Author: Site Staff

Dear Casual Professional:



You can get a short sample policy from the Workforce Research Center.

There are articles like “Dress Codes Should Match CorporateImage,” anddozens of other articles on the subject in the Research Center.

Also there are dozens of discussions about everything from cropped pants todressing for an interview at the Community Center. In addition, some Workforcemembers have posted their ownpolicies.

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

Busch’s, Inc., a Saline, Michigan-based retail grocer, believes the mantrathat people leave bosses, not companies. With that in mind, it implemented amanager training program for managers to learn soft skills, computer andtechnical skills, and performance management.

    The program has led to lower turnover, better customer service, andultimately the highest profits the company has seen in 27 years of doingbusiness.

    The attached Excel file includes four different spreadsheets the company usesas part of its performance management program.

Workforce Online, April 2003 — Register Now!

Alexander Domaszewicz answered questions posted by Workforce members relating to consumer-driven health care. Here are his answers:

Q: I have a liability question. Employers will be “empowering” employees but it will still be an employer sponsored plan. What safeguards does an employer have to help avoid the lawsuit that comes from arguably incomplete information or an alleged abandonment of employer responsibility?

    A: This is a concern for many employers as they move toward an information-rich health care environment. This is also a question with legal implications that can only be fully addressed by legal counsel (inside and/or outside).

    One of the best analogies is the move from passive defined benefit retirement plans to the “empowered” defined contribution retirement plans we’re seeing more of today. Plan sponsors continue to expand the resources they make available for their employees in the financial area, despite the potential liability issue.

    By keeping health care information resources distinctly separate from company resources and with proper disclaimers, many employers feel they are able to effectively address the liability issue. To my knowledge, no plan sponsor has been held liable for detrimental outcomes after providing health care information to an employee. However, since the potential exists, it is important to address this area when moving towards greater health care consumerism.

Q: What is the FASB liability for HRAs? Example: Employer establishes a $500 HRA for each of 100 employees with a carry forward provision. During the plan year $20,000 is used and paid. Does the employer have to accrue an expense of $30,000 to reflect “rolled over” amount?

    A: As a consulting firm we’re not in a position to give tax or legal advice, but we’re seeing a number of approaches in the marketplace.

    The majority of plan sponsors are viewing the first or second year of CDHP account accumulations as insignificant or diminimus in terms of the overall plan costs, and are not accruing liability yet. They will revisit this as the accounts and balances mature.

    One plan sponsor, using a major accounting house, has deemed it necessary to accrue and report the liability on an ongoing monthly basis. As of now, this approach seems to be the exception.

    With corporate debacles such as Enron and WorldCom, this is one of the areas that we may soon see further health reimbursement account IRS guidance.

Q: One company describes an account that an employee can take with them after termination. These funds are actually in custodial asset accounts.

In what circumstances will this type of account still sanctioned by the IRS?

    A: You may be talking about CareGain’s (www.caregain.com) HealthcareIRA. In reviewing the IRS’s Revenue Ruling 2002-41 and Notice 2002-45 on Health Reimbursement Arrangements (HRAs), there do not seem to be any barriers to an employer setting up an HRA that is portable and personal to an employee. An employee could still access funds after employment has ended, as long as they incur a qualified medical expense and aren’t allowed access to the funds for any other purpose. For now, the issue of how the account is funded is at the discretion of the sponsoring employer who allocated the funds in the first place. The guidance is fairly broad and allows the employer quite a bit of freedom in structuring the HRA, but securing qualified tax and legal guidance would be an important step if structuring an HRA with a funded custodial asset account.

Q: Most of us have been hearing the success stories of some Consumer Driven Health Plans, which is great, but might not actually paint a true picture. Are you aware of any companies that took the CDH initiative and failed miserably with it? If so, what were the faults with the program? I know these plans are new, so there might not be enough information out there to answer this question.

On a different note, aren’t the majority of employees signing up for these types of plans young and have few health problems? What I’d be interested in reviewing is the medical increases on the plans that are still being run with a managed care philosophy for some of the companies that are seeing very low increases on the CDH renewals. For example, if half the group is on a CDHP and that plan only experienced a 5 percent increase, but the HMO and PPO plans that cover the other half of the group saw a 25 percent to 30 percent increase are there really any savings on these plans?

