Employee engagement levels are woefully low. The latest Gallup data shows only 34 percent of employees are actively engaged in their work.
That means more than half of all employees are not engaged in their work, and 13 percent are actively disengaged, according to the survey.
These are troubling numbers given the proven benefits that employee engagement brings to a business, which include higher share prices, greater customer loyalty, lower turnover, easier recruiting and a host of other desirable business outcomes.
The good news in this story is that HR is not to blame. While HR leaders may be responsible for overseeing benefits programs, gathering employee engagement survey results, and rolling out employee programs and campaigns, they are not the ones who actually move the needle on engagement.
Studies consistently find that employee engagement hinges entirely on the way leaders lead and the kind of culture they create, said Patrick Kulesa, global head of employee research for Willis Towers Watson in New York. âThe numbers show that how leaders inspire people with their strategy and mission determines whether employees will be engaged,â Kulesa said.
The problem is that leaders rarely take responsibility for employee engagement. They see it as a people issue, so they assume HR will fix whatever is broken. This is one of many mistakes leaders make when it comes to engagement.
Here are some of the other mistakes leaders make that damage employee engagement and how they can do better.
Leaders assume company perks will make a difference. Offering free coffee, half-day summer Fridays and other creature comforts may deliver short-term positive vibes from overworked employees. But if you arenât also addressing the core problems in your culture â like a lack of acknowledgement for work well done, managers who canât be trusted or limited opportunities for development â no amount of free snacks will solve your employee engagement problems, Kulesa said.
Leaders talk, but they donât listen. âEmployees donât need to be told what to do. They need to be encouraged to trust their instincts,â said Kevin Hancock, CEO of Hancock Lumber in Casco, Maine and and author of The Seventh Power. Hancock learned this lesson after acquiring a rare voice disorder in 2010 that made it difficult for him to speak. To protect his voice, whenever anyone asked him a question, he responded with, âWhat do you think is the right answer?â He wasnât trying to improve engagement, but thatâs what happened. Over the course of a year, engagement levels rose as employees gained confidence in their ideas and became more innovative and invested in their work. It made him realize the power of distributed leadership, and giving everyone a voice.
Leaders think employees should serve the business, not the other way around. When business leaders make financial performance the most important factor in every decision, employees become slaves to business outcomes. âBut what if you rethink the purpose of work?â Hancock said. When leaders prioritize improving the lives of employees, improved employee engagement is the natural result. That leads to better performance, higher revenues and other business benefits that every leader wants, he said. âWhen the company exists to serve the employees, it creates a stronger company and a better future for everyone.â
Leaders focus on numbers, not outcomes. When leaders only care about achieving the right employee engagement score, they lose focus on the ultimate goal, said Jim MacLennan, founder of Maker Turtle, a digital transformation consulting firm, and author of âDonât Think So Much.â âOnce they reach the target metric they move on to something else.â That makes employees cynical about their motives and can cause any short-term improvements to quickly sag. Instead, he suggested using employee engagement surveys to identify the biggest problem in your culture, then to spend the year solving it. âKeep it simple and define what âbetterâ looks like so it doesnât get diluted,â MacLennan said. Once you see improvements, move on to the next thing. When leaders focus on outcomes rather than metrics, continuous improvement becomes part of the way things are done.
They mistake surveys for conversations. If you want engagement to improve, leaders have to actually talk to employees, listen to their needs and build a corporate culture that inspires trust and respect. âYou canât do that with a survey,â MacLennan said. âOnce you wade in and start having conversations, youâll be amazed at what you learn.â
Washington state employers now must comply with one of the strictest noncompete laws in the country, which the Legislature determined will apply retroactively to restrictive covenants entered into before Jan. 1, 2020.
Washington House Bill 1450 declares that noncompetes are unenforceable against employees who make less than $100,000 a year (and in the case of independent contractors, $250,000 a year). The law also requires significant disclosures to be made to the employee at the time they sign the noncompete â the absence of which could also invalidate the clause.
The law requires compensation to be paid to the employee during the period that it will be enforced at a rate not less than the employeeâs previous salary, minus any compensation earned through subsequent employment during the period of enforcement.
Further, noncompetes lasting longer than 18 months are presumptively void. Under the law, any attempt by an employer to noncompetes against Washington employees or independent contractors in another state (i.e., through a forum clause) will render the covenant unenforceable.
Finally, the law states that in the case of a noncompete being declared unenforceable or enforceable in part or as modified, the party seeking enforcement must pay the aggrieved person the greater of actual damages suffered or a $5,000 penalty, plus reasonable attorneyâs fees and costs.Â
IMPACT: Employers should be aware of any state restrictive covenant laws that may impact portions of the workforce.Â
Crescent Metal Products in Ohio fired Donald Tschappatt for a variety of instances of poor work performance.
He made “negative comments” about co-workers. He stood around doing nothing and disappeared from his work area. He took extended bathroom breaks. And he made various assembly and packing errors.
After the company fired the 55-year-old Tschappatt, he sued for age discrimination.
The problem with Tschappatt’s claim? Crescent Metal Products replaced him with someone 6 years older. That’s not a great fact for an employee claiming age discrimination.
Tschappatt fails ⌠to show that he was replaced by someone younger. All of the competent and relevant evidence indicates that the company replaced him with Bob Hunter, who was 61.⌠Crescent put in plenty of evidence that Bob Hunter, age 61, replaced Tschappatt. Crescent reassigned Hunter to Tschappattâs position, and Hunter has been “able to successfully reach the same production goals” and “perform all of the duties” of the position “without incident.”
The law protects older workers from discrimination favoring younger workers. An employee cannot establish this if replaced by someone older. Case closed.
The phrase âdrugs in the workplaceâ understandably elicits an alarmed reaction from employers. But the truth is the amount of substances that are considered drugs are many and varied, and many are commonplace for an employeeâs daily routine.
Substance use abounds in the workplace â and thatâs just legal substances. Employees roll into work and canât get anything done without their daily dose of caffeine. Colleagues meet in the break room with cases of beer to partake in the regular happy hour. Someone anxious about an upcoming deadline picks up a CBD-infused coffee at breakfast or a CBD-infused burger for lunch. And donât forget about that roll of antacids or bottle of ibuprofen in the desk drawer or an energy drink in the fridge for a mid-afternoon pick-me-up.
In short, regulating substance use among employees is not simple and straightforward. Drugs like caffeine and alcohol are legal, but employers may get into trouble if an employeeâs alcohol consumption leads them to cause problems during the employee get-together.
Cannabis is still illegal federally in the United States as more states legalize it for medical and recreational purposes, causing confusion for employers who canât keep compliance straight among the constant changes. And, a recent surge of âsmart drugsâ â substances taken to improve creativity, attention, executive function and working memory â poses major ethical questions about whether itâs OK to take a mental steroid to be productive at work.
PRODUCTIVITY
Much has been made about college students taking medication to stay productive and awake, but that habit doesnât end at graduation.
People use cognitive enhancing drugs â also referred to as âsmart drugsâ â to improve their creativity, attention, executive function and memory. Much like athletes may use performance-enhancing drugs to improve speed and endurance, employees may use smart drugs to be productive at work.
