Category Archives: benefits

The High Cost of Caregiving

You may or may not be familiar with the story of Kristian Rex, a New Jersey man who cares for his elderly father, a former boat captain who once had “arms like Popeye” and who now — thanks to a debilitating stroke — is unable to perform basic, daily routines such as shaving himself. As shown in a recent award-winning commercial (for Gillette, no less), Rex Jr. must perform these and other tasks for his dad, and he does so with care and grace, as any good son would.

Many of us will find ourselves in Rex Jr.’s shoes one day, as the number of elderly in the U.S. continues to grow. In fact, an estimated 40 million Americans already serve as family caregivers and of those, 24 million juggle those responsibilities with holding down a job (Rex Jr. is a bit of an outlier, as women make up the majority of caregivers for elderly parents.) Nearly one in five adult children provide care for at least one elderly parent at some point, according to Boston College’s Center for Retirement Research. These caregivers spend an average of 77 hours per month with their parents, the Center finds, or the equivalent of about two weeks of work. Caregiving also exacts a mental and physical toll on health, with women caregivers reporting more pain and significantly higher out-of-pocket costs for their own healthcare, a study by the Center for Retirement Research finds. The study also finds that both male and female caregivers say they’re more depressed and suffer from poorer health because of parental care.

Many employers recognize the burden that caregiving employees shoulder: A new survey by the Northeast Business Group on Health (undertaken in partnership with AARP) finds that more than three quarters of the 129 mostly large employers surveyed agree that caregiving will grow in importance to their companies over the next five years. Respondents cited increased productivity, decreased absenteeism and reduced healthcare costs as the top drivers that would make a compelling case for investing in benefits that would make them “caregiver friendly” organizations.

“Family caregiving is an issue that affects the vast majority of us,” says AARP Chief Advocacy and Engagement Officer Nancy LeaMond. “We are either caregivers now, have been in the past, will be in the future or will need care ourselves.”

Fewer than half of the companies surveyed have programs or benefits designed specifically for caregivers, such as caregiver support groups, subsidized in-home back-up care for those being cared for, or counseling services. For those that do make such offerings available, communication appears to be an issue, with most saying their employees are only “somewhat” or “not very” aware of these benefits and services.

Plenty of compelling reasons exist for employers to get serious now about offering — and communicating — these services.

“The implications of this trend are significant not only for workplace productivity but for employee population health and healthcare costs,” says Dr. Jeremy Nobel, Executive Director of NEBGH’s Solutions Center. “Caregivers tend to abandon their own physical and emotional needs and employers need to plan for how to respond.”

Bill Would Boost ESOPs

You may think the U.S. Senate has bigger fish to fry – uh, like healthcare reform? – but senators now have something new to consider that will be of interest to HR leaders: a bill with bipartisan support that would encourage companies to offer employee stock ownership plans.

Introduced July 12 by Sens. Gary Peters (D-Mich.) and Jim Risch (R-Idaho), the bill in part aims to give workers another way to save for retirement, according to a statement issued by Risch. ESOPs also may offer

business owners the opportunity for a comfortable exit.

Advocates for ESOPs also tout their power to inspire employee satisfaction, retention, engagement and loyalty in companies of any size. Risch says 13.5 million employees now  participate in 7,000 ESOPs nationally, reaping 12.5 percent more than their peers in wages and retirement contributions.

The bill is aimed at smaller companies that may not have easy access to the expertise needed to launch an ESOP. It calls for the nonprofit business-advisory group SCORE — which operates with support from the U.S. Small Business Administration — to provide those companies the information they need.

“ESOPs are the perfect transition solution for many successful closely held companies, benefiting both employees and owners,” says Corey Rose, founder of the National Center for Employee Ownership, quoted in Risch’s statement. “But despite their many tax, planning, and legacy benefits, few owners know that this is even a possibility. The outreach program proposed in this bill would be a very cost-effective way to address this issue.”

Back From Vacation — And Stressed

That week in the Bahamas was everything you’d hoped it would be. And now it’s Monday, your first day back at the office — and life stinks.

