Category Archives: benefits

The Zenefits Saga Continues

It appears Zenefits woes are continuing—and if the predictions of one consultant are correct, they aren’t likely to end anytime soon.

Yesterday, Washington State Insurance Commissioner Mike Kreidler ordered Zenefits to “cease free distribution of its employee benefits software, noting the tactic violates Washington state insurance law against inducements,” his office’s statement reads.zenefitslogo

Washington is said to be the first state to take action against the company for violating inducement laws. Under an agreement with Kreidler, Zenefits can challenge the order within 90 days.

The state took issue with the fact that Zenefits required clients to designate it as its broker of record and then collected insurance commissions from the products it sold in order for them to access its free software.

“The inducement law in Washington is clear,” Kreidler said. “Everyone has to play by the same rules.”

Following the announcement, Zenefits’ General Counsel Josh Stein posted the following on the company’s website

“Today, Zenefits has reached a compromise agreement with the Washington Office of the Insurance Commissioner (OIC) on how Zenefits will price its services in Washington State.  Beginning January 1, at the order of OIC, Zenefits may no longer provide free software services in Washington. As a result, Zenefits will charge all Washington state customers $5 per employee per month for our core HR product.”

Stein went on to say …

“The Washington viewpoint is a decidedly minority view. Since its founding, Zenefits has had conversations with regulators about our business model, which includes some free HR apps. Many states have looked into the issue and concluded that free software from Zenefits is not a problem; in fact, it’s in the interest of consumers. Only one state other than Washington has disagreed.  Utah’s department of insurance tried to force Zenefits to raise prices for consumers, and Utah’s state legislature and governor quickly took action, passing a bill to clarify that its rebating statute should not be interpreted to prohibit innovative new business models that deliver value to consumers.”

Earlier today, I spoke with Rhonda Marcucci, partner and consultant in Gruppo Marcucci, a Chicago-based HR and benefits technology consulting firm.

Zenefits has created its own regulatory scrutiny reputation for the rest of its life, Marcucci told me. In this case, she said, “I don’t think it is driven so much by the brokers but by the insurance departments who are extremely angry about the licensing piece—so that now invites more scrutiny in other places. Brokers may have brought it to [the attention of insurance regulators], but the way I look at this, Zenefits is a regulatory penalty box—and they will be, I think, forever.”

Marcucci noted that every state, except for California, has some kind of no rebating or inducement laws for transactions. But that doesn’t necessarily mean that every employer is following the law.

At the end of day, she said, states typically base their decision on enforcing these laws by “who screams the loudest.”

As far as Zenefits is concerned, Marcucci said, it’s realistic to expect that other states might follow Washington’s lead, especially those states with difficult regulatory insurance environments such as New York.

The Gig Economy: Benefits and Drawbacks

More than one in 10 working Americans have joined the so-called gig economy, working as freelancers or independent contractors, according to a survey of 1,008 people from ReportLinker. A third of respondents said they would consider exiting the traditional workplace to work in the gig economy, while nearly half said they would be willing to consider doing so within the next three years.

Why would so many consider giving up the security and benefits of a full-time job for the uncertainties of gig work? Twenty eight percent of survey respondents cited “being your own boss,” while the ability to work flexible hours came in second. Nearly 40 percent of job seekers say they’d consider becoming an independent contractor, as would 59 percent of part-time workers and 33 percent of students, according to the survey.

The lack of benefits is a drawback for those working in the gig economy, however, with one in four of the respondents who work as freelancers citing the lack of retirement benefits as a downside. Indeed, the lack of traditional job benefits such as sick-leave pay and unemployment benefits has led the United Kingdom to appoint a team of four experts to review the impact of “disruptive” businesses such as Uber and Deliveroo on that nation’s workforce, reports the BBC. The panelists include Matthew Taylor, chief executive of the Royal Society for the Arts.

“One of the key issues for the review is ensuring that our system of employment rules are fit for the fast-changing world of work,” Taylor writes in a piece for the Guardian newspaper.

“As well as making specific recommendations, I hope the review will promote a national conversation and explore how we can all contribute to work that provides opportunity, fairness and dignity,” he told the BBC.

