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workforce.com

March/April 2018

Rebuilding the

RETIREMENT MODEL Sharon Emek eases boomers into life after career

• Live to 100? • Fusing Health & Wealth


REDUCE THE RISK OF BAD HIRING DECISIONS It’s no surprise that bad hiring decisions cost your business time, money, and most importantly, threaten your organization’s culture. At Caliper, we believe that people are your most important asset – and we can help. In fact, Caliper has worked with more than 30,000 companies across the globe to objectively and scientifically predict performance. End the cycle of bad hiring decisions today. Call 609-524-1200 to connect with a trusted HR advisor.

For more information visit calipercorp.com


From Our Editors

FROM PERSONNEL TO WORKFORCE

During the State of the Union address this year, a group of HR professionals took to Twitter for a little HR activism. Using #HRSOTU, they advocated for priorities like immigration, workplace flexibility, apprenticeships and health care. But in the hallowed halls of Congress policy takes a back seat to politics. HR can’t wait for lawmakers. The #MeToo movement and rising wave of sexual harassment allegations are a prime example. It’s causing some to take a hard look at HR’s role and oftentimes failure to better define policy and procedures to protect employees and employers alike. Retirement planning is another opportunity. More than half of workers are woefully unprepared for their golden years and risk seeing their living standard drop. Our special section this month has ideas to help. Politicians talk; HR has to act.And they are. —Mike Prokopeak, Editor in Chief 4

Workƒorce | w o r k f o r c e . c o m 

The workplace has changed a lot since 1922. That year The Journal of Personnel Research debuted, rebranded later as Personnel Journal and finally Workforce. Now in our 96th year, we take a look back at what was on the minds of past generations of people managers.

Enron’s Epic Meltdown Following energy giant Enron’s collapse into bankruptcy in 2001, companies and employees entered panic mode, according to Shari Caudron, who painted the collapse as a one of many catalysts for changing concerns toward retirement. It “vastly accelerated the public’s anxiety about their retirement assets. As a result, retirement is no longer a simmering back-burner topic reserved for Congress and financial planners. It’s a boiling cauldron of issues that sits squarely in HR’s 2002 April domain,” she wrote. The article also explored another major impact of the company’s disintegration: the loss of employee trust. Most of the workers’ 401(k) assets were invested in company stock, and they believed that was safer than having a diversified stock fund. After the collapse, they did not trust that management was being transparent with them. Caudron suggested that the debacle was a “defining moment for HR.” The issue also featured a Q&A section. A company that had to relocate after 9/11 had trouble with an ADA suit filed by an employee with mobility problems. Another company wanted to know if it could punish an employee who’d just received a disciplinary notice by withholding his benefits. And an HR practitioner wanted to know how to interview HR professionals who already know the “right” answer to interview questions. Another article cited that the biggest talent crunch was to be expected from 2015-2025, as baby boomers retire. Looks we’re living that now, with 10,000 boomers retiring each day. — Andie Burjek

READER FEEDBACK Several readers responded to the story titled “Employee Loyalty Not for Sale” in the January/February issue of Workforce. Bill Fotsch said: Trivial perks are not only ineffective as the article suggests, they are also demeaning. In contrast, industry leaders, like Southwest Airlines, CapitalOne and BHP Billiton empower employees to think and act like owners, driving and participating in the profitable growth of the company.

Said John-Michael Pagano: Certainly there is some give and take, but in reality it comes down to three things for most employees. It’s first and foremost about respect. Encouragement, positive feedback, the knowledge of where they stand at all times, all

are part of the respect that every employee needs to operate at their full potential. Second, work-life balance.You can’t take away parts of an employee’s life, hijack their time — time that they will never get back.The knowledge that they won’t be scorned for choosing family over work gives them a sense of security and fosters a trusting culture. Last, there must be a compensation system based on merit where key performers are rewarded for their efforts.They must also need to know that they can advance in some way, otherwise they will aspire to an “up or out” mentality.

And finally John McAuley added: This is a very good presentation. It flies in the face of many of our out dated ideas, quirky perks etc., but it is spot on. Thanks. Workforce.com/EmployeeLoyalty march/april

2018


The

GOLD S TA N D A R D for Coaching in Organizations

The International Coach Federation’s

Prism Award celebrates organizations with coaching programs that meet high standards and drive meaningful change.

Nominations open April 4. Learn more at coachfederation.org/prism-award.


NOMINATIONS OPENING

AWARDS

Have an HR initiative or program that’s achieving results? The annual Optimas Awards from Workforce magazine will help you recognize it. Awards presented in 10 categories: u Benefits u Business Impact u Corporate Citizenship u Global Outlook u Innovation

u Managing Change u Partnership u Recruiting u Training u Vision

Nominations open April 20. Visit Workforce.com/Optimas to apply. #OptimasAwards


A PUBLICATION OF March/April 2018 | Volume 97, Issue 2 CHIEF EXECUTIVE OFFICER VICE PRESIDENT, RESEARCH AND John R. Taggart ADVISORY SERVICES jrtag@workforce.com Sarah Kimmel PRESIDENT skimmel@workforce.com Kevin A. Simpson RESEARCH MANAGER ksimpson@workforce.com Tim Harnett VICE PRESIDENT, tharnett@workforce.com GROUP PUBLISHER DATA SCIENTIST Clifford Capone Grey Litaker ccapone@workforce.com glitaker@workforce.com VICE PRESIDENT, RESEARCH CONTENT EDITOR IN CHIEF SPECIALIST Mike Prokopeak Kristen Britt mikep@workforce.com kbritt@workforce.com EDITORIAL DIRECTOR VIDEO AND MULTIMEDIA Rick Bell PRODUCER rbell@workforce.com Andrew Kennedy Lewis MANAGING EDITOR alewis@workforce.com Ashley St. John MEDIA & PRODUCTION astjohn@workforce.com MANAGER SENIOR EDITOR Ashley Flora Lauren Dixon aflora@workforce.com ldixon@workforce.com PRODUCTION ASSOCIATE EDITORS COORDINATOR Andie Burjek Nina Howard aburjek@workforce.com nhoward@workforce.com Ave Rio VICE PRESIDENT, EVENTS ario@workforce.com Trey Smith COPY EDITOR tsmith@workforce.com Christopher Magnus EVENTS CONTENT EDITOR cmagnus@workforce.com Malaz Elsheikh EDITORIAL INTERNS melsheikh@workforce.com Aysha Ashley Househ EVENTS GRAPHIC ahouseh@workforce.com DESIGNER Tonya Harris Mariel Tishma lharris@workforce.com mtishma@workforce.com

WEBCAST MANAGER Alec O’Dell aodell@workforce.com BUSINESS MANAGER Vince Czarnowski vince@workforce.com REGIONAL SALES MANAGERS Derek Graham dgraham@workforce.com Robert Stevens rstevens@workforce.com Daniella Weinberg dweinberg@workforce.com

CONTRIBUTING WRITERS Jennifer Benz Courtney Blanchard Catherine Collinson Kris Dunn Sarah Fister Gale Jon Hyman Patty Kujawa Rita Pyrillis Michelle V. Rafter Daniel Saeedi Rachel L. Schaller

DIRECTOR, BUSINESS DEVELOPMENT Kevin Fields kfields@workforce.com DIRECTOR, AUDIENCE DEVELOPMENT Cindy Cardinal ccardinal@workforce.com DIGITAL & AUDIENCE INSIGHTS MANAGER Lauren Lynch llynch@workforce.com DIGITAL COORDINATOR Mannat Mahtani mmahtani@workforce.com LIST MANAGER Mike Rovello hcmlistrentals@infogroup.com BUSINESS ADMINISTRATIVE MANAGER Melanie Lee mlee@workforce.com

WORKFORCE EDITORIAL ADVISORY BOARD Arie Ball, Vice President, Sourcing and Talent Acquisition, Sodexo Angela Bailey, Associate Director and Chief Human Capital Officer, U.S. Office of Personnel Management Kris Dunn, Chief Human Resources Officer, Kinetix, and Founder, Fistful of Talent and HR Capitalist Curtis Gray, Senior Vice President, Human Resources and Administration, BAE Systems Jil Greene, Vice President, Human Resources and Community Relations, Harrah’s New Orleans Ted Hoff, Human Resources Vice President, Global Sales and Sales Incentives, IBM Tracy Kofski, Vice President, Compensation and Benefits, General Mills Jon Hyman, Partner, Meyers, Roman, Friedberg & Lewis Jim McDermid, Vice President, Human Resources, Cardiac and Vascular Group, Medtronic Randall Moon, Vice President, International HR, Benefits and HRIS, Lowe’s Cos. Dan Satterthwaite, Head of Human Resources, DreamWorks Dave Ulrich, Professor, Ross School of Business, University of Michigan Workforce (ISSN 2331-2793) is published bi-monthly by MediaTec Publishing Inc., 111 E. Wacker Dr., Suite 1200, Chicago IL 60601. Periodicals postage paid at Chicago, IL and additional mailing offices. POSTMASTER: Send address changes to Workforce, P.O. Box 8712 Lowell, MA 01853. Subscriptions are free to qualified professionals within the US and Canada. Digital free subscriptions are available worldwide. Nonqualified paid subscriptions are available at the subscription price of $199 for 12 issues. All countries outside the US and Canada must be prepaid in US funds with an additional $33 postage surcharge. Single price copy is $29.99 Workforce and Workforce.com are the trademarks of MediaTec Publishing Inc. Copyright © 2018, MediaTec Publishing Inc. ALL RIGHTS RESERVED. Reproduction of material published in Workforce is forbidden without permission. Printed by: Quad/Graphics, Sussex, WI

FREE LIVE

ONLINE EVENTS


CONTENTS

ON THE COVER NEW FACE OF RETIREMENT

Sharen Emek, left, launched a company that places retiring baby boomers in work-at-home jobs. COVER PHOTO BY DAVID LUBARSKY

34 40 SECTOR REPORT

FEATURES

48 DENTAL INSURANCE PROVIDERS

28 REMODELING RETIREMENT

50 CORPORATE WELLNESS PROVIDERS

40 UNDER ONE UMBRELLA

Dental insurance is a benefit that everyone wants to have but almost no one wants to use. Wellness programs may be more about brand building than employee health, but that’s OK.

8

Workƒorce | w o r k f o r c e . c o m 

There is hope that a retirement system mired in a 20th century mindset can be rebuilt. Merging health and wealth benefits is changing the benefits industry and the workplace relationship.

RETIREMENT

READY? 44 WORKING INTO RETIREMENT

Workers’ vision of retirement depends on the willingness of employers to embrace older workers. march/april

2018


ON THE WEB SPEAK UP!

44

The Workforce online community provides you with virtual meeting places to chat about issues and trends affecting you and your workplace. LIKE US: facebook.com/workforce.magazine

FOLLOW US: twitter.com/workforcenews

28

JOIN THE GROUP: workforce.com/LinkedIn

WATCH US: workforce.com/youtube

FOR YOUR BENEFIT COLUMNS 4

YOUR FORCE

HR’s actions speak louder than politicians’ words.

