SPECIAL REPORT: Laws, Regulations Crunching Businesses Trying to Survive

(Editor’s Note: First in a series detailing the issues business owners face as they navigate the COVID-19 crisis.)

As states around the country have begun to relax stay-at-home orders put in place to battle the spread of COVID-19, businesses and their employees are chomping at the bit to reopen and get back to work.

Or are they?

Of course they are, but owners know that, in the new post-COVID era, things aren’t going to be business-as-usual. Most states are going to add new requirements for the safety and health of workers and customers, and experts say a general fear about coming back too soon is likely to cause fear in workers returning to their jobs.

According to Timothy Williams, Vice Chairman of Pinkerton, a global provider of corporate risk management services and solutions, it’s largely a fear of the unknown.

“There’s a great deal of anxiety,” Williams said. “There’s so much we don’t know. We have generally accepted protocols to deal with other crises. We understand how to deal with an earthquake or a tornado. But there are still so many unknowns and so many variables with (COVID) that we’re going to have to be exceptionally patient as we reopen the economy.”

The anxiety is coming in waves from several different directions. Employers are concerned, for instance, about being able to comply with new safety standards that are almost certain to be imposed when they’re allowed to reopen.

Workplace safety the biggest concern
Having workers report back to a safe environment is going to be one of the paramount obligations for employers. Businesses will likely have to have adequate personal protective equipment in place, as well as policies about cleanliness and sanitization.

Occupational Safety and Health Administration (OSHA) regulations are certainly going to affect how companies do business. According to information on the OSHA website (www.osha.gov/SLTC/covid-19/standards.html), some of the more relevant requirements include:

  • OSHA’s Personal Protective Equipment (PPE) standards, which require using gloves, eye and face protection, and respiratory protection when job hazards warrant it.
  • When respirators are necessary to protect workers, employers must implement a comprehensive respiratory protection program in accordance with the Respiratory Protection standard.
  • The General Duty Clause requires employers to furnish to each worker “employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.”

Denise Navarro, President/CEO of Houston, Texas-based Logical Innovations, Inc., said the requirements will likely vary by industry, but will still likely be, at a minimum, a financial stressor.

“For instance, I have noted that some businesses are restructuring and redesigning office layouts to accommodate continued social distancing,” Navarro said. “This could lead to additional costs and limited space.”

Workplace safety standards are going to be a focus. According to information provided by the Michigan OSHA, more than 300 workplace complaints were received March 30-31 alone.

What will new standards look like?
Steve Girard, a labor attorney with Grand Rapids, Mich.-based Clark Hill PLC, said OSHA inspectors will look at employers who had COVID-19-positive employees and ask if the company “did everything they could do” to protect employees. If OSHA determines such wasn’t the case, Girard warned, companies could face citations.

The problem with that, he said, is it’ll be an after-the-fact determination of whether companies did everything they could against a virus nobody has ever seen.

“You’re going have investigators after the fact doing some Monday morning quarterbacking and saying ‘you could have done more,’” Girard said.

What safety standards may be required is still a bit of an unknown, and most businesses are already setting up to meet projected requirements as best they can.

For instance, Mid-West Instrument – which develops proprietary designs manufactured for Original Equipment Manufacturers – is already, among other actions, voluntarily testing employees for temperatures at the start of shifts; locking visitors out of the building; requiring staffers to clean their own work areas; placing hand sanitizer throughout the building; offering cloth masks to every employee; and suspended all work-related travel.

Can business keep up with evolving standards?
Because Mid-West Instrument was identified as an “essential” business, the company has remained open during the stay-at-home order, and has only laid off two of its 40 employees. But business is down, and the company is waiting to hear about its loan under the Paycheck Protection Program.

More: Construction, Real Estate Activity Next Up for Reopening

More: Claims Continue to Flow as U.S. Unemployment Passes 30 Million

More: Town Hall Answers Questions as Businesses Get Ready to Re-Engage

Meanwhile, company officials worry about what the requirements will look like when the stay-at-home order is finally eased.

“As this is rapidly changing we do not know what new requirements may be implemented,” said Mid-West Instrument President Mike Lueck. “We are concerned that impractical safety requirements may be imposed which far exceed CDC recommendations.”

Workplace rules changed to benefit the employee could be problematic for employers, as well. For instance, Whitmer signed an executive order last month saying businesses can’t punish workers who stay home when either they or their close contacts are sick.

And Clark Hill’s Girard said worker’s compensation will likely be another big issue for essential employers operating now and non-essential employers when they reopen. Rules were changed last month, Girard said, that employers of first responders and healthcare providers who contract COVID-19 must prove by what Girard called “objective evidence” that the worker didn’t get it on the job before denying a claim.

Legal and political challenges are popping up over how states and individual companies are handling the pandemic. For instance, Illinois Gov. J.B. Pritzker was sued by a couple of business groups and by a state legislator for establishing a stay-at-home order (a judge ruled in favor of the legislator and issued a stay in that legislator’s favor).

An employee of a Tuscon, Arizona electrical company was recently awarded $1,600 because the company denied him paid sick leave after he was told by a doctor to self-quarantine.

And there was a lawsuit filed by a director of Eastern Airlines who was fired just days after requesting time off to tend to an 11-year-old child.

Lois M. Kosch, a partner in the employment law practice group for California-based Wilson Turner Kosmo LLP whose practice emphasizes the litigation of harassment, discrimination, wrongful termination, and wage and hour matters, said that, while the DOL wasn’t doing much enforcement at first, they are now.

“Enforcement actions are happening, whether from the government or private attorneys, so (businesses) should keep those obligations in mind,” Kosch said.

She said some 187 new labor laws have been passed as a result of COVID-19. For instance, the Families First Coronavirus Relief Act mandates paid sick leave and paid time off to take care of children.

There are also obligations under the Family Medical Leave Act to accommodate employees who have child care challenges. That law, Kosch said, entitles employees up to two-thirds of their regular pay, up to $200 per day.

That’s not going to help businesses already looking at balance sheets that aren’t exactly balanced.

“These additional costs in benefits and required payroll additives add to the already-stressed bottom line for some businesses that have been ‘on hold’ during this crisis,” said Logial Innvoations’ Navarro.

To pay unemployment or not to pay, that is the question
Unemployment assistance is turning out to be a double-edged sword. While it provides compensation for workers who lose their jobs, the additional $600 provided by the federal CARES Act can also make it easier for workers to stay off the job because the compensation is often better, particularly in some retail and restaurant businesses.

If the employer tries to bring them back, and they refuse because the money is less, the employee then loses the right to unemployment.

Kosch said recently updated guidance from the U.S. Department of Labor determined workers in that situation are not authorized to collect unemployment, including the $600 federal supplement.

But Dan West, president of the Livonia, Mich., Chamber of Commerce, said he’s still hearing from business owners there are “a lot of concerns” about workers coming back, particularly among restaurant owners.

“Restaurants had to lay off all their wait staff, so a lot of them have taken jobs at Amazon, Walmart, what have you, and may not come back,” West said. “I’m hearing owners are looking for means of bringing people back part-time so they can still get unemployment. There’s really no incentive to come back if they’re making more (on unemployment).”

Kosch pointed out that they won’t be, at least not for long.

“Without (the $600 federal incentive) they wouldn’t be making more than if they were working,” Kosch said. “I think letting people know if they decide not to come back to work when work has been offered to them they’re going to lose that federal supplement … might be a powerful motivator.”

The other thing about which business owners have expressed concern is a question of what the rules will look like when they are finally allowed to reopen. Governors in states like Georgia, Tennessee and Texas have already issued guidelines for re-engagement.

That’s a good thing, according to West.

“The uncertainty is the biggest thing … business people are planners,” he said. “Right now, that uncertainty makes it hard for them to plan. And they can’t work right now, and that makes it even more frustrating for them.”

New requirements could slow productivity
But it’s not just the state rules that trouble some business owners. Ted Barker, the president of Livonia, Mich.-based Shaw Construction and Management Company that employs some 20 workers, said he received a list of 20 requirements the Michigan Building and Construction Trades Council wants him to follow when reopening.

Among them are requirements for personal protective equipment (PPE), a specified COVID-19 site supervisor, asking employees to self-identify if they have symptoms, and having running water – “A lot of our sites don’t have running water,” Barker said — and soap on job sites.

“They feel this is a good baseline for future work in this environment and that it will provide the governor with assurance that the Michigan construction industry has the infrastructure, culture and training resources to safely return to work beyond the critical infrastructure projects currently underway,” Barker said. “The (COVID requirements) will cost dollars and has the strong possibility of slowing down productivity, which again will cost dollars to all involved. But I don’t know how we can get clearance to work without trying to inforce a new set of guidelines, either.”

Crisis could crush morale
What owners should really be concerned about, according to Pinkerton’s Williams, is the culture that will exist once restrictions are eased. Morale could be a problem, and business leaders are going to have to be acutely aware of the emotional states of their employees.