If this scenario rings true to you (regardless of whether said vacation was in the Bahamas, Disney World or your own backyard), then take heart in knowing you’re hardly alone: Nearly two-thirds (62 percent) of 1,000 full-time U.S. workers polled by training and communications firm Fierce Inc. say they’re either more stressed or have the same level of stress upon returning to work after taking paid time off. The reasons why aren’t that surprising, with most respondents citing having to catch up on missed work, followed by having to readjust to “a work mindset” and needing to resolve major issues that arose while they were away.

Not all employees feel equally stressed, however, with only 14 percent of respondents who said they were “very satisfied” with their job feeling more stressed returning from vacation. Meanwhile, 38 percent of those who reported being unsatisfied with their jobs said they felt more stressed returning to work.

“The fact that returning to work is a stressful situation speaks volumes to the lack of support many employees feel both leading up to, and returning from, vacation,” says Stacey Engle, Fierce’s executive vice president of marketing.

Interestingly, while more than half of employees believe their managers support and encourage them to take time off, only 40 percent say the same of their co-workers. Once again, there’s a correlation between this factor and job satisfaction, with 57 percent of those unsatisfied with their current job saying no one encourages or supports them in taking paid time off, while just 18 percent of those who are very satisfied say the same. Lower-paid employees also report a lack of support, with 45 percent of those with annual household incomes of $50,000 or less saying no one encourages them to take a vacation. Meanwhile, less than 30 percent of employees who make $100,000 a year or more say no one encourages them to take time off.

Then there’s the perennial issue of under-vacationed Americans: Although a third of the Fierce survey respondents say they receive 20 or more vacation days each year, one in every five say they receive less than 10. Not surprisingly, younger and lower-paid workers tend to receive the least PTO days. By way of comparison, countries within the European Union require a minimum of four weeks (20 days) of paid leave for all workers, while a number of them(such as Germany and Switzerland) are even more generous.

Given that there is no national law requiring paid time off in the U.S., employees and HR need to keep the lines of communication open regarding the issue of vacation. As Fierce’s Engle says, “employees need to feel empowered to ask for what they need, and managers must be open to hearing concerns of these employees.”

Unlimited Vacation and Productivity

Since the earliest days of unlimited PTO policies, supporters have argued they are more likely to help productivity than hurt it. A new analysis of data supports that claim.

In a report titled HR Mythbusters 2017, developers of the HR technology platform Namely analyze their data from 2016 to test the notion that unlimited vacation does more good than harm.

The result: Employees with unlimited time took an average of 13 days off, during the year, compared to 15 days for employees with a traditional allowance.

“The data prove that on average employees with unlimited PTO plans do in fact take less time off than employees with a set amount of vacation days,” the report authors write. “This calls for a change in the way HR teams and managers communicate about time off.”

In a related finding, the Namely analysis compared vacation-time usage with job performance. The result: “High performers tended to take an average of 19 vacation days per year, while individuals who scored lower took only 14.”

SHRM in the Big Easy

The heat and humidity of New Orleans in mid-June didn’t keep folks away from the Society for Human Resource Management’s 2017 annual conference, which, according to the association, drew a crowd of more than 15,000 attendees.

In her Monday morning remarks, the SHRM Board Chair Coretha Rushing noted that it was the largest SHRM ever.

If you’re an HR leader, I suppose you can read this to mean that employers are continuing to invest in their HR teams.

Held under the theme “All In,” reflecting the need for HR professionals to be fully engaged in what they do, the conference represents the final one under the stewardship of SHRM President and CEO Hank Jackson. In January, Jackson, 65, announced he would be retiring at the end of the year as head of the 290,000-member association. Earlier this month, SHRM announced his replacement: one-time SHRM chair Johnny Taylor, who is currently chairman and president of the Thurgood Marshall College Fund.

SHRM continued its tradition of releasing its annual Employee Benefits survey at the conference.

According to the latest study, one-third of the 3,227 HR professionals who responded said their organizations increased their overall benefits in the past 12 month, suggesting that benefits continued to be an important tool for recruiting and retaining talent. Health and wellness were the two areas most likely to experience increases, cited by 22 percent and 24 percent of those responding, respectively.

Roughly one-third of organizations (34 percent) indicated they offered healthcare coverage to part-time employees, compared to 27 percent in 2014. Meanwhile, about three of every five organizations (59 percent) said they have a general wellness program for employees.

