Stop right there. Don’t make another move. We may have a problem. It all began with the best of intentions. HR just wanted to help. But somewhere along the way, things have taken a wrong turn. Remember back to the darkest days of the recession. Scores of employees are being laid off. Survivors are running on short fuses and long hours. Everyone seems at the breaking point. Then HR has a novel idea: Jump-start a few programs that will help employees battle through. Offer after-hours day care so employees can work without worrying about Junior. Provide counseling so employees can voice their frustrations in a healthy way. Open gyms to help them work off stress. Toss in a few parenting programs and cultural enhancement seminars to round them out-and voila!-problem solved.
Sorry, you’re not getting away that easily. All those programs and services and benefits haven’t solved the problems permanently. In actuality, they’ve allowed bigger problems to grow roots. And now they’re endangering your company.
How? To begin with, we’ve been engaged in such an all-out rah-rah celebration of employee-service programs, we’ve glossed over the actual problem. Employees are overworked, stressed out, exhausted. For the most part, our little offerings do nothing to truly help them-they’re more like booby prizes for breaking all overtime records. We’re not solving the problem.
Instead, we’re providing an elaborate coping mechanism. Errand services and take-home meals do not make up for the countless hours employees have lost over the past few years, as much as we may like to think they do.
Secondly, these programs are undermining our companies’ efforts to reach Workplace 2000. Everything we hear indicates that in the not-so-distant future only a handful of employees will be permanent, and the rest will be firmly ingrained with an independent-contractor mentality. And from one side of its mouth HR is indeed spouting such proper buzz-words as empowerment and contingent staffing. But the other side is calling even more loudly for more benefits, more programs, more services that will only tie employees closer to the company. We claim we want our employees to be empowered to solve problems on the job, yet we’ve taken on the responsibility of solving so many of their other problems: child-care needs, psychological, physical and personal needs. We’re encouraging them to become dependent on us.
“Many companies offer employee programs for selfish reasons. They want employees to be captured in work morning to night.”
Finally-problem No. 3-no one seems to know if these pet projects of HR really support the bottom line-at least not beyond general ballpark figures and vague mumblings about how morale is improved and how much employees seem to appreciate them. Not only will this damage a company, it will scar HR’s newly minted status as Strategic Partner.
This little lecture certainly isn’t intended to vilify HR. Nor is it to say that companies should be sterilized into cold shells in which employees and their humanity are completely discounted. Nor is it a call for companies to purge themselves of all employee benefits or helping-hand programs. But it is time to stop and reassess. We need to ask ourselves whether we truly are helping our company and its employees. It’s time to look around at where we are, see if it’s really where we want to be, and decide where to go from there.
The First Mistake: Problem soothing instead of problem solving.
Ever heard the phrase “killing with kindness”? That’s what Laura Nash, adjunct professor at Boston University’s School of Management, believes HR might be doing with its employee-service programs. “HR isn’t asking the right questions about these programs,” she says. “They ask, ‘Are people using it?’ The answer is yes. ‘Is there a need?’ The answer is yes. But does that mean they’re solving the problem? The answer is not really, and they may even be making the problem worse by creating this kind of cure-all that covers up the more acute symptoms of the problem.”
Nash cites two reasons for the continued institution of employee perks and programs. One is that HR is constantly being assessed by how many bigger and brighter benefits it creates. “If the only measure of success is whether I can create a new service for employees, it will never end. You can always find something else that people need, so that’s not a good measure.”
The other factor encouraging the proliferation of these programs is that on the surface they all seem like admirable efforts. Devising ways of helping people is a seductive proposition indeed. There’s always something on the horizon that seems helpful or useful or just plain nice. Says Hal Morgan, publications manager for Boston-based Work/Family Directions: “It’s interesting to see the [programs] that companies come up with. Some of them may really be valuable, and some may not. Where do you draw the line?”
It’s a difficult question. Certainly, employee perks do provide a way of helping employees balance the workload: They’re going to be a bit put off if you pile on more work and don’t give them anything in return. And overwork is definitely widespread. “It’s a very rare company in which employees don’t say that they’re working more now than they were five years ago,” says Robert Levering, co-author of “The 100 Best Companies To Work For in America.” “Many companies downsize without ever intending to reduce the workload. Having talked to hundreds and hundreds of employees at 150-plus companies, the most common complaint is the extra workload. So either you have to compensate by reducing the amount of work or you have to compensate by putting in [work-life types of] benefits.”