“There’s a lot of anxiety around the world, let alone in the United States, about ‘do I have a job,’ ‘do I want to go back to work when I can get paid a little more in the interim?’

“Some have lost coworkers and relatives and haven’t had the chance to grieve,” Williams added. “You’ve got a lot of emotions coming into this, and a lot of fear, because it’s a scenario where we don’t have complete information and may never have.”

Mid-West Instrument’s Lueck agrees about the morale, and says Michigan officials, including Whitmer and Attorney General Dana Nessel, haven’t helped the situation with what he calls “aggressive statements.”

“This has been a real issue due to … their total lack of recognition of critical manufacturers supplying to medical gas industry, oil and gas, power generation, military and safe distribution of drinking water,” Lueck said. “This has raised the stress level of many employees who question if we should remain open even though almost all of our products support industries listed (as) essential critical infrastructure workers.”

Fear will also play a role as workers return with concerns about contracting COVID-19 in the workplace. Sonya Bielecki, owner of HR Professional Support Services and a consultant for Express Employment Professionals, doesn’t believe there’s any way to completely reduce an employee’s fear of COVID-19 or the chance they’ll contract it in the workplace.

She said company leadership, “regardless of their personal opinions on COVID-19,” must present a coordinated message to the staff. The other idea she suggests is for employers to prepare a formal communication to workers outlining all of the safety steps they’ve taken.

“If you can prove to an employee that you’ve made CDC and OSHA requirements happen and you’re taking all the steps to keep them safe, that’ll reduce a lot of fears,” Bielecki said. “But the communication has to go out before their return.”

Pinkerton’s Williams agreed communication is the key when there are so many of what former Secretary of Defense Donald Rumsfeld called “unknown unknowns,” things we don’t know that we don’t know.

“That’s perfect for how we are today … It’s not going to be easy,” Williams said. “Communicating with employees several times a day routinely with current information about what we know and what we don’t know would help a great deal with morale.

“If we can be extraordinarily patient in these times with ourselves, with our customers … I think that will keep the security issues at a minimum, and it’s really going to pay off in morale issues,” he added. “People are on edge, anxious. We’re in uncharted territory for our generation. That’s why that ‘high-touch’ (by telephone and conference calls) and very frequent communications that are forthright is going to be very important.”

Biden’s Proposed Gas-Tax Holiday Faces Some Skepticism in Congress

With gas prices reaching record highs across the country, President Joe Biden on Wednesday said he’ll ask Congress to suspend federal gasoline and diesel taxes for three months – a move he believes will ease the burden on car owners but one met with doubt by lawmakers.

Biden is also asking individual states to suspend their own gas taxes or provide similar relief. It would take action by lawmakers in Washington and in statehouses across the country to actually bring relief to consumers.

“It doesn’t reduce all the pain but it will be a big help,” Biden said. “I’m doing my part. I want Congress, states and industry to do their part as well.”

The federal tax on gas is at 18.4 cents-a-gallon, with a 24.4 cents-a-gallon federal tax on diesel fuel. If the gas savings were fully passed along to consumers, people would save roughly 3.6% at the pump when prices are averaging about $5 a gallon nationwide, the Associated Press reported.

Biden’s push appears to face uphill odds in Congress, but a variety of lawmakers have expressed reservations. Even many economists view the idea of a gas tax holiday with skepticism, the AP said.

Democratic House Speaker Nancy Pelosi  said she “will see where the consensus lies on a path forward for the president’s proposal in the House and the Senate.”

The president said “states are now in a strong position to be able to afford to take some of these actions,” thanks to federal support from the 2021 COVID-19 relief bill. But there is no guarantee that states will tap into their budgets to suspend their taxes on gas or to deliver rebates to consumers, as Biden is requesting.

Michigan Gov. Gretchen Whitmer had as late as Tuesday lobbied Biden to suspend the federal gas tax for the rest of the year, but in April she vetoed Republican-backed legislation that attempted to suspend for six months Michigan’s 27-cent-per-gallon excise tax on fuel, the AP reported.

Michigan’s average price for regular unleaded gasoline was $5.13 per gallon as of Wednesday, topping the national average of $4.96, according to AAA Michigan.

Senate Republican leader Mitch McConnell called the gas tax holiday an “ineffective stunt” in a Wednesday floor speech. “This ineffective administration’s big new idea is a silly proposal that senior members of their own party have already shot down well in advance,” he said.

According to the AP, Rep. Peter DeFazio, the Democratic chairman of the House Transportation and Infrastructure Committee, said he would not support suspending the gas tax. “I’m going to be working against it. I have the largest committee in Congress, so we’ll see.”

In a statement, the White House noted other actions officials say Biden has taken to lower gas prices, including:

  • The release of a record 1 million barrels per day from the Strategic Petroleum Reserve.
  • Rallying international partners to join the U.S., releasing a combined 240 million barrels of oil on the market.
  • Expanding access to biofuels like E15—gasoline that uses a 15 percent ethanol blend—to increase supply and lower prices at thousands of gas stations across the country.
  • Engaging with oil and refining companies to ask them to work with the Administration to bring forward concrete solutions that increase refinery capacity and output. Secretary Granholm is meeting with these CEOs this week.

Fed Chair: Future Rate Hikes Depend on Whether Inflation Begins to Decline

Federal Reserve Chair Jerome Powell on Wednesday used prepared testimony in front of the Senate Banking Committee to emphasize the Fed’s determination to raise interest rates high enough to slow inflation.

But the Associated Press and other outlets are reporting that commitment has fanned concerns that the central bank’s fight against surging prices could tip the economy into recession.

Powell said the decision on future rate hikes will depend on whether — and how quickly — inflation starts to decline, something the Fed will assess on a “meeting by meeting” basis, the AP reported.

Its decision-making will be based on “the incoming data and the evolving outlook for the economy,” Powell said in his testimony,  part of the Fed’s semiannual policy report to Congress.

The Fed last wee raised its benchmark interest rate by three quarters of a percentage point, its biggest hike in nearly three decades, to a range of 1.5% to 1.75%. The Fed also forecast a more-accelerated pace of rate hikes this year and next than they had predicted three months ago. Its key rate could reach 3.8% by the end of 2023, which would be its highest level in 15 years.

The AP reported that concerns are growing the Fed will end up tightening credit so much as to cause a recession. This week, Goldman Sachs estimated the likelihood of a recession at 30% over the next year and at 48% over the next two years.

Last week, Powell suggested that a rate hike of either one-half or three-quarters of a point will be considered at the Fed’s next meeting in late July. Either one would exceed the quarter-point Fed hikes that have been typical in the past, and they reflect the central bank’s struggle to curb high inflation as quickly as possible.

On Wednesday, the Fed chair said the central bank’s policymakers “will be looking for compelling evidence that inflation is moving down” over the coming months before they would ease their pace of rate hikes

For now, most analysts expect a second three-quarter-point rate hike late next month and at least a half-point rate increase when the Fed meets again in September, according to AP.

First-Time Unemployment Claims Drop Slightly, Remain at Five-Month High

U.S. workers filed 229,000 claims for first-time unemployment benefits last week.

That’s a drop of some 2,000 claims from the previous week, but it still leaves jobless claims as high as they’ve been in almost five months. Back in March, first-time filings had dropped to 166,000 – which at the time was the second-fewest on record, according to CBS News – but they’ve been moving slowly higher the last few months.

In a Wall Street journal poll of experts, economists had projected 225,000 first-time claims for the week ending June 18.

The four-week average of new jobless claims, which smooths out the temporary ups and downs, rose to 223,500. That’s the highest level since the end of January, CBS reported.

Experts are reportedlyi watching to see what happens in the job market as the U.S. economy slows down.In an effort to fight off record inflation, the Federal Reserve earlier this month announced it is raising interest rates.

According to statistics released Thursday by the Labor Department, Illinois and Florida and the most significant drops in new unemployment claims. Michigan was the only state to have a notable increase.

The number of people already collecting unemployment benefits, meanwhile, rose by 5,000 to 1.32 million. Continuing claims are still at their lowest level since 1969, but they’ve climbed the last three weeks.

“While labor markets remain tight and we expect job growth to continue even as the economy slows, reports of layoffs in some sectors are on the rise,” Nancy Vanden Houten, lead U.S. economist at Oxford Economics, told MarketWatch.

Ford Issues Revised Guiding Principles to Enhance Supply Chain Sustainability

DEARBORN, Mich. — Ford joined other major automotive manufacturers globally, along with the Automotive Industry Action Group and Drive Sustainability, to make needed changes and additions to the “Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain.”

The revised document addresses the latest environmental, social and governance (ESG) expectations and trends in the automotive supply chain. 

 “A company with Ford’s scale can really influence the supply chain and business practices across our entire industry,” said Sue Slaughter, Ford Purchasing Diretor, Supply Chain and Sustainability. “It is so important that we not only think about how Ford can use our purchasing power to fuel our business needs, but also to advance sustainability.”

