Wellness: Should our company be doing something about it?

Currently, 62% of employers offer some type of wellness plan, whether that is as simple as discounts on gym memberships or as comprehensive as a multi-faceted points-based program. Regardless, an employer must view a wellness program as investment in the employees, not in the health insurance plan itself.

1.  How does an employer decide whether it makes financial sense to implement a wellness program?

Factors such as demographic makeup, company culture, and the overall wellness implementation strategy including structure and design, will determine the ultimate “return on investment.” Employers should expect to pay between $4-$15 per employee per month on a wellness plan Companies with high turnover or lower paid workforces tend to directly benefit the employer the least; however, as more and more companies adopt wellness initiatives, the less that this will hold true.

First, the employer must be willing to adopt a top-down approach to implementing the wellness program and be willing to make a push to change to the company culture with an emphasis on healthy living.  Leaders determine culture.  If caring for yourself and others is part of what the employer values personally, it only makes sense to include wellness as part of company culture as well.

Secondly, an employer must understand the goal of the wellness plan before you can expect to see any results. “Bad” behavior drives risk; risk drives illness and disease; diseases drive healthcare costs. The only way to change the course of this cycle is to change behavior. An employer should not expect to see a dramatic change in the first couple of years. The only real way to measure success is in risk factor reduction.

2.  How does an employer maximize participation in a wellness program?
An employer must begin in the data collection phase of a wellness plan to experience long-term success. It is here where an employer identifies the current risk within the company by examining a multitude of data sets including clinical data obtained through claims or self-reported lifestyle data, health risk assessments (HRA), and biometric data. From here, an employer can determine the most critical areas to impact as the plan is designed.

Employers must then effectively market and communicate the wellness plan to employees AND families when integrating wellness plans. Often, the dependents are the more costly members of the employer’s health plan. Make the communication material as positive and personal as possible. It is vital that support from the executive team is evident in this communication and marketing. Employees follow what is done, not said.

Offering incentives will maximize participation.

Some employers feel that mandating certain requirements to maintain health care eligibility is the most effective way to force the hand in wellness participation. Others feel that offering voluntary incentive based plans is the safer path if you are trying to avoid discrimination liability and hope to boost employee morale as well.

The most effective plans include a variety and combination of incentives that will appeal to a broad employee base.
The most effective incentives are those that are tied to the health plan, such as premium discounts and contribution to flexible spending accounts or health savings accounts associated with high-deductible plans. It is also important that the employee be able to measure their wellness success and milestones. This can be achieved through point based systems as well as effective web tools to evaluate progress.

It is important, however, not to discriminate when implementing certain incentives. To date, the only real measure is placed upon insurance premium reduction. An employer cannot incent  in excess of a 20% cost reduction for participation in the wellness program.

3.  What does the future hold for Wellness programs?

If you understand the fundamentals of what is behind the rising cost of healthcare, one can only speculate that government will begin to highly incent employers via hefty tax credits to enforce employer sponsored wellness plans.

In fact, 16% of gross domestic product is spent within the healthcare sector. This number is rapidly rising and in part is due to the declining health in the US. The only way for this number to stabilize is to change the behavior of the American people at large.

The largest portion, over 60%, of Americans are insured under employer health plans. Similar to other benefits, such as retirement plans, it seems logical that the government will intervene and place the wellness burden in the laps of employers of America to enforce these much needed programs.

Marketing Your Employee Benefits Plan

According to a 2007 study, more than two-thirds of employers feel that their employees don’t fully comprehend the value and costs associated with their insurance benefits. At the same time, two out of five employees say they don’t know which options are most appropriate for them and their needs and would like additional education and assistance with planning their benefits program. Clearly communicating and marketing employment benefits can greatly help both employees and their employers. Such efforts convey a message that the employer is attempting to help employees manage their health and well-being, resulting in positive recruiting efforts and employee retention.
Most employees have a general understanding of the healthcare but are not well versed in specifics such as the cost to the employer. It is shocking when they learn that their employers spend 20% to 40% of the employees’ wages on benefits. Issues such as cost sharing and consumer-driven health plans add to the confusion. While recent studies indicate healthcare premium trends are finally on the decline, employees are still experiencing increased co-pays, deductibles and premium contributions. There are several ways employers can most effectively communicate employment benefits:

