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Blog: The Business of Management - Benefits
 

November 13th, 2008

The Small World of Big Benefit Challenges

Consulting giant Mercer just released its latest survey of benefits practices around the world, and the findings shouldn’t surprise anyone. The concerns we have here in the U.S. mirror the concerns that working people have globally.

In other words, when it comes to the issues surrounding workforce benefits, it’s a small world after all.

Mercer surveyed multinational employers about their benefits offerings and employee concerns for the 2008 edition of Mercer’s Introduction to Benefit Plans Around the World: A Guide for Multinational Employers (available online at www.mercer.com/bpaw). What they found, according to the study, is that although “multinational employers may operate in diverse economies around the world … they face certain common global human resource challenges—chief among them the changing concept of retirement and the continuing rise in the cost of health care,” according to the press release from Mercer on the survey of benefit programs in 48 countries.

The fact that the benefits issues workers worry about in Asia or Europe are pretty much the same as what people are concerned about here in the U.S. shouldn’t be surprising, given the globalization of the economy. As we’ve seen from the financial crisis, bad news that hits one country and its financial markets ripples through other countries and markets. Given how connected we’ve all become, that shouldn’t be too surprising. But it really hits home when you see the top five retirement challenges and trends, and the top five health and welfare challenges and trends, as ranked by Mercer:

Top five retirement challenges/trends
1. The concept of retirement is changing and many will be forced to postpone full retirement.
2. Defined contribution plans are becoming the norm.
3. As more responsibility for retirement is shifted to the individual, there is a disturbing lack of employee understanding of how to ensure a secure retirement.
4. Retirement benefits may be inadequate for many employees.
5. Global governance is on the rise to ensure compliance and competitiveness in all markets in which a company operates.

Top five health and welfare challenges/trends
1. Rising employee expectations for state-of-the-art health care conflict with private sector concern about the rising costs.
2. Workers differ on the value of individual benefits, depending upon their age and personal circumstances.
3. Lifestyle diseases are on the rise, straining health care budgets.
4. Understanding and managing how changing health risks can affect employer liabilities is essential but often overlooked.
5. Tracking global health benefit costs and ensuring good governance of programs worldwide is a challenge.

I’ve written about a lot of benefits studies over the past year, but this is the first time that I’ve gotten such a clear view of how universal the worries and concerns about employee benefits really are. Plus, it tells us that workers everywhere want the same things: good health care, a secure retirement and a little help from their employer in managing it all. It sounds simple, but as we all know, nothing in the current economic environment is simple anymore.


November 6th, 2008

Meet Your New Benefit: Unpaid Time Off

How do you know that times are really getting tough for businesses all over America? It’s when you hear stories about companies “offering” employees goodies like unpaid time off—as a last-ditch attempt to make it through the quarter.

Texas-based computer giant Dell trotted the idea out this week when, according to The Dallas Morning News, CEO Michael Dell sent out an e-mail to workers encouraging them to take up to a week of unpaid leave as part of an effort to cut costs this quarter. Dell’s memo also had this ominous twist: “The note explained that although the leave program is voluntary,” the newspaper reported, “the company may resort to layoffs if it cannot save as much as hoped through this round of cutbacks.”

And that’s not all Dell is doing to cut costs. “Dell hopes it can better weather the economic storm by implementing a number of new cost-cutting measures, including an enhanced severance package for employees who voluntarily leave the company,” according to PC World.

“Within the next couple of weeks, employees will be able to apply for a voluntary separation plan under which they can leave the company and receive a severance package that is better than Dell’s regular offer,” a Dell spokesperson told the magazine.

All of this comes on top of a nearly completed layoff of 8,900 workers—10 percent of the company’s workforce—that was announced in May 2007, as well as a current undisclosed reduction in the number of Dell’s contractors and temporary employees.

Michael Dell has been working hard to try to fire up the troops since he returned as CEO, and he’s had mixed success in bringing glory back to the computer maker that was famous for its just-in-time manufacturing model.