Just 6 percent of the organizations decreased their overall benefits, with healthcare and wellness topping the list of areas being cut.

Workplace flexibility also experienced a modest uptick, with telecommuting and flextime both experiencing increases from a year earlier. Roughly three out of five organizations (62 percent) allowed some type of telecommuting, and 57 percent offered flextime, allowing employees to choose their work hours within limits established by the employer.

Ellen Galinsky, a senior research advisor to SHRM who also serves as president of the Families and Work Institute and is chief science officer for the Bezos Family Foundation, noted that the flexibility findings are consistent with other research she’s done.

“Why are companies helping employees with flexibility?” Galinsky asked during a press conference that gave a first look at SHRM’s Effective Workplace Index, which uses seven components to measure workplace effectiveness. “We found it’s retention, retention, retention.”

In a national study of employers, she said, 39 percent identified retention as the major reason for adding these initiatives. Recruiting was naturally a key factor as well.

Of course, as Laszlo Bock suggested in his Monday morning keynote at the conference, giving employees the freedom to choose what they’re working on also goes a long way to keep them engaged in what they’re doing—and inevitably will lead to greater retention.

Bock, the former senior vice president of human resources at Google who recently announced the launch of a jobs startup called Huma, told those in the audience that “you want to give people a little more freedom than they’re comfortable with.”

The end result, he said, will be increased “productivity and happiness.” (Bock will be keynoting our HR Tech Conference this October, focusing on the role HR can play in building organizations that innovate.)

Bock shared three principles during his remarks.

First, Bock said, companies need to give work meaning. “The most important thing you can do is create an environment that … instills meaning in the work people are doing,” he explained. “If you can connect your work to something more meaningful, [people] will be more productive.”

Second is trust, he said. “Trust comes down to a fundamental question: Do you think people are good or evil? If you believe people are fundamentally good, you’re going to treat them that way. But most organizations [structure themselves in such a way that they] actually don’t assume that they’re good.”

Instead, Bock said, companies need to be more open and transparent with their employees. “One of the things Eric Schmidt at Google always used to do [at every quarterly meeting] was share his entire presentation,” he said. “I don’t know if they’ve been doing it in the last six months, but it never leaked while I was there, and it let people know they were trusted.”

A third principle Bock shared is to “always, always, always, always hire people better than you.”

Know what you’re interviewing for, he said. “I don’t mean the job description. I mean, What are the attributes a job needs.”

He advised HR professionals to not let hiring managers make the hiring decision. Why? “If you’re a hiring manager, you are susceptible to not just the bias inside your own brain, but pressure from outside people.”

Instead, Bock said, establish a hiring committee, one that doesn’t including anyone who’s going to work with the person. The committee’s whole job is to ensure quality, he explained. Was the assessment fair and unbiased? Was it valid?

Over time, he said, companies that hire better than their competitors will emerge as winners.

The ‘Why’ Behind Wellness Programs

It isn’t always about the money.

Or, at least it’s not when it comes to why many companies offer wellness programs, according to a new survey from the International Foundation of Employee Benefit Plans.

For its new Workplace Wellness 2017 Survey Report, the Brookfield, Wisc.-based nonprofit organization polled 530 members of the IFEBP as well as the International Society of Certified Employee Benefit Specialists and the National Wellness Institute.

Overall, more than 90 percent of these organizations offer at least one wellness initiative. Among them, 75 percent report that improving overall worker health and well-being is their company’s No. 1 reason for doing so, with just one in four saying that controlling or reducing health-related costs is their primary motivation for implementing wellness programs.

As for what these wellness initiatives consist of, “traditional” offerings such as free or discounted flu shots “continue to gain steam,” according to an IFEBP statement.

But the aforementioned report also highlights some “popular emerging wellness benefits” that employers are weaving into their wellness initiatives, such as chiropractic services coverage, currently offered by 62 percent of respondents. In addition, 59 percent said they provide employees with opportunities to participate in community charity drives and events, attend onsite wellness-related events and celebrations (58 percent), and take part in wellness competitions such as walking/fitness challenges (51 percent).