14 WORK IN PROGRESS

Time of posession and interviewing candidates.

16 GIGGING FOR BENEFITS

Some employers eye being the ‘gig’ job of choice with lucrative freelancer benefits.

17 A HEALTHY PLAN?

A U.S. Department of Labor proposal on associated health plans meets with mixed reactions.

19 BENEFITS BEAT

Giving employees permission to be well.

22 THE PRACTICAL EMPLOYER

Wile E. Coyote gets a noncompete to the noggin.

54 THE LAST WORD

Saying goodbye to a Game Changer.

march/april

2018 

17 DOING A 180

Workers’ attitudes did a serious reversal last year when thinking about money issues.

18 THE ACO CONUNDRUM

Assessing accountable-care organizations can be a head-scratcher for many employers.

TRENDING 10 TOURNEY TIME

Forget résumés. Candidate challenges are the new tool.

11 FROM THE WEB, PEOPLE MOVES AND BY THE NUMBERS

How-to HR; Bean named CHRO; Retiring minds.

12 Q&A

Author Marion McGovern on the boomer generation.

12 A LYFT TO WORK

Lyft extends tax-saving commuter benefits to more U.S. cities.

LEGAL 20 PREDICTIVE SCHEDULING

The growth of fair workweek laws could prove challenging.

21 LEGAL BRIEFINGS

A cannabis ban; noncompete agreements.

w o r k f o r c e . c o m | Workƒorce

9


TRENDING

It’s Tourney Time — for Hiring Forget résumés. Candidate challenges are the new tool to find top talent. By Sarah Fister Gale ackathons and boot camps are great ticipated in the tournament to find poways to find software engineers. But tential new hires, which has been a big what about the rest of the workforce? challenge as his company grows. In the current war for talent, compaBecause product managers often come nies are struggling to fill all kinds of to the role via a number of different roles, and a coding challenge won’t help paths, résumés haven’t been a great them narrow their candidate pool for all screening tool, he said. As a result, his vacancies. But with a little creativity, the team often hires people with no specific hackathon model could be applied to product management experience and virtually any hiring scenario, giving re- trains them on the job. “You’d never do cruiters a better sense of what a candi- that with an engineer,” he said. Canine date can do, not just what they’ve done. saw the tournament as a better way to “The résumé is such a weird tool,” said vet potential candidates. Jason Shen, founder of Headlight, a perIn the tournament, more than 100 formance hiring platform developer based participants were given three hours to in New York. “It’s a biographical sketch, respond to a hypothetical scenario in and the information is hard to verify.” which a large company had launched a Interviews can be similarly haphazard, product that wasn’t selling as expected. particularly when hiring managers aren’t The participants had to decide whether trained to ask questions that reveal a can- to reposition the product for the current didate’s actual skills. Shen likens the pro- market or take it to a different market, cess to asking a quarterback how he then build a launch plan around that dethrows a football. “He can talk until he is cision, Shen explained. blue in the face, but until you see him “There is no right answer,” he said. throw, you won’t know what he can do.” “Making the decision is the easy part, it’s Headlight has traded in the résumé for what they do next that’s hard.” a more interactive recruiting process, in Submissions were scored based on the which companies give candidates business opportunity, customer insight, role-specific assignments to validate their product development and project mantechnical ability and assess them against agement. Following the event, Canine the competition. Along with a library of along with recruiters from IBM, JP Mortake-home assignments, Headlight also gan Chase, Bank of America and other hosts hiring tournaments, where candi- companies were reviewing the submisdates sign up for a multihour hackathon sions with the intent to hire some of the style event, but instead of writing code top performers. they design a new product plan or create It’s a novel approach, though Headlight a marketing campaign. Participants get is not alone in using competition to vet the assignment the day of the competi- nontech candidates. It is an emerging tion and a panel of industry experts as- trend that has evolved as companies look sesses their submissions. The top per- for better ways to judge candidates based formers win prizes and job interviews. on more than what college they attended.

H

Battle of the Product Managers Their first tournament, held at the end of January, focused on product managers. “There is no academic program or degree for product management,” said Will Canine, co-founder of the New Yorkbased Opentrons Labworks Inc., which makes robots for biologistics applications. Canine is one of 17 employers who par10

Workƒorce | w o r k f o r c e . c o m 

Sumita Banerjee

pete to tackle an industry-relevant challenge. “It is a great feeder for junior talent,” Banerjee said. To participate, students submit a video pitch of their solution for an annual challenge. This year’s topic: invent the professional salon experience of the future.The winning teams are invited to create a full project with support from a library of e-learning courses, an academic mentor and a L’Oréal employee who coaches them during their presentation at the national judging. The national winners are flown to the worldwide finals in Paris where three teams win 10,000 euro for the best brand, the best use of technology and the best sustainable solution. Along with prizes, many participants secure internships and jobs. “Throughout the competition we are actively looking for potential employees.” The challenge gives L’Oréal executives a sense of their innovation, leadership skills and ability to collaborate while providing students with a real-life experience working at L’Oréal. “It’s a great way to find talent, and it Salon of the Future could work in any organization,” BanjerIt can be particularly useful for hiring ee said. Though companies interested in recent college grads, who may have great launching their own competition should potential but little proven work experi- be certain the challenges give something ence, says Sumita Banerjee, head of talent back to participants in terms of experiacquisition for L’Oréal Americas in New ence and access to companies leaders. York. For more than two decades, L’Oréal “There has to be a value exchange if you has hosted Brandstorm, a business com- want candidates to invest this much time petition where teams of students com- and effort to your firm.” march/april

2018


TRENDING

FROM THE WEB  OW-TO HR: THE H SEQUEL A new installment of the popular video series, “Howto HR” offers common sense ways to improve employee engagement among a remote workforce. Experts Jack Skeen and Matt Meservey also weigh in with their thoughts on engaging workers outside of the office. Workforce.com/ HowtoRemote I-9 IDEAS 4 U The Januar y immigration raids on 100 7-Elevens brought to light the stark lessons of proper I-9 compliance among employers. Employment law attorney Montserrat C. Miller offers tips and thoughts on hiring or continuing employment of unauthorized workers. Workforce.com/ I9Immigrations  EOS ON THE HOT C SEAT In a recent installment of the video series “5 Minutes of Management,” Workforce editors Frank Kalman and Rick Bell offer several intriguing stats on CEO concerns about cybersecurity threats, the competition for talent and disruptive technologies. But job security may have weighed most heavily. Also, a 2018 hiring forecast. Workforce.com/ 5MMHotSeat march/april

2018 

PEOPLE

moves

AARON BEAN Enterprise cloud computing company Nutanix named Aaron Bean as chief human resources officer. Bean will be responsible for the company’s global people and places operations and all aspects of the Nutanix employee experience, including recruiting, training, compensation, benefits, engagement and facilities. ANGELA RIDGE Trucking firm CFI named Angela Ridge as vice president, human resources. Ridge will report to President Tim Staroba following the retirement of Bert Johnson. Ridge most recently was the corporate education strategist for Oregon State University, where she was responsible for the university’s corporate training programs and staff development initiatives. DEVORAH ALLEN Western Growers named Devorah Allen human resources and learning development consultant. Allen will be responsible for conducting training for Western Growers members and developing and implementing training programs for Western Growers University, the association’s employee training program.

By the Numbers compiled by Rick Bell

Retiring Minds Want to Know … Will their golden years continue to shine?

The Digit

25

People on a public pension plan as a million member or beneficiary

54

million American workers active 401(k) participants

U.S. Census Bureau, 2016

10%

58%

Investment Company Institute, 2015

30%

Healthy, Wealthy and Working Men age 61 working full time in good health

in poor health

in terrible health

National Bureau of Economic Research, The Role of Health in Retirement, 2014

Confidence Comeback U.S. nonretirees who expect to have enough money for retirement

2002 2009 2012 2016 2017

59% 41% 38% 48% 54% 0

20

40

60

80

100

Gallup, April 2017

Aging Workforce The Age of Work

74

%

Americans planning to work past retirement age

80

Employed Adults Working Past Retirement Age

70 60

63%

50 40 30 20

11%

25%

10 0

Continue working full time

Continue working part time

Stop working altogether

Economy and Personal Finance Survey, Gallup, 2017

Party Like You’re 19 … or 99

People text for business

To be considered for People Moves, email a brief announcement and a high-resolution color photo to editors@workforce.com. Include People Moves in the subject line.

1 in 4 65-year-olds will live past 90

1 in 10 will live past 95 Source: RingCentral, 2015

orkforce.com workforce.com | w Workƒorce 10| Workƒorce

11


TRENDING

WORKERS GET A PRETAX LYFT By Andie Burjek

BABY BOOMERS BOOMING AS GIG WORKERS By Andie Burjek

Marion McGovern, author

Many people associate the gig economy with companies like Uber, but the truth is gigs have been around a long time, said Marion McGovern, author of “Thriving in the Gig Economy.” A gig is just work of a certain duration for multiple clients. A lot of people participate in the gig economy and the biggest demographic is baby boomers. They make up a large share of the independent workforce, said McGovern, and tend to be more skilled at the work, compensated better than their younger counterparts and more satisfied with their jobs. McGovern spoke with Workforce about the growth of independent boomer workers. Workforce: What are the major differences baby boomers would find from working a regular 40-hour week to working in the gig economy? Marion McGovern: This would be true for anyone in the gig economy, but [it might be] more true for boomers than millennials, especially if they’ve been an employee for a long amount of time. There is an aspect [of employment] that you do what your boss says. You might have a particular set of responsibilities, and if your boss says, “I know you’re working on that report, but I need you to do X today,” you do that. If you are an independent worker and you have a consultant project, and your client says, “I know you’re working on this project but I really would like you to do this today,” you can’t do that.

WF: Are employers giving boomers adequate job security in the gig economy? McGovern: It’s a different sort of security. There are all sorts of studies on the gig economy because there’s no government data. In all these studies, they ask people why they are working this way. Some people call it flexibility, but I call it control. One of the studies, the MBO Partners study, started in 2011. They ask, “Is working independently as financially secure as having a regular job?” In the original study, something like 19 percent said it was just as secure. In the study last year, that number was 49 percent. You can be let go at any point in time from a company. They could decide to shut down your division, merge operations somewhere else, whatever it is. At least you’re in control of your own destiny if you’re an independent.

WF: What resources are available to find retired boomers looking for contract work? McGovern: When I [worked on] the book, I joined all sorts of talent platforms just to get a sense of the experience. I don’t think a lot of them were attuned to older workers. There was one where they vetted people as good consultants by virtue of the business school they went to, and you had to join with your business school email at the time. I sent them a polite message saying, “When I went to business school, email wasn’t invented. But I’m sure you don’t want to discriminate against older MBAs.” and I immediately got a response back that wasn’t boilerplate. There are industry ways, like a lot of companies keep track of their own alumni. Some find their retirees [contract work] like that.

