SMB Glossary
Small Business Glossary
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Agile Organization
What Is an Agile Organization? An agile organization is an organization that is able to respond to changing market landscapes with agility. In other words, it is an organization that’s able to react quickly to changes in the market. To achieve this, agile organizations typically put a greater emphasis on customers than profits, even if […]
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Blended Workforce
What Is a Blended Workforce? A blended workforce is a staff that includes permanent employees, temporary employees, and independent contractors. More specifically, this means that the staff may be any combination of full-time employees, part-time employees, temporary employees, long-term contractors, consultants, and independent contractors and freelancers. In other words, a blended workforce is a staffing […]
read moreBoomerang Employee
What Is a Boomerang Employee? A boomerang employee is someone who leaves their current place of work to return to the very same company at a later date. Why Might an Employee Leave Your Company and Then Want to Return? There are a few reasons why this might happen, including: Maybe they left to try […]
read moreBusiness Agility
What Is Business Agility? Business agility refers to a company or organization’s ability to adapt to new situations and quickly change to meet the needs of an evolving market. In other words, it refers to the characteristic of being agile: just like an acrobat who is light on their feet, an agile business is able […]
read moreBuyer Behavior
Buyer behavior refers to the actions that buyers take when purchasing a product. It is vitally important to businesses because it helps them understand how to tweak their product lines. Similarly, it is also useful to study for marketing efforts because it helps marketers understand why people are buying a specific product instead of another […]
read moreBuyer Persona
What Is a Buyer Persona? A buyer persona is an archetypal representation of who your ideal customer is. Typically, the buyer persona will be based on in-depth market research, so while the persona itself is a fictional character, it’s still grounded in reality. For example, if your business sells yoga pants, you may have several […]
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Churn Rate Formula
What Is Churn Rate? Companies spend a lot of time and money attracting new customers. An equally important task is finding out how many customers you’re losing each year. That’s what churn rate means. It’s the rate at which you’re losing customers over a period of time. What Is The Churn Rate Formula? Knowing your […]
read moreCompetency-Based Pay
What Is Competency-Based Pay? Most employees are paid by the hour or are salaried, but there are other ways that you can be paid. One of the most interesting ways is competency-based pay. Competency-based pay is an entirely different kind of pay structure, based on the employee’s skill set, the knowledge that they have, and […]
read moreConvenience Products
What Is a Convenience Product? In the book Principles of Marketing, convenience products are described as a “product that the customer usually buys frequently, immediately, and with a minimum of comparison and buying effort.” Convenience products usually have low prices, and to turn a decent profit, they have to be sold in large volumes. Convenience […]
read moreEasily Schedule Your Employees and Track Time
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Decision Makers
What Are Decision-Makers? Decision makers are, as the name implies, people who make decisions. In a business context, this typically means people who have the power to make strategic business decisions, such as acquisitions, investments, etc. However, it also typically refers to people who have the power to make lower-level decisions, like which software to […]
read moreDeferred Revenue
What is deferred revenue? Deferred revenue refers to a payment that a company has received for goods or services that it hasn’t yet delivered. The term is used in accrual counting, in which income is only recorded once it is earned, i.e. the product or service has been completed or delivered. Until that happens, deferred […]
read moreDisability Leave
What Is Disability Leave? Disability leave is a type of leave of absence that is protected by the Americans with Disabilities Act (ADA). Unlike sick days or other time off, disability leave is not accrued. Rather, it is protected under the law as a disability accommodation. Disability from work can be given to an employee […]
read moreDislocated Worker
What Is a Dislocated Worker? A dislocated worker – sometimes called a displaced worker – is an employee that becomes unemployed due to reasons that are out of their control. While the term sounds like it’s based around geography, it’s more about why someone lost their job. There are several reasons why an employee may […]
read moreDisposable Earnings
What Are Disposable Earnings? Every employee has tax and payment obligations that they have to meet. After these have been met, employees are left with earnings that can be spent – or invested – in any way that the employee decides. This part of your earnings is referred to as disposable earnings. It’s worth noting […]