âSome people start using them in college and then theyâre carrying that habit with them into the workforce. And things donât get easier when you go from college to the workforce,â said Nick Heudecker, vice president of research-data & analytics at Gartner.
The use of smart drugs isnât limited to an industry or economic status, Heudecker said. Even though Silicon Valley workers taking microdoses of lysergic acid diethylamide â more commonly known as the hallucinogenic LSD â to stay focused has received media attention, knowledge workers arenât the only ones taking part. âEvery workforce population is engaging in cognitive enhancement in some way,â Heudecker said.
ADHD drug Adderall is by far the most common smart drug, he said, followed by Ritalin, or methylphenidate. Modafinil, a narcolepsy drug, is another common cognitive enhancer. Energy drinks and caffeine â common parts of many peopleâs daily routines â are also considered smart drugs, according to Heudecker. And the over-the-counter dietary supplements called nootropics claim to improve peopleâs cognitive abilities, as well. Nootropics alone, according to Grand View Research, Inc., is a $2.17 billion market as of 2018 and expected to be a $4.94 billion market by 2025. Meanwhile, microdosing LSD means that the user takes about 1/10th of a dose as a way to âbreak down cognitive barriers and help them be more creative,â Heudecker said, adding there is no research on how microdosing LSD impacts usersâ health.
The nickname âsmart drugâ is a misnomer. âThese drugs donât make you smarter. They allow you to better use the facilities you already have,â Heudecker said. They do so by helping people stay more focused or awake. Users may have that âfeeling of being in the zoneâ for longer.Â
The use of these substances âis becoming more prevalent, not less,â he said, adding that too few employers are thinking practically about how they will address smart drug use in their workforce.
Why People Take Them: In 2018, The European Agency for Safety and Health at Work, or EU-OSHA, released the report âManaging Performance Enhancing Drugs in the Workplace: An Occupational Safety and Health Perspectiveâ to explore the trend of smart drug use among workers.
Employees take them for âincreased monitoring of employee health, stress levels, alertness and fitness,â especially when these measures are used to judge an employeesâ ability to do their jobs. âIt is possible to anticipate that employees under this level of scrutiny may turn to various pharmacological means to allow some control over biometric readings,â the report noted.
Workers in low-paid jobs that are not protected under standard labor laws may feel increased pressure to hit certain productivity levels, especially since they are increasingly being monitored by their employers. Not wanting to lose a job they rely on, they may turn to smart drugs. âElectronic means of monitoring employees are likely to be accompanied by an increase in the stresses on workers,â the article noted.
Employers in general donât seem aware that this trend is happening, Heudecker said. âItâs not like someone goes out for lunch, has a few martinis, and their speech is slurred. It looks like, âIâve got a really productive worker.â Youâre not going to ask questions because itâs a positive outcome,â he said.
While employers may appreciate that their employees are being more productive, if employees must turn to drugs to reach those performance goals, then the employer should consider how the company culture or policy drove them there, Heudecker said.
âThereâs a lot of demand to always be on, so you need to give your employees permission to be off,â he said. His 2017 Gartner report âCognitive Enhancement Drugs Are Changing Your Businessâ also explored the main reasons that push employees to take these substances. Basically, employees either view smart drugs as an opportunity to push the boundaries of what they can accomplish in the workplace or feel coerced into taking them to maintain performance and keep up with their workload.
If employees feel forced, that has the potential to get employers in trouble. âThis may expose organizations to legal risk if CED users obtain drugs illegally because they felt forced by colleagues or management,â the report noted.Â
Employer Response: Brian McPherson, labor and employment attorney at Florida-based law firm Gunster, has never had an employer raise the issue of smart drugs.
Medical cannabis is legal in Florida and thatâs received all the attention, he said. â[Employers donât have] the time or capacity to focus on the other issue that is brewing somewhat underneath.â
Studies support the increased use of Adderall, Ritalin and other drugs for performance, he said. Still, most employers try to stay away from getting involved in the prescription drugs employees are taking, and they assume they are complying with their physiciansâ directions.
âWe know itâs happening on a grand scale, at least more than it has in the past, but employers arenât really talking about or dealing with it,â McPherson said.
Heudecker suggested policies companies can adopt to directly address smart drugs. A chief human resources officer can work with other leaders to draft a policy around cognitive enhancer use in the workforce. They also can support ânon-pharmaceutical cognitive enhancementâ â practices that naturally help people be more productive by âimproving work-life balance, adjusting work schedules, promoting physical activity and educating employees on healthy nutrition and sleep practices,â Heudecker said.
An employerâs response also has to respect the fact that many smart drugs are prescription drugs that people need. âYou donât want to alienate people who need something for their ADHD,â Heudecker said.
THE LEGAL LANDSCAPE
The substance that employers mostly ask about is cannabis, said McPherson. Since medical cannabis is legal in the Florida, McPherson has fielded many questions about its use.
All indications point to cannabis laws continuing to progress in more states, he said. Once states approve it for medicinal purposes, the âfloodgate starts to openâ and there is a âgeneral march toward recreational use.â Currently, 33 states, the District of Columbia and Puerto Rico have passed laws broadly legalizing marijuana in some form. As of Jan. 1, 2020, 11 states â Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington â and the District of Columbia have adopted laws legalizing marijuana for recreational use.
âAs long as marijuana remains illegal under federal law, employers are getting a comfort level that they can still enforce the drug-free workplace tests for marijuana,â he said. âIf it ever becomes legal under federal law, that will really change the landscape, and it will become a much more complex situation.â
Drug use among many U.S. sectors is growing, according to the Quest Diagnostics 2019 âDrug Testing Index.â The data involved in this analysis come from pre-employment testing for safety-sensitive positions or drug-free workplaces, said Barry Sample, senior director of science and technology at Quest Diagnostics, which has been annually analyzing workplace drug testing data since 1988.
Cannabis is the most commonly detected drug in the workplace, according to the âDrug Testing Index.â Positive tests have increased in most sectors. Meanwhile, positive test rates have declined for cocaine, heroin and opiates.
Interestingly, the inclusion of cannabis in testing panels may vary by state, the index showed. In almost all states, 95 percent of organizations still test for it when they have the option. Colorado and Washington, the states where recreational use has been legal for the longest time, saw a 4 percent decrease in organizations testing for cannabis between 2015 and 2018.
There may be differences by industry, Sample added. âWhere there are generally less skilled workers, employers are having difficulties finding employees that will pass all the background screening, including drug testing,â he said. âThey may be making a risk-based judgment on their part that âWeâre going to take the chance and ignore the use of marijuana, because we really need people on board.â â
Meanwhile, two organizations have announced more nuanced drug tests for cannabis that may hit the market in 2020, according to Business Insurance. A research team at the Swanson School of Engineering at the University of Pittsburgh has developed a breathalyzer prototype, and Oakland, California-based Hounds Labs Inc. plans on bringing a breathalyzer to market in 2020.
Such tools could help detect marijuana use, which can stay in a personâs system up to 30 days after consumption, McPherson said. âThe employers Iâve talked to about these tests are excited and hopeful about them,â he said.
Dan Harrah, senior associate at Mercer and a consultant specializing in behavioral health and health care operations, is skeptical about these tests. âThe science of impairment is not settled yet. Thereâs a lot of subjectivity,â he said.