    A: Your question has two parts, so I’ll address them one at a time.

    There have been a few failures in the CDHP market, but it is early in the process and programs for the most part haven’t had a chance to prove themselves (or not). Besides, it’s a lot more fun to tout successes. On the plan sponsor side, I heard about one 5,000-employee wholesaler (non-Mercer client, I might add) that offered a CDHP in 2002 and only attracted eight enrollees. Of course the program was only piloted as a “slice” option in three locations and it’s likely that communications, design, and alignment with the traditional plans was less than optimal. The employer dropped the CDHP and reenrolled the eight employees in other plans. Moving toward a consumer-directed health strategy can take quite a bit of time, effort, energy, and money. Making the new program worthwhile for the employer and the members is critical and any less could be viewed as a failure.

    Another anecdote that is in some respects similar to the example above but is really a success comes from a large employer who offered a CDHP in 2002 and only attracted 30 employees to enroll. The difference here is that the employer actually targeted and was perfectly fine with very low enrollment (less than 100) as it allowed them to gain experience with CDHP for the following year. The employer has now expanded the option and has thousands of enrollees in CDHP.

    The final piece of this equation is around vendors in the CDHP marketplace that have not made it. HealthSync was a great idea–create a health plan marketplace where firms give employees a fixed amount of money to go ‘shopping’ on a Web-based platform allowing them to choose (based on cost and quality) between all the health plans in a given market. Then the health plans would have premiums paid to them out of the entire pool of money adjusted for demographics and disease burden. Unfortunately, this consumer-directed model took too much coordination between health plans and employers, while initially being a solution in a very limited number of markets. HealthSync didn’t make it. Planlinx was another vendor in the consumer directed benefits and education space that didn’t gather enough business to stay afloat. The lesson here is to choose who provides services to your employees carefully.

    The second part of your question has an easy answer: it’s too soon to tell. Of course that is a little cowardly, so I’ll expand just a bit for now. There have been very few full replacement CDHP cases with enough available experience to measure, but what little uncorroborated evidence is available suggests the plans help dampen the cost increase trend. In slice offerings, a lot of what we do with plan sponsors is help create an offering that will not cause excessive selection based on demographics or health status between the plans. In early CDHPs there seems to be little selection based on demographics and low to moderate selection towards the healthy. This is not surprising for the first year or two of any new offering, considering that people with health concerns or undergoing a course of treatment are often not anxious to change plans.

    Also consider that there is still selection between traditional plans with different benefit and cost-sharing structures. Generally, we have not seen the huge increases on the traditional plans that are offered along side CDHPs as in your fictional example. Every CDHP scenario is different and it is hard to generalize the results at one company to others–we see different employer goals, different offering environments, different eligibles and enrollees, different geographies and different administrators. Well-designed CDHPs that are properly aligned to the other benefit offerings with a thoughtful contribution strategy and a strong educational effort are the best defense against the undesirable selection scenario you’ve created.

Alexander Domaszewicz works for Mercer Human Resource Consulting and is an expert on consumer-driven health care.

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.

Workforce Online, April 2003 — Register Now!

It’s easy to say that you have become an employer of choice. In reality,though, being an employer of choice is a difficult–albeit measurable–status toobtain. Here are some ways to assess how far you have come in theemployer-of-choice sweepstakes. The employer-of-choice factors are listed herein descending order of importance.

1. “Best” list appearances. The firm currently appears on Fortune’s or Working Mother’s best places list and on more than one industry or regionalbest places list.

2. Positive name recognition in target population. When asked in a survey orfocus group, people in your target professional fields know the name of yourfirm 75 percent of the time, and over half of those know at least one keypositive selling point of your firm.

3. In the top three choices of top performers. When highly qualifiedprofessionals are asked the names of places they “would like to work someday,”over 50 percent list your firm in the top five most-often mentioned.

4. Where your applications come from. At least 10 percent of your applicantscome from the top five most profitable firms in your industry or region.