read moreDual Labor Market
What Is the Dual Labor Market? The dual labor market is a concept that splits the American economy into two distinct categories: the primary sector and secondary sector. In the primary sector, the workers typically have: Good jobs Solid and well-defined job roles Job security The potential for promotions Safe and clean working conditions On […]
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Employee Benefits Administration
What Is Employee Benefits Administration? Employee benefits administration refers to how the benefits for a business’s employees are decided, administered, and managed. These benefits usually include (but are not limited to): Vacation time – paid and unpaid Sick leave Parental leave Dental benefits Health benefits Disability benefits Retirement benefits The human resources department usually coordinates […]
read moreEmployee Management
What Is Employee Management? Employee management is the process, strategies, and tactics that an organization adopts to help measure, monitor, and interact with its employees. Employee management can help identify underperforming employees and help them turn their performance around. On the other hand, it can take high-performing employees and ensure that their work doesn’t slip […]
read moreEmployee Orientation
What Is Employee Orientation? When you start a new job, you’ll likely have to go through some form of onboarding. In a nutshell, that’s employee orientation. Employee orientation is the process used by an organization to introduce new employees to their teams, colleagues, processes, responsibilities, and workplace. Why Is Orientation Important for New Employees? A […]
read moreEmployee Relations
What Is the Definition of Employee Relations? At its simplest, employee relations is the term used by organizations to describe the relationship between employers and their employees. In recent years, there has been a lot more focus on creating trusted relationships between employees and their line managers. When a positive climate has been built around […]
read moreEmployee Sourcing
What is Employee Sourcing? Employee sourcing, in HR terms, is the process of finding (or identifying) potential employees, contacting them, and engaging with them. It involves proactively finding potential candidates rather than waiting for candidates to find your job postings and apply themselves. Employee sourcing isn’t usually undertaken for roles that attract a large pool […]
read moreEmployee Turnover
What Is Employee Turnover? Sometimes called employee turnover rate, employee turnover refers to the measurement used by businesses to calculate how many people leave that business in any given time period. This time period is most commonly a year, but you can adjust it for your organization. If you have a larger organization, you can […]
read moreEmployment History
What Is Your Employment History? Your employment history is, quite simply, a list of every job you’ve held in your professional career to date. Your employment history is usually requested when you apply for a new job or apply for unemployment benefits. Your employment history should include: The names of the companies you have worked […]
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Federal Unemployment Tax Act (FUTA)
What Is FUTA Payroll Tax? The Federal Unemployment Tax Act, or FUTA, is a federal law stipulating that employers must pay payroll taxes for their employees. Who Must Pay FUTA Tax? Generally speaking, most employers will need to pay FUTA taxes, and it’s against the law for the amount of the tax to be withheld […]
read moreFixed Costs
What Are Fixed Costs? Unlike variable costs, the fixed costs incurred by a business don’t change no matter how many sales it makes. Fixed costs are the opposite of variable costs. You may have heard the term fixed costs used interchangeably with “overheads.” Overheads and fixed costs, though, are not the same. It’s possible to […]
read moreFood Cost Percentage
What Is the Definition of Food Cost Percentage? Food cost percentage is one of the most critical metrics in the restaurant business. It can mean the difference between a profitable restaurant and one that isn’t. High operating costs and the cost of the food itself are some of the biggest challenges for a restaurant business. […]
read moreForm 1042-S
What Is IRS Form 1042-S? Form 1042-S is a Department of the Treasury Internal Revenue Service form titled Foreign Person’s U.S. Source Income Subject to Withholding. Typically, non-citizens of the United States are subject to tax on any income derived from U.S. sources. Therefore, Form 1042-S is commonly used to report any amount paid to […]
read moreForm 1099
What is a 1099 form? A 1099 is a United States tax form that records money sent between two entities that do not have an employer-employee relationship. In less technical terms, a 1099 form keeps track of income you received from a company or person who is not your employer. For companies, it keeps track […]
read moreForm 940
