Horizons Fall/Winter 2019

A publication by RubinBrown LLP

FALL/WINTER 2019

FEATURING

u The 10 Traits Successful Contractors Have in Common u University Hiring Faces Tough Test u Today’s Healthcare Challenges: Minimizing Costs, Increasing Quality, While Reeling with High Turnover u Many Not-For-Profits are Struggling to Retain Talent

Contents

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RubinBrown News

Chairman & Managing Partner John F. Herber, Jr., CPA, CGMA

Timely Reminders

Chicago Managing Partner Christopher J. Langley, CPA

Industry Updates

Denver Managing Partner Ben Barnes, CPA, CGMA

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COLLEGES & UNIVERSITIES

MANUFACTURING & DISTRIBUTION

PUBLIC SECTOR

Kansas City Managing Partner Todd R. Pleimann, CPA, CGMA

University Hiring Faces Tough Test

Battling the Labor Shortage in the Manufacturing Industry Looming retirements and high demand require the industry to rethink retention strategies.

Succession & the Aging Workforce in Government Aging populations and loss of pension plans for many new candidates have forced the industry to focus on talent.

Shared services and outsourcing in the industry can help combat the tough hiring landscape.

Las Vegas Managing Partner Glenn L. Goodnough, CPA, CFE

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Nashville Managing Partner Bryan Keller, CPA, CGMA

CONSTRUCTION

NOT-FOR-PROFIT

REAL ESTATE

10 Traits Successful Contractors Have in Common These top 10 traits, seen by many top organizations, help achieve and sustain success.

Many Not-For-Profits are Struggling to Retain Talent Nonprofits are thinking outside the box to attract and retain competitive talent.

Income Averaging Offers Flexibility Many Hope will Help Cover the Affordable Housing Shortfall As a new minimum set-aside option for LIHTC, Income Averaging aims to help offset current financial constraints.

St. Louis Managing Partner Frederick R. Kostecki, CPA, CGMA

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HEALTHCARE

Editor – Dawn M. Keizer Associate Editor – Ashley Fahrig Art Director – Jen Chapman Designer – Brendan Coleman

Today’s Healthcare Challenges: Minimizing Costs, Increasing Quality, While Reeling with High Turnover Retention woes continue in the industry; better recruiting could be the solution needed.

Horizons , a publication by RubinBrown LLP, is designed to provide general information regarding the subject matters covered. Although prepared by professionals, its contents should not be construed as the rendering of advice regarding specific situations. If accounting, legal or other expert assistance is needed, consult with your professional business advisor. Please call RubinBrown with any questions. Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.

www.RubinBrown.com

Readers should not act upon information presented without individual professional consultation.

RubinBrown’s Internal Brand:

Here at RubinBrown, we live every day by nine core values. These core values serve as the foundational basis for how we make every single decision, including hiring talent. The core values provide a set of behavioral guidelines for all team members, but also for how we operate as a firm to the wider community. The core values represent the moral compass of RubinBrown and are prominently displayed in every workstation, every office and every conference room in each geographic location. The firm’s reputation depends on adherence to these core values. One of the nine core values is “Devotion to the People of RubinBrown.” The people of RubinBrown are a diverse team. Trust, appreciation and respect for all team members is of utmost importance. Equally as important as team members’ commitment to the firm is the firm’s dedication to all team members. RubinBrown is devoted to maintaining a culture and environment that make it a great place to work by providing team members with opportunities to do meaningful work. Five years ago, we solidified our commitment to our team with the development of an internal brand. That brand is “Be Your Best For Others.” We believe that when we are being our best for both our clients and for our fellow team members, we are being our best for ourselves. We also demonstrate “being our best” by serving our communities, as well as the accounting profession. There’s nothing more rewarding for me than to hear our team members say “Be Your Best For Others” in their daily conversations. We have encouraged each other with this brand and reflected on it in making our most important and ethical business decisions.

John F. Herber, Jr., CPA, CGMA Chairman & Managing Partner

RubinBrown’s Core Values Displayed in every office, workstation and conference room are the 9 core values. 1. Superior quality & service 2. Devotion to the people of RubinBrown 3. Teamwork 4. Objectivity & integrity 5. Competence 6. Devotion to our community & profession 7. Innovation & continuous improvement 8. Vision 9. Having fun

Pleasant reading,

Fall/Winter 2019

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RUBINBROWN NEWS

RubinBrown Chicago Office Relocates Downtown

RubinBrown is pleased to share that its Chicago office moved downtown to 225 West Wacker Drive on October 28, 2019.

The new Chicago office is located on just over 17,700 square feet on the 17th floor. The 225 West Wacker building is located at the southeast corner of Wacker Drive and Franklin Street.

Being located downtown helps RubinBrown continue to grow our business, as well as recruit the best and brightest talent to the firm. RubinBrown is proud to bring 50+ jobs to the downtown market.

Please note RubinBrown’s new Chicago address and phone number.