The revised Guiding Principles document now includes sections on circularity, carbon neutrality, animal welfare, biodiversity, land use and deforestation. A companion piece to the Guiding Principles, the supplementary “Global Automotive Sustainability Practical Guidance” has also been updated to better reflect current legalities and practicalities of meeting industry expectations.

“Recent and emerging legislative mandates, coupled with the ongoing complexity of today’s global supply chain, make these revisions to the Guiding Principles more vital than ever,” said Tanya Bolden, AIAG Director of Corporate Responsibility and Supply Chain Products & Services, in a prepared statement. This latest version provides more thorough guidance to support supplier partners at all tiers, she explained.

Stefan Crets, facilitator of Drive Sustainability, added: “The engagement between automotive companies and their suppliers becomes a real force for the sustainability transformation.” 

Read more about the new guidelines here: https://go.aiag.org/globalguidingprinciples.

BrightDrop Accelerates EV Production with First 150 Electric Delivery Vans Integrated into FedEx Fleet

MEMPHIS, Tenn. FedEx announced it has received its first 150 electric delivery vehicles from BrightDrop, the technology startup from General Motors decarbonizing last-mile delivery.

This marks a critical milestone for FedEx as the company plans to transform its entire parcel pickup and delivery (PUD) fleet to all-electric, zero-tailpipe emissions by 2040, and comes just months after BrightDrop’s commercialization of the Zevo 600 as the fastest vehicle to market in GM’s history.

“At FedEx, we have ambitious sustainability goals, and our phased approach to vehicle electrification is a crucial part of our roadmap to achieve carbon neutral global operations,” said Mitch Jackson, Chief Sustainability Officer, FedEx. “In just under six months, we’ve taken delivery of 150 BrightDrop Zevo 600s for our parcel pickup and delivery fleet. In today’s climate of chip shortages and supply chain issues, that’s no ordinary feat and a true testament to the collaboration between FedEx and BrightDrop.”

The first 150 BrightDrop Zevo 600s were delivered throughout Southern California to FedEx Express, a subsidiary of FedEx Corp. and one of the world’s largest express transportation companies. Powered by GM’s Ultium Platform, the Zevo 600 is designed for last-mile deliveries, with an estimated range of up to 250 miles on a full charge. This is part of a larger agreement between FedEx and BrightDrop that will see FedEx incorporate 2,500 total Zevo 600s across FedEx operations over the next few years.

“This shows how BrightDrop is delivering sustainable solutions at scale to customers today, and we couldn’t be happier to be part of FedEx’s sustainability journey,” said Travis Katz, president and CEO of BrightDrop. “Our Zevo 600 has been a record-setting vehicle from the start. From a record-setting time to market, to delivering one of the largest fleets of electric delivery vans on the road today, BrightDrop is showing the world what sustainable delivery looks like.”

To support the new vehicle technology, FedEx is building charging infrastructure across its vast network of facilities, including the more than 500 charging stations the company has already installed across California. FedEx is also actively working with utility companies to help evaluate and determine the capacity needed for electrical grids to support such charging infrastructure and is investing to expand on-site generation and procurement of renewable energy in its facilities.

“For FedEx to successfully achieve our sustainability goals, it will require collaboration across the public, non-profit and corporate sectors,” said Jackson. “Our ongoing collaboration with BrightDrop is a perfect example of what is possible when two organizations come together and work toward achieving similar goals in pursuit of a better world.”

West Michigan Diversity Event Spotlights 10 Takeaways for DE&I Strategy

The phone calls, messages and requests started coming in to Darlene King about a year ago.

After nearly 20 years of success in helping business leaders build new Diversity, Equity & Inclusion programs both nationally and around Michigan, the National Diversity Council was being asked by organizations around the Grand Rapids area to help in West Michigan.

That work began back in April with the launch of the West Michigan Diversity Council, part of the Michigan Diversity Council and, by extension, the NDC.

And the new council’s work started in earnest last week, when the WMDC hosted its first in-person events: A regional meet-and-greet at the University Club of Grand Rapids, followed by a lunch-and-learn event to discuss the 10 Key Benchmarks for DEI Strategy.

“We’re based primarily in southeast Michigan, but within the last year we received a large number of requests from business and community leaders to launch a West Michigan Council,” said King, the National Diversity Council’s executive director. “It’s an opportunity to engage with members of the philanthropic community and the business community.”

King, who has been with the council since 2014, said a racial and social justice component has been introduced to DE&I strategies since the May 2020 murder of George Floyd in Minneapolis, Minn.

New organizations are beginning the work.

“In education, this is a new space to have directors,” said Brooke Davis, director of equity for Kenowa Hills Public Schools. “They seem more prevalent in the business world. This will get some of that foundational work done and help us know how to integrate these practices into our district.”

King agreed, pointing out that strategies used by a school district might not work for Spectrum Health, or for Muskegon College or the Kent County ISD.

“This is not cookie-cutter work,” King said. “The needs are going to be different. The foundational principles of what should be incorporated is the same. You may need to tweak it for it to apply to your own specific work.”

Using surveys conducted among the National Diversity Council’s 350 partners around the country and globally, King shared the 10 biggest benchmarks in building a successful DE&I stragegy, including:

  • Leadership Accountability. King says leadership on the DE&I stage has to start at the top, with leaders who are publicly and visibly supportive of the work.

“It has to start with (leadership),” King said. “If it doesn’t, everything else goes by the wayside. If a leader says, ‘I’m committed’ … but they don’t provide resources, with staff, with a budget, they’re not publicly and visibly supporting the DEI effort, then that’s a ‘check the box” move.

  • Data analysis. Leaders often start their DE&I strategies by simply trying “to start the work” without understanding the data about why it’s needed.

“How do we know where we’re going if we don’t know where we are?” King asked rhetorically. “I’ve seen many organizations say, ‘We’re going to start our DE&I initiatives,’ but they have no idea who they are or who their employees are. Where are they when it comes to their readiness to accept this work? Where are the gaps? They just start doing things and they say, ‘this stuff doesn’t work.’”

  • DE&I learning and education. King called the DE&I learning process “ongoing and multifaceted.” Equity, she said, is “giving people what they need in order to achieve.”

“Organizations enter into this work and they haven’t … created a curriculum of educational training, and they cherry-pick what’s happened from a societal perspective,” King said. “You haven’t given people what they need in order to be successful. So when your DEI initiatives fall flat, now you know why. It’s all important, but you have to do it in gradual stages to bring the organization along.”

“Work with people where they are as opposed to where you want them to be,” she added. “If you work with them where they are, ultimately they’re going to be where you need them to be.”

  • Attract, hire and develop talent. King pointed out the drive for workplace diversity actually started back in the late 1990s – “To be honest, they did a better job then than we do now, by the statistics,” she said — and was all about recruitment.

The problem? While there was a ton of recruitment, there was no room for advancement among the new hires.

“They brought in so much diversity … but they weren’t developing them and they weren’t able to retain them because there was no inclusion and there was definitely no equity as part of the work,” King said. “It’s important that you … also incorporate some development around your recruitment.”

  • Mentorship and sponsorship. Millenials, King said, make up the largest part of the workforce now, and they want succession planning, development and mentorship.

“It is important to have programs internally that are ever-developing your employees,” King said. “These are some of the key strategies of organizations that have amazing DEI initiatives. It is a must.”

  • Executive Diversity Council. Companies developing a DE&I strategy often appoint a diversity officer. It’s not enough, according to King.

“This work is not just for the DEI officer; they can’t do it by themselves,” she said. “It has to be a council of influencers and committed key individuals who are going to help be the strategic leaders. It is imperative to develop a council at the executive level.”

  • Employee Resource Groups. King said these groups are the “pulse” for DE&I work in an organization, but that it’s more than organizing a Cinco De Mayo event for May 5.

“Employee resource groups are not for the purpose of food, fun and festival. We don’t do Taco Tuesday,” King said with a laugh. “Is cultural exposure a part of it? Absolutely. They are a huge part of your DE&I strategy but they don’t come first.”

The problem with focusing on employee resource groups for event purposes is that it might not work.

“This is not where you start. If you don’t have the (DE&I) foundation in place, this could backfire,” said Misti Stanton, vice president, DE&I, for Mercantile Bank. “For your organization to understand why it’s important for people to have space … when you’re focused on a particular identity of people, this could backfire if it’s not done right.”

  • Communitiy, government relations and social. King said organizations “have to be responsible for understanding their role from a community, government relations and a social perspective when we start talking about what is their responsibility for sustainability in this work.”
  • Supplier Diversity. King called this a “huge component to reaching equity within our communities. It helps tell the story of your commitment.”
  • Workplace environment. This conundrum has been caused by the COVID-19 pandemic, King pointed out. It’s about attracting new talent – particularly among younger people – to an environment where you might require them to go back into the office.

