The Health Care Task Force may not be the most creative name for a super group of organizational planners, but it served a vital service for University of Minnesota in 2002 when the institution switched to a self-insured plan.
“Employers, no matter the size, have finally given up hope that a huge insurance company or the government in D.C. will do something to save them or change costs, and so they’re taking it upon themselves to do something,” said one benefits professional.
Rather than relying on the state of Minnesota, the university set up its own internal infrastructure, complete with internal expertise in areas like pharmacy, HR and law.
Fifteen years later, the university’s internal plan still yields impressive results contrary to general health care cost trends. They avoid the high-deductible health plan, which shifts costs to employees; their pharmacy costs are well below the national trend; and employees aren’t seeing a premium increase for 2018, according to Ken Horstman, senior director of total compensation at the University of Minnesota.
The university, which has campuses in five Minnesota cities, accomplished this successful internal program through its own expertise and clear goals. The health plan has gone through many iterations since its genesis in 2002, said Horstman, but what has always been consistent is considering the support of the employees.
For example, costs and trends were skyrocketing in the mid-2000s after the university shifted to self-insurance, he said. When developing the health plan and strategy based on those trends, the impact on employees was a major factor in the decision. “[We] held back on making any significant plan design changes that would shift costs to its employees,” Horstman said.
The task force included a law professor, HR professionals and a consultant who helped determine plan design and how to set up the initial premium structure, he said.
The university also consults employees, forming a Benefits Advisory Committee. Four different employee groups represented include academics and professionals, faculty, civil servants and labor representatives. They’re not decision-makers, but they’re a vital part of the structure of the health plan, said Horstman.
The university’s willingness to experiment, make mistakes and revamp strategy if necessary has contributed to the program’s success. Currently, the university is primarily focused on the overall value and results of the benefits plan rather than the cost, said Horstman. It would have been an easy decision to go the HDHP route like other employers, but the university had its reasons for pursing a different strategy.
“There’s nothing wrong with [HDHPs]. But over time, if you get into too high of a deductible area, it does limit the care people seek for themselves, and that was a concern on our part,” Horstman said.
“Is it sustainable for the future?” he added. “We’ll find out, there’s a lot of uncertainty in this environment, and we can’t control all of that.”
The rise of self-insurance in the face of today’s health care climate is something notable, and not only for large organizations like the University of Minnesota, which covers 19,500 employees and their families. Between 2011 and 2015, self-insurance rose from 11.9 percent to 14.2 percent for employers with fewer than 100 employees and from 25.3 percent to 30.1 percent for employers with 100 to 499 employees, according to data from the Washington, D.C.-based nonprofit Employee Benefits Research Institute.
“Employers, no matter the size, have finally given up hope that a huge insurance company or the government in D.C. will do something to save them or change costs, and so they’re taking it upon themselves to do something,” said Andrew Cavenagh, managing director of Pareto Captive Services, a company that manages benefit captive programs allowing medium sized employers to self-insure with less risk.
It can be daunting at first for small to midsized organizations to go this route, but a good insurance consultant can help, said Cavenagh.
General Converting Inc., a carton manufacturer based in Bolingbrook, Illinois, has about 65 employees and is one Illinois-based employer partnering with Pareto and other small businesses to self-insure.
A critical step for the company is finding a knowledgeable broker with good people behind their company, said Christopher Husenger, controller and CFO for General Converting.
“We don’t have a big staff, an HR staff, we don’t have people working on this solely, so we need to reach out to people to do this,” said Husenger.
“There are a lot of insurance consultants out there that the status quo is great for,” said Cavenagh. “What we spend a lot of our time doing is trying to identify consultants who aren’t willing to accept the status quo on behalf of their clients.”
He added that he sees real health care reform, at the employer level, coming from small employers partnering together. “I think this will change the health care economy in our country.”
Andie Burjek is aWorkforceassociate editor. Comment below or email editors@workforce.com. FollowWorkforceon Twitter at@workforcenews.
Each month Workforce looks at important stats in the human resources sector. Here’s the topic we’re keeping an eye on for January 2018: the winter blues and Seasonal Affective Disorder (SAD). How common are these mood disorders in the workplace, and what impact do they have on employees and the companies they work for? Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.