RubinBrown Chicago Office 225 West Wacker Drive Suite 1700 Chicago, Illinois 60606 312.425.1099

RubinBrown News

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Three RubinBrown Partners Honored on Inaugural Who’s Who in Accounting List Presented by the Denver Business Journal RubinBrown Partners Matt Beerbower , Rhonda Sparlin and Debbi Warden have all been named to the Denver Business Journal’s 2019 Who’s Who in Accounting list. The list recognizes innovators and trailblazers whose expertise and leadership help drive the economic growth of the region. Matt Beerbower is a Partner in RubinBrown’s Assurance Services Group and Vice Chair of the Construction Services Group. He serves clients in industries including construction, manufacturing and distribution, technology and government. Matt is involved at the Ronald McDonald House and volunteers with the Arapahoe Lakes Whalers swim team. He also formerly served on the Board of Directors for the Orchard Gate Association. Rhonda Sparlin serves as the Partner-In-Charge of the State and Local Tax Services Group at RubinBrown. She consults with businesses on issues related to multistate income, franchise and indirect tax issues. Rhonda has served on the Colorado Chamber of Commerce as the Board Chair, is a Board Member at Big Brothers Big Sisters of Colorado and has been a member of the Mile High United Way Tocqueville Society for more than a decade. Debbi Warden is a Partner in RubinBrown’s Entrepreneurial Services Group. She has more than 30 years of accounting, business and management experience. She serves as a member of the Colorado Society of CPAs Financial Literacy Committee and on the Downtown Denver Partnership Women’s Council as the Women on the Rise Event Committee Chair. She was on the Castle Rock Chamber of Commerce Board of Directors for nine years. RubinBrown’s Stephanie Drew Honored with Colorado Society of CPAs Award Stephanie Drew , a partner in RubinBrown’s Business Advisory Services Group, was recently named as a 2019 Woman to Watch award recipient by the Colorado Society of CPAs. The award recognizes female Colorado CPAs for their leadership and contributions to the profession and their communities. Stephanie received the award for the Leaders of Note category, which recognizes women who have advanced to a higher level or leadership position within an organization. Stephanie started her career at RubinBrown in 2011. She has over 20 years of varied experience in accounting, taxation and litigation consulting. She serves as a testifying expert and provides services to counsel, trustees and receivers on a variety of legal disputes. Her primary areas of concentration include the calculation of economic damages, fraud and forensics investigations and bankruptcy.

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Steven J. Brown Vice Chairman St. Louis

LEADERSHIP CHANGES PROMOTIONS PARTNER

Steven is taking on the role of Vice Chairman. In this role, he will work directly with the Chairman on strategic opportunities, governance matters and recruiting high level talent to the firm.

Ben is the Partner-In-Charge of RubinBrown’s Private Equity Services Group. In addition, he is taking on the role of Office Managing Partner for the Denver office. In this role, Ben will provide leadership and direction to the Denver office. Ken is Partner-In-Charge of the Construction Services Group specializing in financial, operational and plan audits. In his new role, Ken will assist the current Chair of Industry Groups with strategic direction and oversight of the firm’s industry groups. Megan is a Partner in the Assurance Services Group specializing in all aspects of employee benefit plan audits, including 401(k) plans, pension plans, health and welfare plans and SEC Form 11-K filing requirements. In her new role, Megan will lead the Assurance practice in the Kansas City office.

Ben Barnes Denver Managing Partner Denver

Ken Van Bree Vice Chair, Industry Groups St. Louis

Megan Knoblauch Partner-In-Charge, Assurance – Kansas City Kansas City

Larry Piparo Tax Services Las Vegas

Mark Breakfield Wealth Advisory Services St. Louis

Christine Figge Business Advisory Services St. Louis

Dominic Pisoni Entrepreneurial Services St. Louis

Chris Tkach Assurance Services St. Louis

Zach Fritz Tax Services Kansas City

Tim Kennedy Assurance Services St. Louis

RubinBrown News

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Jenna Matthias Assurance Services Chicago

Alisha Barnum Assurance Services St. Louis

PROMOTIONS MANAGER

Kendrick Coleman Entrepreneurial Services St. Louis

Eric Mebruer Entrepreneurial Services Nashville

Jake Miller Tax Services Kansas City

Jackie Fausto Tax Services Las Vegas

Nick Giegling Wealth Advisory St. Louis

Tina Pike Tax Services Denver

Amy Reichenberger Assurance Services Kansas City

Alyssa Hicks Assurance Services St. Louis

Joseph Riezman Tax Services St. Louis

Greg Hinkle Assurance Services Las Vegas

Ashley Rogers Wealth Advisory Services St. Louis

Michael Karl Tax Services St. Louis

Stephanie Simon Assurance Services Denver

Wade Kraenzle Assurance Services St. Louis

Ashley Waters Assurance Services Denver

Neal Kremers Assurance Services Kansas City

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Heather Grech Assurance Services Las Vegas

Christy Banton Assurance Services Las Vegas

NEW TALENT PARTNER

Jeff Cooper Gaming Services Las Vegas

Jeff Pero Gaming Services Las Vegas

Doug Winters Business Advisory Services Las Vegas

Michael Dobbins Business Advisory Services Las Vegas

Kristen Plott Jolaoso Assurance Services Chicago

Joe Bogh Assurance Services Las Vegas

NEW TALENT MANAGER

Thomas Butterfield Tax Services Las Vegas

Jacob Peterson Tax Services Las Vegas

Keith Clements Entrepreneurial Services Las Vegas

Shelley Woll Assurance Services St. Louis

James Dunn Wealth Advisory Services St. Louis

Kimberly Woods Tax Services Las Vegas

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Mark Your Calendars

Glean insight into the latest tax legislation. Learn more about how new accounting rules will affect your business. Find out how your organization can benefit from business strategies and innovative ideas. Throughout the year, RubinBrown is an excellent source for learning and insight. Registration will be available five weeks prior to each event at www.RubinBrown.com/Events .

