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HUMAN RESOURCES

Network: February 1993

Network question and answers: Reader-to-reader advice on a variety of topics.
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Foreign Intrigue
My agency contracts professional health-care services to hospitals. Competing agencies employ physical therapists from foreign countries. How can we get involved in such overseas recruiting?

Mary Hill

President

O'Hill Quality Health Care

Chicago

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Rick Surpin, CEO of Cooperative Home Care Associates, in the Bronx, N.Y., says, "A few large hospitals and well-connected agencies may pluck certified nurses and physical therapists from overseas but not without a lot of aggravation and expensive lawyers. You'd have to find suitable candidates, screen them, deal with extensive government red tape, and have them recertified Stateside, anyway."

Surpin suggests you recruit foreign-born workers already living in the States. "Our immigrant populations are underserved as it is. Recent immigrants are ready, willing, and able -- meaning they're already certified and have the necessary work visas," says Peggy Powell, Cooperative Home Care's director of training.

Start at the local immigration office. Databases there list workers with the necessary documentation who may already be enrolled in English courses or job-training programs. Also try the Illinois Department of Employment and Training (312-744-4078).

Social-services agencies also can provide names, funding, training help, and referrals. Call the national headquarters of Lutheran Immigration and Refugee Services (212-532-6350), National Migration and Relief Services (202-541-3220), and the U.S. Catholic Conference (212-614-1250). Locally, try Travelers' and Immigration Aid of Chicago (312-435-4500). Most provide screening, on-the-job training, orientation, and follow-up. Contact community social centers, too.

You'll have to recertify newly immigrated workers, and that costs money. Private-industry councils in major cities fund special training, but Surpin doesn't know how well your business plan will be received if you maintain a bias for overseas workers. Consult with the National Association of Private Industry Councils (202-289-2950).

The National Association for Health Care Recruitment, in Akron (216-867-3088), offers seminars on health-care-recruitment issues. Become a member for $60 and receive the monthly newsletter, recruiting handbooks, and annual.

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Mentor Match
My boss is brilliant at systems integration, but he's not as brilliant at marketing. He needs a mentor but believes technical associations are filled with inept peers out to steal his ideas. Where else can we find a mentor in Washington, D.C.?

Name Withheld

"Technical entrepreneurs are detail oriented; marketers are people oriented," says Denise Hudson, CEO of Transference, a Reston, Va., specialist in positioning high-tech products. "To get beyond a certain level of success, you must bridge that gap."

Several services match mentors with companies like yours. The Dingman Center for Entrepreneurship's mentor program (301-405-2144) pairs tech-based companies (in Maryland, Virginia, and D.C.) with mentors, each of whom has had at least 15 years' experience as a CEO, marketing maven, lawyer, or accountant. At a free initial meeting, parties size one another up. "It all boils down to personality," Hudson says. Once a match is made, the fee to the center is $35 an hour.

George Mason University's small-business-development center (703-993-2130) offers CEOs free one-on-one advice from marketing professionals from local high-tech companies. Or you can buy more extensive help from the same professionals or from staff consultants; $2,500 buys 50 hours over six months. The school's incubator program (703-478-7250) links high-tech CEOs with volunteer higher-ups from its Century Club, a pool of 100 multinationals (including AT&T and IBM). SBDCs at Howard University (202-806-1550) and Montgomery College also offer free advice and networking for techies.

Dave Blohm, the CEO of MathSoft, a Cambridge, Mass., software company, and also the cofounder of SoftEN, a Boston networking group, urges you not to dismiss professional associations. You need advice from people who understand the special challenges of marketing innovative technology. Look for a good mix of CEOs, marketers, and lawyers. (Also see Josh Hyatt's "Words from the Wise," June 1991, [Article link].) If your boss can't escape his paranoia, look for groups with members from noncompeting high-tech industries.

Consider joining the Washington, D.C., chapter of the Technology Executive Roundtable, sponsored nationally by Digital Equipment. It meets monthly. Annual membership is $400. To learn more, call your local sponsor, Beers & Cutler, at 202-331-0300.

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Greener Acres
I'd like to start a business that requires 10 to 15 acres of land. To help fund the business, I'd like to sell my house and buy a cheaper one. Normally that would result in a capital gain and the associated tax. Can I avoid that tax if I roll the capital gain into the purchase of land?

