Creative Strategies to Boost Employee Productivity and Happiness. (#110) — Transcript
Updated: Oct 26
THE PICTURE OF WEALTH · EPISODE 110
Dustin Serviss explores employee retention, benefits and creative compensation strategies, alongside investment considerations for law corporations. This is part five of his financial wellness miniseries.
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This transcript was generated from the episode audio and lightly edited for readability. It may contain transcription or speaker-attribution errors. Refer to the recording for exact wording.
Chapters
[00:00:03] Staff retention and business freedom
[00:01:19] Helping employees with insurance costs
[00:02:32] Thinking in terms of net compensation
[00:03:42] Staff experiences and retreats
[00:05:12] Fixed income inside a corporation
[00:06:31] Revisiting asset location
[00:07:53] Understanding investment fees
[00:08:28] Corporate fee deductibility discussion
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Transcript
[00:00:03] Dustin Serviss: Welcome to mini series episode five, creative strategies to boost employee productivity and happiness. Strategy number three is retention. Retention of your staff and keeping them, you know, engaged, happy, contributing, making an impact, not just doing the work, is extremely good leverage for you to get more free time to go back to slide number one, which was slide number two, which showed my son and I out quadting. Again, your company, your staff need investment. That is just... You know, I could have another bucket actually on the spending accelerator that's called staff.
[00:00:43] Dustin Serviss: And so however you wanna make that a great experience, you can design that. You're the controller of your business. Lawyers Financial offers two things, one, a pension plan called DBplus and employee benefits. Again, these things are... You know, create tax breaks for corporations. And the employee benefits, sometimes what we will do is we will put an employee benefit plan in place, and then we will do a webinar somewhat like this, where I will meet the staff and we'll say, hey. What's going on? I will give the staff tools to use so then you look like the good person. You look like the person that introduced us and help them.
[00:01:19] Dustin Serviss: Again, for many, you know, we have many, law staff. So law staff who have access. Adult children of lawyers... Or of lawyers can access lawyers financial. So if you say to your your admin assistant, hey, you know, you just got a mortgage. Did you get that mortgage life insurance? Then they say, oh, yep. Yep. Got that handled. Well, if they got the mortgage life insurance at the bank, ninety nine percent of the time, it is more expensive than a simple term policy, a simple term that they could buy from Lawyers Financial and save money. So all of a sudden, you haven't given them a raise, but you've put
[00:01:55] Dustin Serviss: more net money in their pocket, and they will be thankful for that. And that starts to build culture. Strategy number four, we're into the bonus kind of area. I would say, whisper strategy. You can call it whatever you want. But this is this is this is things that are maybe a little more creative. And, again, talk to your accountant. They are your they are your ally. I always do this. I'd say to my accountant, hey, fitness and health is important to my staff. What happens if I pay for my staff's gym pass? One thing that we did was a was a big one was cell phones. So, you know, when when a staff was asking for a raise, they're asking
[00:02:32] Dustin Serviss: for net... More net money in their hands. And so when you start thinking of it like that, I'm saying, okay. If I'm gonna look at it, like, from your standpoint, you want net more money. If you get a raise... I I haven't figured out the math. Do you think a person wants a raise of a few dollars an hour? You say, okay. But then you gotta pay CPP. You gotta pay benefits or EI. And so then, you know, it's like... And your payroll goes up, so maybe your WCB goes up. And you say, okay. Well, what about if I give you a hundred dollars towards your cell phone? Or, you know, for some sole practitioners, and and in my case, I could add them to my plan.
[00:03:09] Dustin Serviss: And so I'll say, I'll pay your cell phone bill. What is it? Oh, it's eighty nine bucks. I'll pay up to a hundred dollars a month. So now I've got a write off. I got a write off for a cell phone because we are remote sometimes. So my staff can be remote sometimes, and they need their cell phone because we use Zoom for our phones, and they're... They get calls right through to the Zoom app on their phone. They're calling the office. So it's justified. But that now is a write off for me at a hundred, and they don't have a cell phone bill anymore. And they're happy because their net cash flow goes up. Again, there's other creative things.
