Author: Charlotte Huff

The concierge benefit that Millennium Pharmaceuticals provides to employees rescued Tracy Simpson several years ago, when her husband’s birthday was rapidly approaching. She called the company’s concierge service, Circles, and the Boston-based company swung into gear, searching nationwide for a signed copy of To Kill a Mockingbird for Simpson’s spouse, a writer. Circles provided a menu of birthday options ranging from the out-of-reach (a $29,000 first edition) to a more modest—but collectible—35th anniversary edition ($250) from a rare book shop in Portland.

   That’s what Simpson chose, and the signed book was sent directly from the store. Simpson’s spouse was thrilled and so was Simpson, the biopharmaceutical company’s associate director of human resources. More recently, Circles planned the couple’s first kids-free getaway to celebrate their 10th wedding anniversary.

   Simpson says that the concierge service, in short, is a boon for recruitment and ongoing retention at Millennium, which is based in Cambridge, Massachusetts. “It offers our employees a way to simplify their lives.”

   It’s a great story about a company reducing work/life stresses. But do such anecdotes constitute primarily hype, or an intriguing harbinger of tomorrow’s workplace? Just 5 percent of employers offered concierge services in 2007, up from 2 percent in 2003, according to the Society for Human Resource Management’s annual benefits survey.

   Concierge enthusiasts argue that such programs—ranging from errand services to an on-site concierge—are gaining traction and will follow the trajectory of employee assistance programs. Instead of being perceived as a luxury perk, the argument goes, concierge support will increasingly become a workplace prerequisite, particularly when courting younger—and frequently more work/life sensitive—employees.

   One intriguing sign of a possible future for concierge services is that in late 2007, food and facilities management giant Sodexho announced the acquisition of Circles, making the Boston-based company’s concierge services available to Sodexho’s roughly 3,000 U.S. corporate client sites.

   Still, some questions do persist, beginning with quantifying return on investment. If concierge companies wrap holiday gifts for employees or help service their cars, does that really boost on-the-job productivity? Moreover, how do employers justify such an investment in a cooling economy?

   Circles chief executive Kathy Sherbrooke, who has weathered previous economic speed bumps since co-founding the company in 1997, says a financial case can be made, both in the near and long term. “When your workforce gets lean, you need your workforce to do more,” she says. “You need them focused when they are at work. You need them present and not absent.”

   As for the longer-term horizon, Sherbrooke is quick to categorize employers who cut concierge during the dot-com bust as “fly-by-night” companies. “It’s the companies that are really committed to making their employees’ lives work who will be strongest in the end,” she says.

Work/life juggling
    The hunger among employees for better work/life balance is nearly ubiquitous, Sherbrooke says. More employees are telecommuting, she point outs, not because they prefer working in isolation, but rather to recoup personal time by shedding travel time to work. Middle managers, who could once lean on administrative assistants, have found that crutch less available as support services are trimmed back.

   Employees estimate that they spend an average of three hours each week handling personal tasks at work, according to a 2007 survey by OfficeTeam, a Menlo Park, California-based staffing service. A 2006 survey conducted by ComPsych, the employee assistance program provider, also highlighted the strain of juggling work and personal lives: 22 percent of employees described it as their primary source of stress.

   “People are stressed and overworked,” says Cathy Leibow, vice president of Leverage Life, a national concierge and work/life company based in Pleasanton, California. “How many people drive into work and think about the five other non-work items that they have to do that day?”

   Frayed employees also can undercut their own effectiveness, a point reinforced by research published last year in the Journal of Occupational and Environmental Medicine. In the study, “Fatigue in the U.S. Workforce: Prevalence and Implications for Lost Productive Work Time,” researchers determined that fatigued employees averaged 5.6 hours each week in lost productive time, compared with 3.3 hours among workers who weren’t tired.

   Employers already have taken some steps to invest in more on-site services, according to an annual Hewitt Associates survey of benefits for salaried employees. In 2007, 70 percent of companies offered some type of on-site personal service—from an ATM to dry cleaning to mail services—compared with 65 percent in 2005. “With our clients, there definitely is a trend toward trying to enhance the workplace,” says Carol Sladek, a principal and leader of work/life consulting at Hewitt.

   Even so, when companies tighten their belts, leaders are more likely to demonstrate their commitment to work/life balance with initiatives that don’t require cash on the table, such as flexible scheduling or telecommuting options, rather than investing in programs like concierge services, says Ellen Galinsky, president of the Families and Work Institute, a nonprofit research center in New York.

Measuring the ROI
    If employers do make the investment, the two primary payoffs are likely boosted productivity and loyalty, concierge advocates say. According to a 2007 survey conducted by Leverage Life, 68 percent of employees said that concierge support made them more productive at work.

   At Millennium Pharmaceuticals, employees surveyed after using the Circles service reported saving an average of 2.7 hours each time. Still, that time savings wasn’t necessarily all on the job, a point that emerges in interviews with some concierge users.

   Keisha McDonald, a registered nurse and nurse manager for Memorial Regional Hospital in Hollywood, Florida, used a concierge company to get her presents wrapped during the holidays last year. After dropping off the gifts with a concierge rep near the front of the hospital, McDonald could proceed along to another busy shift.

   The perk didn’t save work time, but did eke out some downtime at home. “When I have more time to relax and do the things I enjoy, when I come back to work I’m refreshed and rejuvenated,” she says.

   McDonald’s employer, Memorial Healthcare System, signed a nearly $400,000 annual contract with Chicago-based Errand Solutions in 2007 to provide concierge services for the system’s 10,600 employees. Besides gift-wrapping, Errand Solutions assists employees with a myriad of other tasks, including dry cleaning and car washing and detailing.

   Making a case for increased work productivity “might be a stretch,” since it’s difficult to measure whether that particular task would have been done on the job, says Ray Kendrick, the hospital system’s chief human resources officer. But Kendrick is more than happy to spread the word about the hospital system’s quality-of-life perk in order to promote recruitment and retention in the hotly competitive South Florida labor market.

   He adds: “We are big believers that whatever we do to help the employees translates to helping the patients.”

Shopping for a concierge
   Sherbrooke says employers shouldn’t be quick to dismiss the value of recaptured employee time, even if some of it is technically off the clock. Circles’ surveys show that employees save two to three hours on average each time they use the service. Those are vital hours that the employee can spend with the children, working out, or actually snagging a good night’s sleep. All that energy can be pumped back into the job, Sherbrooke says.

   Across a large company, the time savings can quickly accumulate. If a company with 10,000 employees has a usage rate of 40 percent—Sherbrooke says the rate varies, depending upon how aggressively the service is marketed—that’s 4,000 requests in a given year. Multiple 4,000 by 2.5 hours, Sherbrooke’s estimate of time saved, and that’s 10,000 hours saved annually.

   By early 2008, Sodoexho officials had just begun to market the Circles offerings to its corporate clients. A Sodexho spokeswoman declined to specify how many clients had signed up, saying it doesn’t share that kind of data with the public.

   But the concierge support option, the company says, would build on Sodexho’s array of facilities management services, which includes custodial, mail room and reception services, among others. In recent years, corporate clients have been asking for quality-of-life tools to better support their time-pressed employees, says Ronni Schorr, Sodexho’s vice president of brand management.