There will need to be a way to review these tests and see how effective they actually are, he added.
Psychedelic Legislation: While laws regarding cannabis use is moving rapidly, legislation on psychedelics is slower, said McPherson. Two cities â Oakland and Denver â have decriminalized psychedelics such as magic mushrooms, and the Chicago City Council in October 2019 approved a resolution that experts say could pave the way to decriminalizing them. The resolution uses the term âentheogenic substances,â defined as any range of natural plants or fungi âthat can inspire personal and spiritual well-being,â as well as other psychological and physical benefits.
âThe most alert employers are watching whatâs going on with the psychedelics and they are concerned,â McPherson said.
Regardless of the substance, he advises employers to stay informed.
ADDICTION
A person with an addiction is hyper-focused on obtaining their drug of choice and getting that high, which can affect their hygiene, sleep, basic social behaviors and work performance, said Andrea Elkon, clinical psychologist and director of behavioral health for Alliance Spine and Pain Centers. This hyper-focus applies to substances such as nicotine, alcohol or opioids as well as behaviors like gambling or shopping.
An employee struggling with a serious substance addiction is fairly obvious to spot, Elkon said. They may consistently come in late, leave early or not show up to work at all, take extended lunch breaks or exhibit erratic behavior such as falling asleep at their desk or acting more emotional than usual.
In such cases, managers need to be assertive, Elkon said. It may be an uncomfortable subject, but not enough people know how to handle it, she said. Managers should learn how to take action â sooner rather than later â while still showing concern toward the addicted employee.
When an employee does not yet have a serious addiction but is on the path toward one, managers can still notice behavior patterns like absenteeism that may point to a substance problem. âThat is a way to address the early signs, to focus specifically on the behaviors that are disruptive to the workplace,â Elkon said.
Employer Communication: Many employers have benefits programs in place to address addiction but not an environment that allows for open conversations about substance use, Harrah said.
âWhen it comes to behavioral health, everybody is able to talk about [how they] didnât sleep well last night, and thereâs no stigma around that. But nobody says, âIâm really thinking about cutting down on my drinking.â Thereâs more stigma around that statement.â he said.
More employers have been taking on behavioral stigma, but thereâs still work to be done. And the lack of communication around substance use benefits can lead employees down the wrong road, Harrah said. For example, if someone with an addiction realizes they need help, oftentimes the first thing they do is Google treatments. While the employer plan may include in-network carriers with good programs for addiction, a simple internet search can lead to low quality, out-of-network care, he said.
âOne of the things that I caution my clients on is you can have these supportive conversations, but you better understand what programs are in place. Because once you start having those conversations, your employees start to come to you, whether for themselves or a family member,â Harrah said.
Substance abuse and mental health benefits also belong in open enrollment conversations, said Morgan Young, vice president of client services, employee benefits at insurance brokerage Holmes Murphy. Young didnât mention mental health and substance abuse benefits in a recent open enrollment meeting, and an employee later asked if the company covered mental health benefits. Young was reminded of how important it is to share that message to employees.
Substance abuse benefits should go beyond the employee assistance program, she added. Employers consistently see low utilization of EAPs and try to convince employees to use them more, but theyâre not going to be the only solution, she said.
âWe need to understand that while an EAP may be a good tool for some, itâs not going to dissolve all the needs we have. We need to come up with different tools, resources and policies and make them available to employees,â she said.
Elkon suggested resources that could help employees or dependents with addictions. One of the first steps is sending them for a substance abuse risk evaluation, she said. These evaluations can tell employers about the employeeâs risk of substance abuse problems and treatment options.
If an employee does have a problem, employers can respond by showing concern and having treatment resources available, Elkon said. The employee could use a leave of absence to get the necessary treatment, with the assurance that they wonât lose their job while theyâre getting treatment.
âIf someone is showing any signs of addiction, itâs important to show concern but be firm with that person sooner rather than later because it could spiral and affect other co-workers.â she said.
Pharmacy benefit managers can help to reduce unnecessary opioid prescribing by improving coordination of care among physicians, pharmacists and patients to identify when the potential benefits of these medications outweigh the risks.
More than 10 million people in the United States misused a prescription opioid in 2018, and the opioid epidemic cost the country $179 billion including mortality, health care expenses, lost productivity, criminal justice expenses and assistance. The National Safety Council notes that the annual direct health care costs of individuals who misuse opioids are 8.7 times higher than those who do not.
The opioid epidemic offers an example of a preventable, complex public health and safety issue that has arisen due to a perfect storm of causative factors. Consequently, it requires multiple stakeholders to develop and deliver an effective solution to help lower costs and improve patient health outcomes. These stakeholders include health care providers, pharmacies, drug manufacturers and even employers.
However, the pharmacy benefit manager is one player in the opioid crisis that fills a critical role by employing clinical programs to ensure safe and appropriate utilization of medications. The PBM is a third-party administrator of prescription drug programs and primarily responsible for contracting with pharmacies for network services, negotiating discounts and rebates with drug manufacturers, developing and maintaining the planâs list of covered drugs (a formulary), and processing and paying prescription drug claims.
PBMs have become an increasingly important part of health benefits since they first entered the market in the 1970s. Today, three pharmacy benefit managers control more than 80 percent of the American market. All are part of massive health care conglomerates that have interests in other aspects of the benefits food chain â from retail pharmacies to medical insurance.
This can create conflicts of interest, as these mega-corporations stand to profit from every stop on a patientâs journey. These conflicts of interest can in turn leave employers and patients vulnerable to increasing health care costs and crises such as the opioid epidemic.
The American public, from the employee to the executive suite and human resources professionals, as well as those who make decisions about employee-sponsored health care, seeks change in todayâs profit-driven benefits industry. Here are just a few of the reasons why:
⢠In 2017, the average annual cost for prescription drugs used to treat chronic conditions reached $20,000, and drug prices increased at twice the rate of inflation.
⢠American families spent 67 percent more on health care in 2018 compared to 2008.
⢠Employer contributions toward health care costs rose 51 percent in the same period.
⢠More than 66 percent of bankruptcies are due to medical expenses or time out of work as a result of illness.
Mergers and acquisitions may answer the health care industryâs need to create new sources of revenue, but they can leave patients and plan sponsors behind. In a sector dominated by an outsized few, consumers all begin to look the same.
To compound the issue, PBM operations are often seen as veiled enterprises. Complex contracts and opaque business practices conceal the flow of dollars, making it difficult for plan sponsors, HR professionals and members to see what theyâre paying for. It may seem impossible to demand meaningful change from such a sizable arm of the health care industry, but it doesnât have to be.
Human resource professionals occupy a unique position in the U.S. workforce. As part of the decision-making process when it comes to employee benefits, HR leaders can demand change from the industry by learning how to spot PBMs that put member and plan sponsor interests first and move away from PBMs that donât.
This requires understanding todayâs health care landscape and how PBMs should be transforming to work for employers, not just for themselves. Here are four key indicators that demonstrate a PBM has broken from the status quo to operate in the best interests of its clients and their members:
⢠Pay-for-performance business model.
⢠Comprehensive clinical programs.
⢠Complete care coordination.
⢠Transparent contracting.