When Gray Skinner tried to recruit developers for Droplr, his growing software start-up company in Bend, Oregon, he was disappointed by his options.
Bend is known more as an outdoor sports mecca than a tech hub, but even when he expanded his search to Portland and San Francisco he struggled to find qualified candidates. “Good talent is so expensive, and we didn’t have the luxury of spending all our capital on developers,” he says.
Even when he managed to hire a few code school graduates, they were quickly poached by other start-ups offering six figure salaries and equity. “After we lost the third one, we knew we had to do something different.”
Skinner is hardly alone. More than 80 percent of CIOs reported difficulty filling tech roles in the past year in a survey from Tech Republic. And Gartner says the lack of available tech talent is the leading obstacle keeping CIOs from achieving their objectives.
Part of the problem is where they are searching. While major U.S. tech hubs may be in short supply of unemployed developers, there are lots of cities with strong tech talent eager to work for U.S. companies; they just aren’t based in the United States.
“When it comes to recruiting you have to think about where the right talent is located,” said Patric Palm, CEO and co-founder of Favro, a collaboration software developer in Uppsala, Sweden. “And in many cases it’s not where you think.”
Cities in South Africa, Vietnam, Slovenia and Lithuania are known for having excellent tech talent who speak English, have advanced degrees and are looking for work, Palm said. And because they are relatively young as tech centers, these locations provide unique opportunities for even the smallest companies to establish themselves as great places to work.
The trick is knowing where to go and how to find the best people once you get there.
Asking customers for help
When Skinner’s team decided to look abroad for talent, they started with their own customer base. Droplr has a large population of users in Poland, so they sent an email via their customer relationship management system saying they would host a recruiting event there later that month to spread the word.
Skinner and his co-founder, Levi Nunnink, ended up interviewing 35 people in two cities over five days and ultimately found their purple squirrel: Radek Paklikowski is a developer with a master’s degree in his early 30s who had lead two previous start-ups, worked with U.S. and U.K. companies, spoke fluent English, and was passionate about being a leader in a U.S. start-up. “We knew right away that he was our guy.”
Skinner and Nunnink hired Paklikowski as vice president and head of the Poland office, and put him in charge of recruiting the rest of the team — with their final approval. Most of the candidates Paklikowski found had master’s degrees in computer science, and one had deep expertise in Amazon Web Service, which is among the toughest skillsets to find in the United States.
“It’s been a great experience, and we are so impressed with how ambitious people are to work with a U.S. startup,” Skinner said. He is also excited about the salaries. Thanks to the local economy and exchange rate, salaries for tech talent in Poland are less than one-third of U.S. rates, and the quality of talent their is much higher. Droplr now has nine employees in Poland and is recruiting two more.
Skinner admitted the process hasn’t been seamless. He and Nunnink each travel to Poland every couple of months, and they’ve had to hire local lawyers to navigate the tax and corporate laws. They also start their days early to overlap time zones. It’s been worth it. In the 18 months since they started hiring in Poland, Droplr went from two employees and $50,000 in debt to 18 people in two countries generating more than $1 million in revenues annually. “Hiring the team in Poland was central to our success,” he says.
While not every start-up will find their dream team in Poland, looking abroad can give cash-strapped companies an edge. “Many companies today have fully distributed teams,” Palm said. “If you are willing to adapt the way you work, geography won’t get in your way.”
Sarah Fister Gale is a writer in Chicago. Comment below or email editors@workforce.com.
Workforce editors Frank Kalman and Rick Bell note that the likelihood of a holiday bonus is down this year from last year. Also, education tech company Grovo has seen a value-add in trademarking the term “microlearning.”
Workforce editors Frank Kalman and Rick Bell note that rather than being a job-killer, the so-called robot revolution may actually create 21 million new types of jobs. Also, you won’t be alone if you check your work email on Christmas Day.
A new Workforce series takes a look at the do’s and don’ts of workplace gift-giving not only during the holidays but all year long. Be inclusive, don’t break the bank and personalize your gifts for each employee.