   Not all concierge services are structured the same way. Some programs labeled concierge services are closer to a telephone-based errand service than a more traditional concierge, which allows face-to-face interactions, says Sara-ann Kasner, founder of the National Concierge Association, based in Minneapolis.

   Kasner recommends that corporate leaders perform due diligence to better understand the concierge provider’s breadth and depth. What types of services would be offered? Does the concierge service specialize in particular areas, such as travel? Is it possible to interact with someone in person or are all the requests handled over the phone or through a Web site?

   Concierge providers also can frequently tailor the menu of services they offer, along with the cost involved. At Millennium Pharmaceuticals, the company’s 1,000 employees don’t pay to tap Circles’ research services, such as to plan a trip or locate a special gift, Simpson says. If they want an errand run, however, a fee would be charged, she says.

   At Memorial Healthcare, employees pay for the retail cost of the service itself, such as the dry cleaning costs, but not the concierge assistance involved. McDonald, the nurse manager, was eager to try out the car servicing option. It would be a productive workday indeed, she says, if she could pick up her spiffed-up car outside the hospital door and return home with sufficient time to regroup and recharge for the next day.

When GE teamed up with mtvU, MTV’s 24-hour college network, in 2006 to float an enticing challenge to U.S. college students, its motives weren’t completely altruistic. The challenge to students was if $25,000 in grant money were on the line, could they develop an environmental project to implement on their own campus?

    The contest’s primary goal was to boost GE’s profile among collegiate consumers, says Steve Canale, manager of recruiting and staffing services.

    “But as a byproduct, we were helping to attract and recruit students,” he says. “It definitely helped with the overall image on campus of GE as an employer.”

    The contest, called the Ecomagination Challenge, fielded more than 100 proposals, later winnowed down to 10 finalists. Earlier this year, a team from the Massachusetts Institute of Technology won for its solar-powered processor. Throughout the contest, a snazzy Web site detailed its progress. On the lower left-hand side, a discreet link glowed in a moss-green color, announcing: “Jobs at GE.”

    In the race to attract the most talented, innovative employees, some companies like GE are painting themselves in green—a rich environmental green—to boost their recruiting leverage. An environmental pedigree, recruiting experts say, can help lure applicants.

    In a 2006 Conference Board report, 78 percent of 198 multinational companies surveyed described corporate citizenship, including good environmental practices, as very or extremely important in recruiting and retention. And employees are paying attention: One-third reported that they would prefer to work for an environmentally sensitive company, according to a 2007 Harris Interactive survey of nearly 2,500 U.S. adults conducted for staffing firm Adecco USA.

    Still, so-called green recruiting has only emerged in the past couple of years, even among companies with ample reason to tout their credentials, says John Sullivan, a human resources consultant and professor of management at San Francisco State University’s College of Business. “If you want an advantage in recruiting, here’s one of them,” he says. “At this point, it’s not one that many companies are using.”

Grooming talent
   Job applicants themselves are driving this recruiting shift, says Nicholas Eisenberger, a managing principal at Green Order. The New York-based firm, which consults with companies on environmental strategy, helped develop the Ecomagination Challenge.

    At a law firm, Eisenberger says, it’s not uncommon now for applicants to ask: Where does that wood paneling come from in the lobby? Paul Richard, vice president of human resources at Shaw Industries, says younger applicants don’t mince words, asking: What are you doing for the environment?

    Midcareer professionals, those with a spacious office and title to match, also may be searching for a new job, one with a higher purpose, says Lisa Walker, a senior client partner at Korn/ Ferry International, the Los Angeles-based executive recruiting company. Environmental sensitivity is one shorthand way to assess how a company treats its employees, she says. “It shows that this company cares for something more than just profits.”

Burnishing your green … credentials
   Want to highlight your company’s green credentials? You need to offer potential employees more than a hybrid car reimbursement, although that’s a good start, Sullivan says.

    Plug environmental successes wherever possible—in job descriptions, recruiting advertisements and during interviews with applicants, Sullivan says. Raise your stature as a “green” resource by getting quoted in the press. And maximize the company Web site, Sullivan says. Don’t just describe your company’s recyclable products, but also estimate how many pounds they keep out of the landfill.

    On its Web site, GE does just that, touting that the company’s wind turbines “prevent as much as 18.3 million tons of greenhouse gases annually, an amount roughly equal to keeping over 3 million cars off the road.” But there’s always room for improvement, Canale says. An ongoing redesign of the careers section will more prominently display such environmental information, he says.

Assessing results
   To sell green recruiting to upper management, be sure to track data and measure results, Sullivan suggests. A good strategy is to survey job prospects, once they accept a position, to determine whether the company’s environmental record played a role, he says.

    During Shaw’s latest employee survey, conducted in late 2006, a few environmental questions were added, Richard says. Shaw has a number of environmental initiatives, including a recycling program projected to keep as much as 300 million pounds of carpet waste annually out of the landfills.

    The employee responses to the survey were overwhelmingly green, Richard says, revealing a recruiting sweet spot. Of the 2,520 Shaw employees surveyed, 80 percent said they were very or extremely interested in environmental concerns.

    Assessing the direct impact of green recruiting isn’t always easy, GE’s Canale says. During the college challenge, job applications did increase, he says. But those related to the challenge weren’t tracked separately from other college recruiting activities.

    Canale, however, doesn’t need to be convinced. To his recruiting list, he’s added at least one member of MIT’s winning team.

    Shaw’s Richard says, half-jokingly: “I hope that other companies don’t catch on too fast, because that will continue to give us a competitive edge.”

The 30-something Oregon woman was highly sought after, ranked by an interviewing panel among the top 10 employees hired for a new shift at the forest products plant.

    She passed the pre-employment drug screening and assumed her assembly line position. Nine months later, her supervisors were far less enthralled.

    “She was hard to get along with,” says Jerry Gjesvold, manager of employer services at Serenity Lane Treatment Center, a residential drug facility in Eugene, Oregon. “She was moody and snapped at co-workers and her supervisor, and didn’t take directions well.”

    Finally the woman’s supervisors asked for a drug test, citing “for-cause” or reasonable suspicion of drug use. The results: overwhelmingly positive for methamphetamine.

    Was she hooked when she landed the job offer? Gjesvold, whose facility handled the woman’s treatment assessment, says the high levels of meth in her system point to a chronic addition. Even more so, he says, her story illustrates how the stimulating drug can be driving some seemingly—at first—outstanding employees. And identification can be surprisingly thorny.

    A recent analysis by national laboratory company Quest Diagnostics provided some encouraging news on the meth front, with results showing that the percentage of U.S. workers testing positive for amphetamines, including meth, declined 10 percent during the first five months of 2006 compared with the same stretch in 2005, reaching just 0.43 percent of all drug tests.

    But not all data is so glowing. Federal statistics show that meth treatment admissions are on the rise. Meanwhile, drug intervention experts worry that several factors muddy a clear view of employee usage. Meth-infused energy and productivity can mirror ideal employee behavior, rather than addiction, they say.

    And drug testing is not foolproof. The stimulant remains in the body only a few days. Further, employers must confront the employee in the first place, a stressful and not always desired option in fields or regions of the country with a tightening job market.

    “Some employers will say, ‘I don’t care how the hell they get the job done. I just need the job done,’ ” says Tim Dimoff, president of SACS Consulting, an Akron, Ohio-based firm that specializes in high-risk business issues, including drug use and workplace violence. “The employer initially turns their head because they don’t see any whirlwind effects—yet.”

