Industrial diversity in Utah’s economy

A diverse (or balanced) economy is generally considered a stable economy. A loose rationalization would center upon an economy that is not prone to bouts of boom or bust, an economy that can withstand misfortunes in particular industries as others thrive, an economy that largely rides an even keel.

The idea is to avoid over-dependence, or specialization, within one or two industries. To borrow a simple idiom as an illustration, “don’t put all your eggs in one basket.” The lesson is if you drop your basket you might break all your eggs. However, if you were to spread your eggs across several baskets, then if you drop a basket you still have eggs available in the other baskets. The same concept works when evaluating an economy. If too much employment and economic dependence is placed upon one industry and that industry comes on hard times, the entire economic system correspondingly suffers.

A balanced economy would have a diverse share of employment spread across various industries, and the industries would not be so tied together that they are overly dependent upon a core industry. If one industry were to falter, the others would help keep the overall economy afloat.

To read more, see the latest issue of Utah Insights.

Lehi Roller Mills for sale: Court CRO determines assets must go

A historical community landmark-- Lehi Roller Mills SEmD is about to change ownership.

Having started the bankruptcy process in December 2012, Lehi Roller Mills owner Sherwin Robinson had said he hoped to keep the business intact by filing a Chapter 11.

Instead, the U.S. Bankruptcy Court appointed a Chief Restructuring Officer in March, Mark Hashimoto, CPA for Piercy, Bowler, Taylor & Kern.

To date, KEB Enterprises, a holding company, has offered $4.4 million for nearly all of the Lehi Roller Mills assets. If there are higher or better offers received by Aug. 13, then an auction will take place between the competing bidders on Aug. 15.

"The amount of debt we had was pretty insurmountable. The total debt was in excess of $10 million," Hashimoto said. Daily Herald

Robert Half Survey reveals retention is Executives' main staffing concern

As difficult as it has become to locate top performers, keeping them on board is proving to be an even greater worry for employers, a recent Robert Half survey shows. Nearly four in 10 (38 percent) chief financial officers (CFOs) interviewed said retaining valuable employees is their biggest staffing concern for the next 12 months. Twenty-seven percent of respondents said their top focus will be maintaining employee productivity.

The survey was developed by Robert Half, the world's first and largest specialized staffing firm, and conducted by an independent research firm. It is based on interviews with more than 2,100 CFOs from a stratified random sample of companies in more than 20 of the largest U.S. markets.

CFOs were asked, "Which one of the following is your greatest staffing concern in the next 12 months?" Their responses:

To read more including five tips for retaining key employees, click here.

Georgia chicken chain Zaxby’s to open 18 Utah locations

Zaxby’s, a Georgia-based restaurant chain that features a fare of fried chicken foods, plans to open 18 Utah locations in the next five years under the management of a Nevada-based group.

Zaxby’s, which has more than 575 restaurants in 13 mostly southern states, is expanding its brand westward.

It will do so in Utah in partnership with MJM 5G, which says it has operated 30 Five Guys Burgers and Fries franchises in California and Nevada under co-founders Mike Cummings and brothers Jeff and Ryan Howes.

The majority of Zaxby’s restaurants will be in the Salt Lake Valley. Salt Lake Tribune

To Advance Professionally You Must Develop Your “Soft Skills”

We are living in an era of constant change. Because businesses are becoming less dictatorial and more social, the understanding and value of soft skills to an organization are growing daily.

“Soft skills” is a term relating to a collection of personal, positive attributes and competencies that enhance your relationships, job performance and value to the market.

Soft skills include your ability to listen well, communicate effectively, be positive, handle conflict, accept responsibility, show respect, build trust, work well with others, manage time effectively, accept criticism, work under pressure, be likable and demonstrate good manners.

“Hard skills” are specific, trainable abilities necessary to carry out the professional or technical requirements of a job or occupation.

Hard skills would include knowledge, machine operation, computer procedures, safety standards, financial systems, technical analysis, and sales administration. Unlike soft skills, hard skills are typically easy to quantify, and measure.

More and more corporations around the world recognize that, in order to gain a competitive advantage, they need to make sure their people know how to handle themselves at work and how to relate with their customers and peers.

The great thing about building your soft skills is that you can acquire them on your own. Regardless of your background, gender or education, developing your soft skills will make you stand out from the crowd in whatever you choose to do.

To advance professionally, you must put an emphasis on developing your soft skills.

Read more of this editorial from Brad Larsen at the Standard Examiner

As Utah’s star rises after 2 recessions, lessons linger

With few exceptions, the pattern of jobs distributed across Utah is largely unchanged after two recessions since the turn of the new century.

That underscores not only the unusual diversity of the state’s economy, but it increases the likelihood employment in the state will grow faster than in the U.S. for some time.

