Latest Articles

Starting a Business in the New Normal

The year 2020 has been very challenging for many small business owners. They are hot the hardest during this pandemic, some are even close to bankruptcy. Many have crawled their way up to survive this crisis. This pandemic has drastically change their approach on how small businesses operate. Business owners and customers are adjusting to the so-called new normal. With these changes comes a number of opportunities for those who would like to start a new business in this era of COVID-19. Before starting a business one should closely look whether the product and service you’ll be offering in the market fits the current consumer needs. We should also look at how to budget and continually finance this business taking to consider the fast changing environment. 

 

 

 

 

 

New entrepreneurs should always consider the following when thinking of establishing a new business during this times:

  1. Ask the question, what service and products will I offer and why offer it at this time?  You should always be well equipped to give a new and unique line of products and services
  2. Look for businesses that are in demand in different areas. Take note of what people are searching for. Think of what they are in need of at this time and how your business will be able to serve these needs. Observe other companies’ in various categories. Compare them and make this as your basis for growth and improvement.
Read More

Renters Insurance – What Is It And What Are Its Benefits?

Some renters think that a landlord’s property insurance policy is enough to cover damage, injury or loss. While a landlord’s property insurance covers losses or damage to the belongings of the landlord and the building itself, your personal properties as well as certain liabilities aren’t. If you are renting a place, whether an apartment, a condo, a house or a bedroom, getting a renters insurance is advisable.

What Is A Renters Insurance?

As a tenant or a renter, you will have to look and pay for a renters insurance so as to cover your personal belongings in case of damage or loss due to circumstances that apply to your insurance policy such as burglary, fire or hurricane. Such insurance could also cover medical expenses when you accidentally hurt or injure yourself within the property you are renting. A renters insurance is offered by many insurance companies and are often tailored to suit the distinct needs of renters. Unlike other kinds of insurance policies, a renters insurance costs relatively low as the average annual cost is only $180. However, prior to purchasing a renters insurance plan, you have to make certain that you know and understand what the policy covers as well as how it could protect you from the unexpected.

How Does It Work?

When you file a claim on your renters insurance, the insurer will have to carefully inspect the damage or loss and establish its the monetary value. If your insurance claim is approved, you could receive reimbursement in one or two means based on the structure of your policy:

  • Actual Cash Value. With the ACV method, you are given reimbursement after the age of every item covered is accounted for and discounted for the depreciation or devaluation that has transpired throughout the years to reduce its value. Typically, the ACV doesn’t go over or equate to the market value, however the premiums are likely to be much cheaper.
  • Replacement Cost Value. Unlike ACV, the RCV replaces your possessions or belongings with items that are similar to them and at their present market value. This means that depreciation, or wear and tear, isn’t a factor. But, RCV premiums are around 10% higher compared to ACV premiums.

What Are The Benefits?

Having a renters insurance plan is extremely crucial if you are renting a place to live as it covers certain common liabilities as well as provides you peace of mind in terms of finance. In the event that something does unfortunately happen your possessions, a renters insurance plan aids in covering the cost.

Those without renters insurance are almost certainly to pay for replacements or repairs for damaged items using their own money. This could be much more expensive and unaffordable compared to paying for a monthly or annual renters insurance that will cover these damages or loss.

Read More

The Big Players’ Trading Approach

Let us realize that all market participants swim in the same shark tank. However, the balance of power is unevenly distributed and some participants leave their mark on the market.

Bank Trading Secrets: How to Trade like the Banks!

Central banks are among the most important participants in the forex and bond market. Central banks are responsible for monetary policy in the respective currency area. They conduct foreign exchange transactions and change key interest rates, This impacts forex brokers like XMTrading and this means that the remaining big players make new investment decisions. This in turn ensures price movements that we speculators can use to our advantage. Of course, only if we know why an asset is moving in the corresponding direction.

In addition to the central banks, investment banks and hedge funds also ensure movement in the market due to their size. Many pursue a “global macro strategy” and are very successful with it. New trading is nothing else than what we do at TradingFreaks.