Whatever form a wellness program takes, the effort seems to be paying off for many organizations. More than half of the responding companies that measure their wellness offerings, for example, say they’ve seen a decrease in absenteeism since putting a wellness program in place. An even larger number (63 percent) indicate that they are experiencing financial sustainability and growth in the organization, while 67 percent say their employees are more satisfied and 66 percent report increased productivity.

“Employers are realizing that wellness is not just about cutting healthcare costs, because wellness is not only about physical health,” says Julie Stich, associate vice president of content at IFEBP, in a statement.

“Embracing the broad definition of wellness has led to a tremendous impact on organizational health and worker productivity and happiness.”

It would stand to reason that a happier, more productive workforce translates to a bigger, better bottom line, of course. And, for those HR and benefits leaders who haven’t yet made the business case for developing workplace wellness programs, the numbers to emerge from this report could certainly provide them with some strong ammunition.

Homing in on Behavioral Health

Just over two years ago, we posted a piece on this site highlighting findings from a Disability Management Employer Coalition study on behavioral health in the workplace.

The DMEC’s research painted what HRE described at the time as a “somewhat incongruous picture.” For example, more than 60 percent of the 314 employers polled said the stigma surrounding mental health issues at work had either stayed the same or gotten worse in the past two years. On the other hand, 37 percent of those same companies said that management had “become more open” about assessing behavioral health in that time. In 2012, 25 percent of respondents said the same, according to DMEC.

Here we are in 2017, and the findings of a new Willis Towers Watson survey suggest that the picture is starting to come into focus for employers, the overwhelming majority of which say they plan to keep upping their efforts to address mental health issues among the workforce.

The firm’s 2017 Behavioral Health Study, which polled 314 U.S. employers, finds 88 percent of respondents saying behavioral health is an important priority for their organizations over the next three years.

More specifically, 63 percent count locating more timely and effective treatment of behavioral health issues as an area of primary concern in that same span. Sixty-one percent said the same about integrating behavioral health case management with medical and disability case management. In addition, 56 percent said their organizations are concentrating on providing better support for complex behavioral health conditions, and 52 percent of employers are looking to expand access to care for mental health issues between now and the year 2020.

Beyond increasing and improving the level of care received by those with behavioral health issues, the survey also found that organizations intend to address the root causes of these issues. More than one third of respondents (36 percent) say they have already addressed and taken steps to reduce stress and improve resiliency, while 47 percent are planning or considering action designed to do so over the next three years. Twenty-eight percent currently provide educational programs that touch on the warning signs of behavioral health issues or distress, and 41 percent are planning or considering such programs.

These employers are also showing more interest in mobile apps to help employees manage behavioral health needs, according to Willis Towers Watson. The survey finds the percentage of companies including mobile applications in their service offerings on the way up. For instance, 11 percent of those surveyed already offer stress reduction or resiliency apps; a number that is expected to increase to 38 percent within three years, the study finds. And, while just 7 percent provide apps designed to help curb anxiety, 31 percent of respondents said they plan to offer such applications between now and 2020.

However they plan to reach workers with mental health needs, “employers are concerned about behavioral health issues because of the impact on costs, employee health and productivity, and workplace safety,” says Julie Stone, a national healthcare practice leader at Willis Towers Watson, in a statement.

“The seriousness of the issues—both for employers and employees—has led to a deeper understanding of the problem and greater resolve to take action.”

Employers are now more committed than ever, says Stone, to “improving access to treatment, providing employees with better coordination of care across various health programs and reducing the stigma that could be associated with behavioral health through educational programs.”

Sad State of Parental Leave

Tuned into a pretty interesting, if not depressing, Facebook Live session on Wednesday. Seems the at-least-slow progress in paid parental leave we’ve been writing about here on HRE Daily and on our HREOnline website isn’t as promising as some think.

At least that’s according to the Society for Human Resource Management, which released during the session its National Study of Employers — a self-described “comprehensive look at employer practices, policies, programs and benefits that address the personal and family needs of employees.” (Here’s the press release for those of you who don’t have the time for an entire study right now.)