Pay for Performance
Most PBMs today operate on a fee-for-service model in which they are paid each time they perform a given function, such as a prior authorization review. While this type of business model is common, it fails to tie the PBMâs financial success to how well the company performs for consumers.
No matter how well or poorly the PBM helps the plan sponsor manage prescription spend, the PBM is paid the same. In some cases, it may even be paid more if the planâs prescription spending grows based on profit incentives tied to per-claim fees and hidden revenue streams.
Thatâs why a pay-for-performance business model has so much potential in the PBM industry. Pay for performance is a relatively new model, so far only explored by a few PBMs despite its power to help tie the companiesâ interests more closely to those of members and plan sponsors.
The pay-for-performance model helps to support transparent PBM operations by holding PBMs responsible for the quality of the work they do and putting dollars at risk if a plan sponsorâs prescription spending rises above a guaranteed maximum. This puts skin in the game and places people, not profits, first.
Under this type of pay-for-performance structure, the PBM is held accountable. Its success is tied directly to quality of service and whether it reduces overall drug spending through proactive clinical programs that help reduce inappropriate utilization. The plan sponsor is rewarded by performance guarantees tied directly to the PBMâs clinical programs and how well they improve health outcomes and lower costs over time.
This new approach helps encourage a straightforward pricing structure that does not benefit from unnecessary prescribing practices. It eliminates conflicts of interest and places plan sponsors and their members first.
Comprehensive Clinical Programs
Clinical programs can be easily overlooked when it comes to their importance not only in safeguarding patient health, but also in the amount patients and plan sponsors pay for health care each year. While many see programs such as step therapy and clinical reviews for prior authorization as sources of member disruption â and they can be if handled poorly â itâs important to recognize that these programs can positively impact plan sponsors and members alike.
An estimated 40 percent of opioid overdose deaths in 2016 involved a prescription opioid, highlighting the dangers that clinical programs have the chance to prevent. From 2011 to 2016, prescriptions were written for dozens of opioid tablets following surgeries, even when procedures would cause relatively little pain.
This prescribing pattern has tremendous impact, as the probability of long-term opioid use and abuse increases sharply in the early days of therapy, particularly after five days. To prevent addiction and abuse, it is vitally important to ensure patients take prescription opioids no longer than is medically necessary.
PBMs can help to reduce unnecessary opioid prescribing by improving coordination of care among physicians, pharmacists and patients to identify when the potential benefits of these medications outweigh the risks. Comprehensive clinical programs offer a strategic way to ensure medical necessity while protecting patients.
Data from the Centers for Disease Control and Prevention show that the rate of opioid addiction is relatively low if only one day of opioid therapy is prescribed initially, with just 6 percent of patients on opioids one year later. The likelihood of addiction increases sharply with eight or more days of prescription opioid therapy (13.5 percent of patients on opioids one year later). This data demonstrate just one way that clinical programs, such as starter dose and quantity limits, can help protect patients.
Starter dose programs limit the initial supply of a drug to help determine its appropriateness for the patient. In the case of opioids, my company, BeneCard PBF, found that a program limiting the initial supply to three days helped curb the number of prescription opioid claims by 67 percent as part of a comprehensive, clinically driven approach preventing opioid addiction. The starter dose program helps avoid members having excess opioids on hand when therapy is needed for just a few days. This approach also reduces the risk of opioid fraud, waste and abuse.
Quantity limits, which control how much of a medication can be dispensed at a time based on medical best practices, can provide similar protection. This helps to prevent unused medication from building up in the home, where it presents a danger not only to the patient, but to others who may be accidentally exposed to the drug (such as children and pets) or who may be at risk of using the medication without a prescription and a physicianâs oversight.
Carefully designed and managed clinical programs have the power to save lives and to protect members and their employers from fraud, waste and abuse of prescription medications. There is an urgent need to do so that extends beyond controlled substance abuse. The United States spends about $21 billion on medication errors and $935 billion in overall health care waste each year. However, many PBMs rely primarily on retrospective reviews of prescription drug utilization to identify problems. This approach may represent a conflict of interest, as many PBMs charge a per-claim fee, meaning they get paid every time a prescription is filled.
Instead, look for a PBM that offers comprehensive clinical programs designed to be proactive, not reactive. These programs should include a retrospective review, but they should also work to identify potential concerns before a medication is dispensed and prevent potentially dangerous or wasteful prescription utilization instead of addressing it after the fact.
Complete Care Coordination
Since todayâs health care system is so complex, a clinically driven PBM model is important in protecting patient and plan sponsor interests and helping to control prescription spending.
Unfortunately, many PBMs rely primarily on rebates and negotiated discounts to control prescription spending. While these negotiations are necessary in todayâs marketplace, they focus on only one part of the equation.
As in any other industry, obtaining strong discounts is simply not enough. PBMs must also be smart about where and how money is spent. Thatâs why a clinical focus is key. Rebates and discounts do little good if the number of prescription claims continues to rise because patient welfare has become secondary to numbers on a spreadsheet.
But how do you put people first in this challenging environment? Select a PBM that empowers its pharmacists to coordinate care between the various members of a patientâs health care team. This team can include primary care physicians, specialists, retail pharmacists and others.
Often, these individuals are spread across multiple practices, and communication between them can be difficult. However, the PBMâs pharmacists have a unique perspective, with insight into the prescriptions written and filled by multiple providers. This puts them in an ideal position to facilitate more effective communications between all parties involved in a patientâs care.
PBMs should understand a patientâs condition, symptoms, medical history and any other medications they use to help ensure each prescription dispensed is medically appropriate. They must know each drugâs manufacturer recommendations and FDA guidelines to understand if it offers the most effective course of treatment for that particular individual. PBMs also must take into account industry best practices, which constantly evolve as new medications and new clinical data become available.
All of this helps to support better health outcomes by reducing the risk of side effects and adverse drug reactions, improving treatment efficacy and supporting a better quality of life. This, in turn, can reduce the need for repeat visits to the doctor and lower the risk of hospitalization. It can also lower the risk of patients taking a medication that offers little or no benefit. All of this helps to lower overall health care costs, improve member satisfaction and support a stronger workforce.
Health care must be a coordinated team effort to achieve positive results for both the patients and the PBM.
Transparent Contracting
The ongoing conversation regarding PBMs and their role in controlling costs often focuses on transparency, and it must continue to do so. In many cases, PBMs practice selective transparency, allowing consumers to see only whatâs favorable to the PBM and its revenue streams.
Complicated contracts help to conceal revenue streams in an industry where conflicts of interest have become increasingly common. This creates an environment in which human resource professionals and their companies are not fully informed regarding how their money is being spent and where PBMs may be profiting at consumersâ expense.
Convoluted business practices and hidden revenue streams make accurate PBM comparisons virtually impossible. This means that there is a greater chance companies and their employees could be spending more to get less from their PBM.
The traditional PBM business model masks several revenue streams, including rebates and spread pricing, which pharmacy benefit managers enjoy at the expense of plan sponsors and members. To avoid these and other conflicts, it is vital to select a PBM that offers clear contract terms.