Here, macroeconomic events are used as an opportunity to plan and execute a day trade or swing trade.

Of course, not all news or events are relevant to the market. There are days when there are no important economic data releases, no key interest rate decisions, no escalating politicians, and on which classic “trend trading” can work in short time units.

Market phases alternate constantly and as a trader, you have to find out when your time has come (and when not).

What news is interesting for traders?

As a trader, your job must be to find out which news move the market and which are irrelevant.

We start with the influencing factors in the forex market.

We consider two broad categories:
1. Geopolitics
2. Monetary policy

We pay attention to market-relevant news and economic data from these two subject areas.

  • Important economic data are indicators for the central banks. Since we know how a central bank works and what it will do (changes in key interest rates), we can take advantage of such events.
  • In times of crisis, the yen is chosen as the safe-haven flow. We use the JPY as a strong currency, especially in politically unstable times. Accordingly, the money will flow out of the JPY when the situation calms down.
  • If a central or central bank announces a “dovish” measure and this surprises the market, then the rate of the currency falls. In the picture above we see this case in EURSEK.

In addition, there is another example for the stock market: The profit warning in the Thyssen share ensures further downward pressure after opening with a gap down.

  • The right news ensures that market participants reposition themselves. The increasing volume often leads to spikes and trend changes that we can use perfectly.
  • Even if a trader does not sit directly on the screen to publish the news, he can still use the fresh sentiment a few hours later. This trading approach is also interesting for working people!

So you see that news can be traded. The crux of the matter is to concentrate on the right news in trading and there are many misconceptions. News trading is a strategy used by investment banks and hedge funds on a daily basis, and we can do it the same way.

Remember: The most important thing for a private trader is to have a proven trading strategy. Tried and tested means that it has brought in constant profits over a period of at least 6 months without a large drawdown.

 

Read More

Norway, Still the Global Leader in Seafood Exports; But for How Long?

Despite the pandemic, Norway was able to make headway as world leader in providing safe and healthy seafood; having already surpassed its 2019 export values.

So far, with still a quarter to go before the end of 2020, Norway’s seafood exports to date has already reached a total of NOK 76.7 billion. When compared to the figures for the same period last year, current Norwegian seafood exports posted an increase of NOK 623 million or nearly one percent (1%) of its 2019 achievement.

CEO Renate Larsen of the Norwegian Seafood Council took pride in announcing that

“We are managing to stay ahead of last year’s export values since we saw a strong start this year even with a weak Norwegian kroner, there were higher export volumes and individual product processing. Although there was a slump in the export values of clipfish cod and shrimp, other species like herring, mackerel, and their related products are yielding the largest increases in values.”

Increased Demand in Processed and Frozen Seafood Products Identified as Main Cause of Decline

Minister Odd Emil Ingebrigtsen (H) of Fisheries and Seafood noted that the impressive record high export values achieved by the country in the past nine (9) months, demonstrate that the seafood industry has many legs with which it can stand. During a period that was marked by several uncertainties particularly the COVID-19 health crisis, a closer look at the achievements in the past three (3) quarters gives a clearer picture of how growth was achieved.

When Norway went into lockdown due to the pandemic, the industry’s second and third quarter export values went down by three percent (3%) and five percent (5%), respectively. Yet the seafood industry had a good start in the first quarter of 2020, in which the export values saw an increase of 11%,

When compared to the value achieved in September last year, there is actually a decrease of two (2%). A decline in the demand for clipfish along with other seafood products was the main cause.

According to the Norwegian Seafood Council, several markets are seeing an increased demand for processed and prepacked seafood, as these products like frozen fish and clipfish have longer “sell-by” dates. Nonetheless, the council reports that the Norwegian seafood industry has proven agile enough to shift productions in order to meet current consumers’ needs and preferences.

As an aside, some consumers are experiencing financial difficulties, while needing to meet certain extraordinary expenses, such as house repairs, car repairs or major medical expenses not covered by basic healthcare. While taking a loan is a viable solution, it would be wise to check out our website, långuiden dot.com, where consumers can get adequate information that serve as guides in looking for the right loan provider.