I get it. You’re an HR manager/director and you’re wondering if you’re on track to take the big chair in HR in the next decade. As luck would have it, I’m equipped with a crystal ball and the right amount of confidence/swagger to predict your future. Lucky you!
The world is changing, and the people paying the bills want different things from HR. Here are five things to look at to examine and determine if you’ve got what it takes to lead an HR team and be a viable partner to the business leaders who will hire you in 2024. Remember, I’m talking about leading HR, not being a part of an HR team. I’m also providing a road map of what the 2024 HR leader looks like behaviorally — I’m assuming you’ve got the technical skills to do the job.
Let’s go to the list:
You’ve got a world-class processor upstairs. This means you’re better than most at taking large amounts of information and making quick, accurate decisions. It’s OK to take your time in other roles, but as a future HR leader, you’ll be expected to be as quick as the strategy person with your opinions and proposed solutions.
You’re as assertive as the salespeople in your organization. Great HR people have always needed to be assertive, but the need for comfort with confrontation continues to escalate. Chaos is everywhere, and if you’re going to operate efficiently, you’re going to need mix it up on a daily basis. You can be professional and still challenge others who are trying to play you, your department or your company.
A comfort with no rules at all. HR people have always been good at creating structure, but HR leaders are increasingly being asked to value structure less as we get deeper into this century. You’ll find that as you create your HR team, it’s easy to find HR people to help you execute structured solutions. It’s harder to find HR people that don’t want anything to do with the operations manual and instead want to develop the best solution for the situation at hand. Things change too rapidly these days for the old status quo to stick. High challenge, low rules and slightly ADHD HR leaders are on the rise.
You are organized enough at the leadership level to execute. Many of you would guess that low rules in turn means low details. The reality is that detail orientation exists outside of rules orientation, and low rules with mid to high level detail orientation is a very hot profile across executives of all types — including HR. Low rules/high details means you have the ability to dream AND to execute.
You’ve got skin like a fat, old rhino. If you match this need for low sensitivity, when you receive bad news or the rare glimmer of negative feedback, you’re down for about 30 seconds, then you recover and move on. Companies are increasingly looking for HR leaders who aren’t afraid to fail. Failure is a necessary byproduct of attempting to add value. Safe sucks increasingly these days.
Want an easy way to score it? Say “yes” or “no” to whether you really deliver each of these five features, add up the yes votes and use this key to score where you are:
+5 — Welcome to the club. If you are who you say you are, I’d like your résumé for my clients, even if you’re 28 years old.
+4 — Yes, please. You missed on one thing: You’re still a player.
+3 — I’m going to call you an HR citizen. Good enough to get what the business line owners are talking about. Missing a DNA strand or two, but serviceable. You’re probably going to be working for someone younger than you by 2024, but that’s OK because you’ll add value and they’ll still depend on you.
+2 — The world needs ditch-diggers, too. There’s still something for you to do in most HR departments with any size, but it’s not leading the function. You’re good enough, you’re smart enough and gosh darn it, people like you. But you’re going to cap out at the manager level.
+1 — Darwin called. He said the kids these days are growing the HR equivalent of opposable thumbs, and I don’t see any thumb buds on the sides of your hand stumps. Too bad.
That’s my list of the behavioral traits I see in play as we move toward the next decade. Will there still be +1 and +2 HR leaders? Yes.
Will the replacements for those leaders look like their predecessors? My intel says no way.
Kris Dunn, the chief human resources officer at Kinetix, is a Workforce contributing editor. Comment below or email editors@workforce.com.
Marilyn Paul’s best time in her week is spent with her family. These moments help the author and consultant succeed at living her truth — practicing a Sabbath, as she calls it, every week to rejuvenate from overworking, busy schedules and stress.
Marilyn Paul, author of “An Oasis in Time: How a Day of Rest Can Save Your Life”
Her latest book, “An Oasis in Time: How a Day of Rest Can Save Your Life,” focuses on the positives of taking a day a week as an oasis of rest from work. Workforce intern Ariel Parrella-Aureli spoke to Paul about the work benefits of taking breaks and her advice for employers and HR leaders to help employees find their “oasis time” in a culture that demands working excess hours.
Workforce: Where does the idea to constantly work come from?