12

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R

ide-hailing service Lyft is expanding its pretax commuter benefits to Lyft Line users in 13 new cities and across much of New Jersey. The benefit lets employees use pretax commuter benefit dollars to pay for all Lyft Line rides once they add their commuter benefits card to their Lyft account, allowing them to save 35 percent on rides. Amit Patel, Lyft director of business development, said passengers use Lyft Line to share a ride with other people going the same way. The transit benefit, announced in early February, was extended to Atlanta; Austin, Texas; Chicago; Denver; Las Vegas; Los Angeles; Nashville; Philadelphia; Portland, Oregon; San Diego; San Francisco; San Jose/Silicon Valley; Washington, D.C., and New Jersey. The benefit plan already was available in Boston, Miami, New York and Seattle. Ride-hailing companies partnering with benefits providers to offer transit benefits isn’t new. Lyft Line began offering the benefit to its initial four cities in 2017, and ride-hailing company Uber partnered with WageWorks, a provider of consumer-directed benefits, in December 2016 to offer a pretax transit benefit. Even though the recently passed tax reform bill has eliminated the tax deduction that businesses get for providing employees transit benefits, Patel believes that won’t significantly affect an employer’s willingness to offer these benefits. One analyst agrees, although she notes that some organizations might deem transit benefits as expendable. “We anticipate there may be some impact as employers analyze how many employees use the benefit,” said Lydia Jilek, a senior consultant on voluntary benefits for Willis Towers Watson. “That said, we doubt the change will be immediate.” march/april

2018


TRENDING

TIME OF POSSESSION AND THE INTERVIEW By Kris Dunn |

Wo r k i n P r o g r e s s

B

ased on what I do for a living in the world of HR, a portion of my network is always approaching me for advice when it comes to job search and career issues. I’m sure many of you have the same experience. When it comes to interviewing strategies, my advice to amaze hiring managers is simple to understand by my friends looking for their next gig: “If the hiring manager wants to talk the whole time during your interview, let him. After the interview is done, he’ll think it went great.” The advice for your hiring managers/executives, of course, is the direct opposite. The best interviewers across your management teams understand that effective selection on the recruiting trail is more about listening than speaking. But the ol’ “listen more than you talk” platitude oversimplifies the game of interviewing. Simply letting the candidate talk more doesn’t make you an effective interviewer.The real value is found in the following concept:

airtime must be good, right? Nope. The Cyborg represents the manager who gets the official question in, then displays a general tone-deafness to interrupt rambling candidates or ask smart follow-up questions. In other words, you can count on the Cyborg to ask the question you put in front of them, but don’t expect anything else.They’re out of their element, and they won’t get any more information than interviewers who talk all the time. 3. The Narcissist (hiring manager who talks 65 percent or more of the time): Speaking of talking all the time, meet the Narcissist. The Narcissist loves himself. He loves his ideas. He’s got a worldview that is not only unique, it’s profound. He’ll talk all interview long and as I mentioned previously, he likes people who let him talk. If you’re interviewing with him, don’t fight it. Let him talk and you’ll be in good shape to get the job. Of course, you might think carefully about whether you want to work for him. 4. The Investigative Reporter (hiring manager who talks 20 percent of the time): The sweet spot of interviewTime of Possession ing, the Reporter understands the balance that is required In football, “time of possession” tracks the amount of between talking and listening. She’s prepped with intertime one team has the ball. The thought process behind it view questions, but understands that’s simply a starting is that if one team can keep the ball longer than the other point and quickly spends most her time of possession sayteam, they’re apt to score more points and have a fresher ing things like,“tell me more about that” and “why did you defense, which contributes to winning. decide to do that?” She’s an evolved interviewer, underThe inverse is true in interviewing. Success doesn’t hap- standing the need to be agile, probing and interrupting as pen by dominating the conversation, it comes by finding necessary to get maximum information. the sweet spot that allows you to facilitate as an interviewer Do you see your managers of people in these profiles? in a way that provides you with maximum information. Sure you do. Interviewing skills tend to follow behavioral I’ve seen great interviewers and I’ve seen the huddled trends that impact managers in other areas as well. masses who repeatedly fail to get the information they Your most effective managers are generally your best inneed. Here’s how they break down related to time of pos- terviewers. Coaching skills and interviewing skills are highly session (how much they talk versus allowing the candidate related, placing a premium on relationship building, making to talk) and the nicknames I’ve tagged them with: others comfortable to get the best possible outcome and 1. The Friendster (hiring manager who talks 40 to 50 demanding more without coming across as a jerk. percent of the time): A lot of your managers would be satisDivide the managers you support into these interviewfied with this time of possession. “It was a peer-based con- ing profiles, then look at turnover trends across multiple versation,” he said. “I felt like we had some great dialogue,” years.You’ll find the managers with the most effective time she said.They’re wrong.They didn’t make the candidate talk of possession strategies don’t miss in hiring nearly as much long enough to gain meaningful information, and as a result, as their peers. their miss rate on hires is going to be too high. To be a great interviewer, talk less. But ask for more. 2. The Cyborg (hiring manager who talks 5 to 10 percent of the time): If talking too much is wrong, then a man- Kris Dunn, the chief human resources officer at Kinetix, is a Workforce ager who only controls less than 10 percent of the interview contributing editor. To comment, email editors@workforce.com.

MANAGERS WITH EFFECTIVE TIME OF POSSESSION STRATEGIES DON’T MISS IN HIRING NEARLY AS MUCH AS THEIR PEERS.

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march/april

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WE HAVE AN EDUCATED, TALENTED AND DIVERSE WORKFORCE EAGER TO CHANGE THE WORLD. IMAGINE WHAT THEY’LL DO FOR YOUR BUSINESS. The only thing as impressive as our current workforce of more than 10 million is our future one. Our colleges and universities are among the nation’s top performers of R&D and commercialization of technologies. So while we’re helping you succeed with today’s talent, we’re also preparing tomorrow’s. Discover what a future in Florida means for your business at floridathefutureishere.com/potential or call 877-YES-FLORIDA.

march/april

2018 

w o r k f o r c e . c o m | Workƒorce

15


FOR YOUR BENEFIT

Benefits for Gig Workers? Great Idea, But … ? As freelance nation grows, some employers eye being the ‘gig’ of choice with lucrative benefits. By Patty Kujawa

A

gni Skafidas loves the flexibility of being a freelancer but hates the fact that she doesn’t get any kind of health or retirement benefit. Skafidas has a three-month gig with a company in the auto industry. Because she is in human resources, she is well aware that the rate she is being paid is the same as a full-time employee but without the benefits. “For them it’s a great deal because I don’t cost them anything in benefits,” she said.“It’s so comical if you think about it. I’m trying to live by my values [by freelancing], and yet I’m being penalized.” A growing number of workers are leaving their traditional 9-to-5 jobs and are becoming freelancers in the gig economy. Nearly 40 million Americans work in a part-time or a freelance basis according to an October 2017 study by Guardian Life Insurance. By 2020, half of the workforce is expected to be freelancing. While gigs allow these workers to live a flexible lifestyle, many give up the security of having benefits at a full-time position. Only 1 in 4 of these workers has medical insurance through their contracted company, and only 1 in 3 has access to a retirement plan, Guardian’s report showed. The future of work is changing with the rise of contract workers, experts agreed, and many of these freelancers are trying to build a career path in the gig economy. Because of this shift, traditional benefits will not hold up in the future, several corporate benefit leaders said, speaking at the American Benefits Council’s 50th anniversary symposium in Washington, D.C.

THE FUTURE OF WORK IS CHANGING WITH THE RISE OF CONTRACT WORKERS. MANY FREELANCERS ARE TRYING TO BUILD A CAREER PATH IN THE GIG ECONOMY. “We see in this world of gig work or freelance work that it is largely cash-based,” said Fred Thiele, general manager of global benefits for Microsoft Corp. at the December symposium. “Benefits are not usually part of the equation.We are being challenged in this regard.” Phil Scarfi, founder of Pioneer Mobile Applications, said it’s hard for start-up companies like his to offer benefits. He and his four full-time employees don’t have corporate benefits; neither do the four freelancers he is using. “It’s a matter of having consistent income on my part to offer this,” he said. “It’s in my plan to offer benefits at some point.” For now, Scarfi offers perks — annual subscriptions to Spotify or gift cards to help freelancers to feel valued. “At the end of the day, we want good freelancers to stick 16

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around and join the team as an employee down the road when the funds are there,” he said. Some companies that primarily use freelancers, like Lyft, have begun offering certain benefits. Meanwhile, companies like Stride Health cater to these workers by helping them sift through myriad health care options. Gigster, an online site that helps companies find available software engineers, allows freelancers to participate in a bonus program similar to what many full-time workers enjoy. “It’s one of the ways that we want to create an employee-like situation,” said Lori Williams, Gigster’s vice president for fulfillment. “We want them to feel there is an upside beyond being paid for a gig.” Microsoft uses a lot of freelancers and wants to become not only the employer of choice, but the gig of choice,Thiele said. It is looking for ways to give gig workers the benefit security they lack, but in order to do that, Washington needs to adapt rules to this contingent workforce. In many cases, contract workers who are offered traditional benefits may be classified as employees. “If we are stuck with some old rules, we can’t do it,” Theile said at the December symposium. A 2016 paper,“Portable Benefits in the 21st Century,” by The Aspen Institute, suggested that all workers, regardless of their working status, should have access to portable benefits. That means a worker’s benefit plan is not linked to one job. Companies would pay into a worker’s benefit package; the payment would hinge on certain factors like hours worked or pay rate. Some Members of Congress have been working on portable ideas that have fizzled. Several states are also working on portable benefit legislation. “It is a little early. The reg side has to evolve and this doesn’t happen overnight,” Gigster’s Williams said. “This is the future of the gig economy — how we add that kind of value.We are just constrained legislatively right now.” march/april

2018


FOR YOUR BENEFIT

DOL Eyes Easing of Health-Plan Groups By Rita Pyrillis

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proposed rule by the U.S. Department of Labor that makes it easier for small businesses to join together to create health plans is eliciting mixed reactions from employers that are unsure of what this could mean for their health care costs. The proposal issued in early January would make it easier for small-business owners, sole proprietors and other self-employed people to buy insurance as a group, giving them more purchasing power and lower premiums. These plans, called association health plans, would be exempt from consumer protections and other regulations of the Affordable Care Act, including the requirement to provide essential health care benefits. “We’ve been talking to a number of different associations like retail and homebuilders, and in general they are positive about the potential this could have for their members in giving them access to affordable and improved health care options,” said Jeff Ray, who leads consultancy Mercer’s associations practice, which provides insurance products to professional associations. “They are also concerned about the potential impact on the state exchanges and about the logistics and risks of offering these kinds of plans. Frankly, some are hesitant and are expressing concerns in terms of political uncertainty.” Under the ACA, association plans were treated as small businesses and were required to provide all of the law’s mandated benefits. The proposal allows small businesses to qualify as large group plans, which are subject to fewer federal and state requirements. It also allows employers to join together based on geography or industry rather than on a common professional interest, according to a DOL statement. These looser definitions and regulations could mean a return to a history of fraud and abuse surrounding association health plans before the ACA was passed, according to Sarah Lueck, a senior health care policy analyst with the Center for Policy and Budget Priorities, a nonpartisan think tank in Washington, D.C. “Letting a lot of these associations newly form under lower standards opens the door to fraud and abuse and insolvency,” she said. “In the past there were bad actors that were unable to pay claims and then they were gone. That’s why if this proposal goes forward state and federal regulators will have to be very careful.” march/april

