All posts by Andrew McIlvaine

CDHPs: It’s All in the Details

According to the Employee Benefit Research Institute, participation in account-based healthcare plans remains low, but continues to grow: 22 million Americans are currently enrolled in consumer-driven health plans (CDHPs) or high-deductible health plans (HDHPs), according to EBRI’s latest annual Consumer Engagement in Health Care Survey.

Enrollment in CDHPs rose to 5 percent of the privately insured population in 2010, up from 4 percent last year. Enrollment in HDHPs, meanwhile, rose to 14 percent of the privately insured population, up from 13 percent in 2009. (CDHPs are high-deductible plans paired with a tax-favored health-savings account; HDHPs are plans with deductibles of at least $1,000 that are either not paired with an HSA or in which enrollees have elected not to sign up for an HSA.)

Perhaps not surprisingly, given the higher deductibles that enrollees in CDHPs and HDHPs must pay, they tend to exhibit more cost-conscious behaviors than their counterparts enrolled in traditional healthcare plans: 51 percent of CDHP enrollees and 50 percent of HDHP enrollees ask for a generic drug instead of a brand name, compared to 44 percent of employees in traditional plans.

CDHP enrollees are also more likely to participate in health-risk assessment programs and are more likely to choose doctors based on whether they use health-information technology such as electronic health records, according to the survey, which queried 4,509 adults between the ages of 21-64 with private health insurance coverage. They also tend to exhibit healthier behaviors (not smoking, exercising) than their counterparts in traditional plans, the survey found.

The last part, about CDHP enrollees being healthier, struck me as hardly surprising: After all, the conventional wisdom has been that healthier employees are more likely to choose these types of plans because they’re less likely to need healthcare services—and therefore less likely to be put off by those high deductibles. But the EBRI’s Paul Fronstin says that’s not necessarily true.

“Many employers, especially small businesses, offer only one plan, so in many cases employees enroll in a CDHP because that’s the only option,” he says.

More importantly, despite those high deductibles, CDHPs can be structured in such a way that employees can actually save a bit of money compared to a traditional plan,  he says.

“Plan design drives peoples’ behavior,” he says. “Employers can actually make it easier for employees to choose a CDHP over a traditional plan. For example, if you offer a CDHP with a $2,400 annual deductible for an employee and their spouse, with very low monthly premiums,  and a traditional plan with a much lower deductible but monthly premiums of $200, the CDHP could be the better deal, especially if the employer ‘seeds’ the HSA with $1,000 or so.”

According to the EBRI, 61 percent of employers that offer CDHPs contribute $1,000 or more to each employee’s HSA for family coverage; for employee-only coverage, 28 percent of employers contribute $1,000 or more.

Report: Many Customer-Service Employees ‘Highly Disengaged’

The Corporate Leadership Council, part of the Corporate Executive Board consulting firm in Washington, has released its latest quarterly Engagement Trends report. The report measures employees’ discretionary effort, intent to stay and engagement levels and is based on responses from approximately 618,000 workers from every geographic region in the world (with 72 percent of respondents coming from the United States).

Perhaps not surprisingly, considering that the economy continues to recover (albeit slowly), the number of employees who said they have “high levels of intent” to stay in their current positions declined in the third quarter of this year, to 22 percent,  from a high of 27 percent in the fourth quarter of 2009. On a more encouraging note, the number of participants who said they put out high levels of discretionary effort was up slightly, to 6.2 percent in the third quarter, from 6 percent in Q2—this was down from 7 percent in Q4 of 2009, however.

Disengagement levels remain high, according to the survey, which found that 21.6 percent of workers describe themselves as highly disengaged—down just a bit from a peak of 22.2 percent in Q4 2009. And which corporate functions have the most highly disengaged employees? Disturbingly, it’s customer service, with 25.2 percent of workers in this function reporting that they’re highly disengaged, closely followed by finance/accounting, at 22.5 percent. Manufacturing and sales were the areas with the lowest levels of highly disengaged employees, tied at 17.1 percent.

So, this holiday season, when you’re on the phone with a customer-service rep trying to figure out why your child’s new video-game console isn’t working properly, it might help to remember that the person on the other end probably wishes they were doing something else, too.