Ellen Galinsky, president and co-founder of the Families and Work Institute, talked during the session about the study’s key findings — namely that, despite reports from well-known companies (such as Netflix, Amazon, Microsoft, Johnson & Johnson and Ernst & Young — see our own posts linked above) announcing their expansions of paid-parental-leave benefits, the average amount of caregiving and parental leave provided by U.S. employers has not changed significantly since 2012.

Specifically, over the past 11 years, the number of organizations offering at least some replacement pay for women on maternity leave has increased from 46 percent to 58 percent. But the study also found that, among employers offering any replacement pay, the percentage offering full pay has continued to decline, from 17 percent in 2005 to 10 percent in 2016.

In fact, of all employers with 50 or more employees, only 6 percent offer full pay. In addition, daily flexibility, the kind needed for emergencies, has gone down actually, from 87 percent in 2012 to 81 percent in 2016, a statistic Galinsky called “critical.” She added:

“The fact that that kind of flexibility has gone down is a critical [and alarming] finding.”

According to Galinsky, HR has a major role in turning this around. As she put it during the session:

“Flexibility is now the norm. HR should be thinking this way. It used to be, ‘Should or shouldn’t we provide flexibility?’ Now it’s a given that we should.”

Unfortunately, she said, HR needs to do a better job of telling workers what is offered at their organizations. The study found only 23 percent of companies making a real effort to communicate the programs they have.

Here are some other key findings:

  • Small employers (50 to 99 employees) were more likely than large employers (1,000 or more employees) to offer all or most employees 1) traditional flextime, the ability to periodically change start and stop times (36 percent versus 17 percent), 2) control over when to take breaks (63 percent versus 47 percent) and 3) time off during the workday to attend to important family or personal needs without loss of pay (51 percent versus 33 percent).

  • Growth of workplace flexibility has been stable over the past four years. Out of 18 forms of flexibility studied, there were only four changes:

  1. An increase in employers that offer telework, allowing employees to work at least some of their paid hours at home on a regular basis (40 percent in 2016 versus 33 percent in 2012).
  2. An increase in employers that allow employees to return to work gradually after childbirth or adoption (81 percent in 2016 versus 73 percent in 2012).
  3. An increase in organizations that allow employees to receive special consideration after a career break for personal/family responsibilities (28 percent in 2016 versus 21 percent in 2012).
  4. A decrease in organizations that allow employees to take time off during the workday to attend to important family or personal needs without loss of pay (81 percent in 2016 versus 87 percent in 2012).

In Galinsky’s words:

“Whether high-profile companies offering paid [parental] leave are out of step with the majority of employers or leading the way remains to be seen. Given our findings that 78 percent of employers reported difficulty in recruiting employees for highly skilled jobs and 38 percent reported difficulty in recruiting for entry-level, hourly jobs, these high-profile companies could be leading the way in the strategic use of leave benefits.”

And, apparently, that’s not happening. Not yet anyway.

DOL Wants to Delay Fiduciary Rule

The U.S. Dept. of Labor is seeking to delay the implementation of a rule that is intended to protect the best interests of retirement savers but has drawn the ire of many in the financial-services sector. The fiduciary rule, which would apply the “fiduciary standard” to all those who provide retirement investment advice in order to prevent conflicts-of-interest (which the Obama administration’s Council of Economic Advisers said costs retirement savers $17 billion a year), was set to go into effect on April 10. The DOL is seeking a 60-day delay of the rule, to June 9. The proposed delay (which is itself a new rule) will have a 15-day public comment period ending on March 17.

President Donald Trump expressed his concerns about the fiduciary rule in a memo issued on Feb. 3, in which he directed the DOL to examine the rule and “determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.” It directed the DOL to propose a new rule “rescinding or revising” the fiduciary rule if it determines that the regulation is likely to harm investors by limiting their access to certain financial products or services and cause an increase in litigation.

The Financial Services Roundtable, a lobbying group, issued a statement praising the delay. “The fiduciary rule will lead to fewer retirement savings choices for many Americans and we are encouraged the DOL is proposing to delay the rule.”

However, Lisa Donner, executive director of Americans for Financial Reform, told the Los Angeles Times that the delay is merely a preamble to the Trump administration’s plan to ultimately scrap the rule.