It’s true that many of these new work-life, employee-service benefits are of a compensatory nature. They’re a company’s means of acknowledging that employees are being asked to do more than ever before. But this quid pro quo trend-you work more and we’ll give more-has gotten so strong, many HR departments are throwing benefits at the problem without pausing first to see if they can solve it. Certainly employees appreciate a company gym to work off the stress of a 12-hour day. They think it’s nice that you give them access to an EAP to deal with the personal problems that have cropped up since they began working weekends. But maybe they’d prefer HR to cash in all these niceties and hire a few extra people so they don’t have to work late in the first place. Maybe you should give them the money and let them decide what to do with it themselves. Maybe you should ask them.
“I know why companies are offering such things,” says Carolyn Corbin, executive director of the Dallas-based Center for the 21st Century, a think tank on future socioeconomic issues. “They’re doing dry cleaning so people won’t leave to have their dry cleaning done. They’re offering nutritious, low-cost meals so people won’t leave for lunch. It’s all a way of keeping employees doing work so they’ll be less distracted with other thingsÉI think many companies will continue to do some of these things for their own selfish reasons. They want that employee to come in morning to night and be totally captured in doing work.”
“Some HR professionals are trying to help employees find a balance. But others may offer these programs because it’s a fad.”
Like Corbin, Nash believes some programs have become institutionalized as a means of keeping employees at work. “With all these programs, do you think family time is increasing or decreasing? I’d bet decreasing,” says Nash, co-author of “A Fatal Embrace? Assessing Trends in Human Resources Programs.” “By creating this quick-fix solution, you’re creating a culture that says nothing should keep employees from work. You’re asserting a value on work that overrides family in all circumstances. I don’t think anyone intends to do that. But it’s a complex problem, and we may really be kidding ourselves that we’re solving it. What we’re doing is undercutting the will to really address working hours.”
These may sound like harsh words, but even Levering, a strong proponent of companies’ accepting their responsibilities to employees and assisting where they can, has this to say: “I don’t think the specific little extra benefits are as important as figuring out ways of giving employees back their time.”
So therein lies the problem: Under the blanket justification that we’re aiding employees, we’re actually creating ways to keep them at work longer-which is exactly what they’d rather not do. And that’s only part of the problem.
The Second Mistake: Hand-holding in the era of empowerment.
Don’t fool yourself into thinking that paternalism (or maternalism) is dead. It’s not. It simply has changed forms-and in many companies is alive and well. Bluster all you want about the New Contract. Boast about how employees embrace their independence. Strike the pose that HR is a bottom-line strategic partner, not the glorified “parent” figure of days gone by. Then finish making those employee take-home dinners, pick up everyone’s laundry, and drop off tuition money for the employee who wants to enroll in tapestry weaving.
It all comes down to this: Companies are trying to evolve into workplaces of the future, but HR is not always working on the same wavelength. HR is not always partnering with companies in this evolution. Far too many employees receive a mixed message. They’re being told that their job is not an entitlement, that they’re on their own. Then they go to work at a company that basically serves as a snug, surrogate community.
A Towers Perrin survey of 100-plus employers reveals that companies are indeed looking more and more like caretakers: 88% have EAPs; 65% have company-supported fitness centers or offer fitness center memberships; 43% offer tuition reimbursement for non-business-related courses; 37% provide subsidized lunches; 24% have a company convenience store; 15% offer take-home meals; 14% provide onsite dry cleaning; and 10% have an onsite barber or salon. And many more are planning to institute such goodies in the future.
Levering, who also is founder of the San Francisco-based Great Place to Work Institute, says this rush to help and help some more has been a fairly recent occurrence. “When we were doing the ‘100 Best’ revision, we saw lots of [new benefits], particularly of classes being offered, like how to be better parents. We visited all the companies that were on our list, and about 50 more that weren’t. And we did the same exercise 10 years ago. Things like onsite day care were virtually non-existent a decade ago. Fitness centers were extremely uncommon 10 to 15 years ago.”