Survey: Fewer Corporate Holiday Parties This Year

The economy may be improving (slowly), but the workplace holiday party scene is not, at least according to the annual holiday-party survey from New York-based exec-search firm Amrop Battalia Winston: 79 percent of companies plan on holding some type of holiday celebration this year, compared to 81 percent last year and in 2008. This represents the lowest number since ABW started doing the survey 22 years ago.  

For those that will be holding celebrations, just over a quarter (28 percent) say their parties will be more modest than in years past; this is on top of 49 percent who cut back on the lavishness last year.

There is a silver lining, for a very few lucky souls: 11 percent of respondents plan to hold more lavish parties, which is up from 1 percent last year and 2 percent in 2008. The survey did not specify what “lavish” means, so it could refer to a dinner of prime rib and shrimp cocktail accompanied by a live orchestra to serving crackers with cheese this time. The number planning to serve alcohol this year is also up, to 79 percent, compared with 73 percent last year. Sixty-one percent say their parties will be “at the same level” as in years past.

Most workers should not plan on bringing a spouse to this year’s celebrations: 69 percent said their parties will be “employee only,” while a quarter (26 percent) intend to invite employees and their families to gatherings.

On a sadder note, fewer than half of the surveyed companies (47 percent) are planning to get involved with charity events (donating money, food, clothing, gifts and/or volunteering), compared to 66 percent in 2009 and 74 percent in 2008. Here’s hoping they at least encourage employees to donate what they can to a charitable cause. As we all know, the need has hardly subsided.

Vegas Casino Workers Still Subjected to Smoke

If you ever want to go back in time, consider a trip to Las Vegas, where casinos remain as smoke-filled as they were in the days when you could still smoke on airplanes and in doctor’s offices. That’s because, despite the fact that Nevada—like many states—has a ban on smoking in public places, the state’s powerful casino industry has won an exception for casinos with more than 15 slot machines, i.e., every casino on the Strip.

 Now, a group of blackjack dealers and croupiers have filed a class action lawsuit against the Wynn Las Vegas  to try and force that casino-resort to install clean-air technology that will at least reduce the amount of cigarette smoke swirling about the place and into casino employees’ lungs. That’s right, they’re not even trying to seek a smoke-free workplace—they’re simply asking their employer to do a little more to reduce the fumes.

 Given that Nevada has the nation’s highest unemployment rate and that the casino industry has been absolutely hammered by the Great Recession, it’s understandable that casino employees and other state residents might be willing to give the industry a break when it comes to indoor smoking. But it’s pretty sad that blackjack dealers, cocktail waitresses and others are being forced to choose between losing their livelihoods and suffering the deadly effects of prolonged exposure to secondhand smoke. At the very least, the casino industry should think about the high healthcare costs and missed work days these workers are incurring, not to mention all the non-smoking gamblers they’re scaring away. As activists with Smoke-Free gaming, an organization of casino employees who want the industry to ban smoking, have said: “What Happens in Vegas … Stays in Your Lungs.”


Halloween will soon be here, and you know what that means: Employees showing up this Friday wearing potentially offensive costumes! Oh the horror … . Now I’ve written my share of news stories about this trend, and if there’s one thing I’ve learned, it’s that there are a whole bunch of legal experts eager to talk about the potential perils of letting employees show up at work dressed as movie stars, pop icons, politicians etc.  The latest is ELT, an ethics and compliance training firm, which has sent out its list of what it predicts will be the “Most Controversial Workplace Halloween Costumes for 2010.”

What’s on this year’s list? Topping it is “Terrorist/Muslim”–perhaps not a big surprise. ELT illustrates this with a picture of a vest comprised of dynamite sticks and a timer. I gotta concur with ELT on this one: Showing up anywhere, let alone the workplace, with a costume like this represents astoundingly bad judgment. Not funny.

Next is “Illegal Aliens.” Again, not a surprise. It’s hard to find anyone who doesn’t have a strong opinion on this issue, and correct me if I’m wrong, but the workplace is hardly the appropriate venue for hashing out disagreements over what to do about illegal immigration. Throw in the racial overtones, and it’s perfectly reasonable to expect companies to be on guard against costumes with this theme.