5. Often cited in MVPs. Your firm’s HR and people practices are cited atleast five times a year by name in the top three (most valuable publications)that are read by top professionals in their field or industry.

6. Often cited. Your firm’s HR and people practices are cited by name inmajor industry, business, and HR publications over 50 times a year.

7. Referral rate. Employee referrals make up over 50 percent of all hires.

8. “Other offers.” Applicants with multiple offers also get a concurrentoffer from one of the top ten-rated firms in your industry at least 50 percentof the time.

9. Give away/take away ratio. Your firm hires away more people from your topfive competitors than the competitor hires away from you (you win four out offive of these head-to-head battles).

10. Talent competitors talk positively about you. When managers at directtalent competitors are asked in surveys or focus groups about your firm’speople practices, they give a positive response 25 percent of the time.

11. In top three choices of average performers. When professionals in yourindustry are asked the names of places they “would like to work someday,”over 25 percent list your firm.

12. Recruiters list you in top employers. When professional recruiters areasked in surveys or focus groups about your firm’s people practices, they givea positive response 50 percent of the time. When asked to list the top tenemployers of choice in your region or industry, they cite you 50 percent of thetime.

13. On “admired” list. You appear on Fortune’s “most admired firms”list.

14. On diversity list. You appear on Fortune’s diversity list.

15. Former employees do/would return. Over 10 percent of employees whovoluntarily quit in the past three years have returned. Over 50 percent expressan interest in returning when surveyed.

16. Employees send the “same” message. When your employees are asked whatthey tell strangers about “why the firm is a great place to work,” over 50percent of their answers include your top selling point.

17. Low turnover rate of top performers. The turnover rate of your top 25percent-rated employees is below 5 percent.

18. CEO mentions people practices. Your current CEO mentions specific HR orpeople practices by name in 25 percent of external and 50 percent of internalspeeches.

19. Sign-up lists. Your “sign-ups” at college information events exceedthe average by 50 percent. Your lines at job fairs are 25 percent longer thanyour top direct talent competitor.

20. Web hits. You get 50 percent more Web hits on your jobs page than theindustry average.

21. Benchmarked. Fortune 500 firms from outside your industry benchmark you(call to learn about your best practices) at least once a year.

22. Listed first in conference brochures. When presenting firms are listed incommercial seminar brochures, your firm’s name appears in the first 25percent.

23. Book. There has been a book written about your firm or CEO within thelast five years.

24. CEO has wide name recognition. Your current CEO has a positive namerecognition 75 percent of the time when professionals in your industry are askedto comment in surveys or focus groups.

25. You have an EOC manager. Your HR department has a designated manager whohandles employer of choice, best-places-to-work list, and employment-branding.

Excerpted from “HR Metrics, the World-Class Way” by Dr. John Sullivan,with permission from Kennedy Information, (800) 531-0007.  The phrase ‘Employer of Choice,’ is a registered trademark of Employer of Choice, Inc., a division of The Herman Group. Use of the phrase in this article is done with specific permission to www.workforce.com from the trademark holder. For further information, see www.employerofchoice.com.”

Workforce Online, April 2003 — Register Now!

Dear Talent-Hunter:



Recruiting metrics are the building blocks upon which recruiting decisions,strategies, and plans are built. Without these items, it is impossible todevelop a meaningful recruiting strategy or determine the effectiveness of thatstrategy.

Companies commonly rely on the following standard measurements of recruitingeffectiveness:

Source distribution: Number of job applicants and new hires per recruitmentsource.

Time-to-fill: Number of days between when a new job requisition is opened andwhen a candidate accepts an offer.

New-hire quality: A performance assessment conducted during an employee’sfirst 90 to 180 days on the job.

Customer Satisfaction: refers to the average hiring manager rating.