Marilyn Paul: We have become used to being consumers and producers. If you combine the inventive, innovative streak with the marketing and producing element and you add that into the competitive way to get ahead and do, do, do, you have what we are in — you throw in digital tech and we are overwhelmed. Even 2,500 years ago, as this notion of a Sabbath came into being, there was a need to stop the everyday and turn toward something else — if it’s awe, purpose, or if religious and feel themselves turning toward God; we need time for that.
WF: What’s the challenge here for HR practitioners?
Paul: The question for a lot of HR people whom I’ve worked with is how do you start the conversation in your workplace so that people come around to the idea that frequent breaks, staying off email on the weekend, all contribute to increased productivity? Part of the challenge is to shift the norms of your workplace so people really grasp what good rest is. If they are resting, they are not scrolling through their Twitter feed; they are going out for a walk, practicing yoga or having a healthy snack.
WF: What advice do you give to people always working?
Paul: It is counter-cultural but what we all need to do is look for examples of people who know how to rest well, and that doesn’t mean they are flying to Hawaii to the beach. We use busy as a badge of honor. If we are busy it means we are important. If we are running ourselves in the ground it means we are valiant. What I want to help do is change that to say we are not going to squeeze in our rest and our reflection; we are going to embrace ample playtime because that is what makes life worthwhile. There are people all around us who understand the value of this oasis time. We have to find each other and help each other off the clock and off the hook.
Ariel Parrella-Aureli is a Workforce intern. Comment below or email editors@workforce.com.
Earlier this summer, Microsoft announced plans to lay off workers as part of a restructuring to focus on cloud services. A month later Nike made a second round of layoffs, which included hundreds of IT staff, with warnings of more cuts to come.
Big layoffs remain a painful part corporate culture despite being eight years past the Great Recession. It’s also a world where success is based on quarterly results and rapidly shifting markets can make products and people obsolete.
Layoffs may be inevitable, but how companies handle them can make or break their ability to rebuild, said Kevin Martin, chief research officer for the Institute for Corporate Productivity, or I4CP, a human capital research firm.
“Any time you introduce fear, uncertainty or doubt into an organization it kills performance,” Martin said.
Unless companies take measures to actively support those who remain, the losses can be devastating to more than just the people let go.
Managing morale in the wake of a layoff begins with good communication, said Larry Sternberg, president of Talent Plus, an HR consulting firm in Lincoln, Nebraska and co-author of “Managing to Make a Difference.” “Secrecy is one of the biggest mistakes companies make.”
Sternberg recalls being invited to give an inspirational speech to a group of employees at a high-end Miami resort several years ago. When he arrived, the leadership team told him that many of the group was about to be laid off, but no one knew.
“They were afraid they would start looking for new jobs before the end of the season,” Sternberg said.
Disagreeing with their approach, he kicked off his speech by announcing the layoff, then spent the next hour talking about what the company and its remaining employees could do to make sure that it never happened again.
It may seem like a smart move to keep layoff plans secret, but not being honest leads to morale-killing gossip, suspicion and fear. For companies hoping to rebuild with the talent they have left that’s a big problem. Instead, Martin encourages companies to be upfront about who is being laid off and why, then to provide them with support to find new jobs.
“It’s important to help people leave with dignity,” he said. “That speaks volumes to those who remain.”
Make Them Want to Stay
Once a layoff is done, executives need to find ways to empower and engage employees while shoring up the business.
Talent development is a good way to address both of these needs, Martin said. He points to Ally Financial, which was forced to lay off 7,000 of its 30,000 employees during the economic crisis. To engage its remaining staff, the company offered high performers a fast track to leadership roles and stretch assignments where they could develop new skills. “Ally gave them opportunities and responsibilities they couldn’t get anywhere else so early in their careers,” he said.
Giving employees authority to make decisions can also help, Sternberg said. He recalls working with hotelier Ritz-Carlton on how to reduce staff while maintaining excellent customer services. His solution: When departments lose an employee due to attrition, let them choose whether the fill that role or distribute the work — and half of that employee’s salary — among the remaining team.
“Several teams took the deal, and customer service never suffered,” he said. The deal motivated them to find their own ways to be more efficient.