2018 

Promising Drop in Financial Stress Does a Troubling 180 By Patty Kujawa

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fter six years of reporting increasing confidence in their financial situation, workers’ attitudes took a serious nosedive when thinking about their money issues and how they affect their lives, a recent biannual survey found. According to the 2017 “Global Benefits Attitudes Survey” by consulting group Willis Towers Watson, one-third of U.S. workers said their Steve Nyce financial problems are negatively impacting their lives, compared to only 21 percent making this statement two years ago. Plus, only 35 percent said they were happy with their money matters. Those numbers had Willis senior economist Steve Nyce scratching his head because respondents’ satisfaction with their finances had been climbing every year of the study from 26 percent in 2009 to 48 percent in 2015. “Household debt is starting to rise at a pace that is faster than wages,” Nyce said. “People are feeling like they have lost control of their financial situation.They are having a hard time getting ahead.” More than half of workers have had some kind of significant money issue in the past two years, the survey said. Topping the list were significant medical expenses at 30 percent and borrowing money from family and friends at 29 percent. These issues, combined with low wage growth and mounting debt are not just causing financial stress, they are also affecting employees’ health and ability to be productive at work. About a third of respondents identified as struggling financially said that money woes were preventing them from doing their best at work.These workers were also taking more days off as well as saying they were in poor health. Meanwhile, employees with healthier outlooks on their finances tended to be in good health. Only 5 percent in this group said they had high stress levels. “All of this wears on them and drains their energy,” Nyce said. “It is impacting people’s ability to be their best on the job.” Rachel Bari Keane sees a lot of financially stressed-out workers in her job as a benefits analyst at PSCU, the nation’s largest credit union service organization. She said that many workers feel they are still on their own when it comes to figuring out finances and health care. “There is a lot of financial stress out there and it does create a lot of turmoil in their lives,” Keane said. “As benefits have evolved with high-deductible health plans, a lot of people in general haven’t been educated properly and it causes them to worry about how to do it all.” Retirement and student loans are two high interest topics, Keane said. Today’s marketplace is filled with financial wellness products, but many are less helpful than they seem, Nyce said. Many programs, he said, focus on budgeting, which can be inaccurate and consume a tremendous amount of time. “People do not have time to be budgeters,” Nyce said.“Our responsibility in the industry is to provide decision support tools to help [employees] narrow choices and make better decisions. The industry is moving in this direction and we are not turning back.” w o r k f o r c e . c o m | Workƒorce

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FOR YOUR BENEFIT

Employers Making Sure That ACOs Measure Up Comparison tools are becoming a necessity to help gauge the hundreds of organizations. By Rita Pyrillis

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nterest in accountable-care organizations is expected to spike in the next couple of years as more large companies adopt alternative payment models, but with more than 900 of the provider networks of varying sizes and characteristics in the marketplace so far, assessing their performance can be a head-scratcher for employers. The Pennsylvania Employee Benefits Trust Fund discovered just that — with several insurance carriers across the state, gathering ACO performance data is a challenge, according to executive director Kathryn Farley. The group, which covers 290,000 active and retired state employees, launched an ACO last year. “It’s not that we can’t get data from the health plans, but when you have multiple carriers and everyone wants to report what they want to report, the challenge is getting consistent data so you can effectively compare ACOs,” Farley said. “That’s hard when someone measures something in one way and someone else in another.” In an ACO, doctors and hospitals share the responsibility for providing patient care by coordinating their efforts to avoid unnecessary tests and treatments. Data sharing plays a critical role not only for providers but also for employers who are trying to determine if ACOs are living up to their promise to improve health care quality while managing costs, Farley said. ACO models are still fairly new, but interest in them is growing. According to the National Business Group on Health’s “Large Employers’ 2018 Health Care Strategy and Plan Design Survey,” 21 percent of employers will be promoting ACOs offered by their insurance carriers or contracting directly with ACOs in 2018, but that number is expected to double by 2020. The more than 900 ACOs of varying sizes in the marketplace each come with a different mix of providers, performance measures and other characteristics that make it 18

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difficult to assess their effectiveness, according to Brian Marcotte, president and CEO of the NBGH. But employer groups are stepping in to help employers better understand how ACOs work and how to evaluate them. In July, the NBGH released a guide to help companies develop an ACO strategy and in January 2018, the nonprofit employer’s coalition, Catalyst for Payment Reform, issued a set of standard performance measures for employers to share with their health plans. “The employer has very little information on whether the ACOs are improving the quality of care,” said Suzanne Delbanco, executive director of CPR. “The ACO might pick just a few clinical measures to report on. So we created a standard report. Think of it as a nutritional label. You know

DATA SHARING PLAYS A CRITICAL ROLE FOR EMPLOYERS WHO ARE TRYING TO DETERMINE IF ACOs ARE LIVING UP TO THEIR PROMISE TO IMPROVE CARE WHILE MANAGING COSTS. where to look for the calories and for the fat. You can compare two soups. We want to foster that same approach for ACOs — a standardized approach with metrics that employers really care about.” At e-commerce giant Pitney Bowes, an early pioneer of value-based insurance design, obtaining complete and useful ACO data from the insurance carriers it contracts with has been challenging, according to Jennie Pao, manager of health care planning at the mail services company. “We are getting very limited information,” Pao said. “We are getting high level information, like one or

two quality metrics on cancer screenings or diabetes and high blood pressure metrics.” Part of the difficulty in gathering data is that employees are automatically assigned to an ACO based on the number of visits to a particular provider, which is called an attribution model ACO. Under this arrangement, patients don’t know that they are in an ACO and may not have financial incentives to seek care from an ACO provider, according to Pao. This year Pitney Bowes launched two ACO pilot projects in Chicago and Fort Worth, Texas, that allow employees to choose an ACO provider network during open enrollment in exchange for lower premiums and lower cost sharing. Pao said that she’s been discussing the company’s concerns about measuring ACO performance with its health plans and has asked carriers to start reporting on the standardized data developed by CPR. “We’re excited to work with (Catalyst for Payment Reform) to develop more meaningful metrics,” she said. “It will take a while but we’re hoping to get much better reporting in the future.” march/april

2018


FOR YOUR BENEFIT

GIVING EMPLOYEES PERMISSION TO BE WELL By Jennifer Benz |

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Benefits Beat

s you likely remember, last fall there was a huge data breach at Equifax, the nation’s largest credit bureau. We were heads down, working though our busiest time of year: open enrollment. Amid all the chaos and advice about what people should do to protect themselves, my business partner, Isabelle, was concerned about our team taking steps to protect their credit. She knew that with our busy work schedule, they probably wouldn’t. So in January, after things had settled down, Isabelle reminded our team about the breach. She encouraged them to take time during the workday to review their credit score and set up credit freezes and monitoring. She explained the urgency of the situation and how to access each of the three major credit bureaus.And most notably, she specifically asked our team members to carve out time to do this during the workday and block it on their calendars. That time “on the clock” was key. It’s a simple but often-overlooked aspect of encouraging well-being. Focusing on our own well-being — whether it’s going for a walk outside, signing up for a class on stress management or understanding our credit — takes time. And that time has to be juggled along with everything else in life. Encouraging employees to take care of themselves needs to come with permission to do so during the workday. Whether it’s taking steps to improve their physical health, their mental state or their financial life, finding the time to do what they know they should do is one of the biggest barriers to engagement. That’s why we loved a recent financial wellness campaign called #SaveABillion from Movement Mortgage, a South Carolina-based company with more than 4,000 employees. As part of its campaign to get its employees to save more, the company’s CEO assigned them a very specific task: take a financial wellness assessment and retirement checkup. He also gave them the time to do it by creating a 20-minute companywide “blackout” on a Friday. During the blackout, no one could access their email or other systems. This empowered employees to schedule the task on their calendars and eliminated a huge barrier to engagement: time. Not every company can literally block out time for employees like Movement Mortgage did. But all employers can do more to encourage employees to balance their work and personal lives in ways that make sense and help them be productive.

Increasingly, benefits programs are asking employees to make thoughtful decisions about complicated topics — and to engage in programs throughout the year. As part of your strategy, think about how and when employees will take the time to use these programs. And help them prioritize the time they need to take action. It helps tremendously to use a goal-setting technique from behavioral science called “implementation intention.” Simply explained, it involves writing down your intention to do something, including when and under what conditions. You’re more likely to complete the task because by writing it down and specifying a time, you’ve made the act of getting started that much easier. And as we all know, the first step is often the hardest to take. We frequently use this method in campaigns — asking people to write down when they will do something, sending calendar invites or including a simple “commitment” form on a print piece — because it increases engagement. Still, if you want to succeed at creating a culture of well-being, you also have to continuously look at removing obstacles. In focus groups for our clients, we have heard employees call out the hypocrisy of asking people to take care of their health while, at the same time, asking them to meet business needs such as working 70 hours a week to meet a target. We hear about bad managers who want employees to stay at their desks all day, despite company encouragement to take walks during lunch or use the on-site fitness center. Employees are quick to notice the inconsistencies between messages that come from the company and what their manager is requiring of them day in and day out. This is one of the reasons why senior leadership support, while valuable, doesn’t automatically change everyone’s behavior. As you review your well-being and benefits initiatives, ask your team: Have you been realistic about how much time employees need to engage? And have you simply and truly given employees permission to take advantage of all of these programs at work?

IT’S AN OVERLOOKED ASPECT OF ENCOURAGING WELL-BEING: MAKING TIME FOR SELF-CARE HAS TO BE JUGGLED ALONGSIDE EVERYTHING ELSE.

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2018 

Jennifer Benz is CEO and Founder of Benz Communications, a San Francisco-based employee benefits communications agency. She was honored as one of Workforce’s Game Changers in 2013. Contact her at jen@benzcommunications.com or follow her on Twitter at @jenbenz.