Pat Brown, vice president and manager of family matters for Memphis-based First Tennessee Bank, is a bit wary of the trend. She believes that in an era of supposed employee empowerment, most companies are actually doing more “caretaking” than two years ago. “I know that one of the motivations is that [HR] is recognizing employee stress levels and is trying to help them find a balance. But some of it may be because it’s the fad to do, and HR professionals may not be really recognizing why they’re doing it.”
So is this movement an example of assisting employees or a case of killing them with kindness? Corbin will tell you that she believes the trend will cause some serious fallout. And you might want to listen to her. In 1986, Corbin authored “Strategies 2000,” a book predicting future work trends-trends proven to be 95% correct 10 years later. “The danger in all this is that people are looking at companies today to meet the needs that the community, church and family used to meet. This is not healthy,” she says. “Many corporations have set themselves up to be [all those things] to employees. And when that relationship is severed, that can be extremely paralyzing and traumatic to the person. It can even be the basis of violence. The corporation is not dealing well with how these benefits are enabling employees to be co-dependent.”
Jay Hotchkiss, of Portland, Maine-based HR consulting firm John Jay & Co., agrees that companies can go overboard in offering too many HR services. “If the company takes a very maternalistic stance as opposed to just empowering employees and giving them some resources to go out and do it themselves, I think they’re sending a mixed message.”
It’s a good point in this age of no-such-thing-as-a-permanent-job. Consider these scenarios:
- An alcoholic employee receiving ongoing counseling through your company EAP is downsized. He loses his support line right at one of the most trying times of his life. Did the firm really do him a service?
- A woman working toward her master’s is reengineered out of a job. She’s forced to quit school because she can’t afford it without tuition assistance, and looks upon the whole experience as three years wasted away from her family. Did the company really help her improve her personal life?
- An employee and his teenage daughter have been working through serious interpersonal problems with the company’s parenting support group. Just as they’re close to a breakthrough, the man is terminated. Because the other members of the support group are employees who meet on company time, the man and his daughter are basically exiled. What do they do now?
The other side of the coin is whether companies themselves really gain much from acting as de facto caretakers. In a Personnel Journal reader survey, 52% of respondents said that companies had taken on the caretaking role; 55% believed the trend was on the upswing; and 74% reported that they’d introduced initiatives in 1994 that could be perceived as caretaking (see February 1995 Dialogue). Most respondents (58%) considered their actions advantageous.
Many others disagree. “I think they just get dependent employees,” says Paul Bates, vice president of HR for Knoxville, Tennessee-based East Tennessee Children’s Hospital. “Then, when employees are let go, they’ve lost not only their employment-they’ve lost a way of living.”
So there’s the second part of the problem inherent in these service programs. In the age of empowerment, we’re throwing benefits at employees, tying them closer to us-which is exactly what we’ve said we don’t want in the workplace of the future. And then there’s the money issue.
The Third Mistake: Unjustified spending in the age of bottom-line viability.
Aside from employee empowerment, if there’s a mission that HR has been trumpeting over the past few years, it’s keeping an eye on the bottom line, becoming a strategic function. Yet while it’s been shouting the message from the rooftops, HR has been spending money hand over fist on employees. In 1989, U.S. corporate investment in benefits and training programs was estimated-conservatively-to be $60 billion by economist Richard H. Beinecke for Boston University’s Institute for the Study of Economic Culture. And a recent Hewitt Associates survey reveals that employee benefits now exceed 40% of payroll in some industries.
This is, of course, all well and good if HR can prove the investment pays off. Unfortunately, most HR professionals put very little time and effort in ensuring a return on investment. In a recent survey of more than 1,500 HR professionals by Philadelphia-based The Hay Group, only 28% considered controlling benefits costs to be among their top four priorities. A 1994 Work/Family Directions profile of 75 clients-among them four Malcolm Baldrige Award winners and 31 Fortune “Most Admired Companies of 1995”-revealed that even among this business-savvy group “relatively few of the respondents formally evaluate the impact of their programs-about one in five.”
“HR people are the last people to feel this pressure to cost-justify-pressure that’s been around since the late ’80s. But I think the idea of somehow cost-justifying just about anything we do is going to become important,” says Hotchkiss. “The days of nice to do’s are gone. You can’t justify programs by saying, ‘Oh, gee, people would really like this.'”