The lack of benefits typical in most gig economy jobs has resonated Stateside as well, of course, with a number of gig workers filing suit alleging that they’re actually employees, not independent contractors, and are thus eligible for benefits such as unemployment compensation. In response, companies that employ freelancers are pushing for bills that promote “portable” benefits that workers would be able to take from job to job. Online home-cleaning company Handy, for example, is circulating a draft bill in the New York State legislature that would establish guidelines for portable benefits for workers in that state’s gig-economy companies, reports Reuters. The bill would classify workers at companies choosing to participate in the program as independent contractors rather than employees under state law, as long as the companies’ dealings with their workers “meet certain criteria.”

Not all are pleased with the bill. Larry Engelstein, executive vice president of 32BJ Service Employees International Union, criticized it as offering workers too little.

“The amount of money that’s supposed to be put into these portable benefit funds seems so meager,” Engelstein told Reuters. “The actual benefit a worker is getting hardly warrants what the worker is giving up.”

Answering the Cancer Call

It’s nice to see efforts continuing at a healthy pace to help employers and employees deal with one of the scariest threats to corporate 508254750-cancerhealth — the growth of cancer in our aging workforce.

The latest initiative is an impressive one, a program introduced recently by the Memorial Sloan Kettering Cancer Center in New York through which it now collaborates with employers to simplify the whole process for their working cancer patients to get the help they need. New as the program is, it already has six employers signed on for this collaboration, including CBS Corp. and the Port Authority of New York and New Jersey.

Through the program, called MSK Direct, each collaborative partnership is customized to the individual employer’s and its employees’ needs. A customized menu might include initial evaluations or second opinions, the options to immediately begin cancer treatment and support services such as counseling.

“Cancer care is extraordinarily difficult to go through, but accessing it in a time of distress shouldn’t be,” says Wendy Perchick, senior vice president of strategy and innovation at MSK. “MSK Direct is a prime example of our commitment to our mission, which includes making all aspects of our experience, care and services more accessible, seamless and beneficial to as many people as possible. In the face of a cancer diagnosis, we want patients, their family members and their employers to feel certain they are in caring and highly capable hands.”

Let’s face it, she and others say: The number of cancer diagnoses among working Americans is only going to climb as baby boomers continue to keep working out of a sense of purpose, but also out of necessity, whatever the cost to health, welfare and sanity may be.

As this story in HRE by Julie Cook Ramirez less than a year ago confirms, the number of people continuing to work with cancer diagnoses is now close to 15 million. And though there are a lot of positives around that for those employees (a sense of purpose, distraction away from their diagnosis, the list goes on), there are many challenges they bring to work as well, including diminished physical capabilities and stamina, and some mental impairments as they undergo chemotherapy.

The story also details things HR professionals can do to make such a devastating time for an employee a little more navigable, such as reworking their schedules, making a special effort to go over all benefits till they’re sure the patient understands and basically just being there to answer all the questions they may have.

As the numbers grow, so grow the costs. This post by me in 2014 put the price tag for employers at about $19,000 annually per 100 employees in lost work time and medical treatments, according to research from the Integrated Benefits Institute. (IBI President Tom Parry confirmed for me that these are still the latest figures.)

Numbers aside, let’s face it, there are a whole lot of us baby boomers in the workplace probably in a good bit of denial about what lies ahead. Many of these boomers’ employers might also be happily sharing in that denial as they continue reaping the benefits of older employees’ work ethics and knowledge.

But let’s also face the inevitability. None of us are getting any younger. And as workers age, health problems at work grow. As one friend, a seemingly ageless practicing family doctor in Seattle who likes to backpack, power walk, participate in medical missions abroad … and who’s just been diagnosed with breast cancer … put it, “No one ever told us boomers that life after 50 becomes a journey of loss — loss of our own health and loss of loved ones to the loss of their health. They should have told us this.” (And she’s a doctor!)

At least some employers are now facing this reality with their unstoppable boomers and helping them through the obstacle course that is cancer, however they want to be helped.

For some tips on how this might be done at your organization, and some immediate steps you can take to increase the value of cancer-care benefits and services you’re providing, consider this report — High Value Cancer Care: Guidance for Employers — that the Northeast Business Group on Health put out just last week. Here’s the news statement as well.

