for your benefit – Page 2

April 29, 2019June 29, 2023

Personal Lessons in Communicating Change

At the start of the year, I took a personal crash course in navigating organizational change. Despite consulting on issues around change management for most of my career, I learned it’s a different animal when you’re right in the middle of it yourself. Going through a big change reinforced a lot of what I know — and it gave me some new insights.

The source of all this change? My company, Benz Communications, joined forces with The Segal Group on Jan. 1. By absolutely all measures, this was — and is — an awesome step for our team, our business and our clients.

Segal is an 80-year-old privately held employee benefits and HR consulting firm that works with an amazing group of clients around the country. Our communications team doubled from 30 to 60 people, and we are so proud to be part of an organization with Segal’s history, values, people and clients. One of my favorite comments from a member of my team was “I feel like I just got an even better job — along with 30 of my best friends.”

Still, all the good stuff doesn’t mean change isn’t hard.

One of the things I learned is that it takes people a while to digest information when they are caught off guard. Fortunately, we were able to share our news in person with the Benz team during our annual end-of-year celebration in November.

But they were expecting to enjoy the time with colleagues and rejoice in all the great work we created during the year; no one was expecting me to announce a huge organizational change like this. That kind of surprise, no matter how good the news is, creates anxiety.

Also in Benefits Beat: Make Benefits and Internal Communications Inseparable

One of my team members said, “I know your lips were moving, but I didn’t absorb a thing you said.” It highlights an important lesson for corporate communicators, reinforcing why you have to give people time to absorb information and why you need to say things many times and in multiple ways.

It was also a reminder that leaders and employees experience change in entirely different ways. When I talk to clients about this, I tell them to remember that leaders have more context, more insight, more control and more notice.

It takes people a while to digest information when they are caught off guard. No matter how good the news is, surprise creates anxiety.

Those factors make it hard to put themselves in employees’ shoes. Even so, I was surprised by how big a blind spot I had in predicting my team’s concerns. Fortunately, people felt comfortable telling me exactly what they and their colleagues needed (it helps to have several communications consultants among them!). But over and over, I was disappointed in myself for not being able to anticipate their concerns on my own.

One example: Benefits changes are hard — even for a team of benefits experts. We didn’t have much time to move the Benz team onto Segal’s systems and benefits.

It’s hard getting up to speed on new programs, understanding how they compare to the old ones and making decisions — especially when you have so many other questions and concerns bubbling around. And present discomfort obscures long-term gain.

Our benefits package at Segal is far richer than what we had as a small business — we have a 401(k) match and a pension plan! But when your prescription ID card doesn’t arrive and you’re at the pharmacy with a sick kiddo, you’re not thinking about your pension plan.

And that was a big lesson for me. In times of change, not only do you need to communicate more, but you also need to thoughtfully engineer the small stuff.

Also in Benefits Beat: Employers Should Be Bold With Their Benefits

Go above and beyond to make sure there are no kinks in the systems or information flow. I recently caught up with a longtime friend and client who works for a large global corporation. She is immersed in M&A all year, because their business strategy relies so much on acquiring new companies. She said they have perfected almost everything about acquiring new companies — except delivering medical plan ID cards. That’s still a huge pain point for new employees and the one thing that continues to be a disconnect. It’s the small stuff.

I hope these personal anecdotes will help you navigate your next big change. While they are the lessons learned, we did plenty of things the right way, too.

Most importantly, we started from a place of trust and transparency, built from an employee-centered culture. And we joined an organization that shares our core values and also prioritizes doing the right thing for employees. Those are the best things any organization can have to help navigate the inevitable changes ahead.

March 20, 2019June 29, 2023

Sabbaticals Help Fight Employee Burnout

When executive recruiter Beata Zagona, a self-described city girl, decided to take a fully paid sabbatical from her job, her choice of destination came as a surprise to some. Last summer, she spent a month scooping rhinoceros poop, among other chores, at a rhino sanctuary in South Africa.

“I had worked for the firm for two weeks in South Africa and fell in love with the country,” said Zagona, a manager at PwC in New York. “I had gone on safari in Kenya and became more aware of wildlife poaching and saw the atrocities being committed against these animals. I thought the sabbatical was a great opportunity to do something adventurous and meaningful.”

Many employers would agree that a rested and recharged employee is more engaged and productive and that sabbaticals are a good idea, but PwC requires it for all newly promoted senior managers. The firm offers four weeks off — it pays for three — to give employees a chance to pursue a lifelong goal, volunteer or do nothing at all.