See the Salt Lake Tribune analysis of employment data here.

Health insurance tax and small‐business owners

Many small-business owners worry that a new tax on insurance providers in the health-care law will mean higher premiums for them, undermining the law’s capacity to lower their health-care costs.

Starting next year, the federal government will charge a new fee on health insurance firms based on the plans they sell to individuals and companies, known as the fully insured market. Meanwhile, the provision exempts health-insurance plans that are set up and operated by businesses themselves (the self-insured market).

The Department of Health and Human Services reports that among private businesses that offer health insurance, three of every four firms with between 100 and 500 employees purchase coverage in the fully insured market. The number jumped to 87 percent for firms with fewer than 100 workers.

The concerns from small-business owners and insurance companies have prompted lawmakers to introduce bills that would repeal the health insurance tax.

Business lobbying groups from the manufacturing, construction and farming sectors have supported those efforts, citing similar concerns about the likely impact on their health insurance premiums. Washington Post

ATK to acquire ammunition maker Caliber Co.

ATK said it has entered into an agreement to acquire Caliber Co., the parent company of Savage Sports Corp., one of the world’s largest manufacturers of hunting rifles and shotguns.

The purchase would expand ATK’s portfolio of munitions-related operations of commercial and security ammunition. The transaction is subject to regulatory approvals and conditions, with closing anticipated by the end of June.

ATK is an aerospace, defense, and commercial products company with approximately 15,000  employees and operations in 21 states, including Utah, and internationally. Salt Lake Tribune

Targeted Employment Areas as Defined by the EB‐5 Investor Program

The Utah Department of Workforce Services is the state agency responsible for determining areas within Utah that qualify as USCIS “Targeted Employment Areas” relating to the USCIS EB-5 Immigrant Investor Program, including the geographic or political subdivisions of non-rural areas within the state that may qualify as areas of high unemployment. See the updated information here.

Small Businesses Support Increasing Minimum Wage

Small business owners nationwide are recovering from the Great Recession and slowly fortifying their businesses. It is the jobs these small businesses provide and the consumers they serve that keeps our recovery moving. Entrepreneurs nationwide recognize we need to foster this trend. According to a national scientific opinion poll conducted for Small Business Majority, small business owners widely agree our federal minimum wage should increase so that small business employees and consumers have more money in their pockets.

Main findings include that surprisingly, more than two-thirds of small business owners support increasing the federal minimum wage, and adjusting it annually to reflect the cost of living, and believe that it will boost consumer demand, helping small businesses to grow and hire. The vast majority of respondents claim to pay all of their employees more than minimum wage. Small Business Majority

Read the entire report here.

Utah women outpaced U.S. average in starting businesses

When it comes to starting businesses, women in Utah have shined in the past decade and a half.

The state has an estimated 72,800 women-owned firms, employing 58,300 workers, and those companies are expected to generate $13 billion in sales this year.

More telling, Utah is ranked seventh nationally in the number of firms (73.4 percent) added in the past 16 years and fifth in growth of company revenue (156.7 percent), according to the State of Women-Owned Businesses Report, commissioned by American Express OPEN.

By comparison, the number of women-owned businesses has increased 59 percent nationally since 1997, according to the analysis of data from the U.S. Census Bureau. Salt Lake Tribune

Utah stock index lifted by market surge

A stock market surge that saw the Dow Jones industrial average hit an all-time high during the first quarter of 2013 also greatly benefited the shares of Utah’s publicly held companies.

The Salt Lake Tribune/Bloomberg Index, which tracks the share-price performance of Utah’s largest publicly held companies, rose 12 percent during the first quarter of this year, hitting a record of 395.90 on March 26. Its performance beat the 11 percent gain of the Dow and the 10 percent climb by Standard & Poor’s 500.

Nationally, investors seemed to be particularly focused on buying shares of companies with high dividend yields, such as those found in the health care, consumer staples and utility sectors, Sterling Jenson, regional managing director for Wells Capital Management in Salt Lake City said.

And that seemed to play out among Utah companies as well.

Utah’s top performer during the first quarter was USANA, a multi-level marketing company that sells nutritional and personal health care products. Its shares were up 47 percent. Salt Lake Tribune

Facts & Figures Handbook: How Does Utah Compare?

How do taxes in your state compare nationally? This convenient pocket-size booklet (below) compares the 50 states on many different measures of taxing and spending, including individual and corporate income tax rates, business tax climates, excise taxes, tax burdens and state spending.

Northeastern states appear to be the highest taxed, whereas those in the South are taxed the least.

Here in Utah, every man, woman and child pay $3,181 each year, when the amount of taxes is divided by the population, ranking us 36th in the nation.

Facts and Figures - How Does Your State Compare? 2013 Edition

Tax Foundation

What every employee with a family should look for in a company

More than three-fourths of families had at least one person employed in 2011, according to the Bureau of Labor Statistics. For these households, what makes a company family friendly?