Recruiting Cost Ratio: requires figuring out the total recruiting costs, andthen dividing by the total compensation recruited. Total recruiting costs aredetermined by adding up four cost areas:

• Fixed-overhead recruiting expenses
  
• Sourcing-advertising, recruiting fees, Internet-posting expenses
  
• Signing bonuses
  
• Travel, relocation, visa expenses
  

The sum of these four areas equals total recruiting costs. Total compensationrecruited is the sum of the annual base starting compensation of all externalpositions filled by recruiting. Once you’ve come up with these two figures, therecruiting cost ratio can be calculated by using the following equation:

Recruiting Cost Ratio=Total RecruitingCosts/

Total Compensation Recruited

Recruiting cost ratio replaces the more traditional and commonly usedcost-per-hire metric. It takes into account more factors that affect cost, suchas geographic differences, industry differences, functional differences, anddifferences in job level.

SOURCE: Mike Sweeny, T. Williams ConsultingInc., Collegeville, Pennsylvania,Aug. 14, 2002. Staffing.org developed therecruiting cost ratio.

LEARN MORE: Read How Can We Measure Our RecruitingCosts?

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

 Dear Caught in a Vise:



Depending on how much downsizing is involved, this may be problematic foryou. I would strongly advise against providing raises to “surviving” staffmembers, particularly in situations where the downsizing is significant — morethan 10 percent of the workforce.

Many of the remaining employees will react unfavorably to the increases, nomatter how you position things. It will serve to increase the level of confusionand frustration that they feel, and many may think that their colleagues were”sacrificed” to pay for the raises. The best approach would be to separatethe events by at least four to six months. You can provide increases on theregularly scheduled annual review date, assuming you have one. If you use ananniversary system, then freeze all increases (not performance reviews) for thenext four to six months. You can then begin them again when you feel that theshock of the downsizing is past. For those whose increases were delayed due tothis process, provide them with prorated increase amounts. For example, a personwhose increase was delayed four months would get 16/12ths of their increase.

If you absolutely cannot wait to provide salary increases, then the way tohandle things is to be as up front and honest with employees as prudentlypossible. You need to explain the business situation. Be clear as to the reasonsfor the downsizing, and why you feel it is necessary to provide raises to theremaining staff members.

Let’s assume for a moment that you are giving the raises to keep pay atcompetitive levels, even during a business downturn. Your message should focusfirst on the company’s inability, due to business conditions, to allow stafflevels to remain at current levels. The next message should explain that eventhough you must downsize, the company remains committed to keeping talentedpeople, and paying market-competitive compensation.

Employees need to believe that all of this makes sense from a businessperspective, so you will need to craft these messages carefully. Whether youprovide increases right away, or wait as explained above, communicate via groupmeetings with senior management, as well as personal meetings between managersand employees. Follow these up with e-mails or personal letters. Useface-to-face communication as your primary vehicle for getting the message out.Your goal is to gain understanding, if not acceptance. Make sure you get there.

SOURCE: Robert Fulton, managing director, The Pathfinder’sGroup, Chicago,Illinois, Aug. 13, 2002.

LEARN MORE: Read Thirteen Alternatives toDownsizing.

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

Workforce has compiled several stories, checklists, and resources that mightbe help you prepare for and cope with emergencies, as well as relatedchallenges.

You can also discussall of these issues with other HR professionals at the CommunityCenter.

Emergency planning and recovery

Bioterrorism

Employee assistance and counseling

Military reserve issues

Discrimination

Layoffs and downsizing

Emergency planning and recovery

• An emergency planning checklist

  
  

• Communicating with Your Employees During a Crisis and Positively Managing Crisis Situations (articles)

  
  

• “Bracing For Emergencies” (discusses how HR can use its expertiseto help shape disaster plans)

  
  

• Injured Employees: A Supervisor’s Checklist

  
  

• How Malden Mills Industries Inc. coped with a fire that destroyed three ofits buildings and displaced 1,400 employees

  
  

• Each state’s emergency division (links)

  
  

• Emergency Management Guide for Business and Industry (PDF file)

  
  

• American Red Cross (link)

  
  

• What to Do in a Catastrophe (Steps to take in the unlikely event of ashooting, a plane crash, an earthquake, or a chemical exposure)

  
  

• Government information on disasters and emergencies; emergency medical services; environmental disasters (from the HHS)

  
  

• Standard Checklist Criteria For Business Recovery (from the U.S. government)

  
  

Bioterrorism

• Suspicious Mail and Anthrax

  
  