[00:03:42] Dustin Serviss: I put the picture of the boat. Maybe you have a, you know, a really big yacht or a fancy boat. Ask your accountant. What happens if you take your staff out for a day of fishing on the boat? Can your law corp rent your boat for a day to take the staff out? If you've got a... Maybe a recreation retreat, you know, I saw some people from Vancouver. You got a place at Whistler or the ski hill. Can your law court put on an employee and spouse retreat at your at your chalet, and can your chalet rent that out to your law court? Again, everyone needs to talk to their account, but just try and get the, you know, the ideas flowing.
[00:04:22] Dustin Serviss: We're switching gears now a little bit to investment order. And now we're talking about investments inside your law corp. So for any of you who have a law corp or are thinking about getting a law corp and you are... You know, you've heard or read, you know, should I do investing? And I'm talking about investments, stocks, bonds, funds, ETFs inside your law corp. There's a real subtle thing. Here's a law corp and a person, and this person has growth stocks in their TFSA. Okay? So you have a TFSA that has growth stocks or an RRSP, so that account is personally owned. In the law corp, you have an investment account, a non registered
[00:05:12] Dustin Serviss: or what they call it, open investment account. And they have fixed income in there because they're kind of being a little more conservative. Because you wanna be, like, you know, conservative with the investments. If you look fixed income inside a corporation, so even a GIC, a bond fund, you'll say... Use a GIC. At four percent is the GIC in the investment account in the law corp. That attracts fifty percent tax on that growth. So the net is only two percent. In this particular case... And, again, talk to your accountant, talk to your adviser. But we could switch we could switch the allocation.
[00:05:54] Dustin Serviss: So for some people, having a little bit of growth stocks and having some fixed income make up a good balanced portfolio. So when you look at not just the individual accounts you have, and often, you know, advisors will just say, oh, well, your balance will just have all of your law corp, your RSP, your TFSA. We'll just put it all in the same fund. If you wanna get a little bit more strategic, you could look at all the money you have. So let's say in this case, you want it to be fifty fifty. You're like, I'm kinda up the middle. I want some fixed income, and I want some growth. But I'm fifty fifty. I'm a balanced person. Okay.
[00:06:31] Dustin Serviss: So on a million dollar account, you would have five hundred in fixed income, five hundred in growth stocks. In this case, we could flip the fixed income and put five hundred fixed income into your personal accounts, like your RRSP or TFSA, and we'd have five hundred in growth stocks inside your corp. And what does that do? All of a sudden, you've now created capital gains tax in your law corp and isn't attracting fifty percent tax that the fixed income is getting. On the same vein of investments in in fees, it's important to hot topic a few years ago. What I would talk about is making sure... Or if you've got... Again, in this...
[00:07:15] Dustin Serviss: I will preface, and I'll make this bigger in a second. I will preface that the fee based accounts usually... The doors start to open above about three hundred to five hundred thousand. That's the reality. That the truly fee based where you get an invoice for the the the investments that you have, usually, it's three to five hundred thousand. Now what is it? Well, a mutual fund invested in your law corp, the fees are not tax deductible. The fees are buried in what's called the MER or the management expense ratio. So for... Just a backup, if you if you don't know that or you have mutual
[00:07:53] Dustin Serviss: funds or you're thinking about them, mutual funds have a management expense ratio. And what that means is if you get, say, on your statement, you see a seven percent return and your management expense ratio is two, you actually got a nine percent return and they took two percent off for the fee, and you saw seven. But it's it's in the fund. It's it's not a secret. They tell you about it. They have to disclose it, but it is more sort of buried in there. If you have a law corp and you're, you know, able to get a fee based account, Lawyers Financial uses Fiera Capital. Again, you can look them up, on the line.
[00:08:28] Dustin Serviss: But for a privately managed account, if you can get this fee based in your law corp, the fees are tax deductible. So, again, on smaller accounts, this isn't a huge advantage. But once you're talking three, four, five hundred, a million, two million, this tax savings becomes material.