Roughly, as Dr. Jeremy Nobel, executive director of NEBGH’s Solutions Center, lays it out:

“Understanding what high-value services to look for when evaluating sites of care; making sure patients have access and coverage for seeking expert second opinions whether via health-plan-recommended specialists, a Center of Excellence or third-party second-opinion services; and encouraging employees to educate themselves about the benefits of palliative care and to request it early in the treatment process are all important steps employers can take right now.”

I guess I might only add that leaving them in the driver’s seat on directions to go and care to pursue, honoring their journey with the dignity they deserve, is a must.

Trading PTO for Perks

It happens all the time: The end of the year rolls around, and busy employees find themselves with handfuls of unused vacation days, and too much work to feel good about cashing them in.

But what if they could still get something of value in exchange for that paid time off?

A new start-up is enabling employees to do just that.

As recently reported in the Washington Post, PTO Exchange has just begun working with Premera Blue Cross to let the health insurer’s workers trade in the value of their unused paid time off for other perks, which could include added contributions to 401(k) accounts, putting money toward college tuition expenses, getting reimbursement for travel expenses or making a donation to a favorite charity.

While Premera Blue Cross is PTO Exchange’s first and only client thus far, co-founder Rob Whalen told the Post that PTO Exchange has heard from “150 interested companies, including large retailers and pharmaceutical firms, and is in advanced discussions with several major [HR] consulting firms.”

Organizations are “trying to offer flexibility to their employees,” Whalen told the paper. “They currently have this benefit on the books, and it’s budgeted—they might as well find ways to use it.”

The notion of offering workers the opportunity to swap paid time off for other perks “is a brand new concept meant to meet an emerging workforce need,” says Craig Dolezal, senior vice president at Lincolnshire, Ill.-based Aon Hewitt.

We could very well see others emerging to provide a similar service, he says.

“Like all innovations in benefits, there typically is a leader that drives a potential solution first, with others more than willing to create their own version once there is a real market need. … If more adopt [the PTO Exchange] model, we will most certainly see others build comparable solutions.”

Whether that happens, of course, is predicated on the idea that exchanging PTO days for other needs or wants passes all legal, administrative, compliance and financial tests, adds Dolezal.

Indeed, employers and HR have much to consider before rolling out such a benefit to the workforce.

“The very first place to focus is on the alignment with an employer’s business, cultural and human capital strategies,” says Dolezal. “Does this type of total benefits flexibility benefit the organization and [its] people? Does the exchange work in concert with [the company’s] broader workforce management approaches?”

If the answer to those questions is yes, then the company “would need to explore the legal and financial viability of the exchange and test the administrative approach,” he says, “to ensure this potentially new benefit can work seamlessly alongside other total rewards programs.”

 

Zenefits: Unicorn Comeback?

Remember Zenefits — the cloud-based benefits-administration startup that was going to revolutionize the industry by providing a benefits platform to small and mid-sized businesses and which was valued at $4 billion just two years after it was founded? The high-flying unicorn plummeted back to earth amid revelations that Zenefits’ co-founder and CEO, Parker Conrad, led an effort to help the company’s sales reps skip over state insurance-licensing requirements so they could start selling as soon as possible. More fuel was added to the bonfire when details started emerging about Zenefits’ rowdy office culture, in which managers had to send out a memo specifically banning employees from having sex in the building’s stairwells. The company parted ways with Conrad, laid off hundreds of employees, and cut its valuation in half in order to avoid a lawsuit by investors.

Now the company is struggling to regain its once-lofty perch, but its got robust new rivals to contend with. In today’s New York Timestechnology columnist Farhad Manjoo interviews Zenefits’ current CEO, David Sacks, about its soon-to-be-released software redesign, the internal reforms he undertook to fix the company’s culture and its new branding campaign, which include billboards throughout Silicon Valley that ask: “What is Z2?” In the wake of Conrad’s resignation, Manjoo writes, Sacks worked hard to rebuild Zenefits’ reputation by being open and honest about previous wrongdoings, describing his strategy as “admit, fix, settle and repeat.”