“They can sit and read movie star magazines for all we care, but we do require that they take time off,” said Anne Donovan, U.S. people experience leader at PwC. “We’re adamant. It’s not just a wink and a nod.”

The firm has always allowed individual employees to request a sabbatical but few employees did, according to Donovan. So in 2011, PwC established a formal program that requires senior managers with five years or more of service to take some time off.

About 17 percent of companies offered a sabbatical — either paid or unpaid — in 2017, according to a report from the Society for Human Resource Management. But the need for time off among senior level employees is supported by a number of recent studies showing that job burnout is a costly problem for both workers and employers.

Job burnout accounts for an estimated $125 billion to $190 billion in health care spending each year and has been attributed to type 2 diabetes, coronary heart disease, gastrointestinal issues, high cholesterol and even death for those under the age of 45, according to 2017 article in the Harvard Business Review.

And the number of employees reporting burnout is on the rise, according to a recent Gallup study of nearly 7,500 full-time employees. The study found that 23 percent reported feeling burned out at work very often or always, while an additional 44 percent reported feeling burned out sometimes.

For Zagona, spending weeks waking up at dawn to feed rhinos, clean their enclosures and dig ditches made her feel more resilient. She said that she came back to work more focused.

“The attitude and innovation that comes back to us and to our clients is huge,” said Donovan. “You get an employee that has an appreciation for life and for the firm that’s unmatched.”

Opioid Treatment Programs Offer Second Chances to Workers Facing Addiction

When a job seeker fails a pre-employment drug test, often the company rescinds the offer and both parties move on.

That scenario wasn’t working for the Belden wire and cable factory in Richmond, Indiana, which in 2016 faced a labor shortage due to a spike in retirements and a dearth in qualified applicants. So they tried something dramatically different.

Belden’s factory, which sits near the Ohio state line and employs more than 400 people, began offering drug treatment to those who failed their drug screening with a promise of a job if they successfully complete the program — all on the company’s dime. The pilot program, called Pathways to Employment, was launched in February 2018 and is believed to be the first of its kind.

“We had many people who were retiring and we needed to fill dozens of positions, but it was getting harder to find candidates because so many were failing their drug test — around 10 percent,” said Dean McKenna, Belden’s senior vice president of human resources. “There was no mechanism to deal with this except to say, ‘Sorry, you can’t work here.’ The CEO and others talked about what would happen if we hired these people. They said, ‘How bad would it be to give them the opportunity to get back in the workplace?’ ”

Also read: Construction Industry Nailing Down Opioid Addiction Woes

Belden teamed with Richmond-area organizations including Centerstone, a mental health and drug addiction provider, Meridian Health Services, Ivy Tech Community College and employment agency Manpower of Richmond, to manage the program. Participants are referred to a health care provider for evaluation and to develop a treatment plan, according to McKenna. So far, 26 have been through the program.

“The success rate is better than what we could have hoped for,” he said. “My peers probably thought we shouldn’t do this. There are risks of injury and litigation. You need the right level of support from the community.”

While many states are struggling with the opioid epidemic, Indiana is among a handful that is also facing a growing labor shortage, according to research from Indiana University. The economic damage caused by opioid abuse cost the state $4.3 billion in 2018 and will exceed $4 billion again this year, the study showed.

In 2015, nearly a million Americans were not working because of opioid addiction, according to a study by the American Action Forum, a nonprofit advocacy group. Between 1999 and 2015, the decline in labor force participation cost the U.S. economy $702 billion as the result of 12.1 billion worker hours lost, the study found. In some industries, such as construction, trucking or manufacturing, the numbers are even higher.

In neighboring Ohio, which leads the country in drug overdose deaths per capita, opioid addiction, abuse and overdose deaths cost the state anywhere from $6.6 billion to $8.8 billion annually, according to a 2017 report from the C. William Swank Program in Rural-Urban Policy at Ohio State University.

Also read: State Chamber Fights Workplace Addiction With Employer Opioid Toolkit

In order to help employers improve worker health and safety, the Ohio Bureau of Workers Compensation launched a pilot program in October to reimburse companies for drug testing and to provide training that helps managers deal with workers in recovery.

“In Ohio we are almost at zero unemployment, but we have employers that can’t find candidates who can pass a drug test,” said Dr. Terry Welsh, the bureau’s chief medical officer. “We aim to help employers hire and manage folks in recovery no matter their addiction. Normally, drug testing is an expense that employers bear themselves, but we are incentivizing them to do it by offering reimbursement. We are also providing professional training to folks in management for second chance employees.”