1. Open Enrollment is an employer’s opportunity to highlight their benefits program each year. An employer’s Benefits Broker/Consultant can facilitate this process by holding open enrollment meetings, webinars, and developing user-friendly communication pieces highlighting the benefit programs.
2. Highlight benefits in employee newsletters and offer “lunch and learns” to provide constant communication with employees.
3. Develop and maintain a benefits portal within the corporate Intranet or HRIS, providing a resource where employees can access up-to-date information regarding their benefit programs.
4. Implement an online enrollment benefits management system whereby employees can: a) Access their account and view/update their benefits enrollment information. b) Hyperlink to carrier and vendor websites in order to view physicians and claims. c) View list of FAQs to help employees understand how to best utilize their benefits, i.e. how to access a doctor and/or obtain a referral.
5. Provide new hire orientation meetings for all newly eligible employees.
6. Train your Human Resources team to ensure they can clearly communicate the value of the entire benefits package to your employees.
7. Hold a Health Fair every couple of years. A health fair provides a venue for employees to interact directly with the carriers and vendors. It is a non-threatening environment for employees to obtain information about health & wellness, prevention, and additional resources available through their health plans.

Both employees and employers can feel the negative effects of insufficient communication and marketing of employment benefits. Employers can face difficulty with respect to employee recruitment and retention. Employees, in turn may suffer from poor morale if they feel their company undervalues them, contributing to a negative work environment. Conversely, when a company shows it cares about its employees, both parties can greatly benefit from the advantages of open communications and a well-informed, strongly motivated staff. Proper marketing of the benefit plan is critical to communicating the real value to the employees. If done properly, the employer will reap increased overall employee satisfaction.

Training Employees – Why it is More Important than Ever

Companies have found that investment in human capital in the form of training and development yields high returns. The ones that recognize the value of their employees and place a new emphasis on education and training are becoming more competitive, successful, and profitable as a result. According to a study conducted by Knowledge Assessment Management, companies in the top 20 percent of those who spend money on training receive higher returns in the stock market. Is it possible that knowledge is equal to profit?

According to an article in T+D Magazine a knowledgeable workforce may ensure a company’s survival. The article profiles four companies that survived the economic impact of September 11, 2001, and a business climate marked by recession and corporate scandals. These companies—Southwest Airlines, Viacom, Dell, and Guardsmark—all consider employee training an investment in company growth and stability. Rather than cutting back their training budgets during hard times, these companies chose to invest in the development of new skills and knowledge within their workforce. In doing so, these companies showed a commitment to their workers and gave them the educational background necessary to increase productivity and effectiveness in their respective markets. The workers, in turn, supported these companies and ensured their survival through a difficult chapter of American business history.

Experts in this field can work with your leaders to help instill the importance of a motivated and engaged workforce. That is critical to achieve success when the economy improves.

The face of business is changing at an alarming rate. Technology advances, globalization, workplace diversity and the list goes on. And all this in a weakened economy! Every industry sector and each departmental division within a company is confronting the same reality. Which outcome a company and its people will experience is directly focused on their commitment to training and development.

The new paradigm for training requires us to view it as an inseparable part of performance improvement and management. Once viewed in the eyes of management as a nonessential support tool, training and development has become an integral part of business strategy and aligned with business results. Training is a process that involves dynamic interrelationships with the other functions of the organization, especially supervisors, managers and performance management systems.

A number of trends in training and development are occurring as the marketplace changes and companies strive to achieve these levels of performance in a time when corporate dollars are not spent on training. As they watch their budgets shrink, HR and corporate training professionals are looking for cost effective training options that can still get the job done without an expensive price tag.

This economic downturn is actually an excellent time for companies to focus on maximizing internal talent and resources by means of an improved training program. Spending time and resources now to train employees will help motivate them to be ready to move forward successfully when the economy gets better.