But Zenefits’ path to redemption faces roadblocks in the form of  new, well-funded competitors such as Gusto, which has 40,000 paying customers and was recently valued at $1 billion, Manjoo writes. Gusto has a much different corporate culture than did the earlier incarnation of Zenefits, where the philosophy had been “ready, fire, aim”: Gusto is taking a slower, more deliberate approach to building its business under the leadership of its CEO, Joshua Reeves. Its offices “has the air of a meditative retreat,” Manjoo writes, with plants, couches and a ban on wearing shoes “to make it feel more like home than work.”

Yet regardless of whether Zenefits or Gusto ultimately prevails, this heated competition for the SMB market probably means the ultimate winners will be the small to mid-sized companies that had previously been unable to afford the sort of benefits-administration software that large companies have long enjoyed. Despite the sordid behavior that marked its rise, Zenefits’ early founders at least deserve props for being one of the first to use the cloud to help this long-underserved market.

 

Are You Giving Job Seekers What They Want?

The gender gap. The generation gap. The wage gap. The skills gap …

Disparities abound in the workplace, unfortunately. And, according to Randstad U.S., we can go ahead and add “attributes gap” to the lengthy list.

The HR services provider’s recent survey of more than 200,000 respondents—designed to measure “the market perception of employers with the largest workforces” in 25 countries, according to Randstad—found salary and employee benefits, long-term job security and a pleasant working atmosphere to be the top three employer characteristics that job seekers value most.

These same attributes, however, scored fifth, sixth and eighth, respectively, on the list of attributes that would-be employees feel companies actually offer.

The same poll finds employers excelling in other ways, of course. The problem is that job seekers don’t seem to care that much about the things that organizations are good at delivering.

For example, the attributes that job seekers feel U.S. employers score highest on—financial health, strong management and quality training, in that order—rank fifth, ninth and seventh on jobseekers’ list of most-desired employee attributes.

“These findings reveal an ‘attributes gap’ between what U.S. job seekers want and what they perceive potential employers to be best at providing,” says Jim Link, chief human resource officer at Randstad North America, in a statement.

“What this should signify to employers is a growing disconnect that can be detrimental from an employee engagement, retention and, ultimately, cost perspective.”

Naturally, Randstad offers employers and HR executives suggestions on bridging this gap, such as “evaluat[ing] where you stand versus companies with which you compete for talent and determin[ing] the best steps to take to improve upon performance and/or perception.”

In addition, the firm recommends developing a three-year plan to “anticipate the future needs of your employees and what employer attributes talent will view as most important,” advising HR leaders to “arm yourself with insight leveraging talent analytics and predictive workforce intelligence to stay ahead of changing workplace dynamics.”

While organizational and HR leaders “may not be able to influence every workplace desire, managing workers’ wants and needs should not only be done from a macro-level by the organization,” says Link, “but also much more frequently from a micro-level by managers to ensure alignment.”

Retirement Planning: The Gender Gap Persists

A quick search of our website, using the terms “women” and “retirement,” brings back an article from August 2008 that describes retirement planning as “a nightmare for many women.”

In said piece, former HRE freelancer Marlene Prost shed light on female employees’ well-founded worries about outliving their retirement savings, and urged HR leaders to “step in with help” for women workers, who live longer than men on average while typically earning less.

As I sat this morning reading a press release summarizing new Aon Hewitt research, it felt like Prost’s article could have just as easily been written in 2016.

In other words, the story remains largely the same.

In examining the retirement saving and investing behaviors of roughly 3.5 million defined contribution participants from more than 125 employers, the Lincolnshire, Ill.-based Aon Hewitt found that 83 percent of women aren’t saving enough to meet their needs in retirement, compared to 74 percent of men who feel they aren’t putting enough away to live comfortably after leaving the workforce.

Aon Hewitt projects that women will need 11.5 times their final pay to meet their financial needs in retirement, but finds “a gap of 3.3 times pay between what women need and what they’re actually on track to have saved in order to retire at age 65.” Meanwhile, the disparity between needs and resources is just 2.0 times pay for men.

This shortfall, according to Aon Hewitt, means women, on average, will need to work until age 69—one year longer than men—in order to meet 100 percent of their needs in retirement.