Read More

COVID 19 Still Increasing In Europe, Mask Orders Implemented

As the whole world suffered greatly because of this pandemic many have suffered. Cases are still increasing in Europe causing businesses to shut down. The Government on most European countries has ordered the use of a mask. A mandatory order of using face masks is in effect to stop the virus’ spread. The summer season is in peak across Europe. But many businesses are still threatened to remain closed due to the deadly virus. The supposed fun atmosphere is still far fetched in many parts of Europe. Nightclubs, leisure, and amusement parks are still not allowed to operate. Fireworks are also banned this summer in Europe.

Covid-19 pandemic: Mandatory Face Masks For All

Read More

Business as Usual? Let’s see

A lot of businesses were affected by the Covid-19 outbreak. Unless, you are operating online then most probably you are in a “business as usual” status. But for the land-based counterpart, reopening after the situation may be a bit of a challenge. To overcome this, it will be necessary to place an effective communication plan in spreading the message among your customers.

As several businesses are preparing to reopen, among the biggest questions they are trying to figure out is how to communicate their plans to their consumers effectively? Business owners should not just update their audience on the availability of their product and/or service or about their hours of operation. It is imperative for businesses as well to explain new safety and health protocols that they put in place to prevent the spread of the virus even further.

Communication is the Secret

Communication ought to be done right. This is critical to the overall success of your business, especially during the post-pandemic that the world is experiencing. The reason for this is that, consumers are seeking for businesses that would make them feel secure and safe. So, if you are an entrepreneur and planning for a communication strategy of announcing about your reopening, then considering the tips below may help you out nail it!

Create a Unified Message for several Channels

Many communication experts do agree that whatever message is sent today must be relevant, considerate, timely and empathetic of the customer’s current problems and needs.

So prior to any announcements you are planning to make, meet with your staff to have assurance that everyone has thoroughly understood the message you are about to send out.

After having the core message in place, this is when you can start creating a copy as well as creative assets for the platforms below:

Website – you have to update your homepage so your protocols and plans for reopening are at the center and upfront when your customers start searching for you. In case your website has a live chat feature, you might want to set automated message that’ll pop-up recapping the most important information.

Social media channels – it is essential to create a series of posts for each platform that your business is using. This is going to be an effort on your end in consistently pushing the message leading to your business’ reopening. Providing frequent updates regarding your operations and staff shows that you’re back in business and proactively addressing consumer’s needs.

Read More

Travel Industry On The Abyss, Demands Protective Measures

The crisis is an existential threat for many companies – from the souvenir shop on the corner to the travel group. What protective measures can the government do so as not to bring the industry permanently into the abyss?

Government policy around the world to contain the corona pandemic is severely restricting public life. This inevitably brings travel and tourism to a complete standstill. Many countries have imposed travel and entry restrictions – including many tourist-relevant vacation countries. Many countries have issued a general travel warning. The tour operators, therefore, cancel package tours. As of today, trips abroad are no longer possible. It is now clear that this also applies to domestic trips.

Due to the dynamic spread of the coronavirus, the entire travel industry is faced with an unprecedented crisis situation which it is not responsible for and which it cannot influence through its own business decisions. From the point of view of the travel association, it is, therefore, necessary that politicians – in addition to the economic measures – put up a protective shield.

Suspend cancellation policies to protect business and consumers

Due to the currently increasingly necessary cancellation of trips, tour operators and travel agencies have an extraordinary need for liquidity, because customers have a legal right to reimbursement of the paid travel price or the down payment. The applicable cancellation rules in travel law are not suitable for such a major crisis. Therefore, we call on the federal government to compensate the commissions for travel agencies and the cancellation costs for tour operators as part of a grant. If this is not implemented in a timely manner, the immediate repayments based on the applicable cancellation rules must be suspended immediately to protect the company and consumers or replaced by travel credits will. For this, the travel industry needs the support of politics. With these steps, liquidity can be maintained in the entire travel industry. That protects consumers and the economy.