Qualified Instructional Design firms can help you maximize your talent pool by ensuring that your succession planning and talent management processes are setting you up to emerge successfully when the economy takes an upturn.

HR Technology – The Core of Strategic HR

Do you feel as if your human resource department has turned into a mess of administrative work?

Are your core processes muddled with paper-based, manual systems?

Is senior management questioning how HR adds value to the organization?

Is it becoming harder to get additional budget assigned to your department?

If yes, is the answer to any of these questions, it may be time to look at getting out of the “paper pushing” business and take that leap towards functioning as a truly strategic department that adds value to the overall business approach. HR departments alike strive to focus their attention on key elements deemed as “Strategic HR”. This includes recruiting top talent, training/development, and organizational development strategies that focus on employee retention and succession planning. HR departments that can effectively strategize and implement these core functions are truly maximizing the value of human capital. The first step towards this end is the deployment of the right HR technology. Without access to meaningful HR related data, a business cannot measure or analyze trends within their organization. One of the key reasons that companies struggle with gaining visibility into the organization is because data is contained in multiple systems thus limiting any reporting capability needed for analysis. The right HR technology strategy is paramount to deployment of “Strategic HR” as it will minimize administrative processes, easily ensure compliance, and allow access and create meaningful reporting capabilities.

Implementing an end to end HRIS which includes employee and manager self-service is necessary for a business that is striving to become fully paperless. Since payroll is the most accurate data in any organization, it only makes sense to build an HR database off of this data. To maximize the benefits of automation and ensure data integrity, fully integrated or single database for Payroll/HRIS system is the answer. Most systems on the market today deploy role based security which allows designated employees including managers, employees, and non-HR executives to have unique access rights to certain data points that are core to their role in the organization. The system becomes a universal tool that benefits the entire workforce, not just HR. Self- service gives employees, managers, and executives instant access to the information that otherwise was only accessible by the HR department thus eliminating the time consuming requests made on HR. This alone promotes productivity and makes for a compelling ROI for implementing a new system. Explore the benefits that are realized by using an integrated system and the features to look for as your company evaluates the applications on the market today. For a no cost evaluation of your company’s needs or for assistance with a vendor selection process, contact Centripetal Consulting Group at 214-824-4439 or at www.gocentripetal.com.

Key Benefits of an Integrated Payroll/HRIS:

• Improve responsiveness to employees and management with a workflow process that streamlines HR record-keeping and maintains proper audit trails
• Maintain a competitive workforce by simplifying and speeding up hiring, training and retention programs with an accessible, integrated database
• Gain greater control real time payroll processing by eliminating the need to transfer files back and forth, reduce errors and payroll corrections
• Ensure government and payroll tax compliance with automatic updates that keep you up-to-date on the latest regulations
• Plan for talent succession by indentifying top talent and key positions for keeping the business fluid and healthy
• Increase employee retention by deployment of self-service tools that keep employees involved with the employment lifecycle
• Enhance your reporting capabilities with workforce decision data that helps you lower benefit costs, spot organizational trends and take clear action
• Containment of costs including insurance premiums, controlled labor expenses including overtime, Travel and Expense, IT and disparate system related costs
• Improve employee communications through centralized intranet portals and employee survey capabilities
• Create and leverage a standardized infrastructure that will enable executives to better analyze costs associated with their organizational structure for budgeting and forecasting purposes

Key Features of an Integrated Payroll/HRIS

• Applicant Tracking that interface to outside job boards and company website
• Electronic On-Boarding
• Time and Attendance
• Payroll Processing
• Benefits Enrollment and Administration
• Performance Management and Compensation
• Salary Planning and Budgeting
• Automated Learning/Training Management
• Employment History and Succession Planning
• Employee/Manager Self-Service
• Effective Dating
• Open platform for easy integration and import/export to third party systems