This sounds like common sense, yet most HR departments remain guilty of it to some degree. Think about it. Do those parenting programs you offer really make your employees more productive? Wait: Don’t just give the standard line, “If they’re not worrying about things at home, they can focus on the jobÉ” It’s not enough. The fact is, HR continues to offer a variety of nurturing, thoughtful programs-that can’t be even indirectly traced to keeping the business healthy.
“HR has to make business decisions. We need to view our programs as any other product of the company.”
Now, it’s easy to predict how most HR professionals will react to the challenge. But our programs do pay off, they’ll say. Morale, recruitment, retention all get a boost when you offer employees a hand through extra benefits or services. OK, this sounds like bottom-line talk. Now write down on a piece of paper your exact return on investment. Do you have the figures to prove your work-family programs really haul candidates in? How many employees really have been straightened out by your EAP to return to top performance? How many people refused to leave your company because they were so dazzled by your tuition-reimbursement plan?
Don’t assume these things work-make sure they do. Because sooner or later, budgets will tighten up again-it’s inevitable with competition growing both domestically and globally. And when companies are looking for ways to cut back, they’re going to turn their eyes on HR. “Corporations have been buying into this endless stream of programs without really thinking it through,” says Nash. “Then, when there’s a dollar crunch, guess what’s going to be axed?”
Tracking the dollars and dimes is no easy task, to be sure. It’s not as if such things as morale or commitment, time saved or retention can be absolutely quantified like assembly-line widgets. “We’re still applying the old industrial-age measures to a knowledge-based work force,” says Bob McDowell, national director of HR for New York City-based Coopers & Lybrand L.L.P. “I think the difficulty is that with HR issues it’s more complex. But we have to find [some way], because there’s a point at which you make an investment that you don’t get a return on any more.”
The amorphous nature of HR issues does present a bit of a stumbling block in cost-justification matters: “Lack of measurement may be an indication that the potential business outcomes from work-life programs aren’t widely understood, or that resources for measurement simply aren’t available,” says the Work/Family Directions client survey. Yet there are ways of pinning down some cost savings. For instance, it’s fairly simple to track absenteeism and stress-related claims before and after instituting certain programs. However, these two components were the least-often evaluated by the responding client companies. So, as nettlesome as the project may seem, you really can show a return on investment for your programs. You’re going to have to. Start gathering company-specific proof now. Because for every piece of data that shows employee benefits do help the bottom line, there’s a second piece that shows they don’t.
Take, for instance, the argument that generous employee benefits boost recruitment efforts. Not necessarily so. In a phone poll of 1,000 people conducted by the Employee Benefit Research Institute and The Gallup Organization, of those who’ve turned down a job offer in the last five years, the primary reason was because the salary was inadequate (31%). This was followed by the fact that they didn’t think they’d like the job as much as their current job (30%), followed by the fact that they’d have to relocate (18%). Only 7% even mentioned benefits as a reason for turning down a job, and that was specifically for inadequate health benefits. Work-family initiatives, wellness centers, et al don’t even make an appearance.
The point: Lose the mindset that extensive benefits are something to brag about. They shouldn’t be automatically equated with a gold star. Instead, employ some of that famous HR strategy to prove the numbers add up to profit.
The first step on the road to recovery: Get out your calculator.
If HR is guilty of thwarting company evolution to Workplace 2000, there are several things it can do to get back on track. To begin with, cost-justify all your programs, because if they’re not making a solid contribution to the bottom line, they’ll have to go.
Where do you begin? The Towers Perrin employer survey suggests that successful work-life initiatives evolve from a needs assessment. Those who can best justify their programs are those who gather hard data on the issues. Among the techniques that employers reported using most frequently are employee attitude surveys (used by 49%) and employee focus groups (32%).
So start by finding out what will keep your best employees with the company and what will help make them more productive. New York City-based Time Warner Inc. knows. It conducts regular anecdotal analysis and focus groups across all business divisions on all work-life initiatives. In 1992, the company opened the doors of its child-care center at the Time & Life Building. The center is friendly and fun, colorful and open-and free to employees who sign up. It sounds suspiciously like a “caretaking” benefit. It actually is a competitive advantage. Caring for as many as 30 kids when employees’ regular child care falls through or schools are closed, the center has provided more than 47,000 hours of back-up child care. The center, which costs $375,000 a year to run, pays for itself in saving otherwise lost work days. It’s the perfect example of a way to assist employees for the benefit of the company. “We have [comment] after [comment] saying, ‘I can’t imagine going to a company that didn’t have this benefit,'” says Nancy Platt, assistant director of training and work-life initiatives.