What Is Form 940? Form 940 is a Department of the Treasury Internal Revenue Service form titled Employer’s Annual Federal Unemployment (FUTA) Tax Return. It’s a form used to pay and report federal unemployment taxes. The money received from companies paying FUTA taxes helps compensate unemployed workers that were laid off due to no fault […]
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Goal Card
What Is a Goal Card? A goal card is a non-technical term used by some bloggers and influencers that refers to an index card that you use to write down your goals. For example, if you want to increase sales by 10% next month, you could find an index card and write “I want to […]
read moreGross Misconduct
What Is Gross Misconduct? Gross misconduct is when an employee commits an action that is so bad it requires immediate dismissal. What Are Examples of Gross Misconduct? Theft or fraud – this could be stealing office equipment or stealing belongings of other colleagues. It can also include the theft of data, making fraudulent expense claims, […]
read moreGross Wages
What Are Gross Wages? Gross wages is the amount of money an employee earns before deductions are taken out. Gross wages are set by the employer either with an hourly wage or an annual salary. Hourly workers, also known as non-exempt employees, can calculate their gross wages by multiplying their hours worked by their hourly […]
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Human Capital Management (HCM)
What Is Human Capital Management (HCM)? Human capital management (or HCM for short) refers to the practices that an organization has related to people resource management. Human capital management is vital for hiring employees, training them, and ultimately retaining them. These are generally broken down into 3 distinct categories: Workforce acquisition Workforce management Workforce optimization […]
read moreHuman Resources Business Partner
What is an HR Business Partner? The term Human Resources Business Partner (HRBP) refers to the shift of human resources toward a greater focus on business results. It’s about increasing the effectiveness of human resources by aligning it closely with the business needs and overall strategic vision. Typical functions of HR include recruiting, compliance, safety, […]
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Indirect Compensation
What Is Indirect Compensation? Indirect compensation refers to non-monetary benefits that are offered to employees in addition to their normal pay. It is also known as indirect benefits. How Does Indirect Compensation Differ from Direct Compensation? Direct compensation is the money paid directly by the company to the employee through their salary or wages for […]
read moreInformal Communication
What Is Informal Communication in the Workplace? Informal communication (sometimes referred to as grapevine communication) is often free-flowing throughout an organization. It is characterized as being: Quick Relational Natural Spontaneous It usually covers a diverse range of topics and doesn’t leave a paper trail. Informal communication often grows naturally via an organization’s employees and the […]
read moreInventory Turnover Ratio
What Is the Definition of Inventory Turnover Ratio? Inventory turnover ratio is commonly used to calculate how much inventory a business has sold and then replaced. This is specified over a certain amount of time. In order to calculate your inventory turnover ratio, you’ll first need to calculate your average inventory. Inventory turnover ratio is […]
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Job Classification
What Is Job Classification? Also known as job valuation, job classification is the process that an organization uses to fully evaluate the complexity, scope, duties, and responsibilities of a position within the company. Job classification is used to ensure that the job title for each role matches both its standards and job specifications. While job […]
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Leave Request
What Is a Leave Request? A leave request or PTO (paid time off) is the process that a company puts in place for an employee to request paid time off work. There are many reasons why an employee may put in a leave request – here are some of the most common ones: Health reasons […]
read moreLeave of Absence
What Is a Leave of Absence? A leave of absence is a period during which an employee is granted the ability to take time off work. Typically, the employee will request their leave for personal reasons, such as recovering from a medical issue, dealing with a recently passed family member’s estate, or the birth of […]
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Market Penetration
What Is Market Penetration? There are two common ways to define market penetration: Market penetration is the measurement of an organization’s sales expressed as a percentage of all of the sales for a given service or product. Market penetration can also be defined as the percentage of an organization’s target market that uses their services […]
read moreMarket Saturation