• What to look for in your mail (Washington Post item)

  
  

• Government information on biological, chemical and radiological weapons

  
  

• Government information on bioterrorism

  
  

Employee assistance and emotional counseling

• Employee Assistance (EAP) providers (paid list of vendors)

  
  

• “Facing Grief” (Workforce article describing how HR can help peoplecope with loss)

  
  

• “Expert answers” about bereavement and grief

  
  

• More on employee assistance (links to Workforce)

  
  

Military reserve and expat issues

• Gearing Up for Active Duty (Workforce article)

  
  

• Keeping Expats Safe (Workforce article)

  
  

• Resources for Expats and Expat Managers (Workforce article)

  
  

• More on expat management (links to Workforce)

  
  

Discrimination

• Religious harassment in the workplace and accommodating Muslim employees

  
  

• Legal Forum

  
  

• More on Discrimination and EEOC Compliance

  
  

Layoffs and downsizing

• More than downsizing articles, tips, and charts

  
  

• Calculate the Cost and Benefit of a Layoff

  
  

Compiled by Workforce’s Carroll Lachnit, Catherine Tharp, and Todd Raphael

Dear Head-Scratcher:

You’re wrestling with a problem that has always plagued HR executives. The HR function is undeniably overhead. HR doesn’t really produce anything; it isa cost of doing business, in the view of some, and the best it can show is costavoidance. Unfortunately, defining cost avoidance is a bit like nailing Jell-O to a wall since you’re dealing with “what it could’ve cost,” rather than what it did cost.

Recruiting costs are typically a high-profile budget item. Even at 17 percent, signing a check for the recruiting fee for a $100,000 salary higher causes most CFOs to shudder. A word of caution on recruiting fees: Yes, you can get a 17 percent fee now when the economy is down and still get some good hires. But once the economy improves, watch for the number of good hires to decline dramatically when you go through the agency channel. The agencies know whenthey’ve got good candidates and they’ll send them to the organizations thatwill pay 25 percent or more, and not to the client paying 17 percent. Yoursavings here will therefore last only so long as the economy is in decline. Thenyou’ll have to explain why your recruiting expenses went up, because you will have to pay the higher fees to get good people.

Depending on the number of new hires you need each year, consider adding avery Internet-savvy recruiter to your staff. A good recruiter who can mine theInternet for low-cost quality hires can help you avoid significant recruiting costs and more than justify the cost of the new position in just a few months.

Benefits are another high-cost area. How aggressively are you negotiatingyour health insurance rates? Are you shopping them around to various vendors? Are you looking at partial or total self-funding arrangements? Are there anyindustry or trade associations that, for a smaller company, have an agreement with a carrier that provides member companies with favorable rates? If you can consistently show a renewal rate for health insurance several percentage points below the renewal average, you’re saving the company money.

Avoiding legal representation costs is good, and you can certainly point outhow much your legal background saves the company. Even better, though, would bereducing the situations that incur those legal costs in the first place. What measures can you develop and implement that will reduce the number of cases going to arbitration? Can you reduce the number of sexual harassment complaints, wrongful termination suits, or wage and hour complaints? What is yourunemployment-insurance rate? Is it as low as it can get for an employer of your size, or are terminated employees winning UI cases that they shouldn’t be, and driving up your insurance rate? Reductions in all of these areas not only avoid legal costs, they also mean fewer distractions for line management and a more content and productive workforce.

Cost avoidance is at best a short-term measure of your performance. You might ook like a superstar for a year or two but then all the easy cost savings will have been realized. A better approach would be to develop a long-term workforce strategy with measurable goals that go way beyond cost avoidance. Some of thei ssues noted above could be good starting points. Good luck.

SOURCE: Carl Norcross holds amaster’s degree in human resources and has more than 20 years leading HR departments. He has worked for several midsize and Fortune 500 firms, including GRID Systems, Colorado Memory Systems, and Nortel Networks.

LEARN MORE: Read Measure WhatYou Bring to the Bottom Line.

The information contained in thisarticle is intended to provide useful information on the topic covered, butshould not be construed as legal advice or a legal opinion. Also remember thatstate laws may differ from the federal law.