As for retention and productivity, First Tennessee Bank provides an excellent example of a company that uses work-life initiatives and other employee extras to support the bottom line while helping employees. A great deal of credit goes to the fact that it simply starts out with the right attitude. “I haven’t found anybody who’d argue against doing something because it’s a good thing to do for our people. But still we have to make business decisions,” says Brown. “As HR personnel, we need to be more tuned-in and aligned with that overall business strategy, and we need to view our programs the same as any other product or offering of the company.”
Brown certainly can’t be criticized for having a do-as-I-say-not-as-I-do attitude: The Institute of Management & Administration recently used the Memphis-based bank in its Report on Reducing Benefits Costs as an example that proves work-life programs “can lead to increased productivity and profitability at little or no cost to the employer.” How did they do it? For one thing, Brown didn’t start with a work-life wish list of programs and then try to find business reasons to justify them. She started with what her business wanted to accomplish. “My whole focus was on strategy,” she says. “For instance, we’re very focused on how we can improve customer retention. At a bank that’s critical-the only way we can differentiate ourselves in the marketplace is through our people. A checking account is a checking account.”
Improving customer assistance, of course, means finding out what prevents employees from top-notch service. One problem was absenteeism, so First Tennessee Bank circulated an anonymous questionnaire among its 8,000 employees to find out exactly why they were taking absences. The survey revealed that many employees at all levels were staying home to care for sick children. It was then that Brown began considering sick-child care: The benefit became a business strategy. (For more on choosing the most profitable child-care option, see “Deciding How To Provide Dependent Care Isn’t Child’s Play”.)
Similarly, when the bank wanted to improve service in the account reconcilement area, it again rooted out the problem. In a discussion with employees in that unit, the bank discovered that the group had its busiest time at the beginning of each month. Companies who were waiting to have their accounts reconciled obviously wanted them done soon-two days ago if possible. But the overwhelmed group was taking about eight working days to do so. The solution? The group approved a no-cost flexible schedule: They’d be willing to work longer hours and in return take time off later in the month.
Now the group works 12-hour days at the beginning of each month, and reconciles all the books in four days-half the time it took before. The bank pays them overtime, but then to balance the budget, as well as employees’ personal time, the group takes off a day or two later in the month. “It worked because it allowed the employees to come up with the solution, and in turn customers profit as well as the employees,” says Brown. The work-life solution cost the company nothing and achieved a business goal-First Bank has seen service-quality responses from customers jump 50% since instituting the new flextime.
The bank also used work-life programs to aid its retention. When a group of full-time employees were feeling overwhelmed and on the verge of leaving due to family responsibilities, the company offered to let them reduce their hours while keeping their full-time benefits. Estimating from the people who took the company up on its offer, Brown says the organization saved an 85% turnover from that group-a great savings for the company, which pays approximately 50% annual salary to replace a non-exempt staffer and 150% for an exempt professional.
The result of all these programs? Yes, employees are happier and morale is up. But-most importantly-Brown can quote true bottom-line savings the next time a company official says “Why do it?”
The second step to success: Give your benefits a check-up.
It’s no coincidence that, like First Tennessee Bank, most companies lauded for their business-minded benefits offer a generous helping of flexible work arrangements. Why? They are an answer to assisting employees without yielding any of the three main problems of other benefits. For instance, flexible work arrangements help employees help themselves, which is, after all, what we want. They maintain business objectives while giving employees back some of their time, which is, after all, what they want. “Time is the most precious commodity for lots and lots of people,” says Levering. “Some of the best benefits are those that give employees back their time. Variations in flextime and vacations and sabbaticals-those I think are the best.”
Don’t believe it? Check out these statistics: In a 1994 survey of 1,000 employees by Cambridge Reports/Research International, 72% rated as “very or extremely important” that their job does not interfere with their personal life.
Brown believes her company’s flex schedule addresses the need for employees to “take a little time.” According to her, the initiative is a little- to no-cost way to help out the bank’s 8,000 employees while still keeping an eye on the bottom line. “Our employees told us that it was impossible to feel empowered to support their customers if they felt powerless over how they structured their own jobs. Our flexibility allowed managers and employees to work through the empowerment model. Flexibility in the workplace is the greatest thing a company can do-and it’s probably also the cheapest.”