Year-End Update DENVER DECEMBER 3, 2019 RubinBrown Office KANSAS CITY DECEMBER 4, 2019 1900 Building LAS VEGAS DECEMBER 10, 2019 Bali Hai ST. LOUIS DECEMBER 5, 2019 Donald Danforth Plant Science Center Business For Breakfast Facing Uncertainty of the Future as a CEO KANSAS CITY NOVEMBER 19, 2019 1900 Building

Public Sector Seminar DENVER JANUARY 24, 2020 RubinBrown Office ST. LOUIS JANUARY 30, 2020 RubinBrown Office

Not-For-Profit Seminar DENVER JANUARY 29, 2020 RubinBrown Office

KANSAS CITY JANUARY 30, 2020 Johnson County Community College

ST. LOUIS JANUARY 28, 2020 St. Louis Art Museum

Manufacturing & Distribution Summit KANSAS CITY FEBRUARY 5, 2020 1900 Building

SEC Update ST. LOUIS JANUARY 7, 2020 RubinBrown Office

CONNECT WITH US ON SOCIAL MEDIA We regularly post accounting and tax updates, as well as announce client seminars and other important and timely information.

Connect with RubinBrown Recruiting

Fall/Winter 2019

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INDUSTRY UPDATE COLLEGES & UNIVERSITIES

University Hiring Faces Tough Test by Kim Ryan, CPA, JD, LL.M

C ompetition for top talent in the workplace today is as competitive as it has ever been before, and colleges and universities are not immune to the talent challenges faced by other industries. In addition to simply trying to hire broadly within a competitive environment, colleges and universities can have further difficulties in hiring talent due to specialized talent necessary to work in certain areas of higher education. Also, the constrained resources and hiring processes are sometimes less agile than other industries. Hiring specialized talent might require previous experience and a limited pool of individuals with that talent may require convincing someone to move from a densely

populated city to a more rural community where the college is located.

The current budget environment faced by many colleges and universities can also result in difficulties being able to pay market rates for a specific skill set or not being able to absorb an employee who is not fully productive at the position for which they are hired. For example, a college might need the equivalent of 1.7 people for a specific skill, but is unable to absorb paying for another full time hire (2.0 people) when only 1.7 people are needed. Finally, the hiring practices of some colleges and universities are more rigid in the interview and background check process than some private employers that a prospective

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employee might be considering. All of these factors can cause colleges and universities challenges with talent acquisition.

Shared services, at the level of these two institutions, has led to a broader array of academic choices, more in-depth I T departments and significant cost savings and efficiencies.

Shared Services One way a college or university can address talent and acquisition needs is through the use of shared services between organizations. The College of Saint Benedict, a women’s college in St. Joseph, Minnesota, has partnered with Saint John’s University, a men’s college in St. Joseph, Minnesota, since the 1970s through sharing services and personnel. The institutions operate with separate leadership and governance teams; however, they are able to share approximately 60% of the workforce between the two institutions. Most employees, when signing on to work at one of the institutions, acknowledges the expectation to provide services to each of the organizations. The College of Saint Benedict and Saint John’s University operate their model of shared services through a memorandum of understanding and bill each other for services provided based on the levels of the services provided. The agreed-upon rates in the memorandum of understanding are evaluated at least every few years. The two institutions are able to share services in academic programming, technology services, admissions, human resources, library services, counseling, bookstores, budget analysis and academic advising. Shared services, at the level of these to institutions, has led to a broader array of academic choices, more in-depth IT departments and significant cost savings and efficiencies. The nature of these institutions as separate women’s and men’s institutions of higher education and their proximity to each other allows these schools to work together while avoiding competition for students.

Not all organizations have similar type organizations that operate in their industry and that they don’t compete with closely. However, there are many functions such as HR, payroll or IT services that can be shared with organizations that can be done remotely or by employees of other organizations that operate in different industries. Organizations may also consider that even if another organization operates in the same industry but doesn’t compete in the same way, there may be opportunities for shared services. For example, a dental school may consider working with a chiropractic school to share services. Outsourcing If an entity is having a difficult time finding the right talent and a shared services approach does not seem viable, then outsourcing certain functions on a temporary or permanent basis may be another option. Outsourcing certain work areas can allow the college or university to gain access to a higher level of expertise than currently employed. In addition, the college or university may learn additional vantage points or other perspectives that could be beneficial given the outsource provider’s broad experience in a specific space. Areas that are ideal candidates for outsourcing include highly specialized functions such as cyber security services, internal audit, financial statement and tax preparation as well as payroll.