While the travel industry is presently suffering the measures to control the corona pandemic, taking out a loan may not be a good option but it is still a choice for many in the travel industry. The step therefore to suspend cancellation policies is a better option to protect the industry.

Is your business affected too? Get a same day loan with your vehicle.

When will this pandemic be over?

The question now is when will this corona pandemic be over? According to the Atlantic, The answer is straightforward: when more than enough of the populace — presumably 60 or 80% of the population — is protected from COVID-19 to stop the disease’s spread from one person to another. This is the objective, though nobody knows precisely how long it may need to reach the goal. And while governments are putting their heads together to constrain the virus, they are also putting their hands together to stabilize the already shaken economy.

Read More

San Diego City Council Enacts Eviction Moratorium

The San Diego City Council has enacted a temporary eviction moratorium that will bar property owners and/or managers from kicking out tenants who can show proof that they are facing financial difficulties because of the Covid-19 crisis.

The local emergency law though is temporary and limited in nature, as it will be effective until May 31, 2020 only and subject to certain conditions.

Limitations of the Eviction Moratorium Law Enacted by the San Diego City Council

The eviction moratorium can only protect those that can demonstrate or show proof that their income has been greatly reduced due to lack of business or employment engagements. Tenants suffering from financial stress caused by substantial medical expenses can also seek protection against eviction by presenting proofs of medical bills that they have to incur as a result of the health crisis.

The conditions suggest that tenants who are in good health and receiving compensation under a work-at-home arrangement, are expected to pay rent as they fall due even during the ongoing coronavirus restrictions. Otherwise, their landlord can enforce eviction order and force them to shelter-in-place in another location.

Business owners who continue to trade or render services through the Internet of things can also be expected to pay rent for their brick-and-mortar storefronts. Not unless they can show proof that their online business operation does not yield income that can sufficiently replace the substantial loss of sales suffered from the absence of storefront operations.

Such conditions required from tenants and lessors of commercial spaces aim to strike a balance in protecting the interest of both tenants and landlords. After all landlords and rental property owners are also entitled to seek protection of their business income to prevent unscrupulous individuals from taking advantage of the eviction moratorium.

State Government’s Lockdown and Shelter-in-Place Orders Do not Automatically Include the Eviction Moratorium

When California Governor Gavin Newsom placed the entire population of Calfirnians under lockdown and shelter-in-place restrictions, he also gave authorization to local governments to temporarily suspend eviction actions against residents and business owners. However, Gov. Newsom made it clear that the suspension of eviction laws can be enforced only if the local council had enacted an eviction moratorium law similar to the law enacted by the San Diego City Council.

This denotes that a San Diego landlord can proceed and pursue eviction actions against non-paying tenants in Bay Area communities that have no emergency moratorium laws in place. According to Governor Newsom, city or community councils must pass their own temporary eviction moratorium in order to protect their residents from unjust eviction orders during their Covid-19 trials.

SD Councilman Chris Ward Sees the Need to Come-Up with Long Term Solutions

SD Councilman Chris Ward said that

”The emergency eviction moratorium is necessary but they do not go far enough to provide tenants with long term solutions

Missed or delayed payments of rents will only add to the financial burdens faced by families and business operators even after the Covid-19 crisis ends. Although the San Diego City Council approved the financial assistance package recommended by San Diego Mayor Kevin Faulconer, he still sees the need to develop a strategy aimed at working with banks and lenders.

Councilman Ward specifically mentioned halting of mortgage payments that will burden individuals and landlords who suffered severe losses of compensations and business income in the wake of the coronavirus crisis. .

Otherwise, many risk facing bankruptcy once all delayed payment of obligations will be up for collection. Although one can seek legal assistance from a bankruptcy attorney san diego based lawyers can best help San Diegans get out of bankruptcy if there are related local laws that can immediately ease the financial demands on an individual’s economic resources.

Read More

Many Companies Will Not Survive The Corona Crisis

The coronavirus shocks the stock market and paralyzes the economy. Insolvency and restructuring specialist Lucas Flöther has been dealing with crises for two decades. The lawyer considers the Corona crisis to be a serious burden on the economy, which has been unprecedented in recent economic history. He expects numerous bankruptcies.