At White Plains, New York-based NYNEX Corp., Don Sacco, vice president of HR, also mentions flexible work arrangements as one of the most popular and least expensive programs offered to his company’s 70,000 employees. “If it’s compatible with the job, and you treat everyone like an adult, then 99.9% of employees really enjoy that and are more productive, and we gain from it. Most employees want to do a good job and if you give them freedom, they’ll use it in a way that makes sense. Same with casual dress days. There’s no cost to us. Yet the reaction to it from employees is very positive.”
Of course in some cases, flexible work arrangements aren’t an option, and HR is forced to deal with employee overwork as an unfortunate fact. HR still, however, should check over its benefits to ensure they don’t encourage company dependence. Most HR professionals will be happy to know that it’s still OK to lend a hand-as long as it’s a means to the end of empowerment.
“I think that teaching people how to quite literally ‘get a life’ is the responsibility of the corporation in this transition period,” says Corbin, author of “Conquering Corporate Codependence.” “People aren’t making their own life decisions. They’re very fearful. They’ve never really grown up. Even animals wean their young, but we never have. People go from family to school to work, and don’t know how to make a life for themselves. I believe that the corporation has the responsibility of telling people this, and offering training. Now if after all that, people don’t get it, that’s their problem.”
So how does a company know how far to go? What do these empowering programs look like? Where’s the line between helping employees to, as Corbin put it “get a life” and actually becoming employees’ lifelines?
“This program is not about somebody saying, “This is what I want; give it to me.” This is a life skill we’re teaching people.”
Many companies are doing a good job in such areas as financial planning. They’re turning more responsibility over to employees while providing a steadying hand and a source of information. Hartford, Connecticut-based Aetna Life and Casualty is one example. The company offers its employees assistance in financial planning, but lets them follow through on their own. “That fits right in line with our entire strategic plan to move employees from spenders to savers to investors to financial planners,” says Ann Ewers, vice president of corporate benefits. “We’re looking for employees to assume more responsibility for their choices. We educate them, put the tools in their hands and teach them to use those tools. But then we expect them to take it from there.”
Burlington, Vermont-based Rhino Foods Inc. also seems to be striking a good balance between assistance and empowerment with its “wants” program. Initiated about five years ago, the program is designed to help employees achieve their life goals-be it to buy a house, get a promotion, write a book-whatever.
It works like this: Eight employees currently act as “wants coordinators,” and all 75 employees of the frozen-dessert company are encouraged to meet with coordinators once every three months. At these hour-long meetings, held on company time, employees identify their “wants.”.
Marlene Dailey, director of HR, stresses the importance of the wants coordinators not just handing solutions to employees. They should act as facilitators, not “doers.” They should ask questions, not provide answers. “Let’s say someone told their wants coordinator they really wanted to buy a house. The coordinator would ask questions about how that person would go about it versus saying ‘Oh, I’ve bought three houses, let me tell you how it’s done.'”
The wants program helps employees cultivate skills they can use both on and off the job. For instance, one employee wanted to improve his communications. By working with his coordinator, the man decided to find a coach. Apparently, the plan is working; he’s received higher performance marks from his supervisor and reports smoother personal relations.
Dailey says the program is extremely popular-about 80% of employees are currently working on a “want.” The cost to the company is very little: Four hours of meetings per year for each participating employee; fewer than 10 hours of training for each new batch of wants coordinators, plus follow-up meetings for the coordinators-probably less than 500 hours of employee time each year.
In return, the company has watched its work force become truly empowered. Dailey says employees are more confident and innovative on the job. “This program is not about somebody saying, ‘This is what I want, now give it to me.’ The whole program is set up on the idea that this is a life skill that we’re trying to teach people. It’s not an altruistic thing. We very clearly say to people that this will be great for work.”
That’s the spirit that seems most likely to help employees: company-provided assistance with a do-it-yourself follow-through. It’s a spirit that many experts recognize in resource-and-referral services, which are gaining momentum. According to a Hewitt Associates study, 84% of 1,035 surveyed employers offered some kind of child-care assistance-40% of these offered resource-and-referral services. Of the 24% of employers who offered elder-care benefits, 78% had a resource-and-referral service.