Kaylie Astin, the founder of FamilyFriendlyWork.org, said that depends on personal preference and priority, but she gave pointers on what to look for to maintain work-life balance.

Flexibility in the workplace allows a parent to be there for children when they need it. Astin said one way to look for this is by seeing how many women work at a particular company.

The company’s willingness to promote women or part-time workers, allowing a parental leave program, and having paid sick leave and elder care are options that help families balance.

While most companies don’t offer on-site childcare, some do offer referral programs that prescreen child care centers for employees. However, it's best not to ask about these benefits found in family friendly companies before being given an offer.


Research before a job interview can be done online. A number of companies, including those on this list by Glassdoor, are rated the best places to work. For 2013, Glassdoor ranked Facebook, McKinsey & Company, Riverbed Technology, Bain & Company and M.D. Anderson Cancer Center the top five.

Astin said to check previous years of ratings because companies don’t apply every year for these kinds of lists. She also recommends talking to other employees once an offer has been made. Ask them questions like, “Does your manager trust you? Does he or she micromanage your work?”

Legally, companies aren’t required to offer employees much for work-life balance. Even the Family and Medical Leave Act, which allows employees 12 workweeks of leave for a birth; placement of adoption or foster care; or caring for a spouse, child or parent with serious health conditions, has exceptions.

Despite the lack of legal obligations, employers who like and want to hire applicants are willing to negotiate more than prospective employees tend to think, Astin said. She said that even if a policy is in the handbook, an employee can still ask the employer to negotiate it. Deseret News

Businesses trying to limit budget-cut damage

Many small businesses that have contracts with the government are looking for new business elsewhere to blunt the impact of $85 billion in federal budget cuts slated to begin March 1.

Researchers at George Mason University in Northern Virginia, the home of many government contractors, released a forecast of the possible nationwide impact of the cuts and warned that more than 157,000 jobs could be lost at small business contractors.

Many contractors already feel the pain. The cuts are the result of a bill that Congress passed in August 2011, mandating the cuts if lawmakers couldn’t agree to reduce the budget. Federal agencies already have cut back their spending in anticipation of the cuts.

For defense contractors, the impending cuts are particularly troubling because they’re coming on top of an expected drop in defense spending as the U.S. withdraws troops from Afghanistan. Companies with Pentagon contracts began feeling the pinch of impending budget cuts late last year. The Department of Defense cut its spending more than 22 percent during the fourth quarter. While part of that drop was due to troop withdrawals, Small Business Administration head Karen Mills told reporters last week that in December, contracts were put on hold because of the expected budget cuts.

Budget cuts are expected to have a huge impact on small business, with 956,000 jobs lost at companies across the country, according to the study last year by George Mason University and the economic forecasting firm Chmura Economics and Analytics. That includes contractors and subcontractors, their suppliers and companies like retailers that cater to their employees. The study did not estimate how much revenue small businesses might lose due to the cuts.

It’s not known how many small businesses are federal contractors. The SBA roughly estimates there are more than 130,000. The George Mason researchers forecast that more than 81,000 jobs could be lost at small businesses that contract with the Pentagon, and another 76,000 could be lost at companies with contracts at other federal agencies.

Prospecting for business with private companies can potentially replace revenue lost from the government, but there are challenges. Salt Lake Tribune

Office Stress: His vs. Hers

The Wall Street Journal recently reported on survey results that show one-third of employees experience chronic work-related stress.

"Too much work, too little money and not enough opportunity for growth are stressing us out on the job, according to a new survey from the American Psychological Association.

"One-third of employees experience chronic stress related to work, the survey found. Women report higher levels of work stress than men, as well as a gnawing sense that they are under-appreciated and underpaid.

"Fifty-four percent of the 1,501 employed adults surveyed say they feel they are paid too little for their contributions, and 61% said their jobs don't offer adequate opportunities to advance. Only half of the adults polled said they feel valued at work.

"Women feel especially stuck and tense, the association survey indicates. Thirty-two percent of women said their employers don't provide sufficient opportunities for internal advancement, compared with 30% of men. Women are more likely to feel tense during a typical workday, reporting more often that their employer doesn't appreciate what they do.

"The annual survey, conducted in January and released Tuesday, found the proportion of chronically stressed individuals has shrunk to 35% this year, compared with 41% in 2012, suggesting an improving economy and job market are making some people's work lives easier. But smaller percentages reported satisfaction with their jobs and work-life balance compared with 2012 - two areas that had been on the upswing." Deseret News

U.S. maternity leave trails other countries, and going away may not mean 'out of the office'

With fewer than 11 percent of working parents in the private industry receiving paid leave when a child is born, America lags behind every other industrial country — and most others, too. And when new moms and dads take leave, they may not be able to leave work at the office. Technology has extended work's reach into homes and nurseries.