HR Outsourcing in a Down Economy

The mid-way point of 2009 has come and gone and the economic forecasting remains positive, however the statistics still remain grim. Unemployment remains at a 20 year high, consumer spending is at the lowest levels since the early 1980s, and disposable income has sunk to levels not seen since 1947. To add to this, health care reform has the country in a tailspin, especially the large populations of employees who make their living in the healthcare industry. Concerned employers wonder how it may impact their businesses in the short and long term. As the economic downturn continues, employers across all market sizes report their top business concerns or threats to their business:

Threats to the Business

1. Diminished productivity due to deflated employee morale and leaner staff
2. Dropping revenues and unpredictable cash flow
3. Increasing layoffs and the potential for rising lawsuits
4. Increasing insurance for healthcare premiums and operating expenses

Employers, both large and small, are not prepared to watch and wait from the sidelines. They have taken matters into their own hands to offset rising operational costs and dropping profits through the use of outsourcing. “Outsourcing” is defined as, “the procuring of services or products from an outside supplier or manufacturer in order to cut costs.” Almost every employer engages in at least one form of outsourcing. In recent years, and continuing through the recession, Human Resources and Accounting top the list as key areas where businesses can immediately realize cost savings and operational efficiency. Because both of these processes are not core functions of the business itself, a return on investment or business case for outsourcing to a third party is easily made. To learn more about the key drivers behind Outsourced Accounting click here

HR Outsourcing Industry Continues to Soar

Human Resource Outsourcing is a business strategy that allows an employer the means to reduce overhead expenses, reduce employer liability, and improve employee productivity. While some employers may select to outsource only specific HR functions like payroll or recruiting, others have opted for a comprehensive, single source solution. To learn more about the differences among HR solutions and providers available to the market, click here.

HR Outsourcing continues to gain momentum as a viable solution for challenged businesses. According to IDC, a global research firm, outsourcing Human Resources functions has become the fastest growing segment of the broader business process outsourcing (BPO) industry. It grew close to 70 percent over the past 6 years, with companies worldwide spending more than $103.3 billion.

Additionally, Centripetal Consulting Group obtained information from Everest Research Institute, an independent research and analysis organization which states that North American HR outsourcing transactions reached $25.4 billion by the end of 2007, an increase of 19 percent over the previous year. In 2008, despite the slowing economy, HRO transactions grew an additional $2.9 billion, an increase of over eleven percent over the previous year. Everest Group, the parent company of Everest Research Institute contributes to this growing number of business utilizing an outsourced HR strategy. Centripetal Consulting Group is currently working with this 70 employee firm to select the right HR outsourcing technology partner which will enable the company to streamline and automate employee related transactions and internal processes.

Why Outsource?

While large corporations feel the impact of a recession, these factors are magnified for small businesses and their recovery time is significantly longer. Public corporations may report diminished returns for their shareholders and are subject to public scrutiny. A small employer can easily go out of business overnight. This is frightening for everyone because small businesses or the SMB market are the lifeblood of the economy. These businesses are run by innovative and motivated entrepreneurs who invest their personal savings, time, and livelihood. They need protection more than a large company, yet many times either cannot afford the internal HR resources or aren’t really aware of their true exposure as an employer.

One of the reasons for the continued growth in HR outsourcing may be attributed to employers who had not considered outsourcing in the past, are now seeing the benefits of HR outsourcing as a means to reduce overhead and cut operational expenses. They’ve been forced to slash headcount. This creates a “do more with less” environment which can compromise productivity. But from a legal and compliance standpoint, employers feel vulnerable to increased regulation associated with employee terminations. The changes to COBRA are one example. This fear has motivated employers to consider the outsourcing to alleviate the burden of dealing with employment related compliance and administration.

The key for small employers to successfully navigate through a recession is to stabilize revenues and improve employee productivity. The cost associated with labor and employee benefits are reportedly the two top line items on the balance sheet, thus making HR accountable and responsible for maximizing employee productivity while minimizing costs and risk. Employers look to HR outsourcing as a means to achieve these objectives:

1. Stabilizing operating expenses increases company value and calms corporate anxiety.
2. Streamlining operations reduces unnecessary overhead and cuts wasteful spending.
3. Lowering insurance premiums reduces overhead and expenses.
4. Minimizing employment risks reduces the potential of lawsuits and complaints to the federal and state agencies, and the resultant legal fees and judgments.
5. Training and motivating staff increases employee morale and improves productivity.