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For example, cyber security is a highly technical field requiring a very unique skillset. Finding the right talent that can quickly identify and address vulnerabilities, conduct network penetration testing, provide on-demand CISO support and other services may be challenging. Outsourcing this function will ensure that an entity has an independent third party with vast experience in this area to help navigate through these security risks in order to minimize the risk of compromise and breach. Another example is the preparation of the IRS 990 or 990-T tax return, which can be very time consuming if internal resources only work through that process once a year. In addition, there can be significant complexities due to legislation changes that are difficult to understand. As a result, the increased complexity has led many colleges and universities to address the potential impacts of these legislative changes by outsourcing the preparation of the related forms. For example, within the Tax Cuts and Jobs Act of 2017, there are new rules related to sources of unrelated business income, separate lines of business tracking, potential income inclusion for certain fringe benefits provided to employees, net operating loss deduction ordering rules and new excise taxes. In this evolving and highly-scrutinized area for the IRS, outsourced providers review potential sources of unrelated business income and help determine how the new tax law will impact those sources. Additionally, the IRS has provided guidance in Notice 2018-67 about the mechanics of the 2018 Form 990-T, which has new schedules, including Schedule M, to monitor the tracking of separate lines of business income, expenses and related net operating losses. The IRS has also recently provided information through Notice 2018-99, which outlines the four-step safe harbor

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methodology for the unrelated business income inclusion of costs associated with certain employee fringe benefits (parking and other transportation fringes). Additionally, the most recent guidance issued in Notice 2019-09 addresses the new 21% excise tax on certain employee compensation. Of course, the costs associated with outsourcing are an important part of the overall consideration. When comparing the outsourced fees to the cost of hiring talent in-house, the salary of hired talent as well as the benefits provided (healthcare insurance, retirement plans, disability, etc.) should be part of the evaluation.

Another consideration is the college or university’s future budget variability that might impede hiring someone fulltime. Addressing the challenges around identifying and hiring talent is not a small task. Collaborative agreements for shared services between unrelated colleges or universities can be a solution. In addition, outsourcing any aspect of operations can address objectives that are currently not being met or are being satisfied temporarily by overwhelmed staff.

COLLEGES & UNIVERSITIES SERVICES GROUP

The Colleges & Universities Services Group provides a full range of assurance, consulting services and tax to colleges and universities. Our specialized services and expertise are delivered with close personal attention to our clients. For more information, visit www.RubinBrown.com/Colleges .

Chester Moyer, CPA Partner-In-Charge Colleges & Universities Services 816.859.7945 chester.moyer@rubinbrown.com

Brent Stevens, CPA, CGMA Partner Colleges & Universities Services 314.290.3428 brent.stevens@rubinbrown.com

Kim Ryan, CPA, JD, LL.M Partner Colleges & Universities Services 303.952.1208 kim.ryan@rubinbrown.com

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INDUSTRY UPDATE CONSTRUCTION

10 Traits Successful Contractors Have in Common This article was originally published on Construction Dive

L et’s face the grim statistics — the labor shortage has 70% of contractors missing deadlines and it simply isn’t letting up. The industry is bogged down in constraints even at the peak of its economic cycle, but fixating on this is discouraging to companies targeting continuous growth and improvement. Without minimizing present pain points, Dennis Engelbrecht, a senior consultant at The Family Business Institute, part of The Travelers Cos. family, framed his recommendations at a recent Associated General Contractors of America convention in a much more positive light. He explained the top 10 reasons contractors achieve success and can continue to do so.

These are the characteristics that the institute’s top rung of clients, marked by growth and profitability, have in common.

1. Servant Leadership An effective leader likely attained that position because of innate talent and drive, but once at the top, he doesn’t settle in his ways. “There’s always more to learn,” said Engelbrecht. “And as soon as you think you’ve got it all, it probably means your ego is leading more than it should be.” That drive can also be channeled to move an organization forward in a spirit of service to employees, not self-interest, he suggested, and oriented in a way that meets the needs of millennials and other up-and-comers.

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“They want to be motivated, they want to be part of something,” Engelbrecht said. Leadership should be among the first to inspire them to perform and stay on board. Fostering a culture of psychological safety, where employees at any level feel comfortable relaying information up and down the chain is among the most important traits of successful leaders, he added. Bad news must rise to the top, according to Engelbrecht, because when this goes unaddressed for too long, “bad jobs can kill a company.” Over the past two years, 80% of the companies that failed did so because of a single job, he said, citing research from The Travelers Cos. 2. Positive Work Environment “Thriving companies maintain a culture that attracts and retains people,” said Engelbrecht. To make this happen, leaders must be tapped into millennials’ and other groups’ priorities — vision, transparency, teamwork, access to leadership and more. “I don’t know that there’s ever been a more stressful time to be in construction than there is today,” he said. Leaders should look to combat this by supporting employees with a positive work environment and to remove as many obstacles to their success as possible. And since there’s no shortage of work at present, the challenge isn’t finding jobs, but knowing “when to turn off the faucet,” he continued, to ensure that employees aren’t overloaded. Also key is rooting out the “problem people” that can act as a cancer to an organization. “Your culture is determined by the lowest level of behavior your leaders will allow,” Engelbrecht suggested, but good people will elevate the culture when working alongside other good people. 3. Attracting & Retaining the Best People Bringing in new talent is difficult in this day and age, but the undertaking is one of the most formative to a company’s culture and success. “Slow to hire, quick to fire” is a mantra among the upper echelon

ViewPoints Construction Services Blog View the latest construction industry topics and news by visiting www.RubinBrown.com/ViewPointsBlog

of growing firms, Engelbrecht said, but sometimes this is easier said than done.