“Covid has caused this to be a whole thing,” she said. “How are we attracting and retaining staff when workplace environment plays a huge role in it? You’re going to have to be creative if you want to talk about retention and recruitment. Work environment is a huge piece.”

Molly Phan is a branch manager for Lake Michigan Credit Union and part of the organization’s DE&I advisory panel. She was attending a diversity council event for the first time.

“I thought it would be useful,” Phan said. “There was a lot of information, and I think I can incorporate it into our program. I found it very helpful.”

Expert: Business Leaders Facing a Number of Challenges

From the “Great Resignation” to flexible work policies to the effects of the ever-lingering COVID-19 pandemic, business leaders continue to face a variety of challenges.

In a comprehensive webinar hosted by Corp! Magazine, the Best & Brightest Programs and the National Association of Business Resources, labor attorney Olivia Hankinson led a discussion of a variety of those issues.

Hankinson, a labor and employment attorney with Kerr Russell, which sponsored the webinar, “Trending Topics in Labor and Employment,” talked about everything from the effects of record-low unemployment numbers to still-existing pandemic recommendations of the CDC.

One of the biggest challenge facing employers, Hankinson pointed out, is the vast number – record numbers, really – of job openings and a lack of people to fill them.

According to statistics released by the Labor Department, Hankinson said, there were some 11.4 million job openings at the end of April, which is down slightly from March but still a historic high.

Other statistics, according to Hankinson:

  • Layoffs and discharges “are still at historic highs,” she said, but were down to 1.2 million in April.
  • Some 4.4 million people quit their jobs in April.
  • Wage growth is at about 6%, although for those who have switched jobs it’s at about 7.1%, and initial unemployment claims are also at historic lows. Unemployment overall is actually at the lowest level it’s been since 1969.

“So we’re in a period of substantial amounts of job openings, even though it looks like it’s beginning to taper off a little bit,” Hankinson said. “Overall, this data is showing us we’re seeing record high numbers of employees quitting or switching jobs, but we’re seeing record lows of unemployment claims.

“This is causing a real issue for a lot of employers because, although there are so many jobs available, there just aren’t enough workers to fill those roles.”

The phenomenon — record high numbers of employees resigning — has been termed “the Great Resignation,” though Hankinson called it a “little bit of a misnomer” because while there is a record number of workers leaving their jobs, individuals — for the most part — are still in the workforce, simply working for different employers.

“That’s great for us, because if we look at the data and the underlying information as to why employees are choosing to resign … we can look within our own organizations to see if there’s capacity for changes to be implemented to existing practices or policies so that our own employees don’t leave and so that we can create better practices to recruit new employees to join our organizations,” Hankinson said.

There are a number of factors workers are citing for the resignations, including:

  • Toxic work culture;
  • Low pay;
  • No opportunities for advancement;
  • No flexibility regarding remote work;
  • Failure to recognize performance; and
  • Poor response to COVID-19.

There are also financial benefits, she pointed out. According to Hankinson, 64% received more pay transitioning to a new employer; half of those received an 11% raise or more and about 30% received a 6-10% raise.

Some 22% of recent hires got a signing bonus, and 40% of all new hires are getting greater scheduling flexibility.

That flexibility includes the ability to work remotely, usually from home. Hankinson said many employees are looking for companies that provide that flexibility, with about 40% finding that flexibility elsewhere.

It’s a “huge change in the wake” of the pandemic, she pointed out.

“From this we can glean there are some options for employers to take aside from offering wage increases or bonuses to increase our employee retention or to boost recruiting efforts generally,” she said. “One thing companies may want to consider is the option of allowing for remote work, even if it’s 1-2 days a week. But you should certainly have a written policy in place … clearly outlining the requirements and obligations associated with working remotely.”

Flexible work arrangements “are a great tool for retention and recruiting efforts,” because it has been so often identified as one of the top reasons employees are leaving their current employers.

While it can be a “win-win,” Hankinson said employers should crate policies which “clearly delineate” the parameters.

“We’re seeing major companies starting to change their plans to allow employees to work remotely,” said Hankinson, citing Amazon and JP Morgan. “Studies are showing employees who work from home are having less stress and are more satisfied with their jobs. Workers who aren’t allowed to work remotely are twice as likely to leave.”

Another pandemic-induced hiring consequence has been the hiring of employees who don’t have the requisite qualifications to do the job. During the pandemic, Hankinson pointed out, employers “desperate to hire workers” hired candidates who lacked the skills and experience necessary to perform the job.

Reasons for this vary, but mostly it happens when employers are “desperate to hire employees” in order to keep the company moving.

Hankinson said employers are going to find the need to replace those workers with more qualified employees, but that such a move would carry legal risks.

Her solution: Document everything.

“What we anticipate is employers might need to replace these employees who are underqualified with more skilled employees when they become available,” she said. “Performance concerns should be well-documented. You’re going to end up opening yourself up to significant risk of lability without that documentation in place.”

Kellogg Company Announces Separation Of Two Businesses

BATTLE CREEK, Mich. (PRNewswire) — Kellogg Company announced that its Board of Directors has approved a plan to separate its North American cereal and plant-based foods businesses, via tax-free spin-offs, resulting in three independent public companies.

The three companies, whose names will be determined later, would be the following: 

  • “Global Snacking Co.”, with about $11.4 billion* in net sales, will be a leading company in global snacking, international cereal and noodles, and North America frozen breakfast, with iconic, world-class brands and strong underlying growth momentum and profitability;
  • “North America Cereal Co.”, with about $2.4 billion* in net sales, will be a leading cereal company in the U.S., Canada, and Caribbean, with a portfolio of iconic, world-class brands and compelling opportunities for investment and profit growth; and
  • “Plant Co.”, with about $340 million* in net sales, will be a leading, profitable, pure-play plant-based foods company, anchored by the MorningStar Farms brand, with a significant opportunity to capitalize on strong long-term category prospects by investing further in North America penetration and future international expansion.

“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value. This has included re-shaping our portfolio, and today’s announcement is the next step in that transformation,” said Steve Cahillane, Kellogg Company’s Chairman and Chief Executive Officer.  “These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities.  In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth.”

After several years of “transformation and improving results,” company officials said in a release Tuesday they believe it is “the right time” to separate these businesses so they may pursue their particular strategic priorities.

North America Cereal Co. and Plant Co. will both remain headquartered in Battle Creek. Global Snacking Co. will maintain dual campuses in Battle Creek and Chicago, with its corporate headquarters located in Chicago.  Kellogg Company’s three international regions’ headquarters in Europe, Latin America, and AMEA will remain in their current locations.

Local Nonprofit Focused on Ending Family Homelessness Celebrates 25 Years with over 4,000 Families Helped

Grand Rapids, Mich. – Family Promise of Grand Rapids, whose mission over the past 25 years has been to end homelessness, has helped nearly 4,000 families find a place to call home. The organization has been able to empower parents with hope, encouragement, and the connections they need to create a better future for their kids, all while ending the cycle of homelessness. Knowing not every family can be placed in a home immediately, Family Promise also provides emergency shelter while other housing opportunities are explored.

Additional stabilization services, along with Family Promise’s network of partners, have allowed the nonprofit to help these families build futures. Every week, almost 150 Family Promise volunteers work with local families experiencing homelessness. Over the years, these family stabilization services have impacted nearly 6,000 children and 90% of families the nonprofit has served in the past 25 years have made their way home.

“Since starting work with Family Promise in 2009, I have seen the significant impact for families through the work we do,” said Cheryl Schuch, CEO for Family Promise of Grand Rapids. “We are proud of the innovative solutions we have implemented over the past 25 years but knowing that there is an ever-evolving need for housing and shelter here in Grand Rapids, we are laser focused on meeting the critical need we see each day.”

Family Promise is hoping to ensure that while they work on prevention and housing efforts, those in danger each night will have a safe place to stay. To meet the need for shelter as it currently stands, the Greater Grand Rapids community needs 85 rooms of emergency shelter nightly.  Currently there are only 45 rooms available for emergency shelter dedicated to families who are experiencing homelessness. Family Promise and its partner organizations will continue to work tirelessly to provide the remaining rooms.

Tiffany Washington’s family is one of many that Family Promise of Grand Rapids has helped over the past 25 years. Each family is unique and has its own set of circumstances, but Family Promise’s team of dedicated staff members work hard to get families’ home. Tiffany was able to get into emergency shelter through the Interfaith Hospitality Network (IHN) program, which helped her secure her two sons in school and find herself a job locally in Grand Rapids. Tiffany accomplished all this through the program within nine days of asking for help.

“These are REAL life people who are working to make many families’ world a better place,” said Tiffany Washington, Shining Star Award Recipient, and Family Promise Advocate. “When my son was diagnosed with kidney failure at age 13, I knew I had to get him into a stable home environment to ensure he made it on the transplant list. Family Promise’s team provided shelter for me and my two sons into the IHN shelter program and checked in on us each day. I knew from that moment on that everything was going to be okay.”