The World Is On Standstill Due To Coronavirus Spread

Companies that have kept themselves afloat in the past few years without a resilient business model and especially with the help of cheap debt are, particularly at risk. Many start-ups are on the brink. Even companies with a lot of equity are by no means secured.

Read More

Research Says Global Economy Heading for Worst

The latest Bank of America (BofA) Global Research indicated that global economy is heading for the worst.

The BofA report stated recession as “headwinds,” which in business means an economic circumstance affected by certain events or conditions that hamper economic growth. The analysis is that the coronavirus outbreak and several other factors are building up toward a global recession.

Recession is defined as a temporary economic situation in which industrial and trade activities continuously decline for more than a few months, to yield a less than favorable Gross Domestic Product (GDP) growth in two (2) successive quarters. As negative factors continue to affect global economic activities continue, the BofA report projects that the global GDP for the year 2020 is likely to slow at 2.8%; a reading that is similar to the sub-3% growth seen during the 2009 recession.

Factors Cited by BofA Study as Drivers of Potential Economic Recession

The coronavirus or Covid-19 outbreak is cited as the main driver of the current economic downturn. The global research said that several other factors, such as political conflicts and uncertainties, as well as trade war and weaknesses of some countries in handling cases of Covid-19 infections, are compounding the resulting impact caused by the coronavirus problem.

Ever since the Covid-19 virus broke out in China, disruptions in the country’s economic activities ensued. Touted as the “world’s factory,” the inability of China to produce goods that it normally supplied to manufacturers and traders across the globe, created a domino effect.

Not a few U.S. companies rely heavily on key goods supplied by Chinese manufacturers. The shortage in production has disrupted the supply chain, causing investors to panic and to right away sell off their stocks. The UK’s Financial Times Stock Exchange (FTSE) is already in the “correction territory,” which means the financial market are seeing a decline of 10% or higher.

Last week, the U.S. financial markets suffered a week-long blow from the massive sell-offs that transpired. If the trend continues in the coming week ahead, the U.S. financial markets will also go into correction territory.

The bad news is that the current main driver of an economic recession cannot be expected to go away soon. The Director of the National Institute of Allergy and Infectious Diseases (NIAId), Anthony Fauci said that

”Covid-19 is a brand new virus, and we do not know or can count on the possibility, if it will die out, or even diminish once the weather gets warm.”

Although Director Fauci announced earlier that human testing for a potential vaccine for the novel coronavirus will go underway in six weeks at the least if there are no hitches, it is only the first phase of a series of trials that will not be applicable any time soon.

Uncertainties posed by the forthcoming U.S. presidential elections, unresolved trade wars, uncompromising trade deal negotiations and forces of nature that bring major disruptions, are only some of the factors that create an outlook that points toward an imminent global economic recession.

Although some industries like tourism, hospitality services and rental businesses do not rely on products and raw materials supplied by China, they have likewise, been affected by travel restrictions and slow consumer traffic. That is why businesses are urged to take proactive actions, since a recession will likely result to business losses that would call for mass layoffs.

To ordinary folks, loss of jobs means inability to meet their day to day cost of living, including house rentals. This early, it would be wise for owners of rental properties to engage the services of property management companies, since they have the expertise in mitigating the impact of a looming, global economic recession.

Read More

New States that Passed the Cannabis Legislature

Just last week, good news have been fuming up the marijuana industry. To start with is the legislation of medical cannabis bills are passed in advance in Alabama and Kentucky. Meanwhile, in New Hampshire House, the bill to legalize the cultivation of cannabis for adults is already cleared. Moreover, the approval of the legislation that restrict non-residents from enrolling in the program related to medical cannabis is sending to the state government under Gov. Michelle Lujan Grisham this week.

New Passed Bills for Marijuana Legalization

Here are the other states that already approved the legislation and legalization of marijuana. Basic ideas of finance should also be considered by these states.