The agency has been a pioneer in tackling the opioid crisis, according Welsh, who pointed to the 2011 overhaul of its pharmacy program to better monitor and reduce addiction to potentially dangerous prescription drugs. In 2016, the agency also created safeguards to hold prescribers accountable if they don’t follow best practices. The agency saw a drop in opioid addiction among injured workers of 59 percent between 2011 and 2017.

The bureau’s Opioid Workplace Safety Program will provide up to $5 million over two years to employers in the state’s hardest-hit counties for expenses related to both pre-employment and random drug testing, manager training and support for workers in recovery.

At Belden in Indiana, the cost to treat a candidate classified as low-risk for relapse is around $16,000 and up to $25,000 for someone who is considered a high risk. McKenna said it’s a small price to pay.

“When you look at the difference in cost between a manufacturing job we can’t fill and a machine we can’t run versus what it costs to help someone get back on their feet, you see that it’s worth it,” he said. “These are people with real illnesses. They aren’t choosing to be in that situation. It’s unfair to discount them from society because of the problems they’ve stumbled into.”

November 5, 2018June 29, 2023

Employees Put the Bullseye on Target-date Funds

Target-date funds had been in the 401(k) lineup for more than a decade at Zurich American Insurance Co., but it wasn’t until 2014 that the company started using the investment to automatically enroll workers.

After doing an evaluation at that time, target-date funds were the best option for the company to automatically put workers into a professionally managed investment account at a reasonable and low cost, said Dawn Carthan, benefits consultant at Zurich.

“Target-date funds went hand-in-hand with auto-enrollment,” Carthan said.

Today, the commercial insurer’s reasoning is similar to many companies using target-date funds when automatically enrolling workers into 401(k) plans. In its “How America Saves 2018” report, investment management giant Vanguard found that 51 percent of participants were invested in a target-date fund. For plans automatically enrolling participants, 96 percent were enrolled directly into a target-date fund.

Because of the rapid growth of target-date funds, Vanguard expects 70 percent of participants will be invested in them by 2022.

At Zurich, 94 percent of plan participants are using target-date funds, with 68 percent invested entirely in one. That second number is largely because of a re-enrollment project that took place in the first quarter this year. Prior to the initiative, less than half of participants were invested entirely in one target-date fund, a Zurich spokeswoman said.

“Target-date funds have definitely taken off,” said Jean Young, author of the Vanguard report and senior research analyst for the Vanguard Center for Investor Research. “These professionally managed options are so much easier today.”

Young said target-date funds are popular for three reasons: first, they are professionally managed investments that start at a higher rate of risk when a participant is younger, and continually rebalance, moving to a more conservative asset allocation as that person reaches retirement age. Second, costs have come down considerably over the past few years and are certainly well below what it would cost to have all these investments managed individually.

Finally, the Pension Protection Act of 2006 allowed plan sponsors to automatically enroll workers into what is called a qualified default investment alternative, or QDIA, a type of investment that would meet a participant’s retirement needs. Target-date funds fall under that umbrella.

The QDIA qualification catapulted target-date fund growth. Last year, target-date mutual funds pushed over the $1 trillion mark compared to $158 billion in 2008, according to Morningstar’s Target-Date Fund Landscape Report. Net inflows surged to $70 billion in 2017, compared to the $40 billion in net flows every year since 2008.

Three providers, Vanguard, Fidelity and T. Rowe Price, have dominated the field, holding a combined $774.6 billion in total assets in 2017. Within the space, 95 percent of all inflows last year built on the longstanding trend in going to low-cost funds. The average expense ratio for target-date funds was 0.66 percent in 2017, compared to 1.03 in 2009.

Low cost doesn’t necessarily mean best fit, said Jeff Holt, director of multi-asset and alternative strategies for Morningstar Research Services.

“There has been this huge move to low cost,” Holt said in a recent webinar. “But plan sponsors and investors should be aware that it’s not a guarantee that they are going to get the better results despite having the fee advantage.”

Plan sponsors should be wary of having a false sense of security with this QDIA, said Ron Surz, president of Target Date Solutions, an investment management firm based in San Clemente, California.

Also read: Retirement’s Gray Area: Health Care Costs

Surz said many plan sponsors offering target-date funds assume that any available ones will work as the QDIA for their 401(k) plan. Plan sponsors often choose funds out of convenience for themselves rather than the best fit for participants, Surz said.

It’s no coincidence, he added, that two of the three largest target-date fund providers are also the largest record keepers in the retirement benefits industry.

“Many plan sponsors think they are safe,” Surz said. “As fiduciaries, they need to be aware of their duty of care to find the best target-date fund for the beneficiaries and not the most convenient one.”