Name Withheld

* * *

The short answer is no. If you sell a primary residence, the only way to avoid paying a capital-gains tax is to purchase a more expensive primary residence (unless you're older than 55, in which case you may take a onetime credit of up to $125,000).

Now let's get creative. If you set up your business as a sole proprietorship, the law makes no distinction between your personal finances and your business's. Could you avoid a capital gain if you sold your house, bought a more expensive piece of property -- a primary house on 10 to 15 acres -- and set up your business on that land? Price Waterhouse tax manager Joe Gattone says that should work, but he "would put a couple of tax years in between buying the house and setting up the business."

A home-equity loan is less creative but more practical. Let's say your home is worth $200,000, and you've paid all but $20,000 on it. A bank would probably make a loan against 80% of your $180,000 in home equity. That gets you $144,000. You can deduct the use of up to $100,000 of that from your taxes for any purpose. And the rest, Gattone says, you could deduct by tracing it to business purposes. Interest tracing determines how loan proceeds are used. To simplify this, Dave Morgan, also of Price, recommends opening a separate account to receive your loan proceeds. You can find more tax arcana for sole proprietors in the Price Waterhouse Tax Adviser (Pocket Books, 800-223-2336, 1992, $5.99).

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Family Rivalry
I work for a family business, with my mother and sister as partners. We each run a department and from the beginning have received equal bonuses based on company goals. Now we'd like to tie bonuses to each department's productivity. How can we structure our plan without overlooking administrative departments such as accounting?

Troy Nunez

Marketing Director

Travel to Go

San Diego

* * *

"It's always more difficult to reward performance in administrative departments because they have a less direct impact on the bottom line," says Stephanie Wilson, a senior partner at the International Human Resource Group, in Stamford, Conn. "For that reason, administration gets pooh-poohed. But if it didn't get the bills out, that could wreak havoc."

Reward accounting for the timeliness of its billing, its accuracy, and its efforts to streamline procedures. How many bad debts are you carrying? Are you managing cash flow effectively? Reward your MIS department for the quality and timeliness of its reports and how they are used.

To set goals, Wilson says, you have to decide what's important, where it stands now, and where you want it to be. That means measurement, and, she insists, everything can be measured. Then set benchmarks. The trick here is to make your goals ambitious but not impossible. And remember, you don't have to accomplish your goals in a year. You can do so in stages.

As you set up departmental goals, you probably shouldn't eliminate companywide goals. Rather, strike a balance. "Establish ground rules based on the priorities of the business," says Sara Hamilton of the Family Office Exchange, an Oak Park, Ill., consulting firm for family-run businesses. In the exchange's eight-person office, employees work first toward meeting a team goal: covering net operating expenses. Once that's met, profits are pooled and split at year's end, based on individual performance. That way, the entire team has to hit the numbers before any individual earns a bonus. She recommends the Compensation Handbook, by Milton Rock (McGraw-Hill, 800-822-8138, 1991, $89.95) as a guide.

Jon Wehrenberg, CEO of Jamestown Advanced Products, in Jamestown, N.Y. (see "How My Company Learned to Run Itself," January 1991, [Article link]), also recommends a general guide, Compensation and Motivation, by Thomas J. McCoy (AMACOM, 800-538-4761, 1992, $59.95), but cautions that no book will answer all your questions. Since every company is different, ask companies that are like yours how they structure their bonuses.

If the bonus issue becomes too complicated, you could drop it altogether. Property manager Thomas Tochterman of Tochterman Management Group, in Bellevue, Wash., pays himself and his five family members equal salaries, leaving the bonuses to the four other employees. "Sometimes one family member feels he or she is doing more than the rest," he admits, "but we get through it." The Tochtermans have agreed that bankrolling profits for retirement and business growth is more important than bonus payoffs. Tochterman recommends Keeping the Family Business Healthy, by John L. Ward (Jossey-Bass, 415-433-1767, 1987, $29.95), which discusses compensation issues -- specifically, how to evaluate the pluses and minuses of paying family members in creative ways. n

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Reported by Michael P. Cronin, Karen E. Carney, and Phaedra Hise.




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