1. New Mexico

S.B. 139 is a legislation that would restrict non-residents of the states to enrol in the state’s medical cannabis program.

This has been approved by the Senate of New Mexico. Most of the bill followers are hoping for the reversal of the bill. They wish to have a change in the said state law allowing qualified non-residents to acquire ID cards for medical cannabis within the state. The S.B. 139 has been approved this week and sending its legislation to the governor of the state.

2. Iowa

The very first meeting of the year by the Iowa Medical Cannabidiol Board was held. It focuses on the rejection to qualify the conditions of ADHD and panic disorder under the state’s medical cannabis program. In the said meeting, they also recommends to put restrictions on the level of purchasable THC. The current law of the state approved a 3% THC level under medical cannabis use. Iowa Board suggested for a change allowing patient to acquire 4.5 grams of THC within a period of 90 days.

3. Pennsylvania

New legislation for the legalization of adult-use cannabis within the state has been introduced by Rep. Jake Wheatley. The House Bill 2050 is planning to establish a licensing program for the growers of cannabis including the processors and even the dispensaries. House Bill 2050 has a goal to reduce the initial application and the fees for its licensing which would make the cannabis market more accessible for businesses.

4. New Hampshire

A new bill was approved by the House of Representatives with a vote of 236 over 112. This bill is intended to legalize the possession and cultivation of cannabis in limitation. Moreover, this would be applicable for adults 21 years old and above. The H.B. 1648 is similar to that of Vermont’s legalization law and is now sending for consideration under the Senate.

5. Washington

The House Bill of Washington aims to resolve the racial issue within the state’s marijuana industry.

 

Read More

Understanding the Flow of Stock Market shouldn’t be Ignored

Businesses of all industries in the economy are impacted by the movement in stock market for a number of ways. In the US, there are around 5000 publicly traded stocks that could be divided into 11 global industry classifications or GICS. With the day to day movements in the market, each action could lead to a different result, which may either be a positive or negative effect on the business.

The Economy and Stock Market

The stock market is described as the market to which equity shares of public businesses are being sold and bought. It is the stock market that is used in measuring the aggregated value of the publicly-traded firms. Comprehensively, this could be represented by Wilshire 5000. But to be in generally, many investors as well as analysts are focused more on S&P 500. Both of the said indexes play an integral tool to gauge the health of overall economy. Sometimes though, stocks might be misleading.

Most of the time, the economic performance and stock market are aligned. Having said that, whenever the stock market performs well, it’s normally brought by the growing economy. Then again, economic growth is measured in various methods but among the predominant methods is through GDP or Gross Domestic Product.

Whenever the GDP grows, individual businesses produce more and oftentimes, expanding. With expanding business activity, it typically boosts leads and valuations to the gains of stock market.

How Consumer Spending and Stock Market is Connected?

In most cases, consumers are spending more time throughout bull markets because they’re benefiting more from strong economy. At the same time, they feel richer every time their portfolio increases in value. During bear markets though, the economy is spending recedes and thus, not in a good position. Simultaneous fall in the stock value can create the fear for loss of purchasing power and wealth.

Rising stock market on the other hand is aligned with growing economy as mentioned. This is also an indication of increased confidence among investors. With investor confidence in stocks, it results to heightened buying activity that helps in pushing the prices higher. As the stocks are rising, those who have invested in equity market is likely to gain wealth.

With the increase in wealth, it leads to the increase of consumer spending since consumers tend to buy avail more services and buy more goods. And when such thing happens, businesses that are selling these goods and services opt to sell more and produce more. Thus, reaping all the benefits in form of increased ROI.

Now, you have two options in this matter, it is to borrow against settlement and invest in your own business or learn and understand how the stock market works and invest on it.

Read More

Mortgage crisis: alarm on the stock exchanges

The central banks are pumping massive amounts of money into the financial markets. The shares continue to slide.

The US mortgage crisis is now drastically impacting banks and financial markets. For many observers, a “real estate bubble” is bursting in the USA, caused by cheap mortgage loans with houses that are becoming increasingly expensive. Since mortgage rates have turned and numerous US homeowners who no longer have credit ratings are no longer paying their installments, bank loans have become lazy. The Mittelstandsbank IKB was the first German institute to get into the “subprime” swirl.