When you’re starting on a new business venture, it’s vital that you carry out an analysis of your chosen market. Your market analysis will cover your industry, the target market, and finally, what competition is already out there. When conducting this research, you may discover that the market is already saturated, but what does that […]
read moreMerit Pay
What Is Merit Pay? Merit pay falls under the umbrella concept of “pay for performance.” It refers to pay raises based on an employee’s performance after being appraised, often by the line manager. The scale of the increased pay is often based on the quality of the appraisal. The better your appraisal, the higher the […]
read moreMicromanaging
What Is Micromanaging? Micromanaging – or micromanagement – is a type of management style that often has a negative connotation. Micromanaging refers to a situation where a manager or superior very closely supervises (and/or controls) what an employee does, how they do it, and when they do it. Managers who adopt this style often have […]
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Net Sales
What is Net Sales? Net sales is the amount that any given business is paid for a product or service. As returns and allowances can sometimes reduce total sales, net sales allows you to have a better overview of your company’s actual sales. Net sales is a calculation that many businesses and organizations use as […]
read moreNotice Period
What Is a Notice Period? Notice period is the amount of time between when an employee notifies their organization that they will be leaving their job and when they actually leave. On the flip side, it’s the amount of time that an employer has to give their employee if they are terminating the contract – […]
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Paid Time Off
What Is Paid Time Off? Paid time off – or PTO – refers to a company’s policy regarding when their employees can and cannot receive paid time off allowances. Paid time off is sometimes called planned time off or personal time off by some companies. The company’s PTO policy sets forth a number of hours […]
read morePar Level
What Is the Definition of Par Level? Par level has nothing to do with golf for business – it’s a key metric that you need to be tracking if you’re in the restaurant business. At its simplest, your par level is the amount of stock that you require to run your restaurant and meet customer […]
read morePay Period
What Is a Pay Period? A pay period is a defined amount of time over which an employee is paid. This is a recurring amount of time and generally falls into one of these four time periods: Monthly Bi-monthly Weekly Bi-weekly Pay period can also be referred to by several other terms, including payroll schedule, […]
read morePerformance Improvement
Many employees dread performance reviews, but they’re an important part of any business. In addition to performance reviews, you may have heard the term performance improvement plan — this is the plan or strategy that comes out of employee performance reviews. What Is Performance Improvement? Performance improvement is a strategy that is often classified under […]
read morePre-Tax Deductions
What Are Pre-Tax Deductions? A pre-tax deduction refers to any amount that is deducted from a worker’s gross pay before any other taxes are taken from that employee’s paycheck. This reduces an employee’s income tax by reducing their taxable income. It can also mean that an employee owes less FICA tax, which includes Medicare and […]
read morePrestige Pricing
What Is Prestige Pricing? Prestige pricing, which is sometimes also known as image pricing or premium pricing, is a pricing strategy where an organization purposely puts a product or service at a higher price point. This is usually to provide the consumer with the idea that the product is of higher quality. By and large, […]
read morePunctual
What Does Punctual Mean? Punctual (or punctuality) refers to doing something or arriving at the expected time. It essentially means not being late. When Is Punctuality Important for Business? Being punctual is drilled into us from an early age, but many people suffer from poor punctuality, which can have an adverse effect on your business. […]
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Redundant
What Does Redundant Mean? Redundant – or redundancy – is when a business or employer has to reduce their workforce because some jobs or roles are no longer required. It’s worth noting that if you lose your job because it’s considered redundant, but the position is filled by someone else, this is not a redundancy. […]
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SUI (State Unemployment Insurance)
What is SUI taxes? SUI, as it’s often referred to, stands for State Unemployment Insurance and is employer-funded. SUI exists to help employees who have left or lost a job (for many reasons). SUI tax offers these employees short term benefits to help them through their tough time. It’s usual for an employee to receive […]
read moreSalaried Non-Exempt
What Does Salaried Non-Exempt Mean? The Fair Labor Standards Act (FLSA) states that all employers must classify the roles in their business as one of two things: exempt or nonexempt. Only nonexempt employees are covered under the regulations set forth by the FLSA. Under the FLSA, nonexempt workers earn at least the minimum wage and […]
