8 years ago
This month, Ed Andrews, principal consultant, Workforce Development Division, ACT, Inc. writes about his experience presenting at 2007 LiveXchange.
Michael P. Hickey is the founder and president of Hickey & Associates, a consulting company headquartered in Minneapolis, MN, with four regional offices throughout the United States. Hickey is a site selection and public incentives expert who has spoken at numerous national conferences. BF: You say that about 75% of financial incentives offered to relocating companies aren’t fully realized. What factors contribute to this high rate of incompletion? Hickey: The lack of a centralized incentive management system for key corporate team members diminishes their ability to not only manage the incentives they have, but also limits future opportunities to reduce costs. The majority of incentives are never captured and lost permanently, often as a result of missing reporting requirements or sending in incomplete or incorrect data with their company reports. Another primary reason is lack of planning on the company’s part. Company personnel often don’t understand the process of requesting incentives and the importance of being conservative in promising jobs and capital investments, which drive the value of incentives. As a result, they fall short of their required goals and lose out on the opportunities previously negotiated. However, with proper planning these mistakes can be avoided. BF: Can you briefly describe your firm’s Public Incentive Management System (PIMS) and some of the benefits it offers to a relocating or expanding company? Hickey: PIMS is a state-of-the-art, real- time incentive data management and document storage system developed exclusively for the corporate management team. The Web-based system is designed to ensure that the maximum dollar amount and value of incentives are received on a timely basis, and compliance requirements are continually met at the federal, state, and local levels during the life cycle of incentives. PIMS eliminates 90% of the reporting burden. It offers a notification system that alerts users of impending incentive compliance issues. Important contracts and agreements can be uploaded, so as the corporate team changes, historical documents remain accessible. The corporate management team and field locations can easily access incentive data via real-time reports. BF: What risks are companies taking if they fail to meet the requirements of their incentive agreements? Hickey: Nothing positive comes out of lack of compliance, which often is a simple result of not completing reports accurately and when due. Clawbacks and/or discontinuance of incentives will happen without accurate reporting. Clawbacks often require full or prorated payback plus interest of incentives already received, while discontinuance involves programs, such as tax reductions and training grants, being made unavailable due to lack of compliance. Unfortunately, when problems […]
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