Crisis On Wall Street: The Week That Shook The World

Investors have lost confidence in the stock market and are fleeing fixed-income securities. The financial crisis, triggered by the difficulties in the United States with mortgages to customers with low credit ratings, has reached a new high. At first, Düsseldorf’s IKB was almost bankrupt with ailing subprime loans. Now the banks suspect each other of previously unknown risks. Large banks such as WestLB and SachsenLB are also suspected of this. The industry distrusts. The bottleneck on the money market is a vote of no confidence that the institutions issue to each other.

Read More

Wage Transparency Advantages And Disadvantages

Any business with a corporate culture that suits you includes flexible hours, a training budget, and other incentives. All these play a role in choosing the best employer for your services. In any case, the wage remains decisive. We don’t have to bother about that. Everyone has to pay their bills and often even maintain a family.

It is, therefore, no wonder that wages are a topic that lives in the workplace. Certainly when colleagues who do the same job suspect each other that they will be paid less than the other. This influences the motivation and therefore the performance of your staff.

The benefits and risks of salary transparency

On the other hand, they might do their best just a little more when they know that they are being paid correctly, with the aim of receiving more compensation when they take big steps. In contrast, when employees are underpaid or not receiving their wages on time, this results in employee demotivation especially when they will have to seek other sources of cash to bridge the gap in wages.

Not everyone is equally transparent, but some companies consciously choose to give their employees insight into the wages of their colleagues. Some employers do that partially, others fully. This naturally has disadvantages, but also benefits.

No transparency

More freedom, but stiff recruitment. Many employees feel that they and their employers are the only ones who know how much appears on the bill each month.

Advantage
  • Employees will feel more at ease because they feel their privacy is protected.
  • You pay each employee tailor-made, based on their skills, experience, and performance.
Disadvantage
  • Employees will doubt whether they will earn enough and as a result – consciously or not – will do their best less.
  • Wrong information about wages will circulate. If there are very large differences and someone comes to know this in one way or another, this can lead to major internal problems.
  • Wage negotiation is more difficult when the candidate does not know what normal wages are.

Bear in mind that sensitive information often becomes known in one way or another. Are there major differences regarding wages? Then that can cause problems at such a moment. The question then is whether the problem lies with the unequal wages or the lack of transparency about it.

Partial transparency

You can also choose to make wages partially transparent. We are then talking about wage scales instead of specific amounts.

Advantage
  • Are there colleagues who actually perform better than their teammates but currently earn the same? Then you can give them some increase without much ado.
  • This also applies when you hire someone. You have more resources to convince a candidate with something extra.
Disadvantage
  • Some candidates will immediately aim for the highest levels of the wage scale during the wage negotiations.
  • People can still suspect that their colleagues with the same position earns more and is therefore not 100% committed.

Full transparency

It is not common, but there are companies that give employees the opportunity to know exactly what their colleagues deserve. Sometimes the information even spreads outside the company. The disadvantages are easy to guess, but there are also interesting benefits associated with full pay transparency:

Advantage
  • No wrong information or gossip in the teams.
  • You do not create situations where the wages of people with the same duties and responsibilities differ greatly.
  • Knowing what managers deserve can motivate employees at a lower level to do their bit.
  • Much easier wage negotiations.
Disadvantage
  • There will be situations where someone who has been with the company for a long time and has a lot of experience with the way things work deserves the same as someone who is just starting out, which will not always be appreciated.
  • Someone who works harder or has more developed skills may earn better than someone who is on the same pay scale and does no more than is expected from him or her. You must adjust here if necessary. (calling on the less performing colleague or rewarding the hard-working employee)

Full transparency can certainly be considered because, since they will not be underpaid, they will be better able to concentrate on their duties. And knowing what managers deserve, they have a goal to pursue. You may encounter problems if there are too large differences between the performances of team members who earn the same.

Read More