In the next 25 years, Family Promise of Grand Rapids will define success as meeting the community’s need for emergency shelter and investing heavily in affordable housing options, prevention services, and early childhood development efforts. Investments in proactive solutions, rather than reactive ones, can make achieving these goals possible. Family Promise has grown because of the explosive need to help families experiencing homelessness within our community, as housing becomes more of a scarcity. 

To continue supporting Family Promise of Grand Rapids or to learn more about getting involved, please visit https://www.familypromisegr.org/ and follow along on InstagramFacebook, and LinkedIn for opportunities.

PMP Personnel and Axios HR Merge to Expand Statewide Human Resource Service Offerings

GRAND RAPIDS and PETOSKEY, Mich.) — Axios HR of Grand Rapids, and PMP Personnel, a six-office, 30-year-old employment agency headquartered in Petoskey, have merged to expand service offerings and strengthen relationships among human resources outsourcing and staffing clients.

The combined entity will have 72 employees across 11 offices from northern to southwestern Michigan. The merger was finalized in March. Terms of the deal were not disclosed. Both brands, along with all staff and office locations, will continue to operate with no interruption or changes. PMP affiliates Care Plus TLC and Financial Search Group are also part of the merger.

The decision to merge came after meetings concluded that the companies share the same values and dedication to customer service while also realizing the complementary services offered would be a fit for the respective client base.

“This combined entity will provide greater benefit to our existing clients while becoming a more attractive, comprehensive HR solution to prospective clients,” said Kellie Haines, chief executive officer at Axios HR. “As well, both companies have a rich history of being considered as trusted advisors and not vendors, so we felt now was the time to expand our portfolio to offer even more value to our customers.”

“Axios has a solid footing in West Michigan and PMP’s core strength is serving Northern Michigan. We both wanted to expand our reach, so this just felt like a natural progression,” said Gilbert (Gib) Mosher, D.O., FACEP, founder of PMP Corporation. “Our business is based on relationships, and Axios HR is equally committed to providing the best counsel and services to our clients, so I’m very excited at what we can do together to serve Michigan.”

PMP Personnel, which maintains offices in Auburn, Gaylord, Gladwin, Sparta, Traverse City, and its headquarters in Petoskey, is part of the PMP Corporation, that is owned and operated by Dr. Gilbert Mosher, a well-known Bay City emergency room physician and entrepreneur. Aside from PMP Personnel, PMP Corporation owns Integrity Medical Management Solutions (healthcare billing), Financial Search Group (professional financial recruitment), and Care Plus TLC (medical home care).

Axios HR, with offices in Holland, Ionia, Muskegon, Grand Rapids and Traverse City, was founded in 1988 by Dan Barcheski, who led the company to success with Staffing Inc., Axios Professional Recruitment and Axios Human Resource Services, eventually becoming one of the largest private employers in Grand Rapids. Aside from the staffing industry, the company handles human resources outsourcing and serves as a full-service HR solution for hundreds of Michigan companies helping them attract, retain, and develop talent. Axios HR is now a 100% employee-owned organization (ESOP), with Barcheski serving as Chairman with Kellie Haines serving as CEO.

Kellie Haines will serve as CEO of the combined entity from her Grand Rapids office, although she will regularly travel between the two regions.

“In the short time that we’ve had to combine teams, we’ve already seen the inherent similarities our people bring to a client engagement,” said Haines. “Our clients are going to realize the value of our expanded professional offerings and services and the unmatched desire to serve, giving 100% to client solutions.”

Expert: Fed Plans More Rate Hikes Through Year-End; Steeper Path for Interest Rates Increases Recession Risk

 The Fed raised the federal funds rate 0.75 percentage points June 15, the largest hike since 1994.
• FOMC members expect weaker growth and higher inflation than in their prior forecasts released in March.
• Fed policymakers see themselves on course to raise their benchmark rate another 1.75 percentage points by year-end, and another 0.50 percentage points in 2023. 
• There are near-term upside risks to interest rates from inflationary pressures, and medium-term downside risks from a cooling economy.

The Federal Open Market Committee (FOMC) raised the Federal Reserve’s benchmark federal funds target by three quarters of a percent at the June 15 decision, to a range of 1.50%-to-1.75%. The vote was 8-1, with Kansas City Fed President Esther George favoring an increase of 0.50%. This hike was a big deal, since the last time the Fed raised rates so much in a single go was in 1994. It matched what financial markets priced in the morning before the decision, but that was after a big reset of expectations over the prior week. Financial markets had priced in a hike of half-a-percentage-point in early June, then shifted to expect a three-quarters-of-a-percent hike just two days before the decision, after a Wall Street Journal story (widely suspected to source a leak from the Fed) indicated a hike of three quarters of a percent was likely.

The Fed’s policy statement was little changed from May, but updates to the FOMC’s quarterly economic projections a.k.a. “dot plot” show members expect both growth and inflation to be worse than expected in the prior dot plot from March. The dot plot’s median forecast for real GDP (half of FOMC members are more optimistic, half are more pessimistic) marked down the forecast for 2022 by more than a percentage point, to 1.7% from 2.8%, and lowers the forecast for 2023 to 1.7% from 2.2%. This forecast is for real GDP growth in the fourth quarter of the year, relative to the fourth quarter of the previous year, not for annual growth (whole year versus whole prior year). With weaker growth expected, the median dot anticipates an increase in the unemployment rate over the next two years. It sees a rise from 3.6% in May to 3.7% at the end of 2022 and 3.9% at the end of 2023. Back in March the median dot expected the unemployment rate to hold at 3.5% over that timeframe.

FOMC members expect considerably higher inflation than they did in March, since energy and food prices have surged after Russia’s invasion of Ukraine and housing prices rose more than forecast in recent months. The median FOMC member expects inflation measured by the personal consumption expenditures deflator (PCE inflation, the Fed’s preferred measure) to close 2022 at 5.2% in year-ago terms, up from the 4.3% they forecast in March. The PCE inflation forecast for year-end 2023 is little changed, 2.6% versus 2.7% in the March dot plot.

Separate from these forecasts, the dot plot also summarizes FOMC members’ expectations of the appropriate course of monetary policy. That’s “what they should do,” not “what will happen.” The median FOMC member wants to see another 1.75% in rate hikes by the end of this year, followed by 0.50% more over the course of 2023. That would raise the federal funds rate to a range of 3.25%-to-3.50% by the end of 2022, and to 3.75%-to-4.00% by the end of 2023. Chair Powell provided some guidance during the press conference after the decision describing the Fed’s likely path to those levels. He thinks the next FOMC decision on July 27 will probably be a choice between another 0.75% hike and a 0.50% hike, and he does “not expect moves of [0.75%] to be common.” The Fed sees itself on a course to hike 0.75% in July, 0.50% in September, and a quarter percentage point at the November and December meetings, followed by two more quarter percentage point hikes in early 2023.

Following the June Fed decision, Comerica is revising its forecast for the federal funds rate to foresee a rise to a range of 3.25%-to-3.50% at the December FOMC meeting, ending this rate hike cycle. Relative to our June forecast, this raises the peak federal funds rate by half a percentage point, and pulls forward the end of the hiking cycle by one quarter. In the revised forecast, the fed funds rate will hold unchanged throughout 2023, then be cut by a quarter percentage point at each of the Fed’s decisions in March, June, September, and December 2024, to an assumed terminal rate of 2.25%-2.50%. Risks to the Fed’s hiking plans are to the upside over the next few months, with tight global inventories of crude oil and refined petroleum products putting upward pressure on energy prices and inflation. But risks to the Fed’s plans in the winter and onwards are to the downside, since a cooling housing market will slow house price increases and core inflation—shelter accounts for about two fifths of the CPI basket. Financial markets price in faster hikes than anticipated by this forecast, or by FOMC members (See chart). As of June 16, fed funds futures imply the Fed funds rate rises to 3.50%-to-3.75% in December 2022 and 3.75%-to-4.00% in June 2023. Interest rate swaps price in an even steeper hiking cycle, with the fed funds rate in December 2022 at a range of 4.25%-to-4.50%, and the most likely rate in June 2023 at 4.75%-to-5.00%.