Companies have to think about hiring as a long-term process, looking to college programs for interns and project engineers, for example, who can grow with the firm and continue to add value. Further, even if a job opening isn’t there, “If you find talent in the marketplace, hire it,” said Engelbrecht. Several companies have experienced considerable growth through this somewhat counter-intuitive strategy of finding work to fit the people, he added. And with regard to firing, leaders shouldn’t be slow to pull the trigger in the middle of a job when they’re certain the respective employee isn’t suited to the firm. As soon as that person is let go, the leader and other employees tend to say they wished it had happened sooner, Engelbrecht noted. 4. Strategic Business Planning “If there is a silver bullet for your company, it probably is strategic planning,” said Engelbrecht, who noted that the institute’s customers who did so saw 150% volume growth and 220% profit growth roughly three years later. It’s the simple act of setting a target that puts construction companies on a path to success, noting that “most of us are capable of executing a plan.” The results will come as long as that vision is fully fleshed out and periodically revisited by a broad group of employees in quarterly meetings, for example. Contractors can also play to their strengths by generating action items from these meetings and treating each one like a construction project, Engelbrecht

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Women in Construction? Yes, There are Women in Construction. Even with a lot of focus recently on diversity in the workplace, construction is still a male-dominated industry. According to recent surveys, women make up less than 10% of the construction workforce. There is a higher percentage of women serving in Congress (currently 23.7%) and in the active duty military (14%). Women do in fact make up 47% of the total civilian workforce. So, as the construction industry looks for ways to hire and develop skilled labor, diversity has become more important than ever. There are several challenges to increasing diversity, specifically among women in construction that need to be addressed. These include unwelcome worksites, sexual harassment issues, flexibility and the perception by others that women on the team are not as capable for projects that require manual labor. It’s not the women; it’s the environment and the culture. So what can a construction company do to address these challenges? First, educate both the men and women in the company about diversity and company expectations regarding a safe work environment. Also, provide opportunities for networking and training. Finally, review your compensation structure to make sure that your company enforces a policy of equal pay for equal talent. There are several resources available to help increase diversity at your company and support the women there already. The National Association of Women in Construction (NAWIC), Professional Women in Construction (PWC), as well as other local organizations have tools, educational materials, conferences and other resources available. Construction companies, as well as other organizations, are finding diversity is the key to success. Now is a good time to start the conversation or you may be left behind.

suggested, with objectives, milestones, timelines, outlined responsibilities and more.

“You want to make sure you’re the guy that gets the last look and that’s in there helping develop a budget,” he said, and the secret ingredient here is likeability. People, plain and simple, “like to do business with people they like.” That’s also the recipe for lifetime customers, which are often a contractor’s bread and butter, because “every year you work off your business and then you have to start anew,” he said. Leaders should therefore diligently maintain these relationships that continue to add work to the pipeline, and never to take them for granted because somebody else is inevitably “knocking on that door.”

5. Effective Business Development Practices Pointing to the difficulties of a bid market versus a negotiated market is an easy scapegoat for contractors with lackluster business development practices, according to Engelbrecht. On the other hand, companies that exceed in this area can drive their market in the direction of negotiation instead of bidding.

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6. Diversified & Profitable Mix of Work The hotel construction pipeline hit an 8-year high in 2018 and while it’s a booming sector now, this level of activity can’t be sustained forever. This cyclical pattern extends to every type of construction, so contractors are naturally best off diversifying their portfolio of work. But, at the same time, profitability hinges on the ability to differentiate within the market by drilling down into niches. “A good part of the construction business is a commodity,” Engelbrecht said, and for projects like a college science center, for example, “anybody who’s competing for it can do it.” Run away from that commodity space and mix a high-profit niche with other wide-ranging capabilities, said Engelbrecht, because “the uglier the work, the more under the radar, the less known — the better it pays.” 7. Operational Strength Under the umbrella of operations, top construction companies tend to nail three areas, according to Engelbrecht: launching a project internally, reviewing jobs and finishing strong. Such contractors can plan for a job better than companies in other industries, he said, and involve the right people from the very start. “Monthly and quarterly reviews of submittals, change orders, critical path items and more, when done well, elevate the organization’s performance by keeping knowledge flowing freely within it,” Engelbrecht said. And finally, the contractors in this camp plan so well that a strong finish is inevitable. “They leave a good taste in the client’s mouth so that they’re invited back.” 8. Proper Capitalization The best companies tend to keep a “decent, conservative amount of capital” which allows them to jump on an opportunity when it arises, such as an acquisition or key hire, according to Engelbrecht. “You have to increase your overhead a little bit to take a chance on the future,” he said.

Companies shouldn’t be constantly operating like they’re strapped, but they do need to proceed with the caveat that an economic storm is brewing. Set aside enough capital to weather the downturn or softening of the construction market that is to come. 9. Data Leverage Data-smart companies almost can’t help but be profitable, Engelbrecht suggested. Inputting data into visually interactive dashboards can be a powerful tool for tracking overhead and determining how much is appropriate. “The worst thing you can do is outkick your coverage and get more work than you have the people to handle,” he said. “That’s where the big losses come from.” The better approach is to incrementally grow people first, he continued, noting that dashboards are particularly helpful in tracking the success of this measured strategy.