Number three is Tiger Woods. Now on the one hand, I see ELT’s point: Anytime you have the potential for employees of one race to don a costume depicting someone of a different race,  things can get touchy. On the other hand, it’s well known that Woods is controversial because of his philandering and the resultant marital difficulties. So if an employee shows up in blackface purporting to be Tiger Woods, that’s clearly a no-no. But, if an employee shows up wearing a latex Tiger Woods mask that sports bandages and bleeding (in reference to his wife allegedly attacking him with a golf club), can that really be considered racist?

Number four is Lady Gaga. I’m having some trouble with this one. Yes, some may find Lady Gaga’s music and/or outfits offensively bad. But ELT’s reasoning is that because she wore a dress “made of raw meat” to MTV’s music video awards this year, it may be the wrong time to depict Her Ladyship in the workplace. Personally, I would think an employee who goes to the trouble of re-creating a dress made from raw meat deserves points for hard work and ingenuity. But then again, I’m not a PETA member.

Last on the list is “Chilean Miners.” Obviously, there’s the peril of having non-Latino employees depicting Latino miners. But ELT says such costumes may also “poke fun at workplace safety and blue collar workers.” It seems to me that the story of the Chilean miners showcases courage, ingenuity and persistence in the face of extreme adversity. The entire world was captivated by their rescue. So doesn’t the good far outweigh the potential for bad in this case? I guess I’m  glad I don’t have to make these decisions.

Sam Zell’s Tribune Co: The HR Factor

A really disturbing front-page story on the NY Times the other day profiled some of the goings-on at Chicago-based Tribune Co., the storied media giant that was taken over by real-estate mogul Sam Zell back in 2007. As the story notes, it’s all been downhill—WAY downhill—for the once-proud Tribune Co. ever since. Zell chose to make the purchase (piling enormous debt onto the company in the process) right before the newspaper market cratered.

The company filed for bankruptcy protection less than a year after Zell bought it, yet he and his management team were still able to persuade the bankruptcy judge overseeing the case to sign off on more than $50 million worth of bonuses for top managers earlier this year.

Possible financial shenanigans aside, the story’s big revelation (based on interviews with numerous former Tribune employees) is the allegedly depraved corporate culture that Zell and his people have allowed to flourish at the company.

Two former Tribune execs told NYT writer David Carr that Randy Michaels, one of Zell’s hand-picked minions to run the company (who has a history of sexual-harassment claims filed against him at his former employer), met them in a bar soon after joining the company and is accused of offering a female bartender $100 to show him her breasts. (Michaels has denied doing this).

Michaels and his lieutenants at one point allegedly stood on a balcony overlooking a work area and made loud remarks about the sexual attributes of various employees, within hearing distance of everyone. There’s plenty more, of course.

But for me, what really takes the cake is this little gem, from a rewritten version of the company’s employee handbook that was apparently one of the new team’s first priorities, according to the story:  

“Working at Tribune means accepting that you might hear a word that you, personally, might not use,” the new handbook warned. “You might experience an attitude you don’t share. You might hear a joke that you don’t consider funny. That is because a loose, fun, nonlinear atmosphere is important to the creative process.” It then added, “This should be understood, should not be a surprise and not considered harassment.”

Wow—management actually went ahead and redefined harassment. Brilliant! So the obvious question is: Where was HR when this new handbook was approved and distributed to employees? How could any HR leader possibly sign off on this?

For a quick answer, I checked the archives of our People section and discovered that Luis E. Lewin served as Tribune’s senior VP of corporate human resources from 2000 to 2008. In other words, Lewin (who’s currently the CHRO at Purdue University) left Tribune right as Zell and his team were in the midst of making their changes at the company.

I don’t know Mr. Lewin or the actual circumstances of his departure, but I’d really like to think that it was because he would not be part of a management team that apparently had so little respect for the employees who worked there. I’d also like to think that most HR leaders would, upon failing to convince a CEO that their policies were similarly misguided, do the right thing and tender their resignation.

Times may be tough, but principles are priceless.

The Vendors’ Viewpoint

My HRE colleagues and I spend a lot of time during the show meeting with vendors, and while some of them seem to want to spend all of our limited time hawking their products (boring!) others are genuinely interested in talking about the state of the HCM market (and yeah, I know human capital management is a tiresome and annoying buzzword to some, but I digress).

Anyway, Charles Coy, director of product marketing at Cornerstone OnDemand, said product differentiation is getting tougher and tougher every year for talent-management vendors like his firm. “Look around the show floor,” he told me, gesturing at the crowded booths covering the exhibit floor at this year’s HR Technology®  Conference.