Clinically driven pharmacy benefit management works, and because it works so well, thereâs no need for complicated contracts that conceal exactly what the plan sponsor and their members are paying for. Another method of avoiding hidden revenue streams and conflicts of interest is to work with an independent or privately owned PBM not beholden to shareholders and not driven by the needs of larger health care ventures. This allows the PBM to focus closely on providing superior service with less emphasis on profit margins. Typically, working with these PBMs means carving out the pharmacy benefit from the medical benefit, which offers further advantages and transparency.
There are several small to midsize privately held PBMs that are advancing clinical care, transparency and innovation â outperforming the industry giants for customer satisfaction in numerous categories. The PBMI âPBM Customer Satisfaction Reportâ is an annual survey of pharmacy benefit managersâ customers to show client satisfaction in multiple categories such as delivery of promised savings; meets financial guarantees; effective tools to manage prescription costs; no conflicts of interest issues; and other important factors.
Let the Past Inform Our Future
To effectively manage a benefits program and protect its members as well as its financial viability, it is essential to understand the issues inherent in the pharmacy benefit management system, as well as the steps necessary to create meaningful and lasting change. This entails exploring smarter, more strategic PBM clinical programs designed to promote clinical efficacy and reduce wasteful and inappropriate prescription utilization. It also involves resisting the traditional per-claim fee structure, which can be prone to fraud, waste, and abuse.
Addressing the underlying issues in the PBM industry requires persistence and tenacity. Armed with proper knowledge, employers can begin asking their PBM the tough questions and start demanding more for their plan and for their members.
Road maps are a form of content that will help you navigate key areas of people management. Road maps focus on the changing terrain of employee engagement. This guide offers a step-by-step process for creating a measurable engagement strategy that will deliver results.
Most of your employees are probably not engaged and itâs hurting your bottom line.
But donât feel bad. Almost every company is in the same boat.
Despite years of talking about the importance of employee engagement to hiring, retention and productivity, only 34 percent of employees are engaged, according to data from Gallup. Worse, 13 percent of employees are actively disengaged. âThe numbers have improved over the last decade, but not as much as we want,â said Jim Harter, chief workplace scientist for Gallup.
The good news is that employee engagement can be improved if companies focus on the right things. Harter has seen dozens of organizations across industries increase engagement levels when they implement targeted strategies and stick with them over time. âChange happens incrementally but it does happen,â he said.
When it does, the payoff is clear. Gallup research shows organizations with high levels of employee engagement achieve better earnings-per-share, and see substantially better customer engagement, higher productivity, better retention, fewer accidents and higher profitability.
The trick is understanding who has the power to influence employee engagement, and what they can do to generate change, said Jill Christensen, employee engagement consultant and author of âIf Not You, Who? Cracking the Code of Employee Disengagement.â
HR should be involved. HR still needs to plan, implement and measure employee engagement strategies â but senior leaders need to be the voices of the program to make it work. Itâs a collaboration, and this road map provides a framework for how senior leaders and HR can work together to make engagement happen.
PART 1: MAKE A PLAN
Get leaders on board. Leaders will never independently take ownership of engagement, so HR has to pull them in. Harter suggests sharing data linking employee engagement to business performance to pique their interest, then showing them how their words and actions impact outcomes.
Ask employees what they think. If you want to identify your engagement issues, you have to listen to what employees are saying, said Amanda Popiela, researcher with The Conference Board. âContinuous listening strategies are key to understanding engagement.â Along with reviewing annual survey results, she suggests conducting periodic pulse surveys, hosting employee focus groups, monitoring social media posts, and talking to employee teams about what they love about working for your organization, and what needs to change.
Identify skill gaps. Most leaders and managers are never taught good coaching skills, like how to give feedback, build trust or manage conflict, all of which is key to driving employee engagement. So management training has to be part of the plan. Look for content that is quick and easy to access and let managers know they will be expected to use it.
Set realistic goals and expectations. If you want to foster change you have to hold managers accountable, Christensen said. She suggested setting a goal to increase engagement levels by a specific amount in one year then tying those results to performance reviews. âThatâs how you make culture change happen.â
PART 2: START ENGAGING
Make employee engagement part of every conversation.Define specific communication steps for managers and leaders to integrate engagement into their talking points. These might include discussing engagement issues in every team meeting, sharing engagement strategies in town hall events, and having weekly one-on-ones with team members to identify their specific concerns or needs. âYou need to tell them exactly what to do or they wonât do it,â Christensen warned.
Keep employees up to date. Employees want to feel like they have a voice and that their opinions matter, so keep them in the loop. Report employee engagement survey results, share your action plans to address specific problems, and keep them up to date on progress. âExceptional communication is an important part of employee engagement,â Harter said.
Teach managers to coach. Managers are busy and will often skip training to focus on the next deadline. So you have to make it easy to access, immediately relevant and a clear priority, Popiela said. One way to do that is to get senior leadership involved. Popiela recently worked with a financial services company whose CEO posts a monthly webcast discussing one tip for managers on how to improve engagement. âManagers know what they should be doing, but they donât always do it,â she said. These short, thought-provoking webcasts make them stop and think about what they could do better.
Deal with the disengaged. When teams have toxic, negative or disruptive members, no amount of coaching will make a difference. âThese employees can be toxic,â Christensen said. And itâs up to managers to deal with them. They need to be ready to have these difficult conversations, set clear performance goals, and fire people who refuse to change. A lot of managers ignore toxic employees because they donât have the skills to deal with them, but the consequences of this approach can be severe, she said. âWhen leaders donât take action with these employees, it will breed disengagement in everyone around them.â
PART 3: MEASURE RESULTS
Conduct annual survey results. The annual employee survey is the best baseline measure of engagement and proof that your efforts are working. Remember, even small shifts are a good sign. âChange takes time,â Harter said. But companies that stick with it can achieve dramatic and sustainable change over a few years.
Conduct pulse surveys. Short pulse surveys that sample a percentage of the employee population, or ask everyone a few questions, can give you a sense of progress and help you see whatâs working (or not). But donât overdo it, and donât use surveys to replace real conversations.
Check your eNPS. Employers can now use NPS to measure employee engagement. The one-question survey tells you how likely your staff members are to recommend your company as a place to work on a scale from 0 to 10. âItâs a simple way to gauge engagement,â Christensen said. And it can be a quick easy way to demonstrate results.
Share the data. Any time you survey employees you have to share the results, otherwise it could actually make things worse. Report engagement levels to the entire company, celebrate big successes and share what you plan to do next, Popiela said. Then discuss the data with executives, drawing connections where possible between engagement and productivity, retention, and business performance. âItâs important to show them the âso whatâ of improved engagement,â she said. âEspecially when it effects the bottom line.â
In 2005, Monika Starke filed a charge of discrimination with the EEOC alleging that her employer, CRST Van Expedited, Inc., subjected her to sexual harassment.
The EEOC expanded that initial charge into a federal-court lawsuit over whether CRST engaged in sexual harassment against myriad of its female driver trainees.
What followed was 14 years of litigation, several trips to the court of appeals, one trip to the U.S. Supreme Court, and an attorney-fee award of over $3.3 million against the EEOC for frivolous, unreasonable, or groundless conduct in the filing and prosecution of the underlying claims.
The issue that lead to the large fee award was the EEOCâs heavy-handed prosecution of a pattern-or-practice harassment claim, even though it did not plead such a claim in its complaint.