“Employers that offer these services have chosen to support their employees. They offer a data bank of information and allow employees to pursue such things as child care on their own,” says Hotchkiss. “It follows some of the empowerment trends in Corporate America by giving employees the tools and then saying ‘You go do it yourself. You make it happen.'”
Once you’re on track, get ahead of the game by prepping for the future.
Don’t sit on your laurels once you’ve rehauled your employee programs. Take a look at what’s on the horizon-and don’t be afraid to experiment to find what works for your company.
Here’s what you can expect to see coming your way-in a general chronological order:
- Flexible benefits
- Benefits vouchers
- Voluntary benefits
- Portable benefits
- No benefits.
We know flexible benefits plans work, and will continue to play a role in the transition to more empowering employee services. Companies all over are using them to varying degrees to begin opening up the list of options for employees: Of 489 employers surveyed by Hewitt Associates, for instance, 90% permit employees to waive medical coverage. Vacation buying and selling is provided for flexibility at 15% of the companies. Three out of four benefits programs include at least one flexible spending account, with two-thirds of employers sponsoring both health-care and dependent-care accounts.
NYNEX, a company long-known for its comprehensive benefits strategy, has recently introduced new options in its savings plan. “It used to be that the choices in which employees could invest savings were very limited,” explains Sacco. “We’ve created eight or nine new mutual funds so they can have different investment flavors. We’re offering greater employee choice and control, which frankly doesn’t have any cost to us.”
In addition, the company is about to roll out for management employees an opt-out feature on health-care services if they can show proof they’re getting health care elsewhere, such as through a spouse. East Tennessee Children’s Hospital is offering a similar program-allowing employees to waive out of its health plan and receive credit on other benefits if they can show they’re insured elsewhere. “This way we can keep them within the corporate structure. It gives them more choice, but makes sure they won’t become uncovered,” says Bates.
Benefits vouchers basically take the sentiment behind flexible benefits one step further. The nice thing about vouchers is that they can assist employees without tying them too closely to the company. That way, for instance, the earlier-mentioned case of the downsized alcoholic who lost access to counseling wouldn’t be a concern. That’s because benefits vouchers basically earmark a certain amount of money and let employees invest it outside the organization as they please. So if the man was laid off, he’s already been funded through a certain amount of counseling sessions; and he can continue to keep up that relationship without company involvement.
Morgan of Work/Family Directions sees this trend as heading in the right direction: “Choice can be a very valuable thing to offer employees. Vouchers [say to employees] ‘You’ve got $40 in your benefits package. You have a choice between this and this, but you can’t have both.'”
Vouchers simply make sense. They mesh much more effectively with the workplace of the future. Says Hotchkiss: “If you’re going to give your employees more power and control in the workplace, why not extend that to their benefits package? I think benefits vouchers to buy outside services will be a major trend because of the whole empowerment rationale.”
Requiring even less company involvement are voluntary benefits, which enable employees to purchase insurance and financial products at the worksite to meet their individual needs. Currently, most employers use them as a means of providing employees access to added benefits the company won’t provide. But they just might be the Next Big Thing in employee services. In a survey of more than 3,000 employees, the Life Insurance Marketing and Research Association found that 51% of employees said they’re open to buying products through their work on an employee-pay-all basis.
One key voluntary benefit is long-term care insurance, increasingly important as baby boomers head into their more mature years. According to a Hewitt Associates survey of almost 500 organizations, 27% are planning to offer long-term care insurance within the next three years; 10% currently do.
NYNEX is among these 10%. “A long-term care package is one thing we offer that employees pay for,” says Sacco. “These are becoming a more popular item considering the aging of America and people’s concerns about taking care of the costs that are outside of most medical plans.”
But voluntary benefits can comprise any number of benefits: The point is to help your employees help themselves. “In the face of rising benefits costs and increased bottom-line pressure, we’re seeing a shift in employer paternalism and employee entitlement toward shared responsibility and costs,” says Rick Storms, assistant vice president, worksite voluntary benefits for Minneapolis-based Northwestern National Life Insurance Co. (NWNL). “Voluntary benefits help companies offer some additional benefits to employees while still supporting the message of employee responsibility.”
As the work force becomes more transitory, portable benefits will probably be the next step. They’ll play a major role in untethering employees from specific organizations because they’ll move along with employees from company to company.