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Construction companies who go through a formal “go, no-go” evaluation process ahead of a project and loop in the “naysayers” who are quick to identify the risks are far less likely to get entrenched in a project that was destined for failure from the outset. That skeptic’s voice is a critical counterbalance to a strong economy, said Engelbrecht. “We start to think we’re invulnerable to problems.” This article was originally published on Construction Dive (www.constructiondive.com). Construction Dive is a daily news publication providing busy professionals with a bird’s-eye-view of their industry in 60 seconds.

People, plain and simple, “like to do business with people they like.”

10. Strong Risk Management Contractors are risk-takers by nature, and must be careful not to let this strength become their pitfall. Most job failures can be traced to a bad decision in taking the job on when the red flags were present, Engelbrecht explained.

Sign up: www.constructiondive.com/signup

CONSTRUCTION SERVICES GROUP

RubinBrown provides services to general contractors, specialty subcontractors and related companies in the construction industry. For more information, visit www.RubinBrown.com/Construction .

Ken Van Bree, CPA, CGMA Partner-In-Charge Construction Services 314.290.3429 ken.van.bree@rubinbrown.com

Chris Coleman, CPA, CCIFP Partner Construction Services 314.290.3263 chris.coleman@rubinbrown.com

Matt Beerbower, CPA Partner Construction Services 303.952.1252 matt.beerbower@rubinbrown.com

Mark Jansen, CPA, CGMA Partner Construction Services 314.290.3208 mark.jansen@rubinbrown.com

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Accounting & Business Professionals

ABACUS Recruiting , an affiliate of RubinBrown, can help. Our specialty includes both permanent and temporary placements in the following areas:

Tamara Tucker President 314.878.5522 tamara.tucker@abacusrecruiting.com

∙ Accounting/Financial Management

∙ Marketing

∙ Operations

∙ Bookkeeping

∙ Information Technology

∙ Administrative

Paul Iadevito Recruiting Manager 314.878.5522 paul.iadevito@abacusrecruiting.com

ABACUS Recruiting’s reputation for quality service stems from our industry knowledge, commitment to personalized service, confidentiality and dedication to maintaining the most ethical standards in the recruiting industry. Having successfully placed financial and business professionals in positions at Fortune 1000 companies, regional businesses and entrepreneurial firms, ABACUS Recruiting has become one of the most respected names in our industry. Whether you are a company in search of high caliber professionals or a candidate searching for a job change, ABACUS Recruiting is uniquely qualified to assist you.

Visit us at www.AbacusRecruiting.com

ABACUS RECRUITING IS AN AFFILIATE OF RUBINBROWN LLP

INDUSTRY UPDATE HEALTHCARE

Today’s Healthcare Challenges: Minimizing Costs, Increasing Quality, While Reeling with High Turnover by Tom Zetlmeisl, CPA, CFE, CFF, CGMA

T he healthcare industry in recent years has been challenged with minimizing healthcare costs, while also improving the quality of care patients receive. This is becoming a challenge considering the industry has seen an increase in employee turnover year-after-year since the conclusion of the financial downturn in 2008 and 2009. According to the Bureau of Labor Statistics, in 2010, the United States healthcare industry saw a total of 4 million separations between employee and employer. Since then, this number has increased steadily to a total 5.5 million separations as of the end of 2018.

But what is happening, and what is the industry attempting to do to right the ship? According to a recent study published by the Association of American Medical Colleges, the United States is projected to have a shortage of approximately 121,300 doctors by the year 2030. Some of the shortage can be attributed to the increase in the average American life expectancy resulting in a larger population to care for. But, the majority is a result of doctors leaving the medical field and young Americans not choosing the practice of medicine as a profession.

18 Today’s Healthcare Challenges: Minimizing Costs, Increasing Quality, While Reeling with High Turnover

Retention Woes Today, experienced physicians are beginning to leave the medical field earlier than expected or than what has been observed in the past. The reasons for leaving include burn out from a heavier workload, electronic health records (EHR) and early retirement options. Young Americans, primarily millennials, are choosing fields other than the healthcare industry for higher paying jobs, such as engineering. Main concerns are the rising costs of tuition across the United States, length of schooling and the lack of work-life balance once in the field. Nurses have seen an uptick in turnover over the past several years as well. Though not faced with exactly the same challenges as doctors, there is one similarity that is consistent – nurses are becoming burned out and stressed on the job with having to see more patients each shift. The recent increase in specialty and urgent care facilities has also increased the competition between healthcare facilities when it comes to recruiting efforts. As more healthcare facilities open up, there are more opportunities available for nurses to choose where they wish to work. Specialization of nursing degrees is further thinning out the talent pool as nurses are beginning to seek specialized degrees from colleges and universities across the U.S. These degrees make candidates more appealing to specialized healthcare facilities, which typically can offer better pay, more travel and a more flexible work schedule.

Recruiters within the industry are shifting the way they recruit to focus more on the needs and concerns of the candidate, rather than the goals of the organization.