“So many of us are selling what are essentially the same products, delivered the same way [via SaaS]–how do you stand out from the crowd?” Cornerstone’s strategy will be to distinguish itself from others by pointing out to prospective clients that its suite of tools were developed “organically” (in-house), unlike other vendors, who are assembling suites by going out and purchasing other vendors and integrating their products. “Our products run on the same data platform,” said Coy. “I may be wrong, but I do think that’s a differentiator.”

Coy also chatted at length about the Cornerstone Foundation, a nonprofit foundation created by his firm which — among other things — donates free Cornerstone software to outfits like Teach for America and various charities. “Nonprofits are really underserved in this area,” he said. Interesting …

Michael Custers and Brad Everett of Northgate Arinso chatted about their firm, which recently completed its purchase of Convergys Corp.’s HR business-process outsourcing operations, which makes them one of the largest such vendors in North America, putting them in direct competition with the folks at Hewitt, IBM and Accenture. “We’re a global firm, not US-centric, and we think that will differentiate us,” said Everett.

Over at Saba, they’re feeling pretty confident that collaboration as an actual, workable reality (as opposed to a topic that no one but industry analysts is talking about) is finally taking off, said Yvette Cameron, vice president and general manager. 

“HR people are really starting to drive collaboration and networking within their organizations, and we think that’s great–we want to see them get out in front of this, not hang back and let other departments take the lead,” she told me. Yvette has some self-interest at stake, of course: Saba’s just  introduced Saba People Systems, a suite of collaboration, learning and performance applications that’s designed to “power up the individuals in the organization.” Hmmmmm …  

Meanwhile, Successfactors and Workday are vigorously going after the core HR systems market, with Successfactors asserting that the market is eager for core HR products from best-of-breed vendors. Successfactors can indeed boast of winning over giant technology firm EMC, which is replacing its PeopleSoft enterprise system with SuccessFactors’ EmployeeCentral product for core HR.

And Workday is continuing to go after the large-enterprise market, having used the show to demonstrate how Flextronics (which itself is practially the size of a small country) is one of the small-but-growing cadre of big corporations that are moving away from ERP to SaaS-based enterprise systems.

And what about the regular stream of software updates that SaaS customers receive–which, if you’re a large and complex organization like Flextronics, can wreak havoc on your internal processes?

 “We’re getting much more proactive at communication, letting our customers know ahead of time what these updates will do so they can make sure nothing gets messed up,” said Workday’s Andy McCarthy. Interesting times. We’ll see how things look next year in Las Vegas, where the 2011 HR Technology®  Conference will be held at the Mandalay Bay resort.

The Great HCM Debate, Part 2

Workforce planning and analytics: What do they really mean, and what does a workforce planning strategy look like? HR Technology® Conference co-chair Bill Kutik asked the two participants in The Great Technology Debate, Gartner managing vice president Jim Holincheck and Knowledge Infusion CEO Jason Averbook, to give their thoughts on the topic.

“Analytics are great if you have a great data structure in place,” said Averbook. “It also helps if analytics are really ‘in your face’–Amazon, for example, has a great metric: ‘People who bought this book also bought this book.’ That’s an analytic that creates some action–‘Hey, maybe I should check out this other book.’ When you create analytics that are actionable, that’s when this space will take off.”

A metric that alerts a business executive that sales are down in a particular region because of a shortage of trained salespeople is a good example of an “actionable analytic,” said Averbook.

Workforce planning technnology that lets companies predict labor trends and costs, and adjust their training and recruiting programs accordingly, is still in its first generation, he said. “That’s why this space is so exciting–we’re moving toward that predictability model.”

When asked about social media, Holincheck admitted he is “something of a curmudgeon” on the topic–particularly with respect to what he said is the trend of “everyone trying to embed social media everywhere–it just doesn’t make sense.”

“Some HR departments are very progressive about social media in the workplace but for many others, that’s not the case,” he said. “And, employees are already using Facebook and Twitter–why would they abandon those in favor of enterprise versions you’ve installed?”

Above all, said Holincheck, HR should not attempt to implement a social-media strategy without closely consulting with other departments within the organization. “Other departments are using social media–work with them, have a companywide strategy–otherwise, HR is going to be viewed as just trying to do their own thing, and the effort will fall flat.”