Late last year, the 8th Circuit Court of Appeals affirmed the fee award (which had previously been reduced on appeal from an initial award of $4.5 million).
As the master of its own complaint, it was frivolous, unreasonable and/or groundless for the EEOC to fail to allege a pattern-or-practice violation and then proceed to premise the theory of its case on such a claim. Claims necessarily premised on the inclusion of this claim are likewise frivolous, unreasonable and/or groundless.
As attorneys, we are responsible for our conduct in litigation. When that conduct gets out of hand or crosses the line, there are often consequences. Sometimes, those consequences are harsh, even if warranted. In this case, the EEOC learned a tough lesson, hopefully one that will end one of the longest running discrimination cases in history.
Joint employment is a legal theory in which the operations of two employers are so intertwined that each is legally responsible for the misdeeds (and the liabilities that flow from those misdeeds) of the other. Itâs also a legal theory with which federal agencies and courts have struggled over the past several years.
More recently, however, more measured and business-friendly federal agencies have ratcheted back these expansions. In December 2017, the NLRB announced that it would require âactual ⌠joint control over essential employment termsâ for a finding of joint employment. A few months earlier, the DOL pulled its joint employment rules, leaving the issue in limbo in wage and hour claims.
Earlier this week the DOL announced a final rule to update the regulations interpreting the definition of joint employment under the FLSA.
In the final rule, the department provides a four-factor balancing test for determining FLSA joint employer status in situations where an employee performs work for one employer that simultaneously benefits another entity or individual. The balancing test examines whether the potential joint employer:
Hires or fires the employee;
Supervises and controls the employeeâs work schedule or conditions of employment to a substantial degree;
Determines the employeeâs rate and method of payment; and
Maintains the employeeâs employment records.
The DOL adds that this rule âwill add certainty regarding what business practices may result in joint employer status,â promote âuniformity among court decisions by providing a clearer interpretation of joint employer status,â and âimprove employersâ ability to remain in compliance with the FLSA.â I cannot agree more.
This rule (available here) becomes effective on March 16, 2020.
Following the death of John Hindmanâs son from a heroin overdose, his employer Leidos launched an initiative to combat the opioid epidemic. Photo courtesy of Leidos
In the months after John Hindman lost his son to a heroin overdose in 2016, he discovered that he was not alone in his grief. As word of the tragedy spread among his colleagues at Leidos, a defense, aviation and health tech firm, many came forward to share their stories of loved ones struggling with addiction. He was so overwhelmed by the breadth of the problem that he wrote to his CEO challenging him to do something about it.
In a lengthy email titled âA Fatherâs Requestâ Hindman told Leidos CEO Roger Krone about his son Sean, who died at age 30, and his struggles with opioid addiction and later, heroin. He wrote of his grief and explained that many other employees face similar challenges, either dealing with their own addictions or those of loved ones. A few weeks later Krone replied. Hindman said his exact words were, âYou broke me down. Weâre all in.â
âIâve worked here since 1985 and I never knew how many people were impacted by this epidemic,â Hindman said. âI felt that Leidosâ leadership had no idea of what was happening within the company. I realized that I needed to communicate this within Leidos, not with criticism but with honesty.â
The email launched not only a companywide initiative to combat the opioid epidemic, but also a national movement among business leaders to raise awareness and provide resources to their workforces and communities. The Reston, Virginia-based company distributed a CEO pledge to end opioid addiction that 60 corporate leaders around the country have signed so far.
Leidos, which employs 33,000 people worldwide, also held town hall meetings to gauge the extent of the problem and launched an internal public awareness initiative. It also reexamined its benefits and began looking at ways to better control the prescribing of opioids.
Opioid addiction has ravaged communities across the country. The misuse of these drugs is also a contributing factor in heroin addiction. In 2017, more than 70,000 people in the U.S. died from a drug overdose, a record, according to the Centers for Disease Control and Prevention.
Opioids, which are a risk factor for heroin use, were involved in the majority of those deaths. This has a direct effect on the workplace, impacting health care costs, productivity, absenteeism and recruiting. Employers in states such as West Virginia, Pennsylvania, Ohio and Kentucky have been particularly hard hit, as have those in the construction, trucking and manufacturing industries.
Given that two-thirds of those who are addicted to opioids are in the workforce and that many get their prescriptions through their employers, corporate leaders have found themselves on the front lines of a public health crisis. According to a report by the Society of Actuaries, the prescription opioid epidemic cost the economy $179.4 billion in 2018. This includes $60.4 billion in health care costs and $26.5 billion in lost productivity.
Many employers are finding innovative ways to fight the problem, from public awareness campaigns to offering treatment programs to managing prescription opioids to seeking alternatives to pain pills.
âThis is something weâre all coming to grips with,â said Lorraine M. Martin, president and CEO of the National Safety Council. âIssues in our community will end up in the workplace. This is the first year that opioid deaths eclipsed deaths by car crashes. Thatâs a big alarm bell. Itâs tricky because most people become addicted to drugs that have been prescribed to them and many get those prescriptions through their employer.â
While 75 percent of U.S. employers have been directly affected by opioids, only 17 percent feel extremely well prepared to deal with the issue, according to a survey by the National Safety Council. More than a third have experienced absenteeism or impaired worker performance and have had an overdose, arrest or injury because of opioid use, they survey found.
âI think weâre all at different places on this journey,â Martin said. âIn areas that are hard hit employers have put in place programs that address recovery. Others still donât understand that this is happening in their workforce or the role that they can play in fighting it. Itâs important that employers understand how it affects their bottom line. The numbers are startling. Various industries and employers saw it quicker and some have taken very creative actions.â
One employer that saw firsthand how a regional opioid crisis also affected its workforce was Belden, a manufacturer in Richmond, Indiana. In 2016 the company was facing a labor shortage and having a hard time finding qualified applicants. About 1 in 10 applicants failed their drug test, so the company developed a novel approach to the problem. In 2018, Belden began offering drug treatment to those who failed their drug screening with a promise of a job if they successfully complete the program. The program, called Pathways to Employment, was so successful that the company launched it at its New York and Pennsylvania locations a year later.
âThe program has grown to 30 in Richmond,â said Ellen Drazen, corporate communications manager at Belden. âOur locations in Syracuse and Washington (Pennsylvania) were chosen because they were seeing a similar impact on hiring due to the opioid epidemic.â
Belden has also signed the CEO pledge launched by Krone at Leidos.
In other parts of the country, business coalitions are taking collective action to address the problem.
In Kentucky, which has the fourth highest drug overdose rate in the country, a group of employers launched the Opioid Response Program for Businesses, which helps companies develop policies that support recovery, such as addressing the stigma around addiction. The program is run by the Kentucky Chamber Workforce Center.
âStigma is one the most profound obstacles in dealing with this problem,â said Natalie Middaugh, a project coordinator at the Kentuckiana Health Collaborative, a nonprofit organization focused on improving health care delivery in Louisville and southern Indiana. âWe need to help employers understand that addiction is a chronic disease and not a moral failing or a criminal issue.â
The collaborative joined the effort in 2017 after a significant spike in overdose deaths. In February of that year, Louisville emergency services handled 43 overdoses in one day.