read moreSalary Basis Test
What Is the Salary Basis Test? Federal law states that as an employee, you’re considered eligible for overtime pay. That said, some requirements make it so that an employee is exempt from overtime pay. The salary basis test is the set of conditions that could result in an employee being exempt from this overtime pay. […]
read moreSales Turnover
What Is Sales Turnover? Sales turnover is a somewhat uncommon term that refers to how much money is brought in through sales over a specified time period. Sales turnover can be referred to as commercial revenue or sales. In some situations, the term sales turnover may refer to a concept more similar to inventory turnover, […]
read moreSplit Shift
What Is a Split Shift? Put simply, a split shift refers to when a worker decides to work a certain number of hours in two different shifts on the same day. By contrast, most employees will work one shift in a day and take an assigned number of breaks. Split shifts tend to be most […]
read moreState Unemployment Tax Act (SUTA)
What is SUTA Tax? State Unemployment Tax Act, or SUTA, is a type of payroll tax that employers are required to pay to their state unemployment fund for their employees. If you ever have to collect unemployment, you would collect payments from SUTA funds. How Do You Calculate SUTA Tax? Every employer will be given […]
read moreStatutory Employee
What Does Statutory Employee Mean? Statutory employees are independent contractors who are treated as employees when it comes to tax withholding if they meet certain conditions. Employers are generally not allowed to withhold taxes for the majority of independent contractors. Since statutory employees are neither considered independent contractors nor employees, slightly different rules apply. In […]
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Time Tracking
What Is Time Tracking? At its simplest, time tracking refers to how a business measures the number of hours an employee has worked on a shift, project, or task. It’s primarily used for businesses where the employees are paid by the hour. It’s also often used by freelancers and professionals who charge by the hour. […]
read moreTime to Fill
What Is Time to Fill? Time to fill is often mentioned alongside time to hire – but there’s a difference. Time to fill measures the number of days it takes you (or your HR team) to fill a job position. This is calculated from the day the job was posted until the day that the […]
read moreTime to Hire
What Is Time to Hire? There are many KPIs and metrics that HR managers and business owners have to measure. When it comes to employment, time to hire is crucial. But what is it? Time to hire is often mentioned in the same breath as time to fill, but there are differences. Time to hire […]
read moreTurnover Rate
What Is Turnover Rate? If you work in the restaurant business, you’ll probably know that turnover rate is related to how quickly your tables empty and fill back up in the shift duration. In the broader business sense, turnover rate has a slightly different definition. Turnover rate – or employee turnover rate – is defined […]
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Unique Selling Proposition (USP)
What Is a Unique Selling Proposition (USP)? A unique selling proposition is essentially the key point that differentiates a company’s products from its competitors. In a nutshell, it’s the point that makes each company unique, and the proposition for why buyers should purchase from one company over another. For example, if you were to open […]
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Variable Cost
What Is a Variable Cost? A variable cost is a cost incurred by a business and is associated with the number of services or goods it produces. When a business is producing more goods, the variable costs will increase – and as you might imagine, if the volume decreases, so does the variable cost. Variable […]
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W-2 Form
What is a W-2 form? The W-2 form is a tax document that is used to report employee income, both from salaries and wages. The form also notes how much tax the employer withheld alongside some additional information. If you have made more than $600 from your employer, you are entitled to a W-2 form. […]
read moreWorkforce Analysis
What Is Workforce Analysis? Workforce analysis is the examination of a company’s employee and contractor base, i.e. its workforce, to identify areas of strength and weakness. In essence, it is a process that is used to evaluate how a company’s workforce is performing and see if there’s anything that can be done to improve. Furthermore, […]
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Year to Date (YTD)
What Is Year to Date (YTD)? In its most straightforward form, year to date is used to reference the period of time that has passed from the start of the year to the present time. It’s important to note that year to date – when used in reference to business – may not actually refer […]
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