Faster rate hikes mean risks to economic growth are skewed to the downside. Comerica forecasts for annual real GDP growth of 2.8% in 2022 and 1.7% in 2023, or 1.7% and 1.4% respective increases in the fourth-quarter-to-fourth-quarter terms the Fed uses. Downside risks mean the economy is more likely to underperform this forecast than surprise to the upside. A weaker growth outlook puts the economy closer to slipping into a recession. Recent economic data are already trending softer. Initial claims from unemployment insurance are up 63,000 over the last three months, retail sales fell 0.3% in May, housing data are normalizing, and business and consumer sentiment are down since Russia invaded Ukraine. Considering these data, as well as the faster tempo of rate hikes laid out by the Fed, the likelihood of a recession starting in 2022 is around two-in-ten, up from one-in-ten in early June. The risk of a recession starting in 2023 is up to around three-in-ten from one-in-four.
The Fed did not disclose plans to sell mortgage-backed securities (MBS) at the June decision, a step that will be necessary to reduce the Fed’s holdings at the rate they target ($17.5 billion per month through September, $35 billion per month subsequently). Average interest rates for a 30-year mortgage have jumped to near 6% for the first time since 2008, up from near 3% in late 2021, and mortgage applications for home purchase had the worst month since 2016 in the four weeks through mid-June. Policymakers could be waiting to see how much the housing market slows before committing to a plan for MBS sales, which could be announced in September. 

Bill Adams is senior vice president and chief economist at Comerica.

Financial Markets Price Economic Chart
Source: Comerica

First-Time Unemployment Claims Drop, Remain Near Historic Lows

A week after announcing the U.S. economy had added 390,000 jobs in May, the Labor Department released statistics Thursday showing fewer Americans applied for first-time uemployment assistance last week.

According to the Labor Department, the number of such claims dropped by some 3,000 applications, for a total of 229,000 in the week ending June 11. That’s down from the adjusted total of 232,000 from the week before.

The four-week average for claims rose by 2,750 from the previous week, to 218,500.

According to the Labor Department, some 1.3 million Americans are collecting unemployment assistance, which has been a historic low for the last several months.

After adding 390,000 jobs last month, the Labor Department said the overall unemployment rate remained steady at 3.6%, the lowest level in four decades. Despite the healthy growth in jobs, the May total was the lowest monthly gain in the last year.

Despite the job numbers, the U.S. economy continues to be plagued by historic inflaton rates. The Labor Department reported last week that consumer prices surged 8.6% last month — even more than in April — from a year earlier.

In a continuing effort to curb inflation, the Federal Reserve raised its main borrowing rate by three-quarters of a point on Wednesday. Wednesday’s increase follows a half-point increase in early May.

Jobless claims application this week and last week, though still relatively low, were the highest since the first weeks of the year.

Report: New Research Shows the Metaverse Could Grow Up to $5 Trillion in Value by 2030

NEW YORK and LONDON and PARIS (Globe Newswire) —McKinsey & Company released its new report “Value creation in the metaverse,” which shows the metaverse may be too big to ignore.

McKinsey’s preliminary forecast shows the metaverse has the potential to grow up to $5 trillion in value by 2030. It shows e-commerce as the largest economic force ($2.6 trillion), ahead of sectors such as virtual learning ($270 billion), advertising ($206 billion), and gaming ($125 billion).

As companies of all different shapes and sizes look to enter the metaverse, this extensive report provides a clear view of what the metaverse is and is not, what first movers are doing, what’s fueling the investment, and the potential for consumer and B2B companies.

The report builds on multiple proprietary insights and analysis, including a survey of more than 3,400 consumers and executives on adoption of the metaverse, its potential, and its likely impact on behavior. The researchers also interviewed metaverse builders and industry experts.

“The metaverse represents a strategic inflection point for companies, and it presents a significant opportunity to influence the way we live, connect, learn, innovate, and collaborate,” said Eric Hazan, senior partner, McKinsey & Company. “Our ambition is to help leaders of both consumer and B2B companies better understand its power and potential, identify strategic imperatives, and act as a force for its evolution.”

What’s fueling the metaverse investment
Already this year, companies, venture capital, and private equity firms have invested more than $120 billion in the metaverse—more than double the $57 billion invested in all of last year.

Multiple factors are driving this investor enthusiasm:

  • ongoing technological advances across the infrastructure required to power the metaverse
  • demographic tailwinds
  • increasingly consumer-led brand marketing and engagement
  • increasing marketplace readiness as users explore today’s version of the metaverse, which is largely driven by gaming while applications emerge in socializing, fitness, commerce, virtual learning, and other uses

Already, more than three billion gamers worldwide have access to different versions of the metaverse.

“While the idea of connecting virtually has been decades in the making, it is now increasingly real, meaning real people are using it and spending real money and companies are betting big,” said Lareina Yee, senior partner, McKinsey & Company. “Yet this booming interest has made it difficult to separate hype from reality. It’s worth remembering that while the bust of the first dot-com boom resulted in the disappearance of scores of companies, the internet itself went from strength to strength, giving rise to new entrants.”

Consumers are already engaging in the metaverse
Consumers are already there. McKinsey’s research shows consumers are excited about transitioning life into the metaverse, with almost six in ten (59%) consumers preferring at least one metaverse experience over its physical alternative.

Among those consumers, certain types of activities stand out for being most preferred in the immersive world:

  • shopping—purchasing physical or virtual goods (79%)
  • attending virtual social events or playing social games (78%)
  • exercising using virtual reality (76%)

Senior leaders believe the metaverse will have a significant impact on their industry
Business leaders see the metaverse’s potential to drive impact and margin growth. Ninety-five percent of leaders say they expect the metaverse to have a positive impact on their industry within five to ten years, with 31 percent saying the metaverse will fundamentally change the way their industry operates. More significantly, a quarter of leaders expect the metaverse technology to drive more than 15 percent of their organization’s total margin growth in the next five years.

“The metaverse has put us at the cusp of the next wave of digital disruption,” said Tarek Elmasry, senior partner, McKinsey & Company. “It’s transformative. It will likely have a major impact on our commercial and personal lives, which is why businesses, policy makers, consumers, and citizens may want to explore and understand as much as they can about this phenomenon, the technology that will underpin it, and the ramifications it could have for our economies and wider society.”

Study Forecasts 7.5% Growth for U.S. Back-to-School Retail Sales

While inflation is impacting retail sectors and households in a myriad of ways, continued consumer demand contributed to double-digit growth across nearly all retail sectors in May. This is according to Mastercard SpendingPulse™, which measures in-store and online retail sales across all forms of payment, not adjusted for inflation. As we look ahead to the critical mid-July through Labor Day back-to-school period, U.S. retail sales are expected to grow 7.5% excluding automotive compared to 2021. Sales are anticipated to be up 18.3% compared to pre-pandemic 2019, with Department Stores expected to be a noteworthy winner as the sector continues its recent rebound.

“Back-to-school is the second biggest season for retailers and is often looked at as an early indicator of retail momentum ahead of the traditional holiday season,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “While Mastercard SpendingPulse anticipates growth across sectors, retailers will need to find innovative ways to entice shoppers as discretionary spending potentially stretches thin as a result of increasing prices.”

This back-to-school season will be defined by the resilience and flexibility of the consumer. Ultimately, we’ll watch to see how they balance their desire for fresh styles and new experiences with continued price pressures. Anticipated retail trends for the 2022 back-to-school season include:

  • The In-Store Experience: Shopping for back-to-school becomes an experience of its own. From needing to try on new sizes to wanting to browse the latest fashions in person, the return to stores is expected to grow 8.2% YOY / 9.9% YO3Y this season.
  • Department Stores Continue their Rebound: Following a multi-year decline, department stores have made their way into the spotlight after 15 consecutive months of sustained growth. Serving as a one stop shop with a range of options for the whole family at a variety of price points, the back-to-school season is anticipated to drive the Department Store sector up 13% YOY / 27.3% YO3Y.
  • Stacked Social Calendars Drive Apparel Growth: More gatherings require more looks. With weddings, events and vacations lined up for the foreseeable future, the demand for apparel both in-store and online sees no signs of slowing, forecasted to be up 8.7% YOY / 15.9% YO3Y.

May retail sales growth
According to Mastercard SpendingPulse, total U.S. retail sales excluding automotive increased 10.5% year-over-year in May, and 21.4% compared to pre-pandemic May 2019. This is outpacing YOY monthly growth experienced thus far in 2022. In-store sales were a key driver, up 13.7% compared to pre-pandemic levels.

“The continued retail sales momentum in May aligns with the sustained growth rates we’ve seen so far this year,” said Michelle Meyer, U.S. Chief Economist, Mastercard Economics Institute. “The consumer has been resilient, spending on goods and increasingly services as the economy continues to rebalance. That said, headwinds have become stronger – including gains in prices for necessities like gas and food, as well as higher interest rates.”

SBA Announces Collaboration to Address the Wealth Gap Through Black Entrepreneurship

WASHINGTON (Globe Newswire) — Isabella Casillas Guzman, head of the U.S. Small Business Administration (SBA), signed a Strategic Alliance Memorandum (SAM)–an authority unique to the SBA among federal agencies–with President Reuben A. Shelton III, Esq., on behalf of the National Pan-Hellenic Council (NPHC)’s Council of Presidents, comprised of nine historically Black fraternities and sororities, sometimes referred to as the “Divine Nine.”