Despite the recognition by many small employers as critical priorities to their success, most simply cannot afford to institute the necessary changes. Even the most efficient employers will be unable to devote the time required to make meaningful changes to corporate policies and procedures. Partnering with an HR Outsourcer helps an employer achieve relief. According to Hewitt Associations, a world-wide provider of HR consulting services and research data, the most common reason for engaging an HR Outsourcing firm is to reduce overhead. Companies clearly recognize the value of utilizing an outside resource to conduct various business-related activities, as compared to maintaining these functions internally. Other reasons to outsource include:

1. Access to outside expertise
2. Improving service quality
3. High cost of remaining up-to-date with rapidly changing environment
4 Eliminate high volume of low-value transactional activities
5. Reduce management distractions away from core business
6. Leverage existing staff to focus on key competencies

Although there are several “flavors of outsourcing”, the providers are not all created equal. However, there are two main types of HR Outsourcing providers: Traditional HR Vendors and Professional Employer Organizations (PEOs). Some employers may select to outsource specific functions, others have opted for a comprehensive solution. To learn more about the variety of the HR solution offering, click here.

Traditional Human Resource Vendors

Traditional HR vendors are firms that specialize in one particular service area, such as payroll, benefits brokerage and administration, recruiting, or training. In a traditional outsourced model, the employer selects a mix of HR vendors to perform specific function that encompass all of their outsourcing needs. To learn more about both the benefits and downside to this approach click here.

Professional Employer Organizations

The second main type of outsourcer is a PEO or co-employment vendor. In this relationship, the PEOshares many of the responsibilities of being an employer on behalf of their client. Through co-employment, small organizations access the economies of scale enjoyed by large corporations. In contrast to traditional HR vendors, the PEO provides a wide array of HR services, effectively consolidating multiple vendors under one roof.

The four key service areas include:

• Human Resources compliance and administration
• Employee Benefits and administration
• Workers’ Compensation insurance and safety consulting
• Payroll and tax filing services

This type of employment arrangement can offer several benefits to an employer, especially in a down economy. Many times a PEO can be a savior to a business owner who cannot afford expensive health premiums, is overwhelmed with paperwork, or is concerned with maintaining HR compliance. Click here to explore if a PEO is a good fit for your business.

On the flip side, an employer may only benefit from a co-employment arrangement for a short period of time as it no longer seems financially compelling to fully outsource the HR function. This trend may occur once the economy strengthens or changes in healthcare occur. Because the PEO performs all HR transactions, it is sometimes confusing or difficult for a company to determine their true costs for each of the services delivered by the PEO. Even if you do determine that it makes sense financially to leave thePEO, it can become even harder to piece the right vendors together to unbundle from the PEO. For help in this area click here.

Experts in the flavors of HR Outsourcing

The Importance of Broker Selection

Scott Lewis

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Selecting the right health insurance broker is crucial to an organization’s overall strategy for managing employee benefits. This decision is even more critical when a company has decided to leave a PEO and now seeks direct representation within the health insurance carrier marketplace. Finding the right expert to represent your company is more difficult than normal because the consultant must fully understand the underwriting implications imposed by the carriers. Coming from a PEO, the employer bears no loss ratio or any claims history from the prior benefit plan.

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Open Enrollment Process- The Three Approaches

The fact is that the open enrollment process is evolving, especially for small to mid-size employers. It is migrating from a stand-alone, manual process to an automated, integrated environment where the latest technologies combine to make open enrollment as efficient, effective and productive as possible. Current research shows a migration from older, more obsolete methods of processing benefits applications to web-based initiatives that greatly streamline and enhance the entire process, thus creating a compelling employer ROI and more favorable employee experience.

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