“Women face significant stumbling blocks when it comes to saving enough for retirement, including longer lifespans, lower salaries and a greater likelihood of taking hardship withdrawals from their 401(k)s,” says Virginia Maguire, director of retirement products and solutions at Aon Hewitt, in the aforementioned press release. “Making retirement and financial well-being a priority is paramount for overcoming those challenges.”

The study also finds women and men participating in employer 401(k) plans at the same rate (79 percent), but lower savings rates pair with salary incongruities to further broaden the savings gap. For example, women are, on average, contributing 7.5 percent of their salaries to 401(k)s, which lags more than a full percentage point behind male employees (8.7 percent). In 2015, women had an average plan balance of $71,060, while the average amount for men was $119,150 last year, according to the report.

Naturally, Aon Hewitt suggests ways in which employers can help chip away at the difference, including offering tools such as healthcare and financial market education to improve overall financial well-being, providing professional investment help and adding plan features designed to increase savings rates.

And, even minor tweaks can have a major impact.

“When employers take an active role in helping all workers improve their financial well-being and save more for retirement, women will benefit,” according to Maguire. “Small changes to plan design and an improved focus on day-to-day finances can go a long way to closing the savings gap.”

Telecommuting Up, Wellness Down

ThinkstockPhotos-491705703SHRM’s latest benefits survey suggests that the range of offerings has exploded over the last 20 years — yet many of the core health and retirement offerings remain the most popular.

The Society for Human Resource Management has surveyed its members annually since 1996 to gauge how their organizations spend resources on benefits ranging from health plans to child care referral services.

The share of companies offering core benefits like health coverage has changed little over those 20 years, the survey suggests. About 98 percent offered health plans in 2016 and 94 percent offered some kind of retirement plan.

But a 20-year comparison shows the rise and fall of specific benefits as employee needs, company resources, technology and fashions changed. Overall, this year’s survey asked about 344 different benefits, up from 60 in 1996, said Evren Esen, SHRM’s director of survey programs. She briefed reporters on the results Monday at the organization’s 2016 annual conference in Washington, D.C.

Among newly included benefits: coverage of genetic testing, student-loan assistance and freezing of women’s eggs for nonmedical reasons as a recruitment tool, Esen said. “That wasn’t even on the radar screen” in 1996, she said. “We couldn’t have imagined that.”

Perhaps the most dramatic rise is in the share of employers offering telecommuting — 60 percent in 2016, up from from 20 percent in 1996.

Also seeing significant gains were legal assistance services, up 12 points to 25 percent in 2016; and help with professional dues, up 23 points to 88 percent. In the shorter term, since 2012, fast-rising benefits include health savings accounts, up 7 points in four years to 50 percent, and standing desks, up 20 points to 33 percent.

The list of benefits losing steam over those 20 years is longer. Among the most dramatic drop was credit union services, declining by 47 percentage points to 23 percent of employers in 2016. Employee stock-ownership plans also have declined sharply, the survey suggests. In 1996, 28 percent of employers offered the benefit; the share in 2016 was just 9 percent.

And the share of organizations offering help with parking also dropped significantly, to 10 percent from 25 percent 20 years earlier.

Some benefits showed evidence of losing popularity after years of gains. Wellness benefits were offered in 2016 by 72 percent, up 18 points from 1996. But that share was down from 80 percent in 2015.

While weight-loss and smoking-cessation programs “have stood the test of time,” some other wellness programs may not, Esen said.

“I think wellness is here to stay,” she said. “However, it may be that organizations are taking a step back, to see what’s working.”

The Benefits That Employees Like Best

So it’s not all about the money.

Countless studies have shown employers that much over the past few years, as benefits packages—retirement plans, leave policies, wellness programs and so on—figure more and more prominently in employee satisfaction scores.

But which benefits matter most to workers?

Glassdoor Economic Research, the research arm of Sausalito, Calif.-based job and career website Glassdoor, sought answers to that question in a pair of recent studies.

The first, Which Benefits Drive Employee Satisfaction?, sampled more than 470,000 benefits reviews left anonymously on Glassdoor by employees over the course of roughly 15 months. The sample included 1,226 U.S. employers with at least 20 benefits reviews, across all sectors and ranging in size from 50 employees to more than 10,000 employees.