“This historic alliance between the SBA and the NPHC—the first of its kind for a government agency—will bring SBA’s valuable small business resources into reach for many small businesses and entrepreneurs, furthering the Biden-Harris Administration’s commitment to build equity and close historic wealth gaps that have held back America’s Black entrepreneurs, small business owners and their families and communities for generations,” Guzman said. “Over the past 18 months, the SBA has made incredible progress reaching more of America’s small businesses, delivering vital resources and support to entrepreneurs who have been historically underinvested in and overlooked—the same people and communities hit hardest by the COVID pandemic. Working alongside partners and allies within the Divine Nine will provide even greater reach for the SBA to better provide the highly entrepreneurial Black community access to networks, financial literacy, technical training, and capital readiness so they can successfully realize their American Dreams of business ownership, create jobs, and advance our economy.”

Announced in the leadup to Juneteenth, this new strategic alliance advances the SBA’s implementation of the Biden-Harris Administration’s commitment to building equity throughout the federal government and across America. Under the new alliance, a unique agreement for a federal government agency, the partnership will focus on increasing financial literacy within traditionally underserved, disadvantaged communities, expanding the Agency’s outreach, and introducing Black entrepreneurs to the SBA’s suite of tools and resources to start and grow their businesses including access to capital, government contracting opportunities and counseling. 

Reuben A. Shelton III, Esq., Chairman of the Council of Presidents of the National Pan-Hellenic Council and Grand Polemarch of Kappa Alpha Psi Fraternity, Inc., added: “The National Pan Hellenic Council and its affiliate organizations are very excited about this opportunity with the U.S. Small Business Administration. This collaboration will give NPHC members critical access to information that will promote small business growth and create jobs in all sectors of our economy.”

Often represented on thousands of university campuses, including Historically Black Colleges and Universities (HBCUs), with members in leadership roles across civic and business organizations and the faith community, the NPHC boasts over 2.5 million active members and scores of alumni members. Taken together, this group of engaged leaders is a critical ally in helping building trust within key communities and introducing small business owners to critical resources to bolster their business outcomes as we seek to close the wealth gap. The NPHC represents the following organizations: 

  • Alpha Phi Alpha Fraternity, Inc. 
  • Alpha Kappa Alpha Sorority, Inc. 
  • Kappa Alpha Psi Fraternity, Inc. 
  • Omega Psi Phi Fraternity, Inc.  
  • Delta Sigma Theta Sorority, Inc. 
  • Phi Beta Sigma Fraternity, Inc.
  • Zeta Phi Beta Sorority, Inc.
  • Sigma Gamma Rho Sorority, Inc.
  • Iota Phi Theta Fraternity, Inc. 

Deepened engagement and support 
In line with the Biden-Harris Administration’s agenda outlined in the recently released SBA Equity Action Plan, the SBA has instituted several major changes to level the playing field for all small businesses, including making impactful reforms to the Community Advantage (CA) Pilot loan program that prioritizes equitable access to capital for low-income borrowers and those from underserved communities, releasing disaggregated data across industries and sectors by race and ethnicity and helping to deliver contracting reforms to bring in new, diverse contractors, and launching the American Rescue Plan’s $100 million Community Navigators program. 

In addition, the SBA has expanded the number of Women’s Business Centers (WBCs) it supports to 146 – the largest WBC network in the history of the SBA. Notably, this investment under Administrator Guzman signifies the tripling of WBCs at HBCUs and Minority Serving Institutions (MSIs). Since March 2021, the complete listing of WBCs housed on the campuses of Historically Black Colleges and Universities (HBCUs) now includes: 

  • Miles College, Fairfield, Alabama
  • Savannah State University, Savannah, Georgia 
  • Morgan State University, Baltimore, Maryland 
  • Bowie State University, Bowie, Maryland  
  • Jackson State University, Jackson, Mississippi
  • Alcorn State University, Lorman, Mississippi
  • Bennett College, Greensboro, North Carolina 
  • Winston-Salem State University, Winston Salem, North Carolina
  • Benedict College, Columbia, South Carolina
  • Virginia Union University, Richmond, Virginia 

SBA remains committed to increasing capital for small businesses, including those in underserved communities. This means ensuring entrepreneurs have access to capital, standard and disaster lending programs, and PPP direct forgiveness as well as assistance in  growing their revenues by getting their products online or into global markets and accessing federal contracting opportunities, often by connecting them to one of the Agency’s newly launched Community Navigators, hundreds of Field Offices, or thousands of Resource Partners – including Small Business Development Centers, Women’s Business Centers, SCORE chapters, and Veterans Business Ownership Centers – for mentoring, training, and assistance in navigating government resources. 

For additional information on SBA funding opportunities, please visit www.sba.gov/funding-programs. 

Coalition to Back Black Businesses Reaches Milestone Backing Small Business Growth

The Coalition to Back Black Businesses (CBBB), co-founded by the U.S. Chamber of Commerce Foundation, American Express, and four leading national Black business organizations have reached the halfway point of a $10 million commitment to fund a grant program over four years to help small Black-owned businesses recover from the COVID-19 pandemic.

Since it was established in 2020, the CBBB has distributed over 1,000 grants to a wide range of businesses, with a portion of the funding going toward mentorship programs, training, and leadership development.

Grant recipient C. Anthony Parker, owner of Elk City Auto Spa in Charleston, West Virginia, said, “With the financial support of the Coalition to Back Black Businesses, I’ve been able to expand to a second location and hire new people. It’s amazing that I’m able to create jobs in my community and together, with the CBBB, we can help grow the economy and help our communities.”

Additionally, the CBBB today announced additional financial support for previous grant recipients who are building on their long-term goals. Twenty Black-owned small business owners who received a $5,000 grant earlier in the 2021 grant program are receiving a $25,000 enhancement grant to further support their growth.

 Click here to check out the full list of enhancement grant recipients.

New Diversity Council Takes the DE&I Conversation to West Michigan

Darlene King knows making any progress in establishing a culture of Diversity, Equity & Inclusion has to start with a “courageous conversation” about why the work is necessary.

Apparently, they’re ready to have that conversation in West Michigan.

King, executive director of the National Diversity Council, was in Grand Rapids Wednesday for the first in-person event of the new West Michigan Diversity Council. The WMDC was established in April 2022 to serve under-represented communities around the region.

It was established, King said, because leaders in Grand Rapids and other West Michigan communities were asking for it, including leaders from organizations such as Beaumont Health Spectrum Health (formerly Spectrum Health before a merger with Beaumont Health System) and the City of Kalamazoo.

“It was a request from the community,” King said. “We had partners … along with community leaders in the region who said, ‘your support is really needed’ in the West Miichigan region. If you come, we will support you.’

“It’s really about culture, it’s about creating atmospheres of psychological safety and spaces of belonging,” King added. “That has been a challenge for under-represented communities. It becomes a challenging thing when it does not embrace all that are different. That’s the issue.”

Dick Sherlock, who sits on the board of the new WMDC, said the number of educational institutions that call the Grand Rapids area home is bringing a very diverse student population to the area, encouraging the improvement in DE&I efforts in the region.

“(Positive) race relations happen because of the universities that come here,” Sherlock said. “It’s a very diverse group of people … the biggest employers have a lot of diversity.”

According to King, the new WMDC brings the same services to West Michigan that the Michigan Diversity Council has spread to its 47 partners around the state for 20 years:

  • Tool kits that include some 150 webinars on topics ranging from best practices to social and racial justice issues. “We are all about education,” King said. “It’s the way you change things.”
  • Help with recruiting and retaining a diverse talent pool.
  • Surveys and assessments.
  • Strategy development.
  • Focus groups.

Tarita Johnson, senior vice president-talent & diversity at The Right Place, Inc., the area’s largest economic development consultant, said having the new WMDC ease the pressure in doing her job.

“I’m really excited because it makes the work we do easier,” Johnson said. “To have a whole tool kit available to us makes it easier to do the job.”

What intrigues Lynne Jarman-Johnson, the chief marketing officer for Consumers Credit Union, is the ability to share best practices with the WMDC’s other partners.

“You learn from organizations that are doing this work,” she said. “One of the things I’m most fascinated with is learning to be authentic. Within our organization, we need to have open and authentic conversations. We can’t just be checking a box.”

King acknowledges making a difference in the region is “going to be challenging” because the area has been “accustomed to operating in status quo-mode and now we’re bringing in a concept to say ‘we want to shape status quo that is going to break up that thought process and say ‘everyone has a space and everyone has a place.’”

“Do I think we can be impactful? Yes,” she said. “I know there are people in this community from a business perspective, from community leaders, who are intentional about being transformational and not just checking a box.

“As long as we’re able to continue to pull the interest of leaders in the community, then I think we can make a difference,” King added.

Doing that, though, is going to require one of those courageous conversations. King said change can’t happen without it.

“We need to have a conversation,” she said. “We have to get past being afraid to have conversations about race. That is a hinderer for upward mobility.

