lenders about the business’s operations and management. Lastly, it provides the transferees with a gradual participation in the business’s future returns and maintains the transferor’s capital during the transition.

Feasibility of the succession plan

Generally, it can take from four to ten years for transferors to recover the full value of their business, depending on:

  • The industry;
  • The value of available security;
  • The business’s historical and future cash flows;
  • The transferee’s financial capacity;
  • The transferee’s competencies and the soundness of their succession plan.

A business transfer diagnostic can be a useful tool to shed light on these factors and confirm the succession plan’s feasibility for both parties.

There is a wide range of possible financing scenarios, which is why it’s crucial to talk with the parties to determine their expectations and propose the best financing structure in accordance with their needs. Contact our team of experts. They will support you during this important stage in the life of your company.

07 May 2021  |  Written by :

Éric Dufour is a vice-president at Raymond Chabot Grant Thornton. He is your expert in management...

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Francis Boucher
Partner | CPA, CA, CBV | Financial advisory

Costing improves profitability and is therefore of paramount importance for any business. This is particularly true in these times of uncertainty.

Companies are constantly evolving and will need to arm themselves better than ever to stay the course and consolidate their operations in order to face the coming months. Managers must have all the information they need to make informed decisions and ensure the company’s financial performance.

By definition, costing is the sum of all expenses needed for producing a good and finalizing a service.

Establishing costs for informed decisions

There are several advantages to knowing and controlling the cost of your services, such as:

• Determining the sales price of services;
• Making informed decisions about contracts (because in negotiations with the client, the manager is better able to understand the available margins);
• Recognizing the difference between profitable and non-profitable services.

In many companies, costing is a neglected management tool, either because of lack of time or lack of knowledge.

As a result, many managers navigate rough waters and cannot rely on costing in the many strategic decisions they must make.

Here are some points indicating that you would need to update or review your costs:

  • You have had to review your priorities because of the pandemic;
  • Your costs were last updated more than a year ago;
  • Significant changes were made within your business;
  • Your range of services has increased and you don’t know how to price your new services;
  • You’re not sure you included all of the relevant costs in your costing;
  • Your profit margin does not reflect the estimated profit margin at the time of a tender.

Calculating costs

To evaluate the cost of a service, you have to understand that it is composed of several elements:

  • Salaries;
  • Subcontracting;
  • Operating costs;
  • Sales expenses;
  • Administration expenses.

When determining your costs, one of the most common pitfalls is to evaluate a resource’s hourly rate based on hours worked rather than taking into account productive hours (vacation and other days off, breaks and training).

For example, if we take an employee with a $25 hourly rate including benefits, this is equivalent to an annual salary with benefits of $52,000 per year. This annual expense, based on the number of productive hours per year ($52,000/1,660 hours in our example), gives us a productive hourly rate of $31.33. It is this rate that should be taken into account when assessing a service contract and not the $25 hourly rate.

When assessing your services, you will be confronted with several traps . One of the most important ones to avoid is postponing the project or waiting for 100% accurate information to determine the cost price. Remember that, like your company, costing is a constantly evolving process.

Contact our experts to assist you in these challenging times.

07 May 2021  |  Written by :

Francis Boucher is a Financial Advisor expert at Raymond Chabot Grant Thornton.

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Mathieu Gauthier
Senior Director | Financial advisory

Have plans to grow your business? Ready to invest? Here’s how to maximize your chances of obtaining financing.

After reviewing your business strategy, you’ve put together a plan that will enable you to achieve your growth objectives. For some it’s acquiring another company, while for others it could be constructing a new building, making Industry 4.0 upgrades or turbocharging their operational capacities. No matter what you’ve got planned, you’ll need a loan from a financial partner.

While applying for financing might seem simple, there are a few things you need to do first to make sure your application is properly supported and approved.

How to present your project to your financial partner

Discuss your project with your lender

The first thing you need to do is schedule a call with your financial representative. This simple step can help you gain helpful information on how to effectively prepare the rest of the process. The purpose of the conversation is to discuss the general outline of your growth plan and ask your lender what information they’ll want to see when analyzing your loan application.

Know what information to include in your request

Your lender should give you a list of information you need to provide. The level of detail will depend on your relationship with the lending institution. If you’re a long-term client and interact with your lender several times a year, they will mostly ask about the specifics of your plan. However, if you rarely contact them or you’re a new client, they’ll probably ask for information about your business and its history.