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Legal Predictive Scheduling: What to Expect? Fair workweek laws could prove challenging to employers across jurisdictions. By Courtney Blanchard

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ollowing a wave of paid sick leave laws across the country, predictive scheduling is among the newest issues confronting employers. A recent measure in Oregon is scheduled to take effect July 1. The development gives Oregon the first statewide predictive scheduling measure, also known as a “fair workweek” law, but it comes after similar municipal laws were approved in Seattle, San Francisco and New York City. Under the new measure, large employers will lose some flexibility around scheduling practices but their employees will gain predictability. Employers must provide copies of the written work schedule to employees at least seven days in advance (this increases to 14 days on July 1, 2020). Any changes to the schedule — outside of the notice period — require employers to provide additional compensation to the affected employees.The additional compensation, also known as “predictability pay,” is required in the following circumstances: 1. Employers must pay one additional hour of pay at the employee’s regular rate if the employer does any of the following without proper notice: adds more than 30 minutes of work to an employee’s shift; changes the date, start time or end time of a shift without affecting total hours worked; or schedules the employee for an additional shift (including on-call shifts). 2. Employers must pay an additional one-half times the employee’s regular rate for each scheduled hour that the employee does not work if the employer subtracts hours from a shift; changes the date, start time or end time of a shift, resulting in a loss of work hours; cancels a shift; or for on-call employee, does not ask the employee to perform work while on call. 3. Employers cannot require employees to report back to work less than 10 hours after ending the previous shift unless the employee requests the shift or consents, in which case the employer must pay one-and-one-half times the regular rate of pay. The biggest takeaway is an employee cannot be forced to report for a shift that was not previously scheduled, regardless of whether the employer provides predictability pay. However, the measure provides several ways an employer can avoid predictability pay. 20

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For example, employees can opt in to a “standby” list to volunteer to pick up additional shifts without receiving predictability pay. If the employer has contacted all employees on the standby list and still requires additional workers, then the employer can avoid the predictability pay. In addition, employers can avoid predictability pay if there are “unanticipated customer needs or

The biggest takeaway is an employee cannot be forced to report for a shift that was not previously scheduled, regardless of whether the employer provides predictability pay. unexpected employee absences”; the employer requests volunteers through group communication; the employee volunteers; there is an emergency or unforeseeable event; or the employee’s hours are reduced for a disciplinary reason with just cause. Employers must be ready to comply when the law takes effect because violations may be costly.The Oregon measure provides employees with a private right of action for violations, civil penalties ranging between $500 and $1,000 for each violamarch/april

2018


tion, and creates a new basis for retaliation claims (including an award of attorneys’ fees).

What Are the Law’s Implications? This is just the beginning of predictive scheduling, and Oregon’s approach suggests that the issue will continue to affect employers across the country. Oregon’s bill applies to employers in the retail, hospitality and food service industries with more than 500 employees. Similarly, Seattle’s predictive scheduling ordinance applies only to retail and food service establishments with more than 500 employees, and San Francisco has singled out “formula retail” businesses, or chain stores with more than 11 locations worldwide. Lawmakers in these jurisdictions have made a strategic decision to focus on large employers in the service industry, perhaps under the assumption that these employers are best situated for compliance. But there are early signs that this issue will have a broader impact on small and midsize employers. A new ordinance in Emeryville, California, affects employers with more than 56 employees globally and 20 or more employees in city limits. New York City also passed a measure with various requirements applying to retail employers with 20 or more employees, as well as nationwide fast-food establishments. The growth of predictive scheduling laws could prove challenging to employers, given the different requirements across jurisdictions. For example, Oregon’s bill pre-empts other local ordinances relating to work schedules, creating consistency within the state. But the same employers operating in Seattle, San Francisco, Emeryville and New York City must comply with different requirements. These employers may create a universal policy by selecting the most restrictive requirements, or choose a more economical route by tailoring their approach to each geographic region. While some states have enacted legislation pre-empting any local government ordinance addressing employee work schedules, this does not relieve the obligation elsewhere. Employers may get ahead of the trend by implementing changes to current scheduling practices. Technology and data could help employers find the most efficient scheduling practices, and some large employers are already using data to better predict how many employees are required to operate at any given time. Despite the challenges, employers can find a way to make the most of predictive scheduling by using technology to better predict staffing needs. Courtney Blanchard is a labor and employment attorney for large and multistate employers with Minneapolis-based Nilan Johnson Lewis.

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2018 

Legal Legal Briefings CAN EMPLOYERS RELY ON FEDERAL BAN ON CANNABIS? The Trump administration’s renewed directive to prosecute “marijuana activities” calls into question a recent decision from the Massachusetts Supreme Court finding employers may not rely on the federal prohibition when determining the qualifications of an applicant. In Barbuto v. Advantage Sales & Mktg. LLC, an applicant claimed she was discriminated against on the basis of her disability, Crohn’s disease, after she was disqualified from hiring consideration for testing positive for cannabis. The employer ignored the applicant’s explanation that she took cannabis per her doctor’s written certification, stating “we follow federal law, not state law.” The employer filed a motion to dismiss the disability discrimination claim on the basis that medical cannabis use is a federal crime and, thus, the request to deviate from the employer’s anti-drug policy as an accommodation was “facially unreasonable.” The court disagreed, holding instead that the employer had “a duty to engage in an interactive process with the employee” to consider alternative medicines or other accommodations that would allow the employee to perform her job, and that medicinal cannabis is not “per se unreasonable as an accommodation” simply because it is a violation of federal law. IMPACT: Even with the Trump administration’s new orientation, employers should engage in the interactive process with an applicant or employee who tests positive for cannabis if an alleged disability is at issue.

THE CASE OF THE VANISHING STOCK OPTION Donald Simota joined Stericycle Inc. to become its operations manager. He signed a noncompetition agreement that provided an option to purchase shares of Stericycle’s common stock, an option that would vest after a period of time. Thirteen months later, Simota resigned from Stericycle and joined its competitor, Patriot Environmental Services. Stericycle sued Simota under the agreement he signed. Simota filed a motion to dismiss the case, arguing that he was not given enough “consideration” (i.e., value) for the agreement. Simota argued that his stock options never vested before he resigned, and therefore provided no value to him. The court recognized that noncompetition agreements, known as “restrictive covenants,” are disfavored under the law because they are restraints upon competition. Thus, an employee needs to receive sufficient legal value in exchange for signing such agreements; otherwise they are not enforceable. The court stated that the stock options provided sufficient value even though they never vested and Simota never received any actual stock. The fact that the stock options did not vest was not the fault of Stericycle. Simota caused the option to vanish by resigning early. Thus, the agreement was supported by sufficient legal value given by Stericycle. IMPACT: The enforceability of noncompetition and nonsolicitation agreements is governed by state law; each state has its own legal standard. And, even within a single state the cases can be contradictory. Employers should consult with counsel regarding the drafting and enforcement of these types of agreements. Rachel L. Schaller and Daniel Saeedi are attorneys at Taft Stettinius & Hollister LLP. To comment, email editors@workforce.com.

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Legal

ACME Noncompete Litigation Jon Hyman |

The Practical Employer

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ile E. Coyote. He’s forever chasing the Roadrunner. make the difference between an enforceable contract and a Always ending up falling off a cliff or crushed under a worthless piece of paper. giant boulder. 3. Provide consideration. An employee must receive Kind of like noncompete litigation. Sometimes you win something of value in exchange for giving up the right to an injunction, sometimes the court drops a big boulder on compete. If the covenant is signed at the beginning of your head. employment, the hiring itself usually meets this requireSo suppose after leaving your company, an ex-employee ment. For current employees, though, what qualifies as begins soliciting former co-workers to join him at his new “value” varies from state to state. In Ohio, for example, venture. That employee signed the same noncompetition keeping an at-will employee employed is enough. Other agreement as each of your other 13,000 employees, which states, however, require something of monetary value, among other things, prohibits him from directly or indirect- such as a raise, bonus or extra vacation days. ly soliciting, inducing or encouraging any employee of the 4. Enforce, enforce, enforce. Do not selectively encompany to terminate their employment or to accept em- force your contracts. Suppose Employee A and Employee ployment with a competitor, B are subject to the same supplier or customer. agreement. Employee A And you do what many quits and works for a comemployers do in this situapetitor, and you ignore it. If tion.You sue the ex-employEmployee B does the same, ee to enforce the agreement. but you sue to enforce that In The Manitowoc Comnoncompete, you will have pany v. Lanning, the Wisa hard time proving the leconsin Supreme Court gitimacy of the business indropped the biggest boulterest you are seeking to der possible. It not only protect in light of the fact ruled in the employee’s fathat you chose to ignore the vor, but it found the agreesame as to Employee A. ment to be unreasonably over-broad as drafted and inval5. Ask for help. The internet is a wonderful tool. In the idated it as to all of Manitowoc’s 13,000 employees. click of a mouse you can learn who led the National In today’s job market, courts have become increasingly League in stolen bases in 1971 (the Cardinals’ Lou Brock) skeptical of agreements that limit an employee’s ability to or you can find examples of noncompete agreements. Be find employment. wary, though, of using these examples in your business What steps can you take to maximize your ability to without first having your counsel vet them. No matter the enforce the agreements that your employees sign? Here are quality of the appearance of the form you locate or the five practical steps. trustworthiness of site on which you find it, you have no 1. Pick the right type of covenant. What type of idea when it was drafted, which state’s law it was drafted to competition are you trying to protect? Are you trying to comply with or if counsel ever reviewed it. protect your company’s most guarded secrets from your Post-employment covenants are necessary tools that all biggest competitors, or are you trying to prevent a sales- employers should have in their shed. Employers, however, person from cherry-picking your customers? If all you must use narrowly drafted agreements that only reach need is an agreement prohibiting an employee from so- those legitimate interests worthy of protection. And, if liciting customers, clients or vendors, then limit the there is no such interest, consider foregoing an agreeagreement to protect that interest. Do not cast too wide a ment at all. Otherwise you might end up spending lots net or a court will either narrow it for you, or, worse, toss of money in court in a vain attempt to enforce an unenout the entire agreement. forceable contract. 2. Know your jurisdiction. Different states have difOr, worse yet, a court might just drop that boulder on ferent laws pertaining to the enforceability of noncompete your noggin and invalidate that agreement for all of agreements. California, for example, will only enforce such your employees. agreements in very limited circumstances, while Ohio will enforce any agreement reasonable in time, geographical Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in scope and the legitimate interest you seek to protect. Pick- Cleveland. To comment, email editors@workforce.com. Follow ing the right state’s law to apply to your agreement could Hyman’s blog at Workforce.com/PracticalEmployer.

In today’s job market, courts have become increasingly skeptical of agreements that limit an employee’s ability to find employment.

