Are Your Employees Talking Politics? Are you?
As we head into election season, you might want to think about setting some rules, but that can be trickier than you’d think.
Good Morning!
Here are today’s highlights:
Two of the biggest PPP loan processors have settled charges they misled small businesses.
More employers are disclosing salary ranges in job listings.
Shein has a new offering, use of its vaunted supply-chain network.
Should home buyers and sellers move fast or wait for the new commission rules.
PANDEMIC FUNDING
PPP loan processors Womply and Biz2Credit have settled allegations they made false promises to small businesses: “Time mattered for PPP applicants. The PPP was a temporary program that ended when loan funds ran out in mid-2021. That means that consumers subjected to delayed processing of their applications lost their opportunity to obtain PPP loans at all. And in numerous instances, the delays in processing applications deprived struggling small business consumers of emergency funds they needed immediately.”
“According to the FTC’s complaint, between at least May 2020 and May 2021, Biz2Credit advertised, marketed, and offered PPP loans to struggling small business owners. Biz2Credit originated these loans through its lending arm, Itria. Their marketing paid off: in 2021, Biz2Credit was one of the 10 largest PPP lenders in the U.S., accepting over 500,000 applications in the first five months of that year.
“The FTC charged that Biz2Credit falsely touted that they would process applications within an average time frame of 10-12 business days or, in some instances, 12-14 business days. In reality, the FTC says, the application processing was riddled with delays, and the average processing time was more than a month (25 business days), with tens of thousands of consumers waiting over two months.”
“Oto Analytics, which also does business as Womply, and its CEO, Toby Scammell, agreed to pay $26 million to settle similar FTC charges. The FTC's complaint alleges that Womply and Scammell advertised that small businesses—particularly one-person businesses like gig workers—could successfully get PPP funding. According to the complaint, more than 60 percent of Womply applications never resulted in funding.”
“Many consumers who never received funding were eligible for PPP loans, but according to the FTC, Womply and Scammel failed to fix known technical issues or provide the assistance necessary to process applications. After receiving more than 4,800 telephone calls to Womply's customer service line in March ‘21, and facing increasing requests by email that were frequently not resolved, Womply disconnected their telephonic customer service. In thousands of instances, the FTC says no one from Womply ever replied to consumers' chat messages.” READ MORE
Management
As the presidential election season heats up, Gene Marks has some suggestions for owners concerned about politics in the office: “Approximately 61 percent of workers say they have discussed politics in the office with a colleague in the last 12 months, according to an October survey of more than 1,000 adults from the recruiting site Glassdoor. But most people, around 85 percent, prefer not to talk about politics on the job, according to another survey of more than 1,000 workers, with 74 percent fearing that such conversations can lead to more tensions.”
“‘Elections can create a lot of friction,’ said Mark Saddic, a vice president at CCI Consulting, a Blue Bell, [Pa.], talent management and HR consulting firm. ‘Many of today’s employees — particularly younger generations — want to feel that the company they work for shares their vision and values. Leaders not only have to be careful about what can be discussed, but also how they’re presenting their own positions on issues.’”
“All of this gets complicated by government regulations. For example, certain sections of the National Labor Relations Act say that employees have the right to discuss wages and other terms or conditions of employment with their workers and engage in certain activities that may include protests of their employer’s workplace policies. Hot political topics like dependent care, minimum wage, mandated sick time, and pay discrimination are part of that arena.”
“‘You may decide to not allow anything being worn that has overtly political language, but you can’t stop people from wearing something that’s pro-union as it may impact your compliance with regulations under the NLRA,’ said [Debra Friedman, a Philadelphia labor attorney]. ‘So before you ban a particular button, for instance, or a shirt, you have to consider whether it also is talking about the terms and conditions of employment or collective bargaining.’”
“The same goes for new rules going into effect by the Equal Employment Opportunity Commission, which can hold employers liable for the behavior of employees toward colleagues that are LGBTQ+ or pregnant or those who openly practice their religion, and these can all have political implications.” READ MORE
HUMAN RESOURCES
More employers are disclosing salary ranges in job listings: “About 60 percent of organizations are publishing pay ranges in job postings in 2024, compared to just 45 percent in 2023. That increase is the result of a series of new legislation and recruiting pressure, according to compensation software and data company Payscale’s 2024 Compensation Best Practices Report. It's also drawing questions from existing employees, with 27 percent of organizations saying workers are asking more questions about pay, and 14 percent saying they've had employees quit their jobs because they saw ads with higher pay elsewhere.”
“About 11 percent of organizations said workers saw an internal job posting and realized they were being paid less. About 27 percent of organizations said they do not address severely underpaid employees proactively — they only do so if the employee or their manager asks.”
“‘This year’s report tells us that while the economy may be in flux, employee expectations have not swayed,’ said Lexi Clarke, Payscale's chief people officer, in a news release. ‘Transparent pay practices and meaningful raises are now table stakes to attract and retain top talent, but many organizations are falling behind, as legislation is only accelerating.’” READ MORE
There is evidence that Colorado’s pay-transparency law is closing the gender pay gap: “In the three years since Colorado implemented the most stringent pay equity law in the nation, the state’s gender pay gap shrank substantially — among the most in the nation, according to a new report. Since the state’s Equal Pay for Equal Work Act came into effect in 2021, pay for full-time women workers in Colorado increased from 78 cents to 85 cents for every dollar paid to similarly qualified men, The Women’s Foundation of Colorado said in the report released Tuesday. That's a 7-cent gain compared to a 2-cent average gain for U.S. states that had no pay transparency laws in place during the same time period, said the report's author Max Tejera.”