    The whirlwind effect, as Dimoff dubs it, occurs when productivity degenerates into a hurried and sloppy working style.

    “The right word really would be careless,” he says. “[Meth] stimulates them in such a way that they will be reckless.”

    A super-ego, “Superman” persona also can create havoc. Safety, legal and customer service consequences may not be far behind, he says.

    An analysis published in 2004 by the University of Arkansas’ Sam M. Walton College of Business identified six ways that meth can cost employers, including increased absenteeism, increased employee theft and lost productivity. The drug’s economic impact on employers in just Benton County, they found, was slightly more than $21 million annually, including $47,500 for every one of the estimated 446 meth-using employees, with 50 percent of the cost due to absenteeism and another 32 percent due to lost productivity.

Stimulating effects
   From 2002 to 2004, the number of meth users seeking treatment increased 25 percent, according to data released in April 2006 by the Substance Abuse & Mental Health Services Administration, the most recent available. Nationally, 8 percent of treatment admissions were due to meth addiction.

    Hot spots persist, according to federal officials and other data sources. In seven states, including Arkansas, California and Nevada, at least 20 percent of treatment admissions were due to methamphetamine, according to the federal substance abuse administration data. In a survey of the Portland Human Resource Management Association published in 2005, methamphetamine was ranked as the top substance abuse concern by 22 percent of 141 members surveyed, with only alcohol garnering a greater response (44 percent).

    Methamphetamine is far cheaper than cocaine but has a much longer high, making it attractive to all economic levels. Users may smoke the stimulant, swallow it in pill form or inject it. Early on, users report stratospheric highs in emotion and energy. Over time, those highs can become overshadowed by intense lows and long-term brain effects including paranoia, aggressiveness and hallucinations.

    As of November 2006, 42 states had passed some type of measure restricting over-the-counter sales of pseudoephedrine, a key component in methamphetamine’s manufacture, according to the National Alliance for Model State Drug Laws, a nonprofit coalition based in Alexandria, Virginia. Drug traffickers from Mexico and elsewhere, though, are starting to fill the supply gap created by the shutdown of homegrown labs, drug intervention experts say.

    The stimulant is not only seductive for blue-collar employees pulling double shifts, but also for go-go professional types. A late November 2006 bust of nine meth labs in the New York City area rounded up 10 defendants, including a corporate executive, an automobile mechanic and a university teaching assistant.

    “We see a lot of people in the financial world, because it’s so competitive,” says Jim Geckler, director of professional services at Addiction Intervention Resources, a consulting company based in St. Paul, Minnesota. He also sees it in “real estate markets where you have to be self-motivated.” Lawyers who use meth, he adds, are striving to cram in more billable hours.

    “We do see more of it [meth use], and I don’t know if it’s because of heightened awareness or more use,” he says.

Identifying signs
   At first, a meth user can seem like a dream employee, Geckler says. “At the beginning, you’re able to focus greatly” and can multitask, he says. “You accomplish a lot because of the energy. People work longer hours. Your appearance and demeanor improve—people look better when they start using meth. You lose a little weight. You’re in a good mood all of the time.”

    He speaks from personal experience. When Geckler first sampled meth in his 20s, his sales career soared. He assumed regional sales responsibilities. “I would be able to party all night and go to work,” he says. “I felt amazing. My production went up. My career improved. My relationship with co-workers improved.”

    That is, until meth’s hangover kicked in. Geckler developed paranoia. “I was convinced people were talking about me—I could hear voices.” He started taking more days off.

    Now drug free for more than 15 years, Geckler advises supervisors to pay attention to abrupt changes in behavior. Ray Pohl, a shift supervisor for a Georgia Pacific plant in Wauna, Oregon, agrees, ticking off meth warning signs that he’s witnessed. “Absenteeism. Losing a lot of weight. Being paranoid. Always thinking someone is looking over their shoulder. Talking fast. Not completing sentences.”

    Dimoff recalled one situation in which a delivery person’s efficient style started unraveling. Complaints from customers picked up.

    “The guy would load up his dolly,” Dimoff says. “He would get in there really quick and throw the boxes around. He wasn’t cordial to the client.”

    In another case, a computer programmer felt stretched to the limit while juggling several products with pressing deadlines. When counseling employers in how to head off meth problems, Dimoff advises them to keep a lid on unreasonable hours, making sure they don’t persist week after week.

    “In order for employees to do the impossible, they are going to need a little extra help,” Dimoff says. “And meth is one of the first things they are going to run to today.”

Intervention strategies
   Where meth is concerned, scheduled drug testing may only serve as a partial deterrent, given its limited detection window, says Mike Lehman, general manager at Cardinal Services, which provides staffing services in Oregon.

    “We don’t think we are seeing as much meth [in drug test results] as probably is out there,” he says.

    The woman on the assembly line, for example, likely only cleaned up for the interviewing process, Serenity Lane’s Gjesvold says.

    “She had probably used that day,” he says, based on her test results. “If not, no later than the night before.”

    About a year ago, the Georgia Pacific plant where Pohl works started performing random drug tests. Even with his skill in detecting meth use, Pohl says he’s been surprised by some of the employee results that came back positive.

    When Pohl does approach employees about drug testing, he emphasizes safety concerns—to themselves and fellow employees.

    “These people are working around equipment where, if they put their hand or part of their body in the wrong place, it could injure or even kill them,” he says.

    Still, do some employers prefer to adopt a “Don’t ask, don’t tell” stance? Gjesvold, clearly frustrated, believes that competitive staffing concerns are eroding drug testing interest, despite Oregon’s worries about methamphetamine.

    So does Lehman.

    “We have encountered clients who have come to us and said, ‘I want to stop drug testing,’ ” he says. “They say, ‘I’m losing too many applicants. I can’t fill these spots.’ “

    A 2006 survey of Oregon businesses conducted for Workdrugfree, an Oregon group that assists businesses to become drug free, found that 25 percent of 1,366 employers surveyed conducted random drug testing. Thirty-one percent did pre-employment screening and 42 percent tested employees based on for-cause or reasonable suspicion.

    Oregon officials also have gotten involved, taking steps to squelch the drug’s local manufacture. In 2004, the governor enacted an emergency rule to put all pseudoephedrine products behind the pharmacy counter. In mid-2006, the state began requiring a prescription as well.

    Grant Beardsley, manager of drug testing services at Oregon Medical Laboratories, says that recent employee testing results indicate some progress. Just 0.7 percent of employees tested positive for methamphetamine during the first 11 months of 2006, according to the results from about 40,000 employee tests. That represents a decline from 1 percent in 2005, the first drop in recent memory, Beardsley says.

More information:
University of Arkansas study, “The Economic Impact of Methamphetamine Use in Benton, Arkansas“

12 Steps Every Company Can Take to Deal With Addicted Employees

Sometimes, the joy of giving isn’t all that joyful.

    Too often, managers get stumped by the logistics of recognition programs, says David Sturt, executive vice president of marketing and business development at O.C. Tanner, a Salt Lake City-based recognition company. What should they give a valued employee? How best to present the award? Should they gather the entire team or sit down for a one-on-one?

    Several days pass and managers realize that they’ve lost an opportunity for recognizing work well done, Sturt says.