“Blocking the common-sense, long-overdue rule, which requires retirement advisors to act in their customers’ best interests, would allow Wall Street to continue to grab more than $17 billion a year —  tens of millions of dollars a day —  from retiree savings,” she said. “This decision is not justified by the facts, and it is a betrayal of the public interest.”

More 401(k) Bashing, and a Fix

I posted here earlier this month about a provocative Wall Street Journal piece in which the creators and early adopters of the 401(k) retirement-savings vehicle lament the revolution they started.

Their point: They had no intention of watching the concept turn into the sole — and highly inadequate — savings receptacle for employees.

Now, on the heels of that, comes this piece on the October Three site by benefits expert Larry Sher taking that discussion even further, to a whole lot more wrong with the defined-contribution approach and the people who support it — i.e., the people with skin in its game. As Sher writes:

“For instance, the government tried, unsuccessfully so far, to nudge DC plan sponsors to give participants some sense of how much life annuity their account balances might be able to provide. The push-back was immediate and severe from stakeholders in the DC system.

“Some objected on technical grounds —  the annuity estimate could vary widely depending on a number of assumptions including life expectancies, market interest rates and inflation. Others viewed this initiative cynically, believing that it was just a first step toward mandating annuity availability in DC plans, thus leading to the prospect of huge sums of assets shifting from mutual funds and other asset managers to insurers.”

The chief concern of policymakers, employees and even some of the employers that have embraced the 401(k) concept, Sher says, “can be summed up as the total shifting of risks to employees — the risks that they won’t save enough, the risk that they will use the savings for non-retirement purposes, the risk of unfavorable investment results — culminating in inadequate retirement savings and the prospect of outliving such savings.”

To mitigate the problem of employees dipping into their funds for non-retirement purposes, he suggests employers impose greater restrictions on such withdrawals. Of course, he also writes,

“The best way to close this loop would be to provide a core company contribution for everyone — not just for those who are willing or able to save.”

Here’s one of my favorites of Sher’s points:

“And perhaps one of the most disturbing aspects of a DC-only retirement system is the fruitless attempt to make employees into competent investors. Even if investment education works to an extent, the idea of employees spending time, probably mostly work time, to figure out how to best navigate the investment markets is an exercise in futility.

“When someone is sick they go to a doctor, not to medical school. Investment professionals have gone to investment school — a crash course in investments does little, or no more, than give employees a false sense that they know what they are doing. It’s like self-diagnosing a medical issue based on information on WebMD.

“The response from the DC world is default investments, such as target date funds. That helps but it still leaves employees vulnerable to temptations to time the market and apply their [inadequate]knowledge to making investment choices. Inevitably, the result is wide disparity in outcomes among plan participants — those with better outcomes being the better, or more likely luckier, investors.”

Sher’s solution to this DC mess is to establish a combination of a type of cash balance plan with a “market-return,”  so interest is credited based on real-market investment returns rather than high-quality bond yields. He calls this the MRCB. Here’s how it would work, according to him:

“The MRCB will provide much better cost control than a typical CB design — because account balances will tend to move in tandem with the plan’s assets, and regardless of changes in market interest rates. The employer can tune the degree of investment risk it is willing to share with employees by providing more downside protections, possibly in exchange for retaining a portion of the upside investment returns.

“By providing some of the employer benefits through an MRCB, the employer is accomplishing all of the goals that the government and some employers are trying to achieve by changing DC plans to be something they are not meant to be. Employer pay credits would automatically be provided to all participants — no dependency on employee contributions. There would be no diversion of the benefits during employment — no loans or withdrawals. Annuities would be provided directly by the plan — thus avoiding the extra cost of retail-insured annuities.

“Yes, that means the employer retaining some long-term longevity risk — but even that is controllable by how the factors are set and managed over time to convert accounts to annuities. The MRCB typically would allow employees to elect lump-sum distributions upon termination or retirement [equal to account balances, with spousal consent], although the ability to elect lump sums can be restricted by plan design to the extent the employer considers that to be desirable.”

And where would such an approach leave the 401(k)-DC plan? In Sher’s words:

“Just where it should be –as a short-term and supplemental long-term savings vehicle … “

not the only show in town.