Storms believes that many employers will be looking into this in the future. “It’s just a recognition of the changing nature of the working relationship, that it’s not a lifetime thing, and there are no hard feelings when you leave a company. Employees and employers want to make sure employees are in OK shape when they move on.”
Coopers & Lybrand’s McDowell is a proponent of portable benefits. He believes that just like career-training services, they’ll be a means of emphasizing to employees that they’ll likely leave the company at some point. “The key is finding effective ways of transitioning people from one place of employment to another. When separation time occurs, what mechanisms do you have in place for employee transition? Human resources has just not been creative enough yet in helping people transition in terms of different life events-one being when they leave an employer.”
But there may be one more step to take beyond portable benefits-one that’s currently causing quite a bit of controversy. Corbin sees portable benefits as moving in the right direction-one that will eventually render employee benefits non-existent in lieu of compensation. “Let employees go out and do their thing. I firmly believe that, because I think benefits detract from work. Right now, people are working places not because they’re core competent, not because they’re good at their job or like their job even, but because the benefits are good. When benefits are no longer [part of a company package], then real work will take place.”
On the surface, it seems like a simple concept, and one that many employers would jump at: Forget all those pesky benefits programs and just give employees the money. Let them deal with it. But the issue is one that flares quite a few tempers. Many human resources professionals view it as simply hanging employees out to dry. They believe it’s the company’s responsibility to handle these things.
“I’ve never even heard our employees whisper that they ought to have the money so they can go out and do their own thing,” says Hilmar Hagen, human resources director for Lancaster, Pennsylvania-based Safe Harbor Water Power Corp. “I’ve seen that happen in union organizations, and I’ve seen them become uncovered. Personally, I think it would be horrible to do that because you’d have people spend that money on a new car or whatever and never buy insurance.”
Hotchkiss of John Jay & Co. believes the idea is also uneconomical: “I don’t think the answer is to just hand over money to employees. There are certain things that employers can research and design better than the individual can. There are a lot of things that are cheaper and easier to do in a group setting.”
Mostly, however, the dissent comes from those who are unsure employees can effectively handle the responsibility. Says McDowell: “I know one of our competitors tried something like that, and found that employees just aren’t very knowledgeable consumers. People get themselves in trouble.”
That’s OK, says Corbin. Let them run aground a bit. “I think employees will blow it at first. But when one or two of them stumble and fall and reach retirement and aren’t prepared, then other people will learn from that.”
Corbin acknowledges that it will take some extra training in this transition period to ready employees for the responsibility. “Probably 90% of workers are corporate co-dependent in one way or another, so [you can’t just] turn them loose, and say ‘All benefits are gone, pick your own,’ because nobody’s really been taught.”
Despite the fact that this approach is relatively uncharted territory, Corbin says there’s a real danger in the tendency of companies to underestimate employees’ maturity. Employees need to be encouraged to grow up and handle more themselves. “It’s about empowerment. Trust them to make a decision, and give them responsibility for that decision. It’s continued enablement if we just say ‘They can’t do it. I know they can’t do it.’ That’s crippling for an employee. That’s paralyzing.”
Corbin practices what she preaches. At the Center for the 21st Century, employees, who act as independent contractors, are provided no benefits. Instead, Corbin kicks in a little extra compensation. She believes it’s important to have employees in charge of their own destiny-both for their own good as well as the company’s. “It’s called the workplace, so what should take place there is work. Benefits are a distraction. People stay at a company because of its health care instead of the work done there.”
McDowell agrees that the idea might bear looking into: “I do subscribe to the theory that there’s a shared responsibility in the employment relationship, and that extends to the individual taking on some things on their own. It’s a tough [call]. It would certainly be something I’d try in some areas.”
McDowell’s sentiment really embodies the spirit of what HR needs to be for the future. The attitude is analytical, maybe even a little bit skeptical, of the variety of programs and policies coming down the pike-yet at the same time open-minded enough to give it a spin and see what works.
As we head toward the skill-based, independent-minded company of Workplace 2000, employers are going to need all the support they can get. It’s up to HR to help empower employees while assisting, and to invest with an eye on the return. It’s up to HR to help today’s company-and all its employees-make the transition to the future successfully.
Personnel Journal, October 1995, Vol. 74, No. 10, pp. 76-96.