Sarah Fister Gale is a writer based in the Chicago area. Comment below or email editors@workforce.com. FollowWorkforceon Twitter at@workforcenews.
The common argument by employers against instituting a more robust paid family leave policy is its prohibitive cost. That certainly was the thinking at Bora Architects, along with fears that employees would misuse the policy.
Amy Donohue with Oregon Gov. Kate Brown, who asked to meet with her regarding supporting families in the workplace. Photo credit: Bora Architects.
That mindset quickly changed in 2015 for the Portland, Oregon, firm when a valued receptionist announced she was going to become a single mother. The pending birth and the possibility of losing a quality employee set off alarm bells for Amy Donohue, a principal with the firm, and Dawn Ridenour, the chief financial officer, launching them into a cost-benefit analysis. They had 65 employees at the time.
Ridenour pored over company data from the previous five years and identified all the instances in which an employee could have triggered a paid family leave policy. Donohue said she discovered the cost was reasonable. Specifically, the events she looked at fell under the Oregon Family Leave Act, which covers maternity and paternity leave, time off for adoption and foster care, and care for self, spouse, parent or child.
“It was something we could put in our budget every year,” Donohue said. “Some years we’re going to spend less, and others we might spend more. But on average it’s not a significant expense, especially compared to what it would cost to replace that person if they left. It isn’t just the Googles of the world that can afford it. Smaller companies can, too.”
The patchwork of paid family leave policies dotting the United States reveals a desire on the part of states, municipalities and businesses advocating for such programs. New York is the next state implementing paid family leave beginning Jan. 1, 2018, joining California, Rhode Island and New Jersey.
Sixteen percent of full-time civilian workers have access to paid family leave benefits.
Politically, paid family and medical leave is supported by 71 percent of Republicans and 83 percent of Democrats, according to the May 2017 “Paid Family and Medical Leave” report by the AEI-Brookings Working Group on Parental Leave. The disagreement for a comprehensive federal policy lies not in the real need for the United States to adopt a solution, but in the messy details of how leave is funded, how long it lasts and who is eligible, the report states.
Although the Trump administration has not given any indication that federal paid family leave is on the horizon, first daughter Ivanka Trump has advocated for its implementation in some form, said Tracy Billows, partner at Chicago-based law practice Seyfarth Shaw.
“Whether that will ultimately come to fruition, we’ll have wait and see,” she said. “I don’t think that paid family leave on a federal level is completely off the table as we’ve sometimes seen in prior administrations.”
Meanwhile, a growing number of employers are adopting policies of their own.
Financial service company State Street Corp., which employs 33,000 people, is one of the many companies to enhance its paid family leave policy. Part of the reason the company chose to improve the policy in 2014 was to be a more attractive employer. “Our global total rewards team is constantly looking at the competitiveness of our paid leave policies,” said Mike Scannell, senior vice president and president of the State Street Foundation, the company’s charitable arm.
State Street also solicited feedback from employees through surveys and listening sessions, he said. The executive team wanted to create more channels for employees to share what’s on their minds. “A significant and consistent theme was the value of flexible work time, personal time off and the need for greater work life balance,” Scannell said.
Larger employers with deep financial resources, such as State Street, may be able to afford to offer these policies more easily, while small to midsized employers may be more sensitive to cost or temporary lack of manpower while an employee is out of the office. There are ways around these challenges, though, as Bora Architects and others show.
Companies’ Practices
The structure of Bora’s policy is such that employees would not take advantage of it, according to Donohue. Employees who have been there a year get six weeks and can receive 20 percent of their salary. Employees who have been there two years get six weeks at 40 percent. And those who have been there for three years or more get the full benefit, six weeks at 60 percent of their salary. “We want to make sure people have been here a while to realize the full benefit,” Donohue said.
Even a person receiving the full benefit won’t be motivated to stay home from work longer than necessary, Donohue said, because 60 percent of one’s salary is still a challenge for a family to take on. These people would be living on a compromised salary for six weeks, and they’ll make the point to thoughtfully decide how much time to take.