The Great HCM Debate

Although the HR Technology® Conference’s Industry Analyst Panel switched formats this year to a debate between two industry experts standing behind lecterns instead of the four-member seated panel of conferences past, it featured the same occasionally heated and always-fascinating dialogue between folks who live and breathe this stuff. Moderator and conference co-chair Bill Kutik (who also lives and breathes this stuff) kicked things off by asking the two debaters, Gartner managing vice president Jim Holincheck and Knowledge Infusion founder and CEO Jason Averbook, to define “strategic human capital management.”

“It’s plain and simple–strategic HCM helps companies execute their business strategy,” said Holincheck. “Much of what passes for talent managent has focused on automating existing processes. But that’s not strategic. What you want to be thinking about is, what is my company’s business strategy, and how can talent management help me address that?”

“It’s certainly not about buying technology,” said Averbook. “It’s about answering the question ‘Are we going to buy or build our talent and how are we going to do it?’ It’s a business process, not an HR process.”

A bit later on during the debate, Averbook noted that the days of companies buying software licenses for HR “super users” are long gone. ” “Back in the day, we implemented HR systems for HR users. Today, the consumer is no longer the HR department, it’s the workforce. We want everyone in the company to use these tools,” he said, adding that meant HR had to focus on pushing the new systems out to the workforce and ensuring they’re intuitive and user friendly, much like Amazon and Facebook.

Kutik asked both men to share their thoughts regarding Oracle Corp.’s new Fusion system.

“I see a lot of Gartner clients pursuing a ‘coexistence strategy’–they’re using Fusion on top of their existing Oracle products rather than making plans to install a new system,” said Holincheck.

Regardless of whether Fusion meets expectations, Averbook said, it will still give Oracle a big advantage simply because of the integration factor. “We tell folks to go look at best-of-breed solutions–well, what good is best of breed if you don’t have a way to tie those systems together? If you don’t have a foundation to do that, then best of breed is a waste of time.”

“You don’t need a single vendor to tie it all together,” said Holincheck.

“I’m not saying you need a single vendor, but you do need a strategy,” replied Averbook.

Further on, Averbook castigated vendors for luring customers to SaaS solutions with the “false promise” that they won’t need IT support. “The market’s screwed up because vendors are telling HR clients this–our customers encounter failure when they have no IT support for their SaaS solutions.”

Saving Time with Social Learning

Innovations and new discoveries occur all the time inside organizations. But how can you shorten the time between the moment those discoveries are made and the results  those discoveries will have in terms of increased customer satisfaction or more-efficient internal processes? Cerner Corp., a Kansas City, Mo.-based health-technology company, believes it’s found the answer, said Robert Campbell, the company’s chief learning officer.

Campbell spoke at a panel discussion on social learning at the HR Technology® Conference on Sept. 29. “We created UCern to reduce the time between discovery and adoption,” he said.

UCern is a virtual learning center consisting of threaded discussion lists, a point system that lets users rate the quality of contributors to those discussions, embedded videos and wikis, he said. When employees need the answer to a question, rather than searching for someone within their workgroup who can help them, they can access the discussion lists or the archived discussions for their particular topic. Solutions to vexing problems can be posted on the company’s publicly available wikis, said Campbell, which are available in “published” and “draft” versions. Material posted on published wikis has been verified for accuracy by the company’s experts; material on draft wikis has not yet been verified and is “use at your own risk,” said Campbell. Either way, it’s drastically shortened the time the company previously needed to document and publish information for employees and customers, he said.

Social media technology can, as in Cerner’s example, allow employees to quickly access the experience and knowledge of their colleagues, rather than waiting to take a formalized course or search for documents that may or may not be properly archived, said Jeanne Meister, the panel’s moderator and author of the book The 2020 Workplace.  Nevertheless, many HR leaders are reluctant to embrace social media, she said. They shouldn’t be, she added.

“You have to ask yourself whether your competitors haven’t already embarked on doing this, ” she said. A good place to find out is the website, a database of hundreds of different social-media policies from a wide variety of companies. The database can be searched by industry, so HR can determine whether their company’s competitors are on the social-media bandwagon, said Meister. “Don’t be left behind,” she said.