Set up a timeline

Your call with your lender is also a good opportunity to establish a timeline. Once you’ve submitted all the required information, find out how long it will take to complete the remaining steps, which include the financing proposal, final approval and disbursement of the funds.

If you have a well-structured plan and effectively respond to your financial partners’ queries, you’ll gain their trust and cut down processing times.

Small, medium or big project: assessing all costs

Consider all costs

The scope of your project is likely to influence the type of financial arrangement you obtain, and sometimes even the number of lenders involved. Therefore, it’s important to detail all the costs associated with your initiative, including indirect expenses. For example, if you plan to purchase new equipment, think beyond the purchase price. There’s also the cost of transporting and installing the new equipment, disposing of the old equipment and training staff on how to use it.

Plan for contingencies

To prepare for unforeseen events and ensure you don’t run out of funds part-way through the project, you should include a contingency budget. Generally, setting aside 10% of your project costs should give you enough leeway in the event you have to change course.

Getting to grips with numbers

Most of the information requested by your lenders will be financial in nature. That’s why it’s important to have a good grasp of your business numbers. There are two critical aspects that lenders tend to focus on.

1. Your repayment capacity

Repayment capacity refers to your ability to meet your financial obligations via the funds generated through your company’s activities. One of the most frequently used terms in banking jargon is EBITDA, which stands for earnings before interest, taxes, depreciation and amortization. EBITDA is used to determine whether your business has the available funds to service its debt. To take out a new loan, your business must generate sufficient earnings to cover all your principal and interest payments.

Estimate future profitability

In some cases, a company’s historical performance may not justify a new loan but its future profitability is expected to increase thanks to the new project. While entrepreneurs often evaluate projected growth based on increased revenue, lenders tend to focus on increased profitability (i.e., earnings). An additional $1 million in sales that doesn’t translate into EBITDA growth won’t increase your chances of being approved for financing.

Some specialized financial partners will base their funding decision solely on your ability to generate earnings, and won’t even take into account any guarantees offered by the company. Understanding how your upcoming project will impact the company’s profitability is crucial.

2. Your working capital needs

The second thing to consider is your company’s working capital. Lenders sometimes require a down payment as a financing condition and companies often draw directly from their cash reserves to make that down payment. To determine the maximum amount you can put toward the down payment, you first need to calculate the minimum working capital needed to run your company’s operations. Using historical cash flow data, you’ll be able to establish a minimum liquidity threshold to sustain your operations. Additional sums—referred to as surplus cash—can be used for the down payment.

Prepare your financial projections

Developing financial projections is important to help you properly assess the direct and indirect benefits of your project, and for determining your working capital needs. Financial projections can initially help your team decide which projects are worth pursuing, and later they can be included with the information package provided to your financial partners.

Evaluating your guarantees

Even if your business performed well historically, it could still face a bad year or be hit with unforeseen circumstances affecting its profitability. Therefore, to minimize their losses, lenders may require tangible guarantees from your business. The type of guarantee you’re able to provide will have a direct impact on your loan interest rate.

Get an accredited appraisal

Available guarantees are an important asset for businesses when applying for a loan. The company’s tangible assets can provide leverage in your financial arrangement. To maximize the available leverage on an asset, you may need to get an accredited appraiser to determine the asset’s market value. In most cases, the market value of an asset is higher than its book value (the figure presented in the company’s financial statements).

Important: When communicating with your lender, ask them to provide you with a list of accredited appraisers that they recognize. Some lenders only accept reports prepared by accredited appraisers.

If a business doesn’t have much collateral to offer, the lender may request a personal guarantee from the shareholder. However, personal guarantees can be a source of worry for entrepreneurs who are concerned with protecting their personal finances. The lender’s main goal in this type of arrangement is to make sure the entrepreneur will do everything they can to sort out any financial problems that affect the business. A personal guarantee provides the lender with extra reassurance that every effort will be made to keep the company afloat and able to service its debt.

By following these steps, you’ll be able to present a well-supported financing application to your financial partners and maximize your chances of success.

Having the backing of an experienced team can go a long way to reassuring your partners. Working with experts can also help you avoid costly errors down the road. Our team of financial advisors has the expertise to assist you with every step involved in your financing application, from initial planning to receiving your funds.

04 May 2021  |  Written by :

Mathieu Gauthier is a management consulting expert at Raymond Chabot Grant Thornton.

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