Better Recruiting To combat the issues presented with the recruitment and retention of both physicians and nurses, healthcare providers are looking to improve and ramp up their recruiting efforts. Recruiters within the industry are shifting the way they recruit to focus more on the needs and concerns of the candidate, rather than the goals of the organization. To start, healthcare recruiters are beginning to offer more benefits. To help entice physicians to stay longer or nurses to not enter a specialized field, hospitals and physician offices are looking to start paying professionals more money, offer more benefits, such as vacation and traveling on the job and larger signing bonuses. Healthcare facilities are beginning to offer more tuition reimbursements, scholarships and offering to pay for school to help encourage younger Americans to join the healthcare workforce. New York University has supported this trend by offering free tuition for all current and future medical school students enrolled at the University.

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By growing the overall workforce, not only will the shortage of healthcare professionals begin to shrink, but healthcare facilities will be at the front of the line when it comes time for the individual to enter the workforce full-time. Finally, recruiting is becoming more electronic in today’s age. Instead of having paper applications or posting ads in a paper, job opportunities are posted all over recruiting websites. With just the click of a button, candidates can begin filling out applications online for a job they love. The healthcare industry’s challenges in recruiting and retaining the staff necessary to carry out the services needed are making it difficult to cut costs, while also improving the quality of patient care.

With recruiting comes more expenses, more elaborate employment packages and lost revenue from having vacant positions. Overall, it is affecting each healthcare provider’s bottom line. A reduced bottom line makes investment a challenge, which hinders growth. In order to right the ship, the healthcare industry will have to adapt its recruiting effort to build and retain the experienced and qualified staff it needs to meet patient demands.

HEALTHCARE SERVICES GROUP

RubinBrown’s Healthcare Services Group provides a broad array of services to a diverse group of clients in the healthcare industry including hospitals, physician practices, multi-site medical groups and not-for-profit health organizations. For more information, visit www.RubinBrown.com/Healthcare .

Tom Zetlmeisl, CPA, CFE, CFF, CGMA Partner-In-Charge Healthcare Services 314.290.3395 thomas.zetlmeisl@rubinbrown.com

Eric Westby, CPA, CGMA Partner & Vice Chair Healthcare Services 314.290.3339 eric.westby@rubinbrown.com

Kristin Bettorf, CPA Partner Healthcare Services 314.290.3416 kristin.bettorf@rubinbrown.com

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INDUSTRY UPDATE MANUFACTURING & DISTRIBUTION

Battling the Labor Shortage in the Manufacturing Industry by Brent Stevens, CPA, CGMA & Dan Besmer, CPA

I t comes as no surprise that the manufacturing industry is significantly impacted by the unsavory combination of increased consumer demand/growth potential and historically low unemployment rates. According to a recent study by the National Association of Manufacturers, the manufacturing industry represents approximately one in six private-sector jobs in the United States. The negative impact on the industry has been magnified by the increased demand for skilled labor and STEM talent,

as well as the looming retirement of the babyboomer generation in the work place. According to a Society of Human Resources Management report, nearly 27% of manufacturing workers are expected to retire sometime in the next decade. There has been and will continue to be a large volume of economic data published on how and why labor shortages are occurring in the manufacturing industry.

Most, if not all manufacturers have developed a formal or informal strategy around the retention of their existing workforce.

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don’t apply, but consider periodic catered lunches or investing in improvements to your break/lunch room, etc. While most companies may have practices in place that are similar to the strategies noted, many companies may not have developed a multi-dimensional strategy to combat the current number of generations that are actively in the workplace. Each business should pay careful attention to the generational composition of its workplace and customize the strategies to its audience. A recent article in the Harvard Business Review by Rebecca Knight provides some advice on how a company could approach multiple generations in the workplace: “Don’t dwell on differences. There seems to be a tendency to focus more on what is different about each generation than on what similarities might exist.” “Avoid the potential to accept as true the stereotypes about various generations; be alert to language that perpetuates stereotypes: `All (insert generation) are …,’ or `my generation is ….’” “Build collaborative relationships. We understand and appreciate others more when we have the opportunity to get to know them.” “Creating opportunities for employees of different generations to interact in both work and non-work-related settings “Study your employees. Understand the demographics of your workplace as well as employee communication preferences. An annual survey can be used to help identify both differences and similarities between various employee groups.” can help build relationships and minimize misunderstandings.”

Each business should pay careful attention to the generational composition of its workplace and customize the strategies to its audience.

Listed below are a few action items and strategies that are frequently used to promote employee retention: ∙ Be transparent with your team and constantly make sure they know that you want them to stay ∙ Develop an advisory board, promoting team participation in a company-wide strategic initiative ∙ Create incentives for retirement-age workers to continue working (reduced/ flexible schedule, a mentoring program to pair retirement age workers with those that have less experience) ∙ Ensure your employee performance management process has a focus on each individual’s personal development ∙ Invest in external leadership, training and development resources for your employees ∙ Expand usage of employee rewards programs that captures everyone and not just the company’s top performers ∙ Think outside the box about working remotely – what can be done periodically from home? ∙ Add job perks that are feasible in the manufacturing industry. Strategies like bring your pet to work or casual dress could be implemented. Sleeping pods that are prevalent at tech companies generally ∙ Use training and education programs to increase employee engagement

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“Create opportunities for cross- generational mentoring. This can work both ways; don’t automatically assume that younger generations will be mentored by older generations. All age groups have opportunities to learn from each other.” “Consider life paths. Understand where your employees are at in their life paths in terms of responsibilities and interests they may have outside the workplace.”

“But don’t make assumptions. It’s important to remember that employees, regardless of generation, share both commonalities and differences.”