While an employee is on leave, work still must run smoothly for up to six weeks. This transfer of power can go well if the company culture is supportive, according to Donohue. At Bora, where teams usually run from four to 12 people, those groups may be able to function one person short if a project is winding down. It’s also possible for them to borrow someone from a different team for a short length of time.
A supportive culture is also imperative at Change.org, said Allie Roseman, HR operations director for the petition website, which has 150 employees, 10 of whom took paid family leave in the past year. Stressing that if people are overworked, they hire a contractor. Roseman noted that taking on extra work can be a valuable learning experience.
“It’s often a very good learning opportunity for more senior employees to be able to take on some work and learn something new outside of their scope,” she said.
In 2015, Change.org began to offer 18 weeks of paid family leave for both mothers and fathers, Roseman said. The policy is flexible in that employees can take time off in one block or in smaller, staggered amounts of time, as long as the time is used within a year after the child’s birth.
Roseman took on extra work when the HR department’s most senior member, who is now the chief operating officer, went on leave to take care of his baby. She felt like she was ready to take on new duties, and some have since become her responsibility.
Allie Roseman, HR Operations Director at Change.org
“I see that across the organization,” she said. “A more junior employee will take on a project that a more senior employee had when they were out on leave.” Then, she added, they have a new skill set that they’re happy with and they can contribute on a higher level.
Employers’ Attitudes and Actions
These organizations were able to make something work, but that’s not a common theme for much of the business community. The AEI-Brookings Working Group report addressed the challenges employers may face and potential solutions. The working group, comprised of a politically diverse group of individuals, discussed paid family leave and came up with a compromise policy. Although it did not satisfy everyone, it was an idea that everyone could get behind, said Isabel Sawhill, senior fellow in economic studies at the Brookings Institution.
A major idea behind the compromise was that it could not take form as an employer mandate or as something that would burden businesses with more taxes. “Even if you have a payroll tax to both employers and employees, most economists think it ends up being paid by employees because the employer could pass that along in the form of lower wages,” Sawhill said. The group decided an additional payroll tax on employees was the best option.
Despite the cost concerns of employers, the group ultimately believed it would be in employers’ best interests to offer paid leave. Research suggests that there is less turnover when a company allows paid time off. “Turnover is more disruptive and expensive than any temporary interruption,” Sawhill said.
Temporary absences or inconveniences in the workplace while an employee is on leave is something employers will have to get used to if they care about supporting parents. “It’s going to be inconvenient when an employee gets pregnant and has a baby, period, whether there’s paid time off or not,” Sawhill said.
The current paid family leave landscape, although riddled with its own contradictions, debates and tensions, is not nearly as controversial as other types of paid leave. Seyfarth’s Billows compared the current employer attitudes about paid family leave with that of paid sick leave, which confuses employers because of the variations in state laws. Acceptable reasons of use, family members covered and employee eligibility could differ widely between states, which creates an administrative nightmare for nationwide employers.
She doesn’t expect the same concern regarding paid family leave.
Amy Donohue with Dawn Ridenour, former CFO at Bora Architects, who helped spearhead the Paid Family Leave at the company. Photo credit: Bora Architects.
“Many companies are supportive of paid parental leave and they’re doing so for a number of reasons. For many clients, they’re already doing this because they know it’s an important benefit for recruiting and retaining top talent,” Billows said. “From my perspective, I don’t think there will be any backlash to paid parental leave or paid family leave.”
The voice of businesses is important in the discussion of paid family leave. Bora Architects’ Donohue met with Oregon Gov. Kate Brown to talk about paid leave policy. She, along with other business owners, discussed with the governor what the companies were doing, what had been successful, what the challenges were and what could potentially be implemented at a state level. Donohue also testified in front of the Oregon House of Representatives as a business owner who supports a statewide paid family leave policy.
“Businesses have taken this into their own hands because the governments have been slow to act,” she said. “It’s nice to see people understand this is an investment that pays off in the future.”
Andie Burjek is a Workforce associate editor. Comment below or email editors@workforce.com.
“When it comes to recruiting you have to think about where the right talent is located,” said Patric Palm, CEO and co-founder of Favro, a collaboration software developer in Uppsala, Sweden. “And in many cases it’s not where you think.”