âThat was a huge turning point,â Middaugh said. âItâs a community health issue and a business issue, but there is also genuine concern about employees and their families.â
In the past five years, large employers have made a number of changes in their benefits plans in response to the opioid crisis, according to the Kaiser Family Foundation 2019 âEmployer Health Benefitsâ survey. Forty percent launched or revised an employee assistance program in response to the opioid crisis, nearly a quarter modified their health plans to incorporate step therapy for opioid use, 38 percent provided additional health information to employees, 8 percent required employees with high opioid use to obtain prescriptions from only one provider, 21 percent asked their insurer or PBM to increase monitoring of opioid use, and 2 percent increased the number of substance abuse providers in their networks.
The National Business Group on Health and a number of regional employer coalitions recommend working with health plans and pharmacy benefit managers to develop benefit plans that feature safeguards such as limiting coverage for certain prescriptions to small quantities.
Managing opioid prescriptions was a top priority for Leidos, which in 2018 began restricting prescriptions on long acting opioids, such as morphine, oxycodone and fentanyl, and limiting short-acting opioids to seven days. The most common drugs involved in prescription opioid deaths are methadone, oxycodone and hydrocodone. Leidos worked with its pharmacy benefit manager ExpressScripts to implement the changes, according to Karen Kanjian, director of corporate benefits.
âOur part in this as benefits people is to look at what weâre doing in our programs, and we know that the frontline of defense is our PBM,â she said. âThey see claims coming in real time and they have access to data, such as which doctors are prescribing and how much are they prescribing.â
Leidos also plans to work with dentists, who often prescribe opioids for procedures such as pulling wisdom teeth.
âMy husband had a tooth pulled and got six weeks worth of pain pills that he never finished,â said Heather Misicko, a benefits consultant at Leidos.
A 2018 study in the Journal of the American Medical Association found a link between use of opioids after tooth extraction and long-term use. With 3.5 million wisdom tooth extractions performed each year, thatâs a lot of pain medication sitting in peopleâs medicine cabinets, according to Meg Moynihan, director of strategic marketing at Stericycle. Safe disposal of medications is an important part of addressing opioid addiction, she said.
âBecause these drugs are prescribed by doctors for legitimate medical conditions people donât think of them as a risk,â Moynihan said. âI lock the liquor cabinet but I never thought of locking the medicine cabinet. Having medications lying around makes them more accessible to friends of children, housekeepers and visitors, particularly during open houses when selling a home. It takes less than 30 days to develop an addiction.â
In fact, 20 percent of Americans hold on to their prescription medications because they donât know what to do with them, and 1 in 10 have offered or given their unused prescription drugs to friends or family members for either medical or recreational use, according to a 2019 study conducted by Stericycle. The company offers envelopes that can be mailed to the company anonymously for safe disposal.
In September, Stericycle and the National Safety Council released a free online toolkit to help employers develop and implement policies and programs that support opioid addiction recovery. It includes sample policies, employee presentations, white papers, videos and other materials designed to support a drug-free and recovery friendly workplace, according to Martin.
The toolkit recommends using the NSC substance abuse cost calculator, which takes into account location, industry and number of employees, to determine the economic impact of drug abuse. After that it lays out a 12-month plan for developing and implementing an opioid policy, from education to communication to vetting the policy with legal counsel.
The NSC also recommends working with health care plans to ensure that mental and behavioral health services are covered, encouraging annual screenings for substance abuse, making sure that alternative pain management treatments, such as non-opioid medications, acupuncture, and chiropractic and physical and occupational therapy are covered, and providing or enhancing EAP services.
âIf you donât know where to start, go to the toolkit,â Martin said. âWe advise employers to look at their own health care benefits and to look into alternative medicines. Opioids are not always the best drug for managing pain. Also, make sure to have naloxone in all your facilities. It should be in every workplace and office.â
Naloxone is a medication, either in the form of an injection or a nasal spray, that can stop the effects of an opioid overdose. Before implementing a workplace naloxone program Martin suggests consulting with an attorney to make sure it complies with federal, state and local regulations and training employees on how to spot and respond to an overdose.
While there are many tools and approaches to tackling opioid addiction in the workplace, Hindman said that the most important factor is having company leaders who are committed to the effort. While not every company has the resources of a Leidos, employers are in a unique position to make a difference, he said.
âA third of all addicts are functioning in society, which means that they are in the workplace,â Hindman said. âItâs very hard for the working world to come to grips with this problem. It boils down to a companyâs core values. You need to commit it to paper and use it as a platform to attract talent and not treat it as rhetoric. The problem exists broadly and deeply in society and since youâre reaching into society for the employees you need, it makes sense to invest in solving it.â
Angie Demchenko has an eye for business and a mind for people, and this mindset is immediately reflected in the environment of her new employer, Cresco Labs. The office, a chic, bright space in Chicagoâs trendy River North neighborhood, is abuzz with conversation and collaboration.
Angie Demchenko is the chief people officer for cannabis maker and retailer Cresco labs in Chicago. Photos by Jeff Millies.
It feels focused and fresh, teeming with ideas. And given that Cresco is a major player nationwide in the cannabis industry, itâs something of a novelty to work for a budding business.
Demchenko started her career in the cannabis industry as Cresco Labsâ first chief people officer in July 2019. She got her start in human resources right out of college in Toronto at consultancy giant Accenture before moving to Jones Lang LaSalle, a commercial real estate firm in Chicago, and most recently working with shopping center management company Starwood Retail Partners.
Attending the University of Western Ontario in London, Ontario, Canada, initially piqued Demchenkoâs interest in people management where she attained a business degree with a focus in human resources and a double major in sociology.Â
âI donât think I really understood how much I enjoyed the people side of it until my sophomore year of college,â she said. âI was really interested in how to connect the dots between macro and micro social themes. That decision carried me through my first several years of work, and Iâm really glad I have that people-minded background as well as the true core business sense.â
The challenge of working with a smaller company in an industry that is still in its growing stages appealed to Demchenko, who is among a handful of executives in the cannabis industry with the title of chief people officer.
âI went smaller and smaller in terms of the organizational structure I was a part of. I wanted to learn the connectivity of everything that goes into HR and how it works with the business,â she said.
Demchenko said that her experience at larger organizations enabled her to learn about the intersections of people and business in every aspect of an organization.
âAt larger organizations, you have centers of excellence that you specialize in,â she said. âI wanted to make sure that I was really kind of deep in each of the areas and able to understand how to add real value to a company in the sort of head position.â
Her position at Cresco Labs has presented its own new set of challenges. Cresco Labs is one of the largest vertically integrated multistate cannabis companies in the United States. Cresco is what some in the industry call âseed to store,â meaning that Cresco controls every aspect of the production from cultivation and manufacturing to product packaging to retail, distribution and sales.
According to a Cresco spokesperson, more than 1,000 people are currently employed at the company across the country. Cresco operates 23 production facilities and 22 dispensaries in 11 states. And the nuances of the cannabis industry, which is still considered illegal on the federal level, is something that Demchenko is continuing to navigate.