In order to pare $3 billion in costs from the company’s budget by 2011, Dell has been rummaging through his bag of tricks and pulling out just about every cost-cutting and budget-reduction device imaginable, according to The Wall Street Journal. While $3 billion is a lot of cutting, the really scary thing is that the Journal has a Dell spokesperson saying that “the latest moves are designed to cut costs beyond the $3 billion target … and will better position the company for long-term competitiveness.”

So that’s why Dell’s workforce is getting “offered” the opportunity to take some unpaid time off between now and the end of January. It’s just another sign of the times, of course, but that doesn’t make it any more palatable. And if Dell can get enough people to take the company up on this unpaid vacation “offer,” it will likely be a trend you’ll see other me-too managers and executives drop on their workforces.

Is this a bad trend, or better than the alternative of being out of a job? Is five days’ unpaid time off really such a bad thing? I don’t know how you feel, but it kind of runs counter to the uplifting words of hope we heard from President-elect Barack Obama. And it clearly shows again, as if we needed any more proof, that he’s walking into a really tough economic mess that will quickly put him to the test. Let’s all hope he has some fresh answers and new solutions to get us all back on track.


October 22nd, 2008

A Bad Trend for Workers Who Smoke

Let me be clear about this: I don’t smoke, I have never smoked, and I have serious questions about people who, in this day and age, continue to smoke despite years of warnings about all the bad things that tobacco does to your body.

But I don’t agree with the misguided notion that passive smoke is some sort of crime against humanity. As a nonsmoker, I don’t like smoke in my face but I also don’t think it’s fair that our nanny society seems to want to treat smokers like they’re lepers by making it harder for them to find a place to puff.

I find the over-the-top anti-smoking zealots to be far worse for my health than any passive smoke I might run into. Their holier-than-thou rhetoric and action increases my blood pressure, and it fails to recognize the basic principle of dealing with humans: We’re human. Stopping smoking is tough for even the most motivated person to follow through with, and I am reminded of my winters in Great Falls, Montana, when the smokers congregated for a puff outside the back door of the newspaper in 15-below temperatures. Think they would be out there freezing to death if quitting was all that easy?

The push to get smokers to quit has changed over the years, and the newest trick is also the most insidious: Don’t hire smokers. We’ve reported on this in Workforce Management, but what started with a trickle of organizations taking this approach is now spreading, as this story from The Cincinnati Enquirer seems to indicate.

Although most companies still try to use smoking-cessation programs as the way to get employees healthier, Cincinnati-based USI, an insurance and financial services company, now tests new employees when they’re hired. If you smoke and show no signs of trying to stop, you don’t get the job.

“We decided not to hire smokers because they add additional expense to our health plan and our ongoing operation,” said Dennis Curran, chief human resources officer for USI’s Midwestern region.

The Enquirer story points to a USI job candidate by the name of Jamie Holleman. She had applied for a commercial lines account manager position, “interviewed in March, then withdrew as a job candidate after it became clear that the smoking policy would be an obstacle. But the company called again in July and asked if she would enter a smoking-cessation class. She now takes weekly classes at St. Luke Hospital. ‘I was shocked,’ Holleman said of her reaction when she first heard USI’s position. ‘But I had actually been talking to a friend of mine about quitting.’ ”

Here’s an interesting side element to this story: Although you can deny a smoker a job in Cincinnati, it’s illegal to do so across the Ohio River in the tobacco-growing commonwealth of Kentucky.

The Bluegrass State considers smokers to be a protected class and according to The Enquirer, “a law on the books for several decades in Kentucky, one of the nation’s leading tobacco-growing states, says it would be illegal for an employer ‘to require as a condition of employment that any employee or applicant for employment abstain from smoking or using tobacco products outside the course of employment, as long as the person complies with any workplace policy concerning smoking.’ ”

The story also points to another issue in this debate: that the laws about using workplace hiring policies to regulate behavior such as smoking are evolving. “Courts haven’t quite figured out what to do with it,” Justin Flamm, a partner at Taft, Stettinius & Hollister, told the newspaper.