The New York Times notes that "when it comes to paid parental leave, the United States is among the least generous in the world, ranking down with the handful of countries that don't offer any paid leave at all, among them Liberia, Suriname and Papua New Guinea."

That doesn't mean that some parents can't take leave at the birth of a child. It has been 20 years since the Family and Medical Leave Act became law. Under its provisions, large employers and public agencies must provide up to 12 weeks of unpaid leave, as well as continue health benefits, for birth or adoption of a child, to care for a spouse, parent or child who is ill or for an individual's own health issues. The provision applies to companies with 50 or more employees and it extends to employees who worked 1,250 or more hours within the previous 12 months.

Considering all the people that don't fit within those parameters and adding in the people who can't afford to take unpaid leave, and close to 40 percent of workers "fall through the cracks," wrote the Times' Tara Siegel Bernard.

The Bureau of Labor Statistics estimates 11 percent of private industry workers have access to paid family leave. The Institute for Women's Policy Research says those most likely to have paid leave are those with higher salaries in managerial or professional jobs at large companies, the newspaper said.
States are looking at other aspects of parental leave having nothing to do with pay, but rather focusing on time off. As an article in The Washington Post emphasized, being on leave doesn't always mean leaving your work behind. Deseret News

Senate clears path for restaurant chains to get liquor licenses

Restaurants that serve alcohol would not have to wait for a state liquor license to become available in order to open more locations under a bill the Senate approved Tuesday.

SB167 would create a "master" license that a restaurant chain could obtain to cover all of its outlets rather than having to get permits for each one.

The measure would remove the uncertainty for big chains as to whether liquor licenses would be available under Utah's quota system, said bill sponsor Sen. John Valentine, R-Orem. It also would provide for more restaurants to serve alcohol.

A master full-service restaurant license would cost $1,500 plus a separate $2,200 fee for each location, making it more expensive than buying single licenses. A full-service restaurant may offer liquor, wine and beer. A master license would not be available to bars and social clubs.

The bill also calls for increased enforcement of state liquor laws. It includes a formula for more enforcement officers based on the number of restaurant locations, not licenses issued. Deseret News

Major banks a key link in payday loans

Major banks have quickly become behind-the-scenes allies of a raft of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.

The Utah Legislature has debated payday loans but state law doesn’t forbid them.

While the banks, which include giants like JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.

The banking industry says it is simply serving customers who have authorized the lenders to withdraw money from their accounts. "The industry is not in a position to monitor customer accounts to see where their payments are going," said Virginia O’Neill, senior counsel with the American Bankers Association.

But state and federal officials are taking aim at the banks’ role at a time when authorities are increasing their efforts to clamp down on payday lending and its practice of providing quick money to borrowers who need cash. The Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau are examining banks’ roles in the online loans, according to several people with direct knowledge of the matter. Benjamin M. Lawsky, who heads New York state’s Department of Financial Services, is investigating how banks enable the online lenders to skirt New York law and make loans to residents of the state, where interest rates are capped at 25 percent.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent of payday loan borrowers say the loans caused them to overdraw their accounts, according to a report this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations limiting fees on debit and credit cards have cost banks billions of dollars. Salt Lake Tribune

A Lesson on the Tax Code

The New York Times points out something rather interesting about an otherwise mundane business story. Wal-Mart's fourth-quarter earnings report tells the tale of how changes in the tax code has both helped corporations and hurt them.

As the Times puts it, during the fourth quarter of last year, "the tax code gave and the tax code took away."

The paper explains:

"The company reported higher-than-expected fourth-quarter earnings on Thursday of $1.67 a share, up from $1.51 a share a year ago, largely because of tax credits that brought its corporate tax rate lower than usual.

"But the recent payroll-tax increase and an Internal Revenue Service delay in processing tax returns hit consumers, and that affected the holiday period and sales in February. For the fiscal fourth quarter, which ended Jan. 31, sales at stores open at least a year rose 1 percent at Wal-Mart stores in the United States; analysts had expected a 1.7 percent increase."

The earnings report today adds a bit of context to the internal emails published by Bloomberg last week.

In them company executives worried about early February sales which Jerry Murray, Wal-Mart's vice president of finance and logistics, said were "a total disaster."

In another email Cameron Geiger, senior vice president of Wal-Mart U.S. Replenishment, wonders, "Where are all the customers? And where's their money?"

The official word from the earnings report, this morning, was less dire.

"Customers know about it and are adjusting," he said. "We don't have a clear vision of how they'll continue to behave throughout the year."

According to CNN Money, Wal-Mart U.S. CEO Bill Simon told investors that the company was well aware that that payroll-tax increase was affecting its customers. NPR