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industryinsights Putting a Plan Together Case study: How Mackenzie Investments developed a succession pipeline for its inside sales department

By Tim Harnett

How important is succession planning and employee development at your organization? More than threequarters of organizations (78 percent) have some sort of plan in place, yet 60 percent say they have too few candidates for their needs.¹ Developing employees and promoting from within is crucial to keeping successful employees in house and reducing knowledge loss. For Denise Teixeira, senior manager, product education and blended solutions for distribution at Mackenzie Investments, promoting people to internal sales roles benefits both customers and the organization. “Executives discuss how important professional development has been in their careers, growing them into the leaders they are today. They wanted an initiative that would provide an opportunity to develop employees to be promotion ready to move into the inside wholesaler role — a role that requires deep product and industry knowledge.” Teixeira agreed with the opportunity to identify and move current employees into the role — with the right platform. “Recruiting people internally reduces the time it takes for onboarding. The person comes in with the background knowledge and skills the role requires. By having the impetus come from the top down, it demonstrates commitment to developing people within the organization.” Teixeira developed the online portion of the program using D2L’s Brightspace platform. While it isn’t geared toward any generation, succession programs like the one at Mackenzie Investments are particularly attractive to millennials, 87 percent of whom want development in their jobs.² But before the rollout could begin, Teixeira needed to weigh delivery options. “Due to the nature of the role, we designed our training

with a blended approach — online delivery with some in-person activities.” D2L’s Brightspace was the best platform choice thanks to its discussion boards and video training features, best suited for a mobile sales force. “With the Brightspace platform we are able to host the fundamental learning online with video and required reading to form the basis of their knowledge, and then test their understanding using the built-in quizzing tool. The statistical reporting capabilities allow us to understand in which areas the participants are strongest. Learners will have 4-5 months to complete a series of self-study and in-person learning assignments,” Teixeira says. “Within that time, they’ll apply the knowledge they’ve learned and meet with our inside wholesaler managers and mentors. Timelines and deadlines are managed through conversations with applicants, but the learning is selfpaced. They’ll also receive more onboarding once they become inside wholesalers. The idea is that the program will provide applicants with the readiness to move into the role when there’s an open position.”

“The idea is that the program will provide applicants with the readiness to move into the role when there’s an open position.” Teixeira is building metrics into the succession program to ensure its success can be measured. “We’re examining how the content is digested throughout, since people will be completing the program while employed in their current positions,” Teixeira says. “We want to be building knowledge without having


D2L is the software leader that makes the learning experience better. The company’s cloud-based platform is easier to use, more flexible, and smart. By using D2L, organizations can personalize the learning experience to deliver real results. The company is a world leader in content creation and curation, and enables employers to act in real time to keep workers on track. D2Le is used by learners in higher education, K-12, and the enterprise sector, including the Fortune 1000. D2L has operations in the United States, Canada, Europe, Australia, Brazil, and Singapore. www.D2L.com

the program become a roadblock to success in the employees’ current roles. Going forward, I’ll have communication with program participants as well as their managers, and will periodically touch base and get a pulse check to determine how successful participants are with the content.” Mackenzie’s commitment to internal promotions isn’t limited to the distribution department, either. “There’s been several company initiatives to make sure we keep high performers interested in growing their

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careers with us,” Teixeira says, “giving them access to programs and opportunities to grow and learn while they’re here. The Inside Wholesaler Development Program is one piece of a larger puzzle to addressing attrition, promoting engagement and maximizing product knowledge, which benefits our customers and our bottom line.” Mackenzie Investments uses the D2L platform for their inside sales succession program. Learn more at D2L.com/ financialservices.

2016 Talent Management Succession Planning survey. Adkins, A. and Rigoni, B. (2016). “Millennials want jobs to be development opportunities.” Gallup.


industryinsights High Tech, High Touch: The Power of People in the Digital Era More than 90 percent of organizations expect digital impact in the next two years. Does your business have the right people strategy in place to be successful?

By ManpowerGroup

We’ve been here before…

Leader transformation

If today’s digital disruption seems familiar, that’s because it’s not the first time technology has shaken up our world. During the Industrial Revolution, it took 50 years for industries to redefine processes and scale technologies. Today’s organizations don’t have that luxury of time. Shorter business cycles challenge organizations in six months or less to either change or fail.

Most organizations — including early digital adopters — believe their leadership pipeline and existing leaders aren’t yet prepared to fully win at digital. Eighty-seven percent of HR leaders believe they lack the leadership talent to drive success.⁷ To thrive during digital transformation, organizations must fill their current pipelines with a community of digital-ready, connected leaders dedicated to creating the necessary culture and capability within the organization. An adaptive leadership network will be what both unlocks opportunities and drives successful digital transformation, Antonucci says.

More than 90 percent of employers expect digital impact in the next two years.¹ As digitization advances automation and computing, 75 percent of leaders believe automation will soon require new skills.² Skilling up will require a high level of learnability; across the OECD, jobs requiring greater proficiencies are growing the fastest.³ Younger workers are coming into this environment. By 2030, millennials will make up two-thirds of the workforce,⁴ and they’ll need a high degree of learnability: 65 percent of the jobs they’ll fill over their lifetimes don’t even exist yet.⁵ For Lory Antonucci, senior consultant of organizational effectiveness for Right Management, the challenge of being successful in this digital era goes beyond technology. “These days, successful digital transformation means everybody operates from a shared, comprehensive view of the demands and capabilities required across the organization. This approach helps individuals, leaders and the organization operate under a common understanding of change and opportunity; adapt and function in an era that demands more connectivity; and to make smarter decisions that benefit both people and technology.” Transforming quickly can make the difference between organizational success and failure. Companies embracing digital transformation are 26 percent more profitable than their competitors and enjoy a 12 percent higher market valuation.⁶ To succeed through digital disruption, organizations must proactively address transformation through leadership, culture and the workforce itself.

Culture transformation A culture of innovation is another critical differentiator. Organizations need to embrace change, take calculated risks and be open to failing fast. Culture is both the proof of the past and the foundation for the future. In these times of change, every organization needs to understand and leverage culture as its primary enabler of growth, success and survival. Organizations with a formal innovation system see significant yields: 51 percent are the first to market with most new products and services.⁸

Workforce transformation Forty percent of employers face greater difficulty filling jobs this year than last, the highest level since 2007.⁹ The biggest threat to manufacturing isn’t machines — it’s people. Up to 2 million jobs may go unfulfilled because existing and emerging workers don’t have the necessary skills to perform them.10 Organizations and individuals need to approach digital opportunities with both a short- and long-term plan. “Invest in tools, connections and learning opportunities to gain a new sense of what’s happening with your customers and your work. Learning actions should focus on gaining updated insights, resources and innovations, and then sharing and scaling the new value that you see,” Antonucci says.


Right Management is the global career and talent development expert within ManpowerGroup®. We help organizations become more agile, attractive and innovative by creating a culture of career mobility and learning that nurtures future talent, motivates and engages people, and provides individuals with opportunities to increase their value throughout their careers. We improve time to value through our expertise in organizational effectiveness, career management and individual development. Find us on the web www.right.com.

From the digital suites to the factory floors, digital transformation is a comprehensive journey that impacts every part of an organization. To be successful, organizations must consider: • Are we prepared for calculated risk and set up to fail fast? • Are we agile and open to change, now and throughout the journey of transformation? • Are our processes informed by digital insights? • The path is clear: to thrive in the digital age, organizations need to operate with agility, deliver in the short term and adapt for the long term. Right Management partners with organizations of all sizes to accelerate transformation success, wherever they are in the transformation journey. For more information, visit www.right.com/digitalleader.

“The good news is digital leadership isn’t a total replacement of the fundamental attributes underlying leadership effectiveness. Instead, the 80/20 rule applies. Eighty percent of the competencies and enablers that have always made leaders effective remain the same. The other 20 percent is made up of the capabilities that weren’t so necessary before, but are critical now for modern and future leaders.” —Right Management, “From C-Suite to Digital Suite” (2017)

E ManpowerGroup (2017). The Skills Revolution. ManpowerGroup (2017). Impact of Automation in the Workforce. 3 OECD (2016). Survey of Adult Skills, OECD, 2016 4 Bureau of Labor Statistics. 5 ManpowerGroup (2017). The Skills Revolution. 6 IDE (2017). The MIT Initiative on the Digital Economy. 7 Right Management (2014). Talent Management: Accelerating Business Performance. 8 Accenture (2015). US Innovation Survey. 9 ManpowerGroup. Talent Shortage Survey, 2016/2017. 10 Deloitte (2015). The Skills Gap in U.S. Manufacturing, 2015–2025 Outlook. 1 2


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Remodeling Retirement

for the 21st Century Despite dire predictions as the wave of retiring boomers grows, there is hope that employers and workers can rebuild a system mired in a 20th century mindset. BY ANDIE BURJEK

T

here’s a finality to the concrete definition of retirement. It’s the conclusion of one part of a person’s life and the commencement of the next, the solid boundary separating work and rest, a figurative brick wall marking a definite point between an employee’s and retiree’s timeline. That brick wall has crumbled in recent years prompting an impassioned debate over who is responsible for life beyond the workplace. For decades, many employees retired to a generous pension thanks to paternalistic employers. But with trends like the gig economy, changing family structure and employers demanding that workers take control of their financial future, retirement is facing a distinct upgrade to meet 21st century workplace realities. Some 10,000 baby boomers now retire daily, and the birth rate among younger generations is shrinking as employers scramble to fill empty positions — unfilled jobs that will not fund an ailing Social Security benefits system in the long term. Americans with dramatically meager retirement accounts are living longer and must support themselves in retirement well into their 80s and 90s. Aging workers see the shortfall and realize that remaining employed is their only shot at a comfortable re-

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tirement, according to Ryan Duguid, senior vice president of technology strategy at Nintex, a computer software company in Bellevue,Washington. “That’s the crux of the problem,” he said. “The current system dictates that we all work longer and are less of a burden on society, and the current reality is that it’s getting increasingly hard to remain relevant in the workforce over time.”

Working in Retirement: No Longer an Oxymoron Retirement has historically been thought of as a three-legged stool, comprised of individual savings, company pension and Social Security benefits, according to Larry Sher, partner at October Three Consulting. There’s an increasing need for a fourth leg, he added: working in retirement. Contributing to this trend is the increased diversity of family situations, Sher said. For example, when there are dual earners in a family, one may need to retire or change the type of work they’re doing, meaning the other must continue to work at least on a part-time basis. Having children later in life puts a strain on their retirement savings and forces them to earn income for a longer period of time.

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“Retirement systems need to be rethought to better accommodate a wider variety of situations,” said Sher. People would not have to work in retirement if they saved enough during their career, but that brings up another concern. A third of U.S. workers aren’t offered a pension or 401(k) plan by their employers, according to the Pew Charitable Trusts. That percentage is higher for certain groups of people. Fifty-six percent of part-timers, 55 percent of Hispanics and 45 percent of millennials don’t have access to a retirement plan. Other people may want to work longer not out of financial necessity but because of the nonfinancial benefits work provides, according to Robert Laura, a retirement coach and president of Retirement Project, which certifies retirement coaches. Laura’s work in retirement coaching revolves around educating people about the psychology of retirement — the struggles of retiring that are not financial but social, physical and mental.

RETIREMENT HAS HISTORICALLY BEEN THOUGHT OF AS A THREELEGGED STOOL: INDIVIDUAL SAVINGS, COMPANY PENSION AND SOCIAL SECURITY BENEFITS. “Work provides a very powerful outlet for what you lose in retirement,” Laura said. “You lose contact with people, you lose friends, you lose a schedule, you lose an agenda [and] you lose goals.” Employers tend to focus on the financial side of retirement rather than the other factors, he said, which presents an opportunity for them to explore the psychology of retirement. “Anyone who’s ready to step up will be able to establish themselves or their company as a leader on this topic,” said Laura. Raising awareness among employees on the psychology of retirement can start when employees are in their 40s or 50s rather than when they’re close to 65, he added. Some employees may feel that after retiring they won’t be relevant anymore, he said. Employers could help by offering resources including articles, books, videos and workshops that educate people on the changes they’ll experience during retirement. Former employees may struggle staying connected with other people, and losing that social component of what work provides can make them feel disconnected. Another mistake some employees make is not planning for retirement.“Most people go into retirement with vague assumptions.‘I might work part-time,’ or,‘Maybe I’ll volunteer,’ ” said Laura. “[But] you have to have concrete plans for these years.” 30

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Aiding employees in planning for the realities retirement has in store can be both valuable to the well-being of the employee and the reputation of the company, said Laura. Retirees may be a company’s best PR people, and a fond farewell sends them off on a positive note.