    “They have this guilt complex. They know they should be doing it more,” he says. “They just don’t know how to do it.”

    Companies are taking steps to boost confidence. After years of fielding employer requests for recognition training, the National Association for Employee Recognition this year started offering a certification program, says Christi Gibson, the association’s executive director.

    The first class was so crowded with midlevel and senior managers that they had to turn people away, Gibson says. (For more details on the certification program, visit www.recognition.org.) Other companies provide internal training.

    Insurance provider Aflac offers an orientation class that also discusses employee recognition to employees who have recently been promoted into management, says Audrey Boone Tillman, the company’s senior vice president and director of human resources.

    Some managers are naturals, while others must learn to schedule kudos on their to-do list, says Paula Godar, director of performance strategy at recognition company Maritz.

    “You may have to make it somewhat mechanical for someone who is not very good at it, until they catch on,” she says.

    Ken Siegel, a Los Angeles-based management psychologist, sympathizes with today’s frontline managers, saying they aren’t always given the best resources and support. Layers of corporate approval can be required to purchase awards, he says. Plus, it’s difficult to break the cost-conscious mind-set.

    “Managers are under increasing pressure to do more with less,” Siegel says. “The discretionary spending power for managers has been clearly neutered. I do think the level of consciousness about (awards) is much higher. But that consciousness needs to match the level of authority that managers are given.”

    For managers committed to recognizing more employees, Siegel and others offer suggestions about some key elements of reward programs:

• Timing: Immediate feedback is key, O.C. Tanner’s Sturt says. Ideally, managers should approach employees within a day or two. “If it’s been a week, it’s already awkward,” he says. Siegel agrees: “The closer the reward occurs to the behavior, the more meaningful it is.”

  
  

• Selection: When choosing a reward, walk for a moment in your employees’ shoes, Siegel recommends. “Employers give out awards that they would like to get rather than awards that employees would like,” he says. “They forget that a reward is only a reward if the person receiving it considers it such.”

  
  

• Emotional impact: Specify what employee accomplishments are being recognized, Sturt says. Don’t use generalized praise, like “good job” or “hard work.” At Aflac, Tillman takes the time to forward complimentary e-mails she receives from customers both to the employee involved and the employee’s boss. “I have found out that people print those out and keep those,” she says. “What took me five seconds of time is invaluable.”

  
  

Weyerhaeuser leaders didn’t have to mess with success. By 2004, the company’s residential wood products division could boast of $8 billion in annual sales and 15,000 employees scattered across four time zones.

   But they recognized some worrisome fissures. Cultural rifts persisted in the wake of several high-profile acquisitions. Five businesses fell under the division’s umbrella, competing for and confusing customers. Meanwhile, the home building industry was rapidly consolidating.

   Leaders have responded with what they describe as the company’s largest strategic overhaul in recent memory. The goal: to prove that entrenched work habits can be gutted to build a new strategic framework—one house at a time.

   If all goes well, the new organization—unveiled in April under the name iLevel—will have achieved more than a massive consolidation of five businesses into one. iLevel leaders will have also reshaped the long-term goals of employees to better court and retain customers.

   “It’s a pretty daunting task,” says Allan Bradshaw, the wood products division’s director of human resources, who led the change process. “But people rise to the occasion. People can do more than they think they can.”

   Rather than selling wood products piecemeal, Weyerhaeuser officials want to be considered the one-stop location for all of the innovation and products required to construct residential home frames—joists, beams, floors and all. To achieve that, Weyerhaeuser, long a product-driven company, must learn to operate more like a service company, responsive to the subtleties of customer demands. The company, located near Seattle in the community of Federal Way, Washington, celebrated its 100th anniversary in 2000.

   “The cultural piece has probably been our biggest challenge,” says Kurt Liebich, vice president of marketing. “I think everyone understands what we are trying to do and supports it. But people still slip back into the old language and the old behaviors.”

   Speed rules. In just 12 months—from January to December of 2005—the 11-member business leadership team was selected and the entire workforce restructured. The bulk of the changes occurred during the latter six months, when the business leadership team picked the next several levels of managers, called “transition agents.” Together, they educated employees about the reorganization and worked through a 178-item action plan to launch the new organization internally in January.

   Among the steps they took: retraining the strategic sales force, developing a new glossary of terms and creating an online game and employee DVD to highlight the division’s new strategic direction. With the help of a consultant, the business leadership team and 300 transition agents gathered weekly in an online discussion room to update their progress and address any concerns.

   “It’s really hard when you are sitting at the top of a 15,000-person organization—everything gets filtered,” Liebich says. “The question is, how do you cut through all of the filters and really understand how people are feeling?”

   Bradshaw, who got involved in 2004, participated in everything from strategy meetings to the selection of iLevel’s business leadership team. Together with Lee Alford, the leader of iLevel, he reshaped the residential wood products division without gutting it.

   There were only 108 job losses, mostly related to merging the sales forces, Bradshaw says. Still, creating iLevel has required creative destruction, touching nearly everyone in some way.

   “When we dissolved the old organizations, we didn’t give them (the employees) a home to go back to,” says Alford, senior vice president of residential wood products. By launching a new organization from scratch, “We removed the familiar,” he says.

   This big-concept thinking occurs against the backdrop of a home building industry skittish about skilled labor shortages and a possible housing bubble. The National Association of Home Builders has predicted that total housing starts, which reached a little more than 2 million in 2005, will decline 7.2 percent this year.

   Housing pressures are another reason not to dally, says Alford, part of Weyerhaeuser’s senior management team. “We think in some ways this is an opportune time to demonstrate how we can add services that save the dealers and home builders time and money,” he says. “And, at a time that they’ll need it, because they will be in a price squeeze.”

Labor challenges
   To illustrate how home building has changed, Weyerhaeuser officials frequently point to the television show Extreme Makeover: Home Edition, which the company helps sponsor. Each episode features the rapid overhaul of a home made possible by transporting preassembled materials to the lot, reducing the need for carpenters and other skilled laborers.

   “Home building is such a margin-driven industry,” says Steve Shook, associate professor of forest products marketing at the University of Idaho in Moscow, Idaho. “The manufacturers know that the only place the builder can increase their margin is by lowering their labor costs.”

   Finding skilled labor these days isn’t easy. A survey of 427 builders conducted in October by the National Association of Home Builders found that nearly half—47 percent—were having at least some difficulty locating skilled carpenters.

   At the same time, small home-grown builders are rapidly being overshadowed by large companies capable of raising thousands of new roofs annually. In November, Fort Worth, Texas-based D.R. Horton boasted that it had closed more than 50,000 homes in a single fiscal year.

   With its own significant scale, Weyerhaeuser hopes to entice labor-sensitive builders with preassembled materials and other products that can shave time on-site.

   Weyerhaeuser’s purchases of Canadian forest products company MacMillan Bloedel in 1999 and Portland, Oregon-based Willamette Industries in 2002 added mills and other production capacity, Bradshaw says. The acquisition of Trus Joist in 2000 beefed up research and development.

   By 2004, several of Weyerhaeuser’s residential wood products division’s product lines, including engineered wood and soft lumber, led all or nearly all of its competitors worldwide. Its sales revenue last year comprised slightly more than one-third of Weyerhaeuser Co.’s $22.6 billion.

   But the acquisitions introduced differing decision-making styles and even a mishmash of corporate language. The five businesses largely operated independently, with their own product allegiances and tracking their own profits and losses.

   “They had their own sales forces,” Bradshaw says.

   Weyerhaeuser leaders haven’t wasted time paring down the workforce, which peaked at 64,000 employees following the Willamette purchase. The company now employs about 47,000 people after a series of mill closures in Washington state, Arkansas and other locations. Prior to creating iLevel, “we had already trimmed ourselves of the nonproductive assets,” Bradshaw says.

   The question was, how best to maximize their acquired strengths? “We said, ‘We have the potential to offer a whole framing solution—the bones of the house,’ ” Bradshaw recalls.

Creative destruction
   The frame of the new organization started being erected in January 2005, when six cross-functional teams were formed, comprising 10 or so people per team—all experts pulled from different areas of the company.

   Each team was assigned to develop a proposal for redesigning sales, manufacturing or another function of the new venture. They were directed to work in confidence and to be creative.

   “Rather than start with the org chart, we said, ‘What are all the things that need to be done, for example, in sales?’ ” Bradshaw says. “We developed about 10 different options for how we could organize sales.

   “Then we evaluated each option against a set of criteria to determine which option provided the best return for the company.”

   The five leaders of the affected businesses evaluated the final proposals along with Bradshaw, Alford and several other key leaders. It was sometimes an uncomfortable process, Bradshaw recalls.

   “There was a lot of discussion and debate,” he says. “You have to remember that these five leaders, they all had long careers. They had run successful businesses. They had a lot of stake in tearing down the business walls and reassembling them into one integrated business.”

   Meanwhile, Alford and Bradshaw were engrossed in selecting the nascent organization’s new leadership. Weyerhaeuser’s senior management team wanted fresh blood for the new venture, Bradshaw says. The process was assisted by retirements; three out of the five leaders announced they would be leaving. “We started with a blank sheet of paper,” Bradshaw says.

“It’s a pretty daunting task. But people rise to the occasion. People can do more than they think they can.” –Allan Bradshaw, director of HR, wood products division

   
    In early July, when the 11-member business leadership team was introduced, they were immediately given a new charge: Within the next 90 days, they would select the next several levels of management.

Motivating employees
   In October, the 300 newly selected managers gathered in Chicago for a three-day meeting where they learned about their role. Their mission: to educate and energize fellow employees about the business case for launching a new venture.

   “We’ve learned through acquisitions that in a massive change effort you need to have transition agents,” Bradshaw says. The team used the term “transition agent” instead of the more traditional “change agent,” he says, to signal that the overhaul would have a beginning and an end.

   “Those 300 people who came together in Chicago had three months to go out and tell the story, generate commitment, empower people to change their processes and get the organization in place on January 1,” Bradshaw says.

   “Using transition agents was one of the concepts championed by Leland Russell, a consultant hired last summer to “look over our shoulder,” as Alford puts it, “to challenge us that we’re doing the right thing.”

   Russell advocates speed where organizational change is involved. Moving quickly provides a faster financial and strategic payoff, says Russell, president of Newport Beach, California-based Geo Group Strategic Services. (The Geo Group and design firm Hornall Anderson were the only two outside consultants used throughout the iLevel reorganization, Bradshaw says.)

   “The faster you move, the less chance for systemic resistance,” Russell says. “The status-quoers don’t have time to get organized.”

   Reorganization depends upon intracompany collaboration, gumming up the effort, Russell says. “It’s very, very difficult to move fast.”

   To boost efficiency, Weyerhaeuser purchased access to Geo Group software so the 300 transition agents could meet weekly, gathering online in 30 groups of about 10 people each.

   Every Monday the topics were distributed, and the groups would meet online the following day with the assistance of human resource facilitators. By Wednesday, Bradshaw and the facilitators were holding their own meeting to summarize feedback. The leadership team convened Thursday to take action and develop topics for the following week.

   The transition agents were particularly helpful in relaying employee concerns, Bradshaw says. Once an employee DVD was developed, they hosted numerous meetings to show it to employees and answer any questions.

“When we dissolved the old organizations, we didn’t give them (the employees) a home to go back to. We removed the familiar.” –Lee Alford, senior VP, residential wood products

   Issues did bubble up. An online computer game had been created to teach employees more about iLevel’s strategic focus, but 15 percent of employees don’t have easy access to computers at work, Bradshaw says. Plus, the transition agents were not impressed with their trial run of the game, complaining that it was plagued by technical glitches.

   “They were advocating that we shoot the game,” Liebich says.

   In the end, the technical problems were fixed. An off­line game, with a booklet of puzzles and questions, was developed to reach the remaining employees.

Positioning iLevel
   Many companies before Weyerhaeuser have attempted to move from a product focus to a solutions-based mind-set, says Nathaniel Foote, managing director for TruePoint, a consulting and research firm in Waltham, Massachusetts. “But the track record is not very good,” he says.

   Employees with product strengths may not adapt well. In product sales, Foote says, “all of your instincts are about maximizing your own profit in the transaction. If you move to solutions, you want to build customer loyalty and your share of the customer wallet.”

   The ripple effect extends far beyond the sales department, he says. Manufacturing may need to produce a more complex line of products to keep customers happy. Employee evaluations should be based on new criteria, such as retaining customer loyalty over time.

   “This is a pretty dramatic shift for Weyerhaeuser,” says Foote, who met informally with wood products leaders early in the reorganization process.

   In recent months, Weyerhaeuser has been retraining its strategic sales force, about 250 employees, to approach customers with solutions in mind. It is a consultative selling approach, says Rob Taylor, vice president of lumber technologies.

   Never again, he says, will a salesperson merely sell 10 orders of lumber. Instead, they will discuss the builder or dealer’s long-term needs for wood and other products. Ideally, better collaboration will help both the customer and Weyerhaeuser, Taylor says. “The more we are able to predict the demand, the better able we are to plan against it and deliver against it.”

   For some on the strategic sales team, the new approach also has required a return to the basics, with a crash course in the nuts and bolts of home construction, Bradshaw says. “We want them to know how a (home) frame gets built and how the components interact in that frame.” With that newfound knowledge, he says, “what we want them to do is help our customers find solutions that make them money.”

   To signal its new organizational focus, Weyerhaeuser hired Hornall Anderson Design Works to study branding issues. Once it was determined that a new name was required, the Seattle-based design firm worked through some 700 possibilities, says Hornall marketing director Michelle McRae.

   Last summer the business leadership team gathered, listening intently as Hornall representatives clicked through a PowerPoint presentation, building to the unveiling of the organization’s new name: iLevel.

   “And you could have heard a pin drop,” Bradshaw recalls. “We all said, ‘What is iLevel?’ “

   They soon recognized that the name had legs, with the “i” embodying many of the new venture’s strengths: innovation, integrity, integration. “And a level is a No. 1 tool for a builder,” Bradshaw says. “Level means quality. It means honesty. That we’re going to level with you.”

   Wearing a name, McRae says, is like donning a new coat. “It’s an empty vessel and you have to fill it full of meaning.”

   With the five businesses now operating as iLevel, employees are committed to raising the roof on customer loyalty and, they hope, everyone’s bottom line as well.

Workforce Management, May 8, 2006, pp. 1, 28-36 — Subscribe Now!

As schoolchildren around the world strive to master English in pursuit of their place in the global economy, conducting business in any other language seems almost passé.

    E-mail, teleconferencing, instant messaging–all drive the need for employees to master more than a pidgin version of English. “We do a lot of conference calls,” says Olga Corpion, senior director of human resources for Ingram Micro’s Latin American regional office. “English is the language that can really join us together, whether we are communicating with someone in Mexico or Brazil.”

    Speaking the same language can foster camaraderie and customer service and help cultivate talented Spanish-speaking employees, Corpion says. Most important, it can boost productivity. After a 12-month stint studying with Internet-based language training company GlobalEnglish, employees at Ingram Micro’s Latin American office reported saving an average of 4.5 hours per week, thanks to better English.

    But the growing Hispanic market–both as employees and customers–makes an English-only language approach far from a slam-dunk. By 2050, Hispanic residents are projected to compose nearly one-fourth of the U.S. population, compared with 12.6 percent in 2000, according to census figures. Encouraging two-way communication, with native English speakers picking up some Spanish, recognizes the business realities of that demographic shift, advocates say.

    Which approach should business take? It depends upon the company’s demographic profile, including the location of its employees, its corporate headquarters and its hard-won customers.

    Idealism shouldn’t trump a company’s most pressing business needs, says Paul Wild, director of Customized and Workplace Training, part of Portland Community College in Oregon. “Sure, it would be optimal if everyone spoke English,” says Wild, who works with companies to develop language and other training programs. “But that’s not reality. So then do you compromise things like safety based on some sort of principal?”

    Up to 12 percent of employees of grocery chain H-E-B in some regions of Texas, including Houston and along the U.S.-Mexico border, have limited English proficiency, says Marilyn Goodwin, senior manager of partner learning and development at H-E-B. Last year, the San Antonio-based company offered an English training course called Sed de Saber (Thirst for Knowledge) to 35 employees. After 12 weeks, there was a 28 percent increase in English proficiency–numbers that translate to increased confidence in the grocery store aisles, according to Goodwin. “They really feel like they can interact with customers better and interact with co-workers better,” she says.

    H-E-B officials plan to expand use of the Sed de Saber tutorial, which uses a portable computerized system to teach 500 job-related words and 340 phrases. But officials at the grocery company also are eagerly waiting for Newport Beach, California-based Retention Education, the company that sells Sed de Saber, to roll out a Spanish training version this year. Providing management a working knowledge of Spanish could improve employee training and customer service, says Ceciliamarie White, training coordinator for H-E-B’s Central Market stores. “Those managers could speak to our (Spanish-speaking) customers,” she says. “But right now, they run around and try to get a bilingual-speaking person.”

Mastering English
    Increased productivity is one of the primary reasons why companies invest in English training, says Deepak Desai, president of Brisbane, California-based GlobalEnglish. If companies primarily work in one language, “they will save a significant amount of time,” he says. “Companies are much more cohesive in the way they communicate internally.” And English, he says bluntly, has become the language of global business.

    In 2003, General Electric hired GlobalEnglish to teach its employees in China more English, in an effort to speed up their handling of e-mail. One employee reported that within a four-year period ending in 2003, the number of e-mails she received each day in English jumped from 30 to more than 200. “Even a small improvement in their ability to decipher e-mail would have a huge productivity improvement for their company,” Desai says.

    Nine months of training paid off, with GE employees reporting that they were saving more than 3.5 hours a week on average. According to a GlobalEnglish analysis of 4,147 users worldwide, nine to 10 months of online language training saves an average of 2.32 hours per week.

    The focus of GlobalEnglish is international, with 95 percent of users living outside the United States. GlobalEnglish officials won’t provide exact numbers, citing competitive reasons, but they say Hispanic and Asian users are most common, with Asian users outnumbering Spanish speakers by 19 percent. Spanish-speaking users, though, have increased 122 percent from 2002 to 2005, outpacing growth of 113 percent for Asian users.

    At the Ingram Micro’s Latin American regional office in Miami, nearly all of the employees speak Spanish, says Corpion, the office’s senior director of human resources. But communications with other offices of the global technology distributor, which has its headquarters in Santa Ana, California, are conducted in English, including e-mails and contact with the human resources office, she says.

    To date, 240 employees in the Latin American office have studied with GlobalEnglish. Nearly all of them–95 percent–felt that English was required or important for their job, according to a GlobalEnglish analysis of 58 of those employees.

“Every one of our customers has asked us to teach their managers and their front crew people, such as waiters, to speak Spanish.” –Dave Henninger, Retention Education

    The business payoff, Corpion says, has been clear in everything from improved customer service in tech support to more participation in conference calls.

    For companies with most of their employees in the United States, demographics are still driving a need for English training. Of the nearly 47 million Americans who speak a language other than English at home, 28 million of them speak Spanish, according to U.S. Department of Labor analysis of 2000 census data. Of those, only half–14.3 million–say they can speak English very well.

    Sed de Saber results show that teaching English to Spanish speakers can reduce turnover by 83 percent and boost career opportunities, says Dave Henninger, a senior vice president with Retention Education. One-third of the participants who complete the program are promoted or are eligible for a job promotion, Henninger says. “This is a way to slow down turnover,” he says. “You give people some hope. It’s a message that ‘I have confidence in you.’ “

    At Dallas-based Brinker International, more than 750 employees are studying English through Sed de Saber, says Jose Gomez, senior director of diversity at the restaurant company, which owns the Chili’s and Romano’s Macaroni Grill chains, among others. About 30 percent of Brinker’s 110,000 employees are Hispanic, and a “substantial number” have limited English skills, Gomez says. The hope is that talented long-term employees will thrive professionally with better English. “We want them to move up in the ranks,” Gomez says. “They are going to be some of our future leaders.”

The two-way bridge
    Retention Education, which shipped its first Sed de Saber tutorial in 2005, has quickly learned that language training runs along a two-way street. “Every one of our customers has asked us to teach their managers and their front crew people, such as waiters, to speak Spanish,” Henninger says.

    “If you get the entire company speaking English, it’s better off for everybody,” Henninger says. “At the same time, you are always going to have some Spanish-speaking employees. You are going to have some recent immigrants who want to eat at Denny’s. If I were a manager, I would want to speak with them, to welcome them.”

    For some companies, it may be even more valuable to teach managers some Spanish first before focusing on their employees’ English-speaking skills, says Eli Portnoy, founder of LatinoHire.com, which links Spanish speakers with jobs. After picking up some English, an entry-level employee may find another job, Portnoy says. Plus, Spanish speakers will naturally slip back into their native language when possible, creating a cultural split with management. “But if management learns Spanish, they can also communicate and you can have less of an issue in terms of a cultural divide,” Portnoy says.

    In the end, companies decide to teach managers and employees Spanish to address immediate concerns, from customer service to safety, says Wild, the Portland training program director. Along the way there can be other payoffs, including team building and a better cultural understanding, he says. “There is almost a sense of a shared burden,” he says. “We also have found that it makes supervisors more sympathetic to what it’s like to learn a new language.”

    Goodwin, with H-E-B, is quick to stress that language education efforts at her company will never interfere with employee safety and other job-related needs. “We want people to learn English,” she says. “But we still want them to be able to do their job. And if that means giving them materials in Spanish, that’s what we’ll do.”

    Still, it’s clear from the H-E-B’s experience that employees are hungry for language help. At one Central Market, employees formed their own independent study group to build on the English they were already learning, White says. Meanwhile, the waiting list for Spanish training is growing, with a total of 20 supervisors and managers volunteering at just two stores.

    As the face of American business changes, the biggest potential risk may be ignoring the language schisms that can divide a company’s workers and undercut their long-term productivity.

Workforce Management, February 27, 2006, pp. 38-40 — Subscribe Now!

T he leaders of Cummins, a manufacturer of power generation equipment and systems, knew that some of their employees might be reticent to explore the unknown world of consumer-driven health plans unless the company provided a few guideposts.

    So the Columbus, Indiana-based company invested in a Towers Perrin financial modeling tool that helps employees run cost comparisons. By answering a series of questions flashed on a computer screen, employees could develop a rough picture of their out-of-pocket health expenses for the upcoming year, broken down by plan.

    To sweeten the deal, Cummins officials also committed to depositing $100 into the health flexible spending account of every employee who test-drove the financial tool. About half of the 10,000 eligible employees did so, says Jill Olds, director of benefit strategy. Roughly the same number, 46 percent of Cummins’ eligible employees, selected one of the two consumer-driven plans with health reimbursement accounts for 2004 instead of the third option, a managed care plan.

    “In 2003, consumer-driven health plans were frightening for employees,” Olds says. “And, to the extent that we were able to provide them a tool to model their own experience, that was helpful for them.”

    Compared with the typical managed care plan, in which employees don’t have to consider much beyond meeting the co-pay, consumer-driven health care can appear to be rife with decisions.

    Do you really need to get that shoulder checked out? Which doctor should you consult? How expensive is that physician? Is that recommended MRI necessary?

    Within limits, having options can be enormously liberating, says Barry Schwartz, a psychology professor at Swarthmore College and author of the 2004 book The Paradox of Choice: Why More Is Less. “Having some control is more than helpful. It’s essential to our well-being,” he says. “And you can’t have some control without some choice.”

    But, he cautions, “once you cross some kind of magical line–and no one knows where that is–instead of liberating people, choice paralyzes them. People become overwhelmed, confused.”

    Schwartz worries that employees will become indecisive, postponing vital care and, in the end, running up larger health bills. Employers, he says, should help employees by narrowing complex health choices as much as possible, perhaps by presenting choices in pairs across a series of computer screens. “In effect what you are doing is hiding most of the options from people,” he says. “Then people are more relaxed about decisions, more confident about them.”

    Human resource managers also can provide an emotional safety net by offering health advocates, wellness programs and other specialized resources when employees become ill, says Ron Fontanetta, a principal with the health and welfare practice at Towers Perrin. That’s when employees are most receptive to information anyway, he says.

    “It’s important to create an environment of empathy with the member,” Fontanetta says. “When they are sick, they are scared.”

    Employers that don’t stay ahead of employee needs will soon discover that “consumer-driven’’ can be an apt term. In 2002, the first year Aetna offered a consumer-driven plan to its own employees, leaders didn’t provide a financial modeling tool, says Robin Downey, Aetna’s head of product development. Employees, she says admiringly, cobbled together their own computer spreadsheets to better divine their own personal cost-benefit picture.

Workforce Management, September 2005, p. 60 —Subscribe Now!

Once more concept than reality, consumer-driven health plans are poised to proliferate in the next several years, driving changes in health spending that even early employer converts can’t precisely predict.

    Large employers, previously content to watch an adventurous few wade into the uncertainties of the high-deductible plans, are rapidly creating their own prototypes. In 2004, just 4 percent of companies with at least 500 employees offered a consumer-driven plan, according to Mercer Human Resource Consulting’s annual benefits survey of 3,020 employers. But one-fourth planned to implement the approach by 2006.

    With employers facing ever-increasing health costs, consumerism was this summer’s buzz as companies prepared for 2006 enrollment, says Paul Mango, practice leader for the North American payor provider practice at McKinsey & Co. “We think in the next 24 months you will see a dramatic uptick” in plans, he says. “Virtually every (insurance) payor we talk to now says employer interest is far beyond their expectations.”

    The plans, which typically pair a high-deductible policy with some form of personal employee spending account, are designed to persuade employees, via their wallets, to become less cavalier about treatment decisions–from doctors’ visits to toe fungus prescriptions. This insurance approach “makes people more aware that doctor’s office visits don’t just cost $10 or $15,” says Janice Pushaw, director of global benefits strategy at Whirlpool, which added a consumer-driven plan in 2004.

    But it’s still too early to know how counting pennies will influence long-term employee health, and thus the final bill. Early cost savings have been promising, but employees may be deferring treatment until they build sufficient funds in their personal accounts, Mango says. Gail Shearer, a health policy analyst at Consumers Union, calls the overall insurance concept a double-edged sword.

    “It may well deter some spending,” she says. “It also may deter needed care. It may end up backfiring.”

    Meanwhile, employers face a difficult task: boosting enrollment. Sign-up rates, with the exception of standouts like Owens Corning or Whirlpool, have been on the anemic side. In Mercer’s survey, just 16 percent of employees in 2004 chose a consumer-driven plan when provided another option. Fear of the unknown likely contributes to those decisions. A 2005 survey by Towers Perrin that explores the health purchasing decisions of 1,400 employees found that 55 percent preferred higher premiums over the possibility of reduced health benefits. “There tends to be a desire (among employees) to over-insure because of the fear factor,” says Ron Fontanetta, a principal with the health and welfare practice at Towers Perrin.

    But employers can create a softer landing, Fontanetta and others say. Health advocates can steer employees to specialized treatment centers and suggest prevention strategies. Financial modeling tools can spit out cost estimates, helping employees decide whether the newer high-deductible plan is beneficial. Above all, company leaders must view the shift to consumerism as a fundamental change in corporate philosophy, Whirlpool’s Pushaw says.

    “If all you are looking at is a cost savings number, it’s not going to work,” she says. “We put a stake in the ground and said, ‘We’ve got to do something about rising health costs, and we have to change (employee) behavior.’ “

Changing behavior
    The new high-deductible plans, also dubbed “consumer-directed,’’ can influence health spending–at least in the short term.

    Whirlpool, where 55 percent of employees are enrolled in consumer-driven plans, reports that as of early August the company had spent 15 percent less on that group this year than it had on employees in the company’s managed care plan. Mark Snyder, director of benefits for Toledo, Ohio-based Owens Corning, says his company’s health costs increased less than 5 percent in 2004–compared with previous annual increases of 12 percent–after the introduction of two consumer-driven plans. Employee use of generic drugs has increased about 3 percent, and emergency room visits are down 5 percent to 10 percent, he says.

    The high-deductible plans, which include health reimbursement accounts and health savings accounts, are far from cookie cutter in their approach.

    The company’s contribution to the employee account can vary, as can the size of the deductible. Some employers also pay for annual physicals and preventive tests, such as mammograms. In July, Aetna took the dramatic step of offering coverage, effective next year, for diabetes, blood pressure and other preventive medications. The option was introduced in response to employer interest, says Robin Downey, head of Aetna’s product development.

“It may well deter some spending. It also may deter needed care. It may end up backfiring.” –Gail Shearer, health policy analyst at Consumers Union

    “There are some employers that are concerned that as these plans become more mainstream, maybe some employees won’t get the drugs,” Downey says.

    To some degree, the plans contain a carrot and a stick. The sticker shock of a higher deductible is usually accompanied by the promise of an employee health account that can accrue if employees limit their health spending.

    But don’t assume that employees shortchange their own preventive care, proponents of consumer-driven plans say.

    Aetna reports that adult preventive exams have increased 23 percent among its consumer-driven membership, compared with 8 percent for those enrolled in other insurance plans. And a recent McKinsey & Co. analysis, which focused on the experience of five companies that have switched exclusively to a consumer-driven model, found that participants were at least 20 percent more likely to adhere to treatment plans for chronic conditions.

    Whether health savings can be sustained is the question that makes everyone nervous.

    Skeptics of consumerism point out that managed care was once considered the remedy for skyrocketing health care costs. In a report released in August, California Insurance Commissioner John Garamendi blasted the high-deductible plans, saying they would further destabilize the health insurance system by eroding benefits and cherry-picking younger, healthier employees. Others concerned about the plans’ long-term effects point to a study published last year that provided a snapshot of one unidentified employer: By the second year, hospital costs for employees in the consumer-driven plan had ballooned, running more than double what they were prior to enrollment.

Boosting employee uptake
    Amid this shifting landscape, can employees be encouraged to make the leap into consumerism, or do they require a bit of a nudge?

    McKinsey & Co.’s Mango argues that companies must shift all of their employees to a consumer-driven plan to reap the full benefit. “We don’t think companies who go at this on a slice basis will be successful,” he says. Otherwise, Mango says, employees with more chronic conditions will inevitably remain with the more traditional managed care coverage.

    But there are ways to catch employees’ attention without eliminating their options, says Snyder at Owens Corning, which has achieved a 71 percent enrollment rate. When the company introduced two health reimbursement accounts for 2004, it also redesigned the PPO option, forcing employees to give all of their health options a fresh look, Snyder says.

    Snyder says he has been looking closely for signs that employees might be skimping on vital care. Owens Corning, he says, benefits from nurses based at the work sites who can intervene if they hear, for example, that an employee is not filling a prescription for a cholesterol-lowering medication. “Any time you have cost-sharing, you are always going to have employees who may make short-term financial decisions that affect their long-term health.”

    Still, Snyder’s voice carries a lilt as he describes his employees’ take-charge attitude toward their newly acquired personal health accounts. Like others on the leading edge of consumerism, Snyder hopes that confidence will translate to more impact on employee treadmills and less on the bottom line.

Workforce Management, September 2005, pp. 57-60 —Subscribe Now!

Looking for some other resources to add to your company’s intranet? Here’s a sampling that experts suggest:

www.besttreatments.org/risk: The British Medical Journal provides an easy-to-navigate explanation of how to evaluate medical risk.

www.clinicaltrials.gov: A National Institutes of Health site that allows users to search for research trials.

www.leapfroggroup.org: Allows users to research the number of heart bypasses and other surgical procedures their local hospitals perform.

www.mlanet.org/resources/userguide.html: The Medical Library Association suggests how to best evaluate medical information. There are also links to disease-specific Web sites.

www.ncqa.org: The National Committee for Quality Assurance allows users to research health plans.

www.pubmed.gov: Often cited as an alternative to general search engines, this site is operated by the National Library of Medicine.

Note: Workforce Management does not endorse these sites and is not responsible for their content.

It’s the classic chicken-and-egg quandary: The success of consumer-driven health care depends on employees becoming better health care shoppers. But without a lot of employees enrolled in such plans, information that would make smart-shopping possible is hard to come by.

    Advocates of consumer-driven health plans argue that savvy employees, particularly when their own money is on the line, will research more about the cost, quality and the underlying necessity of the health care they use. In theory, employees will indulge in fewer doctor visits for minor ailments or Cadillac antibiotics for generic-model colds.

    The problem, though, is that while a wealth of medical resources are just a few key strokes away–typing “migraine treatment” into Google reaps 44,000 hits–some of the most vital information, such as cost comparisons between hospitals and doctors, remains scarce to nil. “A lot of health care providers today can’t quote prices,” says Paul Mango, practice leader for the North American Payor Provider Practice at McKinsey & Co.

    More employees must enroll to spur a market for cost and other comparative information, says Chris Calvert, a senior health consultant at the Segal Co. But, Calvert says, “You need to have (quality) information to get people to jump into these plans in droves.”

Meeting the demand
    With at least 1 million Americans using health savings accounts, according to America’s Health Insurance Plans, a national association of insurers, some organizations are moving to fill this need for consumer health information.

    In mid-August, Aetna officials announced a pilot program in the Cincinnati area to dispel the mystery surrounding physician pricing. The pilot, which officials at the insurer describe as the first of its kind, will provide Aetna enrollees online information about the cost of 600 distinct procedures provided by 5,000 physicians and physician groups in its local network. Calvert, who calls the Aetna move “a critical next step” in consumerism, says many insurance companies already provide the average cost of a procedure, such as a Caesarean section, but do not break it down by local physician or hospital.

    Meanwhile, a bevy of other groups–from nonprofit organizations to federal agencies–are providing better snapshots of what constitutes high-quality and cost-effective treatment. For the past few years, a coalition of large employers called the Leapfrog Group has been refining an online resource that employees can use to check the number of heart bypasses and several other surgeries their local hospitals are performing.

    Consumers Union has also launched adrug resource that allows users to compare the relative cost and effectiveness of common medications. In some cases, users can save as much as $1,000 annually by switching to another medication in the same drug class, says Gail Shearer, director of health policy at Consumers Union. Shearer suggests that employees approach their physician with the data in hand. “In a nonconfrontational way, open a conversation,” she says. “Many times doctors aren’t aware of these price differences.”

Health resources and pitfalls
    Eight out of 10 Americans use the Internet to access health information, according to a recent survey by the Pew Internet & American Life Project. The searches have become more sophisticated, according to Susannah Fox, Pew’s associate director. Thirty-one percent of those surveyed in November 2004, for example, reported using the Internet to research health insurance options, compared with 25 percent two years earlier.

    Marlene Porter, head of information services at the Medical University of Ohio’s R.H. Mulford Library, says that employees could benefit from some tips on how to critically search because their confidence sometimes outpaces their expertise. Porter advises employers to provide medicine-specific alternatives to general search engines, such as one operated by theNational Library of Medicine. She also suggests that companies encourage employees to evaluate the relevance and source of the Web pages they stumble across.

    Fox agrees, pointing to a 2002 Pew survey finding that only one-fourth of health information seekers consistently check a Web site’s date and source. “What was the cutting-edge breast cancer therapy or estrogen replacement therapy two years ago is a completely different story now.”

    The biggest risk, though, is not meeting employees’ growing hunger for useful medical information, Mango says. A McKinsey analysis of the experiences of more than 1,000 employees in consumer-driven health plans, released in June, found strong evidence of dissatisfaction with the level of provider information. The vast majority of employees, 80 percent, said that there was insufficient detail available regarding physician charges.

    “Fundamentally these (consumer-driven) plans are very sound in terms of what they are trying to do,” Mango says. But he worries that without sufficient cost and quality resources, the plans will encounter the sort of employee resistance that stymied HMOs when they were first introduced. “The last thing we want is for these plans to be tagged with an HMO-like moniker because employees are frustrated that they aren’t getting the information they need early on to make these (health care) decisions.”