Not surprisingly, health insurance had the biggest effect on how employees rated their satisfaction with employers’ benefits offerings, followed by retirement plans and vacation and paid time off.

Conversely, employee discounts and maternity/paternity leave were found to have little impact on overall satisfaction.

The latter finding may seem surprising when you consider the trend toward more generous leave policies. But, while many employers have indeed added maternity and paternity leave benefits in recent years, “it is possible benefits that are not used by a large subset of employees do not impact overall benefits package satisfaction,” according to Glassdoor.

For its Benefits Review survey, Glassdoor dug a bit deeper, collecting data from employee reviews of 54 distinct employer-provided benefits, such as pet-friendly workplaces, employee adoption assistance, travel concierge services, company cars and mobile phone discounts.

Some of the results were similar, with health insurance deemed to be the top predictor of employee satisfaction with benefits. Vacation and paid time off, pension plans, 401(k) plans and retirement plans rounded out the top five.

Parental leave policies, however, ranked much higher in this study, with maternity and paternity leave ranking as the seventh-best predictor of employee satisfaction with respect to benefits.

On the opposite end of the spectrum, benefits and perks such as gym memberships, reduced or flexible hours, and childcare barely register on the employee satisfaction scale, coming in at 43, 50 and 53 on the list, respectively.

“Overall, the above results echo the findings of our earlier study,” according to Glassdoor. “The core benefits that matter most to workers are health insurance, vacation and paid time off, and retirement plans. These core benefits are most highly correlated with employee satisfaction with benefits packages.”

Still, Glassdoor advises caution in attempting to parse these numbers.

“These are just simple correlations between benefit ratings, and don’t statistically control for factors like company size or industry, as in our previous, more rigorous analysis of Glassdoor benefit ratings.”

Such limitations aside, the lesson that lies within these figures should be clear, according to the company.

“While less common benefits tend to dominate media coverage, employers should not neglect core benefits such as health insurance and paid time off. The data clearly show these benefits—while less exciting than many of today’s flashy workplace perks—are still the main drivers of employee satisfaction.”

The Many, Many Vacation Days Not Taken

Here’s a new buzzword to add to your lexicon: “under-vacationed.” It’s how Project: Time Off, which regularly surveys American workers on how much time they take off from work, describes the 55 percent of U.S. workers who left vacation days unused last year, according to its latest survey. Previous Project: Time Off research showed that 42 percent of Americans were leaving vacation time on the table.

Project: Time Off is sponsored by the U.S. Travel Association, which obviously stands to benefit from more people taking time off to, you know, travel. But the research seems pretty legit, using polling firm GfK to conduct random representative samples of the U.S. population. This year’s survey queried 5,641 American workers working at least 35 hours per week, including 1,184 managers who are company decision-makers.

American workers have lost a full week of vacation, the research finds. Previous research conducted by Project: Time Off found U.S. workers’ vacation usage had fallen to 16.0 days a year—nearly a full week less than the average between 1978 and 2000, when it was 20.3 days per year. In the latest analysis of vacation usage, American workers took 16.2 days of vacation in 2015.

This year’s survey marks the first time that a majority of American workers have left vacation days unused. Previous surveys showed that 42 percent of Americans were leaving vacation time on the table. These “under-vacationed” Americans left a total of 658 million unused vacation days, far exceeding the previous estimate of 429 million unused days, according to Project: Time Off.

It’s not quite as bad as it sounds: Previous Project: Time Off surveys were conducted mid-year and asked respondents how much vacation time they anticipated using during the year. However, the latest survey was conducted in January and required that respondents know the exact amount of time they’d used during the previous year.

Why are so many Americans leaving their vacation time unused? Fears that employees would return to a mountain of work (37 percent) and that no one else can do the job (30 percent) topped the list. People who ranked higher in the organization also expressed concern that it’s harder to take time off when you hold such positions (28 percent). Twenty-two percent cited the idea that employees want to show “complete dedication” to their company and job.

People with high-ranking positions can have a big impact on changing this trend for the better: Eighty percent of employees said if they felt fully supported and encouraged by their boss, they would be likely to take more time off.