âEverything is state-regulated, so the complexity of the business is something that has been frustrating at times,â she said. âBut [itâs] also exciting in terms of, âHow do we problem solve?â âWhat do we need to do to make sure weâre overcoming some of this?â â
Seeking solutions and problem solving are a part of Crescoâs core values, Demchenko said. âI understand why now, because the industry is really sort of riddled with opportunity and challenges and you have to sometimes think a little more creatively.â
Addressing Drug Use at Work
As Crescoâs HR leader, Demchenko is responsible for policies including drug use in the workplace. Like most organizations, these are policies that must be adhered to.
âOur goal is to provide a safe and drug-free work environment for our clients and employees, and our policies mirror the drug use policies you would see at major companies in any other industry,â Demchenko said. âBecause of their personal connection to the industry, we have many certified medical cannabis patients that are employees and their cannabis use is treated the same as any prescription medication would be in the workplace.â
As more states legalize recreational or medicinal cannabis â 11 states have legalized recreational marijuana use while 33 states have legalized medical marijuana â some parties are expressing workplace safety or health concerns from cannabis use. As an HR leader in the cannabis industry, Demchenko is helping to identify use versus abuse.
âAs a leading cannabis company, appropriate cannabis use is a topic that extends far beyond the workplace,â she said. âWe advocate for everyone, whether a long-time consumer or someone experiencing cannabis use for the first time, to educate themselves on the products available, proper consumption and appropriate dosage for their personal use.â
Finding lending institutions willing to fund the industry and other service providers that can accommodate a company like Cresco can present obstacles, but Demchenko views these as opportunities to educate people about the cannabis industry.
âSome of the larger providers have been hesitant in the past in working with cannabis companies,â Demchenko said. âOne of the things thatâs still a challenge but really exciting for me is getting to educate these companies on what the cannabis business is really all about â from a medical and recreational standpoint â [and to] see them change their minds about who theyâll do business with.â
Educational Leaders
Being at the forefront of the industry and having the opportunity to serve as an educator in this way has also been a benefit to Crescoâs growth.
âWe have had a number of situations where â even a few years ago where we were still a single-state company â where conferences wouldnât take the call or let us on a panel,â Demchenko said. âWe were almost an afterthought whereas now weâre such an industry leader that theyâre calling us. They want Cresco on the panel and want to understand what weâre saying from a business standpoint.â
Angie Demchenko
Going forward, Demchenko plans on prioritizing recruitment, retention and building an increasingly inclusive and diverse workplace. Cresco is also launching its first national retail brand, Sunnyside, in November, which will be shops âdesigned to help broaden the spectrum of wellness to include cannabis. Bright, welcoming and convenient, each Sunnyside will serve as a hub for health and wellness for both new and existing cannabis consumers,â as described on Crescoâs website.
The expansion creates a welcome challenge to Demchenko and her burgeoning human resources team.
âWeâre growing at such a rapid rate, so I really want to make sure that weâre bringing in the best talent,â she said. âAnd as you can imagine, there isnât a lot of true industry experience, so we have an interesting opportunity to bring in the best minds from things that are well aligned with what weâre doing.â
The recruiting team, which is comprised of eight recruiters and two management and vice president roles, hires for its dispensaries, manufacturing and processing, cultivation, and corporate offices, and looks to industries that typically have translatable skills ranging from retail and consumer packaged goods to technology and health care.
Recruiting and Diversity
Some of the many job listings on Crescoâs website include more industry-specific positions with quirky titles such as âcultivation agentâ and âedibles packaging specialistâ as well as more traditional general business positions as âstaff accountantâ and âbrand manager.â Building a network of employees with a dynamic background of experience is one of Demchenkoâs visions for Crescoâs future.
Demchenko has also been working on what she described as a sort of âdiversity and inclusion committeeâ that will include individuals from different backgrounds in each department to oversee and facilitate representation at Cresco.
The committee will be responsible for expanding the level of diversity and inclusion as it pertains to many aspects of a personâs identity beyond race or gender, such as veteran status or disabilities, Demchenko said.
âUltimately itâs about increasing representation,â she said. âMaking sure weâve got the representation that matches our consumers and our patients and doing what we can to retain the right talent.â
Another facet of the kind of work Demchenko will be overseeing at Cresco is their social equity and education initiative, or SEED, which works with regulators in different states on pushing forward expungement platforms for those affected by the war on drugs.
âWe work very closely with regulators in every state to make sure that weâre setting the bar really high in terms of what weâre going to be doing in diversity and inclusion, how we hire, how we get involved in communities, all of that,â Demchenko said. âLearning about all of that has been really eye opening.â
The SEED program, according to a Cresco press release from May 2019, âis the cannabis industryâs first national social equity initiative promoting inclusion, expungement, equality, access and community engagement.â
Seeking Social Justice
Realizing the potential for social good at Cresco and expanding on it is one of Demchenkoâs focus points as chief people officer.
âThe industry is so much bigger than just the patients or recreational users,â she said. âThereâs so much to it in terms of social justice, the war on drugs, all of that. Itâs not just a consumer packaged goods company. Itâs really about doing greater good for the communities that we serve.â
Additionally, she said she is focusing on training and building their executive team to adjust to the ins and outs of an emerging industry.
âWith our CEO and president and a number of our leaders, weâre helping them make that transition from a small employee operation to [an organization] of over 2,000 people,â she said. âWe talk a lot about scalability and finding ways of empowering our leaders and holding them accountable, which has been a big focus for me.â
Her past experiences inform her hands-on, dynamic approach to human resources and leadership that continues to grow alongside Cresco.
âAngie has an impressive track record of managing the human resources functions of dynamic, high-growth companies,â said Charlie Bachtell, Crescoâs CEO and co-founder. âHer experience in building best-in-class HR strategies and operations will be valuable in helping Cresco maintain our strong workplace culture and our focus on our core values and mission as we continue to scale.â
Bachtell also said that Demchenkoâs skills in working with people paired with her experiences in a dynamic business world made her an ideal candidate for the position.
âWe believe that Angie is exceptionally well suited to help us achieve our goal of attracting the best talent in the cannabis industry and empowering them with the tools and knowledge to deliver exceptional performance,â he said.
As Crescoâs first chief people officer, Demchenko is intent on bringing a level of enthusiasm, drive and fresh perspective to the cannabis industry.
âThe sky is kind of the limit for us, I would say, being part of a new industry,â she said. âThis role of chief people officer is kind of new â Iâm taking the lessons of what I have learned in other industries and bringing it to this. Having a voice and putting my stamp on what HR can look like in this profession is what is important.â
Workers in low-paid jobs that are not protected under standard labor laws may feel increased pressure to hit certain productivity levels, especially since they are increasingly being monitored by their employers. Not wanting to lose a job they rely on, they may turn to smart drugs. âElectronic means of monitoring employees are likely to be accompanied by an increase in the stresses on workers,â the article noted.
Keep employees up to date. Employees want to feel like they have a voice and that their opinions matter, so keep them in the loop. Report employee engagement survey results, share your action plans to address specific problems, and keep them up to date on progress. âExceptional communication is an important part of employee engagement,â Harter said.
While 75 percent of U.S. employers have been directly affected by opioids, only 17 percent feel extremely well prepared to deal with the issue, according to a survey by the National Safety Council. More than a third have experienced absenteeism or impaired worker performance and have had an overdose, arrest or injury because of opioid use, they survey found.