“We don’t want to be engaged in hard, courageous conversations that are meaningful … Change is people’s fallacies about other cultures of people based upon biases, stereotypes or ‘isms,’” she added. “We need to have some real conversation about what’s really happening and about race. We need to be honest about the data of who’s not represented and who is, and what those gaps are.”

Women Are Making Progress, But There’s Still Work To Do

As the 2022 Women’s Leadership in Michigan’s Public Companies report released by Inforum earlier this year would demonstrate, Mary Barra’s career path hasn’t been what most women experience

Mary T. Barra, Chairman & Chief Executive Officer, General Motors Company

While many women’s careers get sidetracked on the way to the corporate board room — the study shows only 24% of C-suite and board of directors positions are held by women — Barra, the CEO and board chair for General Motors, moved around nearly every level at GM before reaching the top.

Barra, GM’s CEO since January 2014 and chair of the GM Board of Directors since January 2016, served as GM executive vice president, Global Product Development, Purchasing and Supply Chain, and as senior vice president, Global Product Development.

Previously, she served as vice president, Global Human Resources; vice president, Global Manufacturing Engineering; plant manager, Detroit-Hamtramck Assembly; and in several other executive engineering and staff positions.

Barra began her career with GM in 1980 as a General Motors Institute (Kettering University) co-op student at the Pontiac Motor Division. She graduated with a Bachelor of Science degree in electrical engineering in 1985, followed by a Master of Business Administration from the Stanford Graduate School of Business in 1990.

“I think about my own career, which was made possible by leaders who many years ago saw the benefits of a diverse workforce,” Barra said in remarks provided to Corp! Magazine. “Their thoughtful focus made it possible for women like me to pursue opportunities that were not available in the past.”
Barra shared remarks offering a variety of insights into issues facing women in the workplace:

Corp! Magazine: Studies show women are making progress in terms of upper-level management positions.
Mary Barra: Two key findings are that women are still underrepresented in the corporate pipeline, especially in senior management, and women are less likely to be promoted to manager, so fewer end up on the path to leadership.

Both findings are reminders that the most important thing we can do to build a strong workforce is provide all — men, women, under-represented — employees with opportunities to advance and contribute to their full potential.

Corp!: When you ascended to the CEO position, you were the first female CEO of an American automaker. What was the reaction?
Barra: I was taken aback that so much attention was paid to my being the first female CEO of an automaker and I came to the conclusion that perceptions of the auto industry were outdated and, in some cases, inaccurate.

Corp!: What progress is being made?
Barra: In the automotive industry, we’re making progress to close the gender gap — at General Motors alone, we have women leading core areas such as global manufacturing, electrification, car-sharing, tax and audit, marketing and communications. I’m also working with our most senior GM women to further build our bench-strength. And, I look forward to the day when women CEOs are the norm, not the exception. That will be real progress.

Corp!: Studies show not everyone gets the kind of varied career opportunities you earned. How did it all work for you?
Barra: Being given the opportunity to earn my MBA and broaden my skills by working in different areas of the company, as well as being challenged to take on tough assignments, such as managing an assembly plant, opened the doors of opportunity for me. I was given the kind of candid advice and feedback that helped me grow and, equally important, I was also supported in my decision to start a family.

Helping employees achieve all they can continues at GM today. As a company, we are determined to lead and define the future of personal mobility.

Corp!: Talk about the kind of diversity you believe makes GM a success.
Barra: I’m proud of the women we have in key roles at GM and I’m personally very committed to building a strong bench. That’s why … I meet with a good portion of our most senior female leaders to have focused sessions, where we look at our data and brainstorm strategies to increase female leaders at the most senior levels of the company. It’s all about providing opportunities for women to broaden their skills and advance.

GM’s focus on diversity and inclusion starts from the moment employees join the company. And, in fact, it starts well before that, when we promote STEM education for students looking to find challenging and rewarding careers for themselves and their families.

Corp!: Are you satisfied yet?
Barra: From the boardroom, where half of our members are women, to the conference room, supporting a strong and diverse workforce is a high priority. But we can’t stop there. Today, we are doing a better job of giving all employees the opportunity to achieve their full potential and advance through the leadership pipeline. We are making progress, but … we all still have work to do.

Corp!: What’s the best piece of advice you can give?
Barra: “My mom grew up during the Great Depression. She taught my brother and me two lessons: There is no substitute for hard work. And work before you play.”

GM Will Invest $81 Million to Build Cadillac CELESTIQ at Global Technical Center in Warren

DETROIT – General Motors announced it will invest more than $81 million into the company’s Global Technical Center in Warren to prepare the campus to build the Cadillac CELESTIQ. The investment will be used to purchase and install related equipment to hand-build the CELESTIQ and campus renovation work has already begun.

Aerial view of GM’s Global Technical Center in Warren, Michigan.

The CELESTIQ will be the first production vehicle to be built at GM’s Global Technical Center, the center of the company’s engineering and design efforts since its inauguration in May 1956.

“As Cadillac’s future flagship sedan, CELESTIQ signifies a new, resurgent era for the brand,” said Mark Reuss, president, General Motors.  “Each one will be hand-built by an amazing team of craftspeople on our historic Technical Center campus, and today’s investment announcement emphasizes our commitment to delivering a world-class Cadillac with nothing but the best in craftsmanship, design, engineering and technology.”

The Cadillac CELESTIQ will be built on GM’s Ultium Platform, the heart of the company’s EV strategy. The Ultium Platform encompasses a common electric vehicle architecture and propulsion components like battery cells, modules, packs, Ultium Drive units, EV motors and integrated power electronics.

Through the Ultium Platform, GM will realize a strategic value chain shift across its network of vehicle assembly plants as the company commonizes and streamlines machinery, tooling and assembly processes. This flexibility enables lower capital investments and greater efficiencies as additional assembly plant transformations occur.

CELESTIQ embodies Cadillac’s commitment to reimagine what’s possible and sets a new standard for the artful integration of technology.

  • CELESTIQ’s roof is expected to be one of the first to feature a four-quadrant, suspended-particle-device smart glass. With this smart glass, each occupant of the vehicle can set their own level of roof transparency.
  • The driver and front-seat passenger will enjoy a pillar-to-pillar freeform display with active privacy to help mitigate driver distraction.

CELESTIQ is driving innovation across GM’s supplier community with what’s expected to be the highest volume of 3D printed components — more than 100 — of any GM production vehicle. This will include both structural and cosmetic parts, and both polymer and metal pieces. Additionally, the CELESTIQ production facility itself will leverage additive manufacturing for tooling, fixtures and gauges in the assembly process.

GM’s Additive Industrialization Center, which opened on the GM Global Technical Center campus in 2020, has enabled Cadillac to establish itself at the forefront of functional and aesthetic 3D-printed components in the automotive industry. The Cadillac CT4-V and CT5-V were GM’s first vehicles to benefit from additive manufacturing with parts including the shifter emblem, transmission components and HVAC ducts.

“This investment is a great example of our commitment to GM’s EV transformation as we apply our manufacturing expertise to a one-of-a-kind, ultra-luxury vehicle for the Cadillac brand,” said Gerald Johnson, executive vice president of Global Manufacturing and Sustainability. “The advanced manufacturing technology and tools we are utilizing on CELESTIQ will help our team deliver the highest quality vehicles to our customers.”

Clayton & McKervey Earns Global Award

Southfield, Mich. – Clayton & McKervey, an international accounting and business advisory firm servicing growth-driven middle-market companies, has been awarded Centuro Global’s Tax & Accounting Firm of the Year, announced at their Global Expansion Conference 2022, INT-X Awards, in London, England.

This is the first year of the awards program which included votes cast by the business community within each firm’s market. International nominees included:     

  • Finpartner (Lisboa, PT) 
  • Clayton & McKervey (Southfield, MI, USA) 
  • KBA Accounting & Bookkeeping Services, LLC (Dubai, UAE)
  • Malone & Co (Rathcoole, Co, Dublin, IE)
  • Flynth (Arnhem, NL) 

“We have appreciated the opportunity to contribute to Centuro’s mission of easing global expansion” said Teresa Gordon, International Practice Lead for Clayton & McKervey. “Being recognized for our focus in helping business owners achieve their goals through collaboration with key partners is our top priority.” 

In 2020 Clayton & McKervey was selected by Centuro Global to represent the US as an accounting partner, joining their global network of accountants, lawyers, immigration experts and human resource specialists. This group works together to support global expansion with trusted advisors in all corners of the world.  

The Int-X Awards, recognizing the successes, disruptors, and impact makers in international expansion, took place at the 2022 Centuro Global Expansion Conference. Companies from all over the world compete for awards in nine categories. For the full list of nominations, or to learn more about the awards, visit Centuro Global.  

Clayton & McKervey is a metro Detroit-based accounting and business advisory firm helping growth-driven entrepreneurial companies compete in the global marketplace. The firm is headquartered in metro Detroit and services clients throughout the globe. To learn more, visit claytonmckervey.com.