There is no question that the past eighteen months have been very challenging on a wide range of levels. For manufacturers, it has been particularly difficult to maintain cohesive and reliable operations while also complying with mandates for social distancing, employee testing, and other aspects of the response to the epidemic we have all experienced and will continue to experience for the foreseeable future. Here at Tax Credit Advisors LLC, we have learned a few things that we hope you might find useful, and we would like to share those hard-won lessons with you. There are basically three of them:
1) Flexibility is key
In our core business we provide mainly on-site consulting and analysis services for manufacturing companies. In providing our services, we rely on physical observation of factory operations while they are in process, and in consultation with senior technical staff as well as line-level technicians as they strive to achieve the required level of productivity and quality needed in order to satisfy business objectives for any given product or process. Since early 2020, we have relied on remote communications to serve as a surrogate for in-person observations. This is by no means ideal, but we have found that portable devices such as tablets and cameras have helped enormously in the effort to gather and document the needed information to support claims for government funding.
2) Trust but verify
Flexible organizations are built on trust. This means that management trusts the employees to produce even if they are not on site, but also that employees will trust that management will support them in their efforts. The focus must be on productivity, rather than in the number of hours a task requires. This is particularly true for tasks requiring some degree of creativity, but even extends to physical or clerical work. Would you rather have an employee who can complete forty files in an eight hour day at the office, or one who can complete fifty files in only six hours working remotely? Realistic metrics are needed to measure the activities that truly add value to the bottom line — not the number of hours someone spends on site at your facility. The value of the work is key — not the volume of work.
3) Breathable organizations
One of the reasons remote work was not very widely supported in the past is rooted in the old “an hour of work for an hour of pay” model of management. In my view, this was never very effective and encouraged employees to look busy rather than to actually focus on measurable results. Measurement should be based on productivity, and not on attendance. As long as employee compensation is fairly based on results and not on time spent in the office, both the employees and the enterprise can benefit.
That said, some jobs require attendance, like phone coverage, logistics support and personal service provision. Those jobs will always have to be measured in hours spent. However, to the extent you can give the employees “breathing room”, your employees and your bottom line are likely to benefit.
Even in these challenging times, efforts to create new and improved products, processes and equipment continue. There are particular opportunities to secure government funding with regards to manufacturing process improvements. We here at Tax Credit Advisors LLC stand ready, willing and able to help!
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Don't believe the myths - no business is too small to claim their portion of research and development tax credits. We can help you see if money is owed to you at no obligation to you. Schedule your complementary consultation today.