How Can I Possibly Work Longer? Enthusiasm for a longer career is not universal. In theory, what would make sense is that people accept that “70 is the new 65” mentality and work longer, but that’s easier said than done, according to Steve Vernon, a research scholar at the Stanford Center on Longevity. Part of the problem is the attitude of the individual, he said. Many people in their 40s and 50s cannot see themselves working until 70 because of factors like burnout, physically taxing long commutes or emotionally draining office politics. These are legitimate concerns, and one way to fix people’s attitudes toward retirement could be to mend one of these problems. A company could offer a work-from-home option once a week to someone with a long commute as a solution. “For a lot of people, instead of retiring full time in their 60s, they ought to pursue a downshift strategy where maybe they’re not working as hard as they used to, but [they’re] still making money and delaying the start of full retirement,” said Vernon. Advances in technology may also help people stay in their jobs for longer, according to Duguid. Although tech advances can unfortunately make some jobs disappear, they can also improve the quality of other jobs. “Automation and AI have the potential to take away a lot of the mind-numbing [work],” he said. People want a sense of purpose at work, he added, and eliminating the rote tasks so that people can focus on stimulating duties can keep them satisfied for longer. HR professionals may face challenges when people want or need to work longer, according to Vernon. If a company wants to hire an older worker, there are potential conflicts reporting to someone younger.An experienced person transitioning down in pay and rank may not be happy, either. These personal downshifting factors pose a challenge, and there could be legal issues including claims of age discrimination. But, Vernon added, it can work. The parties involved must be prepared to be sensitive to this fragile situation. “It’s a desirable thing to do. It just needs to be handled thoughtfully and carefully,” he said.

Risk Shifting Vs. Risk Sharing As the retirement plan of choice for employers has shifted from defined benefit to defined contribution, employees have taken a larger share of risk. “They’ll be able to retire or might be able to retire if they’ve saved well and haven’t dipped into their accounts, when the market is up and only when the market is up,” said Sher.“And when the market is up is the worst time for a lot of employers to lose their employees to retirement march/april

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because when the market is up, chances are that the company needs the employees to stay.” Shifting all the risk to employees is not going to be ideal, he said. He believes employers should move back toward risk-sharing rather than risk-shifting. “401(k) plans are not retirement plans. They are savings plans,” said Vernon. “There’s a difference between a retirement plan and a savings plan. A savings plan is just accumulating money, and yes that’s a necessary component of having enough money to retire. But it’s not enough.” Although they are interchangeable terms, the problem with retirement plans today is they are becoming inadequate, he said. The value of retirement plans declines as employees deal with higher health care costs and take on more risk. Employees are more content and prepared when they have a more generous defined benefit or defined contribution retirement plan, he said. But although this robust retirement plan is more important than ever, many employers have gone too far shifting risks to employees. “The long-term risk companies could face if their employees come up short later in their careers is that many of these individuals will hang around beyond when they want and beyond when their employer wants, too,” he said. “More of these individuals hanging on tend to be less healthy, feel stuck, disengaged and ultimately that means they are less productive.” Not only are employees financially unable to take the brunt of the financial risk, but they’re not going to be able to make better decisions than an expert investor. And although employers should educate their employees, they should also understand that they can only do so much, he said. “You can’t teach employees to be great investors,” said Sher.“You want them to work at their jobs.You don’t want them to be worried about and focusing on what I’m going to do with this money in my 401(k) plan.You want to engage employees in a discussion, but you don’t want to overwhelm them.” A delicate balance comes into play here. How does a company ensure that giving employees more financial responsibility doesn’t come at the expense of employees’ overall well-being? “The question at the end of day,” said Sher, “is how much paternalism do we want versus flexibility?” That question looms large over many workplaces. Whether employers are considering how much financial burden to put on employees, how much assistance they should offer in helping people prepare for retirement, or how responsible they should feel about keeping their older workers gainfully employed are potential solutions to fend off the silver tsunami washing over the retiring workforce. Striking a balance between these options could help cement the confidence that retirement is a sound option for workers while making employers more attractive to the future workforce.

The Future’s Employer of Choice The ideal employer of the future will learn some lessons from the retirement concerns of today. Larry Sher, partner at October Three Consulting, stressed that employees are increasingly at risk in a 401(k)-only system. “If these programs are going to be the retirement programs of the future, they’re going to have to change one way or another, either voluntarily through employers or because the government forces it upon them,” he said. Embracing risk-sharing rather than risk-shifting and making annuities more available to employees are traits of a retirement plan that will make companies more attractive, Sher said. Steve Vernon, a research scholar at the Stanford Center on Longevity, recommended offering an adviser who can clearly explain to pending retirees when they should retire. “Helping older workers decide if they have enough money to retire, when to take Social Security and how much income they can get from their 401(k) plan,” said Vernon. “These are things an employer could do, shop for professional advisers who would be available to their employees.” Flexible policies also will help employees work longer, he added. Flex work, telework and part-time work would not only add value for near-retirees but other groups of people like working parents who could also benefit from a more flexible schedule. Robert Laura, a retirement coach and president of Retirement Project, agreed on the value of flexible policies. “[Employers] will understand the needs of the employees and bend the work schedule to work for them, which is becoming much easier with technology,” he said. Flexibility could also be applied to sabbaticals, he added. In general, it’s rare for companies to offer employees a sabbatical, said Laura. But what if they redefined the word? Employees don’t necessarily need a break from work that lasts months; they could benefit enough from an extra week off every couple of months. Or they could have one month off during a season of extreme weather. These are potential ways in which employees could both get more flexibility and still meet their work responsibilities. — Andie Burjek

Andie Burjek is a Workforce associate editor. To comment, email editors@workforce.com.

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The New

Face of Facing Retirement

With fears of outliving retirement, boomers are looking for help dealing with ‘pretired’ anxiety. BY RITA PYRILLIS

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evin McGrain has prepped well for his golden years. willingness of many employers to provide a pension plan. He saved diligently, invested wisely and now at age 63, As life expectancy increased, the number of years that the he enjoys traveling with his wife, spending time at average employee spent in retirement stretched dramaticaltheir new North Carolina home near the mountains ly from about 10 years in the early 1950s to 20 years in and visiting with his grandkids. 2000, according to a Social Security Administration report. Life has been good since McGrain left his job last year at And in the midst of that shift, employers began abanan online retailer in Boston. But like many people his age, doning traditional pension plans with their lifetime beneMcGrain is nagged by the fits in favor of defined-confear of running out of money. tribution plans such as “My in-laws are going 401(k)s, which are riskier for through this right now,” he employees. Add soaring said. “My father-in-law health care costs and rising worked for a family business living expenses with an un— SHARON EMEK, his entire life and retired at certain future for Social SeWORK AT HOME VINTAGE EXPERTS 63. He’s now 93 and he and curity and it’s no surprise my mother-in-law have more employees are workaides that live in the house 24/7. He prepared well, but ing at an age when their parents and grandparents had long what money they have is disappearing rapidly.” since sailed into the sunset. With people living longer and healthier lives than ever But some entrepreneurs have found an opportunity to before, it’s a thought that’s scarier than death for many old- help retiring boomers confront their capital crisis. er Americans. In fact, 43 percent of workers over 50 indiIn 2010, Sharon Emek launched an employment agency cate that outliving their savings and investments is their No. specializing in placing aging boomers into work-at-home 1 fear surrounding retirement, according to a 2016 study jobs called Work at Home Vintage Experts, or WAHVE. At by the Transamerica Center for Retirement Studies. It age 64, she was a former insurance industry executive who ranks higher than declining health and loneliness. foresaw an impending brain drain as boomers retired and A look at the numbers explains why. younger workers bypassed insurance jobs and headed for For much of the 20th century, the number of older Wall Street and Silicon Valley. workers steadily declined thanks in part to rising incomes, “There’s a real problem in the insurance industry and the introduction of Social Security and Medicare and the I see it in accounting, too,” said Emek, who is now 72.

‘YOU CAN’T GO COLD TURKEY INTO RETIREMENT.’

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they plan to work past retirement age in 1995. RETIREMENT

READY?

“Young people don’t want to go into insurance. I kept saying, ‘There’s got to be an opportunity here.’ ” Today, the company, which is based in Melville, New York, has 23 employees around the country and 400 boomers placed and working as underwriters, claims specialists, and accountants from their homes. In November, she launched WAHVE Accounting, which caters to the accounting and finance industries. “It’s very hard when you spend the majority of your life working and all of a sudden you’re doing nothing,” she said. “You can’t go cold turkey into retirement. We have done a lot of things and we have a lot of knowledge.We travel, we do yoga, and we stay active, which our parents’ generation didn’t do. Boomers are creating a new paradigm.” Today nearly three-fourths of employees plan to work past 65, according to a recent Gallup poll, compared to only 14 percent who said they plan to work past retirement age in 1995. These employees are redefining retirement and challenging employers to change how they view older workers. At 62, Susan Sferas had no intention of retiring from her lengthy career as an IT specialist, but when her long work commute began taking a toll on her health she said that she had no other choice. It was a hard transition. She quickly got bored and began worrying about the cost of her health insurance, which became her responsibility. Her Medicare wouldn’t kick in for another three years. “I had to purchase health care through the marketplace at a very significant cost. I had a 401(k) but no pension and the only real income I had was Social Security,” said Sferas, who is now 65. Luckily, she said, she discovered WAHVE and has been working steadily ever since.