MANUFACTURING & DISTRIBUTION SERVICES GROUP

RubinBrown’s Manufacturing & Distribution Services Group is nationally recognized for superior assurance, tax and consulting expertise coupled with solid international business knowledge, exceptional inventory management and process improvement services. For more information, visit www.RubinBrown.com/M-and-D

Jim Mather, CPA, CGMA Chair & Partner Manufacturing & Distribution Services 314.290.3470 jim.mather@rubinbrown.com

Kaleb Lilly, CPA Partner Manufacturing & Distribution Services 816.859.7917 kaleb.lilly@rubinbrown.com

Brent Stevens, CPA, CGMA Partner-In-Charge Manufacturing & Distribution Services 314.290.3428 brent.stevens@rubinbrown.com

Henry Rzonca, CPA Partner Manufacturing & Distribution Services 314.290.3350 henry.rzonca@rubinbrown.com

Rick Feldt, CPA, CGMA Partner Manufacturing & Distribution Services 314.290.3220 rick.feldt@rubinbrown.com Mike Lewis, CPA Partner Manufacturing & Distribution Services 314.290.3391 mike.lewis@rubinbrown.com

Russ White, CPA Partner Manufacturing & Distribution Services 303.952.1247 russ.white@rubinbrown.com Dan Besmer, CPA Manager Manufacturing & Distribution Services 314.678.3561 dan.besmer@rubinbrown.com

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INDUSTRY UPDATE NOT-FOR-PROFIT

Many Not-For-Profits are Struggling to Retain Talent by Amy Altholz, CPA, CGMA P er the John Hopkins Center for Civil Society Studies’ 2019 Nonprofit Employment Report , in 2016 the United

The Nonprofit Finance Fund, State of the Nonprofit Sector Survey 2018 found that 59% of respondents were challenged by employing enough staff. This is magnified by another challenge many not-for-profit organizations face — limited resources to serve an ever increasing demand, resulting in many organizations unable to offer the competitive salaries and benefits of the for- profit sector. The obvious answer to this employment challenge is to pay employees more. However, in most instances, this is not feasible for organizations. Instead, organizations must think outside of the box on ways to attract and retain this talent.

States nonprofit sector was the third largest workforce of any U.S. industry, employing more than 12.3 million paid workers (or approximately 10.2% of the total U.S. private workforce). There’s no doubt that it takes a lot of dedicated, committed and passionate employees to improve our communities. However, with a competitive job market fueled by unemployment at its lowest level in nearly 50 years, finding and retaining these types of employees is a challenge for many not-for-profit organizations.

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Multiple Hats When looking for unique and creative solutions to talent retention, an area not as frequently explored is evaluating the organization’s infrastructure to see if there are more collaborative and efficient uses of the organization’s staff and resources. Having to wear multiple hats is an almost universal statement for employees at not-for- profit organizations. However, from an employee’s perspective that can be a difficult and sometimes frustrating state. Employees may be asked to assume responsibilities for which they are not qualified or do not enjoy. To address this potential deterrent to employee recruitment and retention, an “out of the box” idea is moving away from the traditional organizational model where all functions are performed in-house to utilizing shared services for various functions. If an organization evaluates its internal infrastructure, the analysis will likely show that any resource that does not uniquely fulfill the organization’s mission has the potential to be shared. Examples include information technology, purchasing, payroll, human resources, marketing, accounting, etc. Intuitively, by reducing an organization’s staff, this movement may seem to have an opposite objective from the goal of talent recruitment and retention. But, in actuality, this movement is not about reducing staff size but rather utilizing the organization’s limited staff and resources to their highest potential. Shared Services Shared services can offer the opportunity for both skilled technical and program staff to focus on their core competencies and unique expertise. Eliminating responsibilities employees may not feel qualified for or energized by increases their job satisfaction and hopefully their tenure with the organization. In addition to being beneficial for employees, this movement can be beneficial to the organization itself. Not only do shared

services increase efficiencies and generate overall cost savings for the organization, having staff focused on their areas of expertise achieves higher quality service and minimizes the organization’s overall risk. Leadership can sleep easier knowing all administrative and programmatic responsibilities are now being performed by individuals who possess the necessary skills and qualifications, whether as an employee of the organization or as an outsourced resource. Shared services also protect the organization in case they are not able to retain all employees, providing a built- in back up to avoid loss of institutional knowledge and gaps in service delivery. Utilizing an organization’s limited and most important resource, its people, to their highest potential can lead to organizational stability, sustainability and future growth. Firefly Autism, an organization in Denver working to transform the lives of children with autism, made the decision in January 2019 to outsource its accounting, financial and advisory services to RubinBrown. Leadership says that “in the 16-year history of this agency, this was, by far, one of the most beneficial decisions we have made.” “RubinBrown has taken us from a non-profit previously making poor decisions based off inaccurate financials, to a non-profit able to purchase a new building and increase staff salaries. RubinBrown worked with us to examine our current processes, establish Firefly Autism was able to supplement its internal talent with the specialized expertise they needed, while saving money for their organization as well as increasing employee morale. To successfully achieve its mission, a not-for-profit organization often has to make difficult decisions. Utilization of resources and prioritization of time and focus are at the forefront. new systems and enhance our organizational productivity.”

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