“As of last year, [State Sen. Jessie] Danielson told reporters that over 80 percent of Colorado companies include pay and benefit information for application postings. That is compared to less than 25 percent of Colorado employers in 2020, according to research cited by the CDLE. The same research found that more than 50 percent of postings nationwide now include pay information, compared to less than 20 percent in 2020.” READ MORE
MANUFACTURING
Shein is offering other brands, large and small, access to its manufacturing network: “China-founded Shein has built a bargain fashion empire with a pioneering small-batch manufacturing model. Now it is planning to open that up to global brands and designers. The move represents a shift in business strategy as Shein faces challenges in the U.S., its biggest market. Shein’s executive chairman, Donald Tang, announced the plan in a letter to investors viewed by The Wall Street Journal, calling the new initiative ‘supply chain as a service.’ Under the plan, Shein would make its supply-chain infrastructure and technology available to outside brands and designers, allowing them to leverage Shein’s system for testing out new fashion items in small batches and track how popular they are with consumers.”
“Shein has revolutionized fashion manufacturing. It contracts with thousands of factories in China that churn out tens of thousands of new styles daily. It places orders to suppliers to be delivered in days, relies on real-time data to quickly analyze demand and replenishes orders as needed. That cuts down on the cost for storage and limits inventory waste, a primary reason for its ultra-low prices.” READ MORE
ECOMMERCE
Amazon now views Shein and Temu as its primary competitors: “Temu and Shein have, for now, supplanted Walmart and Target as focal points in internal meetings related to retail, people familiar with the matter said. The companies with Chinese roots are expanding in the U.S. and targeting Amazon customers. Temu has gone on an advertising blitz, spending billions of dollars and becoming the top advertiser by revenue on Meta Platforms in 2023, The Wall Street Journal reported this month. Amazon executives are concentrating in part on two aspects of their business they believe will continue to give them a competitive advantage: customer trust and fast delivery.”
“Employees are working to increase the selection of items available for same-day delivery in categories such as electronics, and the company is exploring promotional campaigns that would emphasize reliability and delivery speeds, the people said.”
“Recent Amazon video ads have focused on emotional moments for customers receiving or using products ordered on the platform. Temu’s recent ads, including during the Super Bowl, urged users to ‘shop like a billionaire.’ Amazon executives paid close attention to the Temu campaign, people familiar with the matter said.”
“Temu and Shein have bet correctly that a segment of customers are willing to wait longer to receive some shipments. Amazon, meanwhile, has remained steadfast that its shoppers value quick deliveries and returns and a wide selection that includes trusted brands.” READ MORE
REAL ESTATE
With the rules on commissions changing, home buyers and sellers aren’t sure whether to hurry or to wait: “America’s stressful spring home-selling season just became even more chaotic, after the National Association of Realtors agreed last week to a settlement of legal claims that the industry conspired to keep agent commissions high. As part of the settlement, NAR agreed to get rid of a longstanding rule that required many home sellers to say how much they would pay a home buyer’s agent. Consumer groups had argued that the arrangement effectively prevented buyers from negotiating with agents to save money, and kept commissions in the U.S. higher than most of the world, typically at 5 percent to 6 percent of the total sales price.”
“The new rules, which go into effect in mid-July, are prompting buyers and sellers to question whether they should rush to do deals before the changes or wait to see what takes shape afterward, which remains uncertain.”
“Buyers are weighing whether purchasing a home after July would give them more room to negotiate a lower commission. Sellers are considering whether the changes could make it more common to pay a lower amount, or nothing, to the buyer’s agent.”
“The coming changes are further complicating the equation for buyers, who are struggling with high home prices and elevated mortgage rates, and sellers, who feel stuck in place because of their current low mortgage costs.” READ MORE
THE 21 HATS PODCAST
I Need a Business Model: This week, we offer you a taste of the 21 Hats Live event we held in Fort Worth two weeks ago. It’s a different kind of event where there are no speakers, only participants. It’s pretty much a three-day, peer-group session for business owners, where we share challenges and insights and make connections. There were 25 of us, including most of our podcast regulars. For me, the highlight was an exercise that Chris Hutchinson of the Trebuchet Group facilitates. He calls it a “Fish Bowl” because the idea is to have an owner stand up and expose everything about a specific challenge that he or she is confronting. Fortunately, we had one owner who was gracious enough to agree to reveal all, to answer any question.
“And that owner was—well, it was me, actually. The truth is, this was a priceless opportunity for me to get some feedback from a focus group of smart entrepreneurs who were already familiar with 21 Hats.
“It even got a little emotional, mostly because a couple of the owners were kind enough to say that, had it not been for 21 Hats, their businesses might not have survived the pandemic. We recorded the whole thing, and if you have any thoughts after listening, please send them my way.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren