Author: Site Staff

Patagonia, Inc. is privately held, makes high-performance outdoor and sports apparel, employs 1,200 people, and has annual revenues of about $240 million. Hewlett-Packard ranks eleventh among the Fortune 500, provides a variety of computer products and services, employs 150,000 worldwide, and boasts revenues of $80 billion. Other than the fact that both are headquartered in California, what could they possibly have in common?

    Speaking at a Wharton West conference on leadership, Patagonia president and CEO Michael Crooke and HP executive vice president Ann Livermore proved that developing leadership has some common themes, regardless of an organization’s type or size. Though vocabulary differed–Crooke’s style was more alternative (his keynote speech outlined a “mandala” for the 21st century) and Livermore’s was more traditional–a few essential ideas were remarkably similar.

    Take, for example, HP’s so-called Leadership Framework, consisting of four components which create the field within which an HP manager runs his or her business. Livermore ticked off the familiar four: strategy, “where you put your financial and people resources”; structure and processes that can deliver the strategy; metrics and rewards to support strategy, structure and process; and values and behaviors required to achieve goals.

    “Our view is that the very best leaders are the ones who can manage all four of these simultaneously, get them all in synch and know which one to turn or change when something is going wrong,” said Livermore. Those “best leaders” excel at six skills, she added. They have a winning attitude, a passion for customers, an ability to collaborate across boundaries, a global mindset, an ability to leverage diversity and a talent for working just “fast enough”–getting the right balance point between overly rapid decision-making and paralysis by analysis. With those skills, “great leaders can make an organization work like a system. They can pick a direction; excite people to move in that direction and turn individual stars into a high-performing team, like a sports team. Then you get a really powerful group.”

    Livermore’s philosophy of leadership will undoubtedly be looked at more than closely than before following speculation that she is one of a handful of contenders to take over former CEO Carly Fiorina’s position. Fiorina was ousted by the HP Board on February 9, in part because of her inability to consistently deliver the operational results expected from HP’s 2002 merger with Compaq.

    Livermore heads HP’s Technology Solutions Group, a $30-billion business that supports the company’s largest customers and encompasses enterprise storage and systems, software and services. She joined HP in 1982 and worked her way up through a variety of leadership positions in marketing, R&D, sales and business management before being elected a corporate vice president in 1995. She holds a bachelor’s degree in economics from the University of North Carolina at Chapel Hill and an MBA from Stanford University.

“In the flow”
    Like Livermore, Patagonia’s Crooke sketched a recognizable portrait of leadership. He spoke in terms of a dynamic “eco-system” within an organization: “Sometimes one part is thriving, while another part is dying.” A leader sees the often subtle differences within the system, addresses the problems, gets things into balance and brings all elements into “a high-performance zone, into ‘the flow.'”

    The term “flow,” Crooke explained, comes from University of Chicago psychologist Mihaly Csikszentmihali who has spent 25 years researching the state of mind often associated with athletes when they speak of being in “the zone”–that is, a state of intense concentration, of exceptional mental and physical effectiveness, leading to peak performance. Csikszentmihali calls this state “flow” and, in interviewing more than 100,000 people in all parts of the world, he found that it exists in many areas, not simply sports. Crooke is studying for a doctoral degree under Csikszentmihali.

    “I would argue that if your individual goals as a leader align with those of the organization, and you take a broad perspective, you can put together teams of people who will blow your mind,” said Crooke. “They are in the zone, in the flow.” He compared organizational teams to his experience as a 19-year-old in the Navy, working as part of a SEAL team, an experience that “has been the basis, or thesis, of my leadership style.” There, he learned that when a group of people operate fully as a system, a team, “you get superior results.”

    Metrics are an important part of getting those results, added Crooke. “You develop the right metrics–just a few, not too many–and measure to make sure you are all focused on them. Then build into the organization those methods that allow people to see their relationships to metrics.”

    When Crooke joined Patagonia in 1999, he quickly brought in seven people with skills new to the organization, resulting in a management team of which half had been with the company for nearly 20 years while the other half were newcomers. Maintaining the strong, positive company culture while creating and building a cohesive management team was one of Crooke’s leadership challenges: “Melding the new with the old, creating the next wave.”

Naysayers and a single voice
    Maintaining a stable organization and culture can also be an issue at HP, according to Livermore. “Leaders tend to want to change things, so the issue becomes keeping things stable long enough so people understand it and work well within in. It often takes four or five years of stability before we see an organization reach its peak.”

    A team that acts in concert to achieve goals doesn’t mean one that thinks alike, at either Patagonia or HP, however. Diversity of opinion and viewpoint, challenging ideas and positions, is encouraged among managers. “The people closest to me are all naysayers,” said Crooke, smiling. At HP, said Livermore, “a winning attitude can come across in different ways … For example, we have one guy who always focuses on what could go wrong.”

    But, once a decision is made, a winning team acts with a single voice. “If leaders aren’t all working in unison, there is no way line managers and staff will be,” said Crooke. “I don’t let anybody [be part of] management who can’t put aside his or her own views and work as part of the team once we have made a decision.”

    As for Livermore, “We put the onus on the leader to make sure people understand the direction we are taking. If people can’t follow that direction, we kick them off the bus.” In her playbook, performance is built on creating and maintaining winning teams. That, in turn, demands the ability to attract great people. “One of HP’s advantages is the fact that we have an excellent enough position in the marketplace that we can usually hire anybody we want. In my business, we have a 75 per cent acceptance rate. You’ve got to have people want to work for you.”

    Adds Crooke: “If you want the best people, you better have the best work conditions and benefits.” A critical part of Patagonia’s culture is the care of its employees, and it has been consistently recognized as one of the best companies to work for by such publications as Fortune and Working Mother.

    Employee benefits include daycare facilities, cafeterias featuring healthy, organic food, subsidies for purchasing hybrid vehicles, and a “brain food” speakers program. Environmental internships that allow employees to work for up to two months at an environmental nonprofit, while still receiving a Patagonia check, reflect the company’s commitment to both the environment–Patagonia contributes 1 per cent of sales to environmental causes–and to its employees.

    Any final words of advice from two leaders whose organizations are drastically different, but whose views on leadership are remarkably similar? “If you have any standard for excellence, strive to be the best, not second or third,” said Crooke. “This year Fortune named us the 14th best mid-size company to work for. Well, I’m not thrilled with that. I don’t want to be number 14; I want to be first.”

    A similar winning attitude is number one on Livermore’s list of most important leadership skills. “You get a bunch of business people together and usually it’s not that people aren’t smart enough, or that they don’t have enough capability. Very often–particularly in the technology world–attitude, enthusiasm, a belief that we can get over any mountain, go a very, very long way.”

Republished with permission from Knowledge@Wharton–http://knowledge.wharton.upenn.edu–the online research and business analysis journal of the Wharton School of the University of Pennsylvania.

Growth is nothing new to Aqua America Inc., one of the nation’s largest US based publicly-traded water utility companies. Throughout the past decade, the company has taken aggressive measures to acquire 120 companies in 13 states. Because of these acquisitions, the company achieved record earnings and high shareholder return.

As pleased as Aqua America was with their financial performance, they realized they needed to make some adjustments in other areas of the company in order to accommodate the expansion. One area was the human resource department. Here’s how Aqua America’s human resource team handled the growth.

The need…

As the company began to expand into new territory, HR faced a flood of new employees and applicants—they were tracking close to 7,300 active, terminated, and retired employees and over 17,000 applicants. Another concern for the HR team was communicating with staff located in different office locations, as Aqua America has over 100 locations scattered across the US. The HR team also wanted to reduce their administrative time and paperwork by automating and customizing several features to become more efficient. Additionally, they wanted a system to track affirmative action responsibilities and to generate customized reports for managers and officers.

Managing the growth with technology

Choosing the right HRIS proved to be a simple task for Aqua America. For the past 14 years, they had partnered with Spectrum Human Resource Systems who provided Aqua America with their first DOS and desktop-based HRIS. Since Aqua America already had a good relationship with the company, they were confident that Spectrum’s web-based system, iVantage®, would be a perfect fit.

One of Aqua America’s main concerns was managing the 17,000 existing applications and the new applications coming through the door. According to Carrie Panetta, Assistant Manager of Employee Relations of Aqua America, iVantage Connect™, an applicant and employee self-service module, is especially useful for applicant tracking. The module enables her team to easily post job openings to their company website, lets applicants apply online and makes the entire applicant process virtually paperless.

“Legally, we have to track applicant flow,” Panetta said. “With 17,000 applicants to date, we never could have kept up. The system saves my staff an unprecedented amount of time because they no longer have to key in all of those applications. Before iVantage, we had to key in resumes one at a time and then send out individual mailings to each applicant requesting sex and race data. This system has saved us an exceptional amount of time and money!”

Not only does the web-based HRIS assist the HR team in managing applications, it also helps them to easily create complex reports for managers and officers in a matter of seconds.

According to Panetta, HR often pulls important company data including organizational charts for succession and new position planning, employee terminations for stock option planning, and workers’ compensation reports for managers. Additionally, standardized email templates in the base system assist HR in keeping in constant communication with employees and managers at any of the 100 plus office locations.

Additionally, Aqua America wanted to be able to easily tailor the system to fit their needs. One system customization they have lets them track the employees covered by a pension plan, over 75%, because they needed to track vesting rules.

“Employees with 5 years of service are vested in the pension plan,” Panetta said. “So, if an employee works for us from the age of 20 to 26, they are vested in the plan, but are not eligible for another 40 years. We use the same screen to track employees who have participated in the plan and have retired because we need to keep their beneficiary information for long periods of time as well. Figuring out a way to track this process was imperative to Aqua America.”

Another system customization enables Aqua America to track medical benefits for retirees.

“The majority of our employees qualify for continuation of medical benefits when they retire,” Panetta said. “How much the employee pays toward this continuation of coverage is different for almost every retiree.”

Prior to using iVantage, the continuation of medical benefits for retirees created a lot of extra work for the HR staff. A special customized ‘Retiree Medical’ page shows how much the retiree must pay, how much the company pays, the percentage Aqua America pays towards a predetermined cap and from what account to deduct the payment.

One last concern for Aqua America was the system conversion process. During the conversion process, Aqua America interacted with a Spectrum client service representative on a daily basis. This was key to successfully implementing their system and building a positive relationship.

“Our client service representative is both an HR and Spectrum technology expert—she really strives to understand what we are trying to accomplish on a daily basis,” Panetta said. “Spectrum goes above and beyond to make sure we stay satisfied.”

Where they are today

Aqua America continues to expand into new territories, all while providing exceptional customer service and quality drinking water to their clients. The HR team continues to use iVantage on a daily basis. With the use of features like applicant tracking, employee self-service, pension planning, and the ability to generate key reports for executives, the HR department at Aqua America continues to exceed expectations for its 7,300 active, retired, and terminated employees.

***

About iVantage
iVantage is Spectrum’s fully web-native, human resource information system. iVantage provides complete HR functionality in the base system and additional modules for value added capabilities. Using leading technology, the system delivers robust reporting and analytical capabilities. Available for license, ASP, or a subscription model, the system is affordable for organizations of all sizes and budgets.

About Spectrum
Spectrum, founded in 1984, is a leading provider of high functionality web and desktop-based HR and workforce management software. As a full system and service provider, Spectrum delivers the full range of product related services including system planning, implementation, training, system customization, data conversion and system consulting. Spectrum, headquartered in Denver, Colorado, can be reached at 1.800.334.5660 or on the Internet at www.spectrumhr.com.

Dear Quizzical:



It sounds as though you want to create a culture whereby employees take initiative for their personal learning to support organizational needs. But your question also implies that you are experiencing a compliance culture, in which employees worry only about tasks they are accountable for performing.

Consistent with compliance cultures are employees who typically act in their own interest, and even when they seem to act in the interest of the organization, they do so at the expense of others (such as those in another department).

They likely feel secure in their jobs, with little motivation to improve their performance. You probably would be surprised if an employee went above and beyond what is normally expected to accomplish a task or serve a customer. You also may have problems with work groups that function poorly, employees who never seem to get along, and unresolved communication issues–all have an impact on your organization’s effectiveness.

Creating a workplace culture that inspires employees to choose accountability for specific outcomes requires them to have information, power and training. For most companies, this demands a significant shift in thinking about employee capabilities and what’s required for them to do their jobs. It involves developing learning practices that encourage experimentation, broad sharing of information, and transferring knowledge and expertise in a variety of ways.

Employees must see the big picture and be able to influence change before they choose commitment and accountability. Core employees must become highly literate about the organization, including knowledge of political pressures, budgetary constraints, department functions and needs, customer demands, internal relationships and other factors. Create labor/management partnerships that support problem-solving and decision-making.

Essentially, you must trust core workers with the tools typically reserved for managers. This usually is thought of as rewarding employees who prove themselves. In reality, providing these things in the first place engenders a culture of employee ownership and commitment.

SOURCE: Kevin Herring, president, Ascent Management Consulting

LEARN MORE:Good Union Relationships Are Best.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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Dear Workforce Newsletter

Amid intensifying debates on Capitol Hill about Social Security reform, a new nonpartisan group of business leaders, academics and former government officials has introduced a concept that it believes is a nonpolitical solution to encouraging retirement savings among employers.

The Retirement Security Project is calling on Congress to pass legislation that would provide employers with safe harbor provisions exempting them from fiduciary liability and nondiscrimination rules if they offer automatic 401(k) plans.

“In the current 401(k), the worker is faced with an array of choices and does nothing,” says William Gale, senior fellow at the Brookings Institution and one of the principals of the project. With the automatic 401(k), employees would be enrolled in a diversified investment option that is preapproved by the government and features periodic increases in the percentage of salary that goes into the fund. It would be up to employees to opt out if they wish. “It sets up a system in a way that reduces the information requirements on the workers and gets them doing the right thing,” Gale says.

While some companies already offer automatic enrollment and step-ups in their 401(k) plans, there needs to be more incentive for the employers to do this, Gale says. Until now, most of the discussion has centered on how automatic 401(k) features benefit the employees. But that’s not enough to get employers to implement these offerings. “The pension system is interesting in that it has to be attractive enough to get workers to participate, but it also has to be attractive enough for firms to offer it,” Gale says.

Concern about fiduciary liability has been the main reason that many employers are hesitant to offer automatic enrollment. Under Section 404c of the Employee Retirement Income Security Act, an employer is not liable for investment decisions made by the employee. “We know that a lot of employers aren’t interested in automatic enrollment because of the fiduciary concerns,” says Jan Jacobson, director of retirement policy at the American Benefits Council. “We would like to see legislative action on this safe harbor.”

Nondiscrimination testing is another obstacle that employers face. Anything that would lighten the administrative burden and costs of running the tests required to show that there’s a balance between high- and low-earning employees among plan participants would be encouraging, the Retirement Security Project says. “We could say if you have an auto 401(k) and you match contributions by 50 percent, then you have a safe harbor,” Gale says.

Such details as which funds would be deemed appropriate for the automatic default and how often to do step-ups in the level of employee contribution raise some questions, observers say.

Jacobson speculates that rather than listing names of funds that have the government’s stamp of approval, the Department of Labor will probably provide more guidance about which kinds of funds would be deemed appropriate. The issue of how often to offer step-ups does pose some administrative questions, she notes.

While it may make more sense from the employees’ point of view to have their 401(k) contributions increased when their salaries increase, it would be easier for companies to just offer step-ups to all employees simultaneously on an annual basis. While employers don’t want employees to feel a step-up in contributions, “at the same time you don’t want it to be so expensive administratively that employers won’t do it,” Jacobson says.

The American Benefits Council has been talking to its members about the Retirement Security Project’s ideas, and Jacobson says she believes there will be a legislative proposal based on the recommendations this year. In fact, many believe that this concept has a better chance of becoming a reality this year than the other elements of pension reform being discussed. “Since this is not controversial, it may pass as part of a smaller bill,” Jacobson says.

Doug Hinson, a partner in the Atlanta office of Alston & Bird, agrees that the concept sounds feasible and is less controversial than other proposals being discussed.

“It’s clearly easier to pass than Social Security,” he says. But there is going to be opposition from those who would perceive the safe harbor provisions as being pro-employer and anti-worker, Hinson adds. “It sounds fairly nonpolitical, but anything that takes away the ability of the participant to sue is always controversial.”

The Retirement Security Project, however, says it has received positive feedback from members of government on both sides of the fence. Gale notes that adding the safe harbors would not require a complete rewriting of ERISA, just a few amendments to it.

“There is always concern about the details, but people on both sides seem genuinely interested in this,” he says. “Especially given all of the animosity and debate going on, I think there is a core (group) that is looking for stuff that can get done.”

–Jessica Marquez

 

Health savings accounts offer numerous challenges to employers, with new ones seeming to come up every day. Supporters say HSAs can save employers and workers money two ways. First, high-deductible policies reduce the cost of premiums. Second, HSAs are expected to bring down health costs because it is believed that when consumers spend their own money, they are much less likely to make unnecessary trips to the doctor’s office or order unnecessary tests.

But a new study critical of HSAs raises another issue that employers must consider, and that is whether the high-deductible plans will fulfill the essential role of health insurance by keeping workers healthy and solvent in the face of high medical costs.

The study by the Commonwealth Fund, a New York-based think tank, shows that patients with deductibles of $500 or more are more likely to skip medical tests, treatment or follow-up exams or have prescriptions filled than insured adults with lower deductibles.

The survey, based on telephone interviews with a nationally representative sample of 4,052 adults ages 19 to 65, also showed that patients with deductibles of $500 or more had a greater tendency to run into serious financial difficulties. They were less likely to pay their medical bills and more likely to get contacted by a collection agency.

Commonwealth Fund president Karen Davis says health savings accounts and high-deductible plans have more downside than upside.

“Consumers may be spending less on frivolous things, but they also may be spending less on those things you really want people to have, like medication and treatment for things like congestive heart failure and high blood pressure,” she says.

Critics were quick to jump on the Commonwealth Fund research. HSAs have growing support, particularly in the health insurance industry. The savings plans are part of President Bush’s “ownership society” initiative and key to his efforts to reduce the number of Americans without health insurance.

Critics say the report is flawed because it was based on deductibles of $500 or more, well below the $1,000 for individuals and $2,000 for families mandated by the legislation setting up the health savings accounts. They also note that part of the survey was undertaken before HSAs began being offered last year.

Larry Akey, a spokesman for America’s Health Insurance Plans, an industry trade group, says, “It is difficult to see how the Commonwealth Fund can draw conclusions from data that predates HSAs.”

A key feature of HSAs is that money that is not used can accumulate in savings accounts. “We think HSAs are the answer to the problem Commonwealth raises, not the cause, because people will be able to set aside money to pay medical expenses,” Akey says.

Dan Perrin, executive director of the pro-high-deductible HSA Coalition, says HSAs “work for anyone hammered by health care costs, and that is everyone.”

Akey and Perrin say it is much too early to form conclusions about HSAs because they are so new. Davis agrees up to a point.

“If people are lucky and don’t get sick right away and build up five or 10 years of savings, maybe they will have enough to cover their needs,” she says. “We just don’t know.”   

—Douglas P. Shuit

 

Employers seem less inclined to pass along health care cost increases to employees, according to a new study.

Forty-one percent of companies say they are willing to absorb costs themselves, compared with 29 percent last year, according to a report by Watson Wyatt and the National Business Group on Health. The survey involved 555 employers, each with at least 1,000 employees.

Watson Wyatt suggests that, among other factors, a tight labor market is making employers more reluctant to shift costs to employees.

Matt Roberts, an employee benefits consultant for the health insurance broker Brown & Brown, says that the degree to which employers can shift costs to employees sometimes varies by region. In Rochester, New York, for example, where Roberts is based, of the three major area employers—Bausch & Lomb, Xerox and Kodak—the latter two are both struggling. The weak job market, according to Roberts, means that few Rochester employees have the luxury of comparing the benefits packages found in multiple job offers.

For employers who do shift costs to employees, a critical factor is communication, according to Gary Cunningham, an employment manager at the consulting firm Olenick & Associates. This year, Olenick implemented some cost-shifting in its rich PPO that previously included no deductible and no out-of-pocket costs. The company’s challenge was to explain to employees that their benefits were still highly competitive. “Employers have to identify how they make a good plan still be perceived as good. Perception is reality,” Olenick says.

Beyond cost-shifting, employers are looking at other ways to save money on benefits. Sixty-nine percent, for example, are using disease management programs through a health plan this year, according to the Watson Wyatt study. This represents a 50 percent increase compared with last year. And 32 percent offer obesity reduction programs, also a big jump from 2004, when just 14 percent were offered them.

Other popular strategies used by employers to limit health cost increases: changing health vendors and pharmacy benefits vendors; offering incentives to employees who complete health risk appraisals; and providing employees more information on the quality of health care providers.

Health savings accounts are another cost-control option being explored. Though only 8 percent of employers offer them now, another 18 percent plan to offer them in 2006 and 47 percent are considering HSAs.

Roberts is skeptical that health savings accounts are the cure for America’s rising health costs. “I’m not really a big believer in those,” he says. “I just don’t think they’re going to do much. Americans are very poor consumers. For every positive you have (about the accounts), there’s a negative.” Higher-deductible plans are sometimes hyped because employees may cut back on some unnecessary doctor’s visits, he says, but employees are also likely to cut back on substance abuse and mental health costs that could save a few dollars upfront but have “catastrophic” results on down the road.

He believes that more effective cost-cutting strategies would be to charge some employees, such as smokers, higher health premiums, and for companies to focus their efforts on all employees, not just on disease management programs affecting some employees.

In other news:

• Of more than 800 organizations surveyed in the United Kingdom, 51 percent extend health coverage to all employees, according to a Mercer Human Resource Consulting study. This compares with 41 percent in 2001.

  
  

• U.S. journalists at Reuters are launching a four-day “byline strike” and employees are “working to rule.” Employees are unhappy that the company is shifting health costs to employees and decreasing retirement benefits while increasing CEO pay. The employees are withholding bylines and credits from their work and will be “giving no more to their jobs than what is required,” according to the Newspaper Guild of New York.

• The Employee Benefit Research Institute has published a report on how changes in health care benefits are affecting retirees and future retirees. Among other conclusions, the study finds that “retirement behavior patterns may change as employees nearing retirement age postpone their decision to retire upon learning that, without a job, they may not be able to obtain health insurance coverage, or they are unable to afford insurance premiums and/or out-of-pocket expenses.”

• In the first strike at the Texarkana, Arkansas, factory of Cooper Tire & Rubber since 1978, union workers walked out over health care and retirement benefit issues, according to Rubber & Plastics News. The company is tight-lipped about the specific negotiations, but the local steelworkers union says Cooper wants to increase premiums and offer more limited coverage.

  
  

 

 

 

 

With the war in Iraq, an increasing budget deficit and the ever-more contentious issue of Social Security reform on their agendas, the Bush administration and lawmakers have plenty to do in the coming months. And that has pension experts worried that the administration’s sweeping pension funding reform proposals might not be passed this year.

“The president’s focus on Social Security alone will make it very difficult for Congress to have time to address the pension funding reform issue,” says Dallas Salisbury, president and CEO of the Employee Benefit Research Institute. “Employers should pay attention,” he says, but they should not view these proposals as having a high probability of enactment.

Bush’s plan has already been met with staunch opposition from employer groups.

In February, the American Benefits Council came out with a 32-page report that critiqued the proposal and provided alternatives. The council calls for a permanent implementation of the long-term corporate bond rate to determine current liability, opposes the use of termination liability instead of current liability calculations for funding, and seeks greater disclosure of funding in general.

Days after the council released its report, Labor Secretary Elaine Chao, who is chairman of the board of the Pension Benefit Guaranty Corp., expressed her disappointment with the report. She said it “fails to recognize the reality that the pension funding rules are broken, causing workers and retirees harm and putting taxpayers at risk.”

With such discord among key players, the passage of pension funding reform this year seems doubtful, according to Salisbury. “When everyone is in disagreement with the government, it makes it very difficult for something to happen,” he says.

But the government has to do something to address the issue. The temporary fix Congress implemented with the Pension Funding Equity Act of 2004 is set to expire at the end of 2005. That fix entailed replacing the use of the 30-year Treasury bond rate to determine a plan’s liability with a long-term investment-grade corporate bond rate.

The change, which was made because the 30-year Treasury bond rate had gotten artificially low, was supposed to be a temporary one, however. There was an expectation of a broader, more long-term fix. The question needs to be resolved one way or another this year, notes Steve Mirante, managing consultant of Watson Wyatt’s New Jersey office. But in the wake of opposition and an overflowing agenda, the concern is that Congress will just decide to raise premiums and extend the current interest rate. “This would not be a good thing. … It would just be a patch,” Mirante says.

Merely raising premiums and extending the rate would do nothing but add to the problems, says James Klein, president of the American Benefits Council. After all, it’s the way the PBGC is funded that has caused the current situation, not a lack of premium revenue, he says.

While Klein’s group has taken issue with several points of the pension funding reform proposal, he remains optimistic that legislation could be passed this year. “It will be difficult to get this done this year—. Everyone knows this,” he says. “But I think everyone is committed in good faith to getting something done both in the administration and Congress.”

–Jessica Marquez

Dear Worrier:



Yours is the $64,000 question that remains largely unanswered. Although you should encourage employees to be healthy, getting them to take action is very difficult. If it were easy, wellness programs would not exist. What motivates one person to improve personal health may not motivate someone else.

Monetary rewards may be beyond your financial resources, and would have tax implications for employees. However, early data from consumer-driven health plans indicates that people are beginning to pay more attention to wellness and self-care issues when it affects their wallets.

The best thing you can do is to learn about issues that discourage employees from making positive health changes. Use focus groups or surveys to identify barriers to health improvement. Employees may complain they don’t have time to exercise or attend wellness programs, or that the programs are too expensive or inconveniently located. Employees sometimes also presume that their health issues are not serious enough to merit concern. Attack each barrier head-on; it will help you encourage employees to change their behavior.

Initiate an employee-wellness committee composed of both individuals who participate in wellness programs and some who don’t. Ask the committee to brainstorm for ideas to motivate other employees, including reasonable rewards or incentives.

Consider a customized employee-communication campaign that explains the connection between poor health and rising health-insurance premiums. Use employee newsletters, company meetings and other avenues to tout the success of employees who participate in wellness programs. Over time, these techniques could nudge fence-sitters into taking action.

The healthier your employee population, the greater the chance your insurance premiums will tumble. Perhaps you could link this to a modest rewards program as an incentive for employees to continue their participation in wellness programs. Of course, the point of wellness programs is not only to improve the health of employees but also to reduce health-plan costs associated with acute episodes of chronic illness. Any progress you make in this regard will help you over the long term.

SOURCE: Nancy Hakes, registered nurse and health consultant, and Dr. Tom Barela, national medical director, disease management practice, The Segal Co., Phoenix, April 21, 2004.

LEARN MORE:More Care, Less Cost.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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Dear Workforce Newsletter

Thanks to greater economic activity, executive search firms are posting improved results as their clients shop for new talent at the top.

According to the Association of Executive Search Consultants, the average consultant enjoyed revenue growth of 26 percent in 2004. Top firms, like industry giant Korn/Ferry International, saw even more improvement: Revenue in the United States rose by 31 percent in the 12-month period ending January 31, 2005.

The biggest overall contributor to the search industry was financial services, which accounted for nearly a quarter of search firms’ revenue last year. But the hottest sector was in life sciences and health care. In the fourth quarter of 2004 alone, that industry began 27 percent more searches than it had in the third quarter of 2004.

According to Jeffrey Frerichs, a consultant with the search firm Witt/Kieffer in New York, increased demand for executive talent in health care exists not because the sector is performing particularly well, but because “change is accelerating.”

On that point, Frerichs says health care firms seek leaders who can deal with “a business where revenue may be declining, but accountability continues to rise.” Profit may be slipping for some health care organizations, but the need for leaders who understand government regulations such as the Health Insurance Portability and Accountability Act is not.

Candidates also need to possess a firm grasp of financial matters and an understanding of global business and know how to work with doctors, Frerichs says.

Alicia Russell, associate director of the Alexander Group in Houston, says that in the first quarter of the year, individuals tend to be more proactive about finding new opportunities. That, coupled with improving business and employment climates, could mean the most recent quarter’s results will look even better than the last.

The U.S. Occupational Safety and Health Administration has written to about 14,000 employers to let them know their injury and illness rates are higher than average.

Jonathan L. Snare, acting assistant secretary of labor for OSHA, says that the letter was sent to raise employers’ awareness of the problem and let them know the federal agency can offer assistance in making their businesses safer. It’s not necessarily a precursor to a visit from the agency, OSHA said in a news release.

To identify who would get the letter, OSHA examined data from a 2004 Bureau of Labor Statistics survey of 80,000 work sites. The survey was conducted in 2004 and looked at injuries and illnesses that occurred in 2003. Some of the occupations with high rates of fatal injuries include logging and aircraft jobs. Jobs with high overall numbers of fatal injuries include truck driving, farming/ranching and construction.

Organizations targeted for the OSHA letter had 6.5 or more injuries or illnesses resulting in days away from work, restricted work activity or job transfer for every 100 full-time workers. The national average during is about 2.6 injuries or illnesses.

The lengthy list of the businesses with these high injury rates is available in a “zip file.” It does not include employers in the 21 states and one territory (Puerto Rico) that operate OSHA-approved state plans.

David Galt, a safety expert with Business & Legal Reports Inc., says OSHA’s letter is part of a general trend in the U.S. government, regardless of the political party in the White House, to take a less heavy-handed approach to enforcement. According to Galt, government regulators have said, “We’ve got to move to voluntary compliance on the part of business because government just can’t handle the workload. OSHA doesn’t have all the staff to inspect everybody.”

Paula Brantner, program director for the San Francisco-based nonprofit Workplace Fairness, which advocates for employee rights, agrees that OSHA is moving away from enforcement activity and is more focused on voluntary compliance. “This is all well and good if it happens,” she says, “but there doesn’t seem to be much evidence that voluntary compliance is happening. Sometimes it takes a real threat of enforcement to see the real changes we need, and we’re just not seeing it.”

Brantner agrees with Galt that the government is sometimes stretched thin. But even in times of tight budgets, she says, “There’s still a message from the top that they’re either going to be really strict on violators or they’re going to turn a blind eye and handle things really mildly.” The latter message, she says, is getting through.

A copy of OSHA’s letter is below.

Date
Name of Employer
Address

Dear_______:

Last year, the Occupational Safety and Health Administration (OSHA) surveyed employers to identify the workplaces with the highest Days Away from work, Restricted, or Transferred (DART) rates. Your establishment was one of those identified as having a DART rate higher than most other businesses in this country.

I am writing you to alert you to this fact, and to offer ways that you can obtain assistance in addressing safety and health hazards in your workplace. OSHA recognizes that your elevated DART rate does not necessarily indicate a lack of interest in safety and health. Whatever the cause, a high rate is costly to your company in both personal and financial terms.

Over the years OSHA has found that many employers need additional expertise in the field of workplace safety and health, and welcome assistance by other experts in this field. An excellent way for small business employers with 250 or fewer workers to address safety and health in their workplaces is to ask for assistance from OSHA’s onsite consultation program. This program is administered by a state agency and operated separately from OSHA’s enforcement program.

The service is free to small businesses and confidential. Since it is not associated with enforcement, citations and penalties cannot be issued. Designed for small employers, the onsite consultation program can help you identify hazards in your workplace and find effective and economical solutions for eliminating or controlling those hazards. In addition, the OSHA state consultant can assist you in developing and implementing a safety and health management system for your workplace.

In your state, the OSHA onsite consultation program may be contacted at: (Name/address/phone number varied here)

Often your employees can also be a source for identifying hazards and finding solutions. In addition, private consultants, your insurance carrier, or state’s workers’ compensation agency might be a source of onsite assistance. We encourage you to consider these suggestions as well as visit OSHA’s home page at www.osha.gov for information to ensure safe and healthful working conditions in your establishment. Just like last year, a list of all the employers receiving this letter will be available from the OSHA Web site on the Freedom of Information Act page.

Sincerely,
Jonathan L. Snare
Acting Assistant Secretary