If you’re like me and feel that the anti-smoking zealots have run amok and gone too far, perhaps the better approach is the one most sensible companies follow: Encourage workers to do whatever they can to take better care of their health, whether it be losing weight, exercising more or giving up the smoking habit.

Some companies have even gone so far as to offer financial encouragement to workers who try to get healthier. That’s certainly a more sensible approach and one that is more likely to work. In my many years of management experience, policies that punish people for all-too-human behavior are doomed to fail. That’s something I wish the anti-smoking zealots would remember. You get more positive action by encouraging people to change their ways than you do by wasting brain cells in pursuit of new ways to punish them.


August 12th, 2008

Another Benefit You Probably Don’t Offer

I travel quite a bit in the course of the year, and in my travels I read a lot of America’s newspapers. As a longtime newspaper editor who knows a lot about this subject, take it from me when I say that for the most part, America’s newspapers pretty much stink.

This is especially true at many of the larger metropolitan dailies that have been taken over by philistines like Sam Zell and Randy Michaels, guys who know nothing about the newspaper biz  and seem to think that slashing the basic resource that makes a newspaper valuable—its reporting and news staff—is a smart business strategy.

One newspaper that seems to defy this trend, however, is the Miami Herald. Despite all the cutbacks at its parent company, McClatchy, the Herald is always a great read and does a wonderful job capturing the strange and surreal sense of place that permeates south Florida.

And the Miami Herald does it with stories that you just won’t find anywhere else, stories like this: how some companies in south Florida are offering spiritual and faith-based services to their employees as part of their benefits packages.

Here’s the essence of the story, according to the Herald: “It’s not unusual for faith-based organizations to extend pastoral care to their employees. But as all employers seek to find an edge in recruiting and retaining workers, more and more secular companies are offering free spiritual counseling in their ‘work-life’ package of employee benefits.”

The story specifically points to Tamarac, Florida-based City Furniture, “which has 15 stores from Stuart to Cutler Ridge and about 1,050 employees” and “put together a team of four spiritual counselors earlier this year—a Protestant minister, a Bible teacher, a Catholic priest and a Jewish rabbi. Yes, City Furniture promotes the fact that it sounds like the opening to an old religious joke.”

Curt Nichols, vice president of HR at City Furniture, told the newspaper that the company first tested the waters before moving forward with the idea, which originated with the wife of company founder and CEO Kevin Koenig. “There were those completely excited by it and those who said they would never use it but weren’t offended by it,” Nichols said. “Not one person said it was a bad idea.”

City Furniture recruited the spiritual squad based on recommendations from employees who were members of local congregations. Nichols said he’ll add Muslim, Hindu or other religious representatives if the need arises. The team, which refused payment but agreed on a monthly donation to their congregation or organization, is invited to employee events and visits City Furniture’s main campus twice a month to mingle with employees who are interested. They are available by phone and e-mail and will make appointments to meet privately with any employee.

Sound like an odd benefit to you? It did to me at first, but then I got to thinking: How odd is this compared to some of the goofy employee perks they offer at companies in the Silicon Valley?

There’s also this comment from Rabbi Matthew Berkowitz, senior rabbinic fellow of the Jewish Theological Seminary, and the City Furniture team’s Jewish representative, that puts this kind of benefit in perspective: “We pay great attention to our physical selves, joining gyms and hiring personal trainers,” Berkowitz told the Herald in an e-mail. “The same attention must be given to our spiritual and emotional selves as well. City Furniture is a pioneer in the corporate world, and I hope this model catches on in other venues.”

Yes, this probably isn’t a benefit your company is offering, but after reading this Herald story, I came away wondering: Isn’t spiritual counseling for employees, especially in times of personal crisis, a whole lot more valuable than pet insurance or discount tickets to the local theme park? What do you think? I’d love to know, either with a comment here at the bottom of this blog or in an e-mail to me a jhollon@workforce.com.



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