‘NO LONGER IS IT DESIRABLE TO SAY, ‘I’M 65 AND I’M GOING TO WALK AWAY FROM MY SKILLS AND KNOWLEDGE.’ —CHRIS FARRELL, AUTHOR “A lot of people I know aren’t retiring and the main reason is the health benefits,” she said. “It’s a very different world from when our parents retired. I always invested in my 401(k) at the maximum level, so unless something catastrophic happens I’m OK. But if I had kids I wouldn’t have money to leave them.You can’t plan on that now and your kids shouldn’t plan on it, either.” But this changing view of retirement offers opportunities for workers and employers alike, according to journalist Chris Farrell, author of “Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Com36

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Today nearly three-fourths of employees plan to work past 65, according to a recent Gallup poll, compared to only 14 percent who said they plan to work past retirement age in 1995. munity and the Good Life.” “No longer is it desirable to say, ‘I’m 65 and I’m going to walk away from my skills and knowledge,’ ” said Farrell, who is an economics commentator at Minnesota Public Radio. “People are searching for bridge jobs, they are looking at semiretirement and are staying engaged in the workforce even if it’s not full time.” This bodes well for employers who are facing a skills gap and a shrinking labor pool, according to Farrell. “HR conferences used to be all about the aging workforce but employers did nothing about it,” he said.“You still have a system designed to get the older worker out the door, but they don’t have a line of people walking in the door and that’s forcing (employers) to change how they see older workers.” Companies are responding in a number of ways, such as offering flexible work arrangements, providing retirement planning and elder care benefits, and in some cases, offering phased retirement programs that allow employees to gradually decrease their work hours, according to Roselyn Feinsod, a senior partner in the retirement practice at Aon Hewitt. Phased retirement is touted as a way to help employees ease into retirement and to assist employers with workforce planning issues, like transferring knowledge to younger workers. However, only a handful of companies offer them, she said, focusing instead on offering flexible work arrangements. “What we’re seeing in place of phased retirement is a huge push around a flexible workplace, whether it’s parttime, telecommuting or flex hours,” said Feinsod. “That’s a new form of phased retirement — letting people work in a different way.” While many retirees continue working to make ends meet, money is not always the primary reason for working beyond retirement age, according a 2014 report by Merrill Lynch (now Bank of America Merrill Lynch). The study found that 72 percent of preretirees want to work after they retire, according to Kevin Crain, head of workplace financial solutions at Bank of America Merrill Lynch. march/april

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Older Workers, Employers Helping Each other Tim Driver doesn’t buy into the “gloom and doom” scenarios that either paint older workers as burdens who won’t budge or predict a catastrophic exodus of talent when they do retire. Driver, CEO and founder of RetirementJobs.com, a Waltham, Massachusetts-based company that helps older workers find employment, said that retirement is changing and savvy employers are finding ways to tap the talents of older workers. It’s that belief that led him to launch his jobs website for people over 50. “It’s the same way that you would judge the massive shift of women entering the workforce decades ago,” he said. “Some people thought it was good, some thought it was bad but it was what it was — a major shift.” Driver launched RetirementJobs.com in 2005 to help retired and semiretired workers find jobs with age-friendly companies. The site posts more than 100,000 positions that job seekers can access for free. Employers pay a fee to participate. It also recognizes companies that demonstrate a commitment to hiring older workers through its Certified Age Friendly Employer program — a designation that companies can apply for. About 100 firms have earned a certification. Given the tight job market, a growing skills gap and the fact that people are living longer and healthier lives, older workers can be a boon to companies facing staffing challenges, according to Driver. “If you have a turnover challenge, you’re looking for a mature worker,” Driver said. “Just look at the Bureau of Labor Statistics that shows that employees over 50 turn over at a rate that’s one-third lower than that for employees under 50. What’s more interesting to the CFOs and CEOs is how lower turnover relates to higher customer satisfaction.” While age bias in the workplace persists, Driver predicts that it will decline as employers start seeing older workers as vital to their bottom line. “This whole notion that ‘Mr. Employer, you ought to be worried because all your people are about to retire’ just doesn’t hold water,” he said. “People are living longer and working longer. They are deciding how to spend the latter half of their career. They’re either staying in place, looking at some kind of phased retirement or they are developing other ways of generating income.” — Rita Pyrillis

“Before it was that they had to work,” he said. “People are saying, wait a minute. In the world of longevity 60 isn’t old. Also there is an increasing concern about Alzheimer’s. People feel that they need to remain socially stimulated and stay active to avoid cognitive decline.” At PNC Financial Services, older workers pass their knowledge to younger employees who in turn teach their elders new skills through the company’s mentorship program. Last year the Pittsburgh-based financial services corporation launched an employee affinity group that focuses on intergenerational workplace issues, according to Marsha Jones, chief diversity officer at PNC. The group is among 10 employee-resource groups that focus on some aspect of diversity. “Some older employees over 50 indicated that they wanted a vehicle to give back to the organization,” said Jones. “They still had a number of years to go before retiring and Kevin Crain they felt they had a lot to offer so they suggested an intergenerational group to interface with employees across generations. We use an algorithm that matches employees relative to experiences and attributes and we do reverse mentoring so older workers can engage, share and learn from younger employees.” In 2016, the company launched a series of retirement planning webinars and has since expanded it to offer financial planning for employees of all generations. While Jones could not provide the number of PNC employees who are working past traditional retirement age, she said that more employees are taking sabbaticals from between six months to a year to pursue personal interests before retur ning to work, either full time or Marsha Jones part time. “Baby boomers are living longer and they are healthier and more vibrant,” she said. “They want to be more active than our parents were. When you retire, that becomes your reality so you have to ask yourself, ‘What am going to do for the next 35 years?’ ” Rita Pyrillis is a writer based in the Chicago area. To comment, email editors@workforce.com.

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HEALTH WEALTH

Under One Umbrella

When retirement presents one rainy day after another how can workers best save their windfall for inevitable inclement weather?

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BY PATTY KUJAWA

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astman Chemical Co. has helped its employees stay healthy for nearly two decades. The company, whose heritage traces back to World War I, is a modern-day wellness wonder. It has fitness centers, holds seminars on healthy eating, provides monetary rewards for fit lifestyle habits and even offers free access to health coaches. But in 2016, top management at the Kingsport, Tennessee-based Fortune 500 company began pondering whether its 14,000 employees had life solutions beyond the health equation, said Lori Glawe, Eastman’s vice president for total rewards. They’d read the studies revealing that financial stress has crept into nearly every company, and they made a commitment to address it. “It’s now about overall well-being,” Glawe said. “It’s physical and financial fitness, but it’s emotional decision-making. We want to help people prepare for that. That is the next horizon.”

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The U.S. retirement system is ripe for change. With 10,000 baby boomers retiring daily, financial stress levels are hitting new heights. Merging health and wealth benefits to create an overall life strategy for employees is transforming the benefits industry as well as the employer-employee relationship. Historically, health care has not been seen as a financial decision. Now, consumer-driven high-deductible health plans offering health savings accounts as well as retirement plans including 401(k)s mean that all financial considerations fuse into one strategy. “Everything in the future will be combined into one financial plan,” said Ken Forsythe, assistant vice president at Empower Retirement. “It will be hyperfocused on the user experience.” Meanwhile, employers are realizing they have a role in merging health and wealth and are seeking tools that can help employees become better decision makers. If com-

MERGING HEALTH AND WEALTH BENEFITS TO CREATE AN OVERALL LIFE STRATEGY FOR EMPLOYEES IS TRANSFORMING THE INDUSTRY AS WELL AS THE EMPLOYEREMPLOYEE RELATIONSHIP. panies don’t help, employers are seeing that worker issues will soon become larger business problems. “When you think about the view of benefits through employees’ eyes, they are not benefits experts,” said Alison Borland, executive vice president, defined contribution solutions at Alight Solutions. “They don’t necessarily break it apart. It’s one paycheck and it has to pay for everything.”

The Future Isn’t Here Quite Yet Before looking at where the industry is going, it’s important to look at what is happening now. Trying to determine how much is needed for health care today and tomorrow while figuring out the flurry of money issues a person faces can be overwhelming. Low interest rates, high household debt surpassing wage growth and pricey housing options are some of the factors making it tough for workers to put money toward these long-range issues while struggling with daily needs. More than half of working Americans have suffered a significant financial issue in the past two years, and more than a third say their financial problems have had a negative impact on their lives, a December 2017 study from Willis Towers Watson showed. Financial stress also showed a significant link to physical health. A third of respondents said financial stress is affect42

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ing their ability to do well at work. Workers who are stressed about money are twice as likely to be in poor health, log more absences and have a higher level of stress in general, the survey noted. Because employees are taking on more responsibility for these decisions and are showing significant signs of stress, many companies are turning to well-being programs with a more holistic approach centering on ways to support employee physical, financial, social and emotional issues. Employees find current offerings to be lackluster. In the U.S., only about a third of workers said their well-being programs help them live better lives. Plus, Alison Borland only about half of employees participate in these programs, data from the Willis survey showed. Many of these offerings could be simpler, more intuitive and could give the user a better reason to take action, Forsythe said. “Just providing tools or a calculator doesn’t exactly get someone to take action,” Forsythe said.

What Will Motivate Employees? There are plenty of folks in the workforce who don’t live healthy lives. They pay through the nose for health care and haven’t given a lot of thought or dollars to save for retirement. It’s a bad situation to be in, but people don’t like to be judged, said Shane Bartling, senior consultant with Willis Towers Watson. “It’s a major point of anxiety,” he said. “People know what their problems are. They don’t need to be told they are 15 pounds overweight or need to add more money to their 401(k).” Programs engaging workers that make them smarter about their own choices before making a poor decision appears to be the elusive golden ticket. Until that ticket is pulled, Bartling summarized a working solution in five words: Nudge them, don’t judge them. It’s a behavioral economic theory that has been touted for about a decade by Richard Thaler, the 2017 Nobel Peace Prize winner for Behavioral Science and Economics. People usually choose the easier solution as opposed to the smarter one, so nudging a person to the right decision will most likely create the better outcome. For example, putting fruit on a plate might encourage someone passing by to take one, instead of detouring to the pantry to grab a bag of chips. march/april

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RETIREMENT

READY?

The nudge theory has been put to the test over the past few years with automatic enrollment. Workers who are automatically enrolled in 401(k) plans don’t have to go through the often-daunting task of signing up, electing a deferral rate and then deciding where to invest. It’s all done for them and studies have shown that auto-enrolled workers tend to be better savers. Plenty of industry providers are starting to expand the nudge theory to well-being programs. Willis Towers Watson introduced MyFiTage, an online tool that stands for Financial Independence Target Age. The program uses existing information from health care and financial providers and asks users to add other information like bank accounts, physical activity and spouse/partner data to generate two numbers: an age when the person’s financial resources will be able to cover expenses in retirement; and the number of years those resources should last. Users might not like what they see when first logging on, Bartling said, even after adding simple information like health savings account balances and outside Individual Retirement Accounts. The tool allows users to tinker with the fields that determine the FiTage: lifestyle, health, wealth and invest, to make changes important to that user. By trying out different scenarios, users can decide for themselves what they want to change to lower their FiTage, Bartling said. Most often, they use nudge theory by determining the easiest course of action for their situation. “It puts them in the driver’s seat,” he added. “It helps them become aware and what it means to have these numbers.” In March 2017, Empower Retirement and health service company Optum paired up to create a product to integrate health savings accounts and 401(k) plans. The Empower HSA analyzes and shows users what their health savings looks like in conjunction with their reShane Bartling tirement savings today and in retirement. It’s important to see the money on one platform because users can learn the power health savings accounts have when used as health retirement accounts, Empower’s Forsythe said. For HSAs, money goes in tax free, it grows tax free and is not taxed when used for approved medical expenses. In many cases, it makes sense for participants to contribute enough to their 401(k) plan to get the company match, then move to the HSA and contribute as much as possible in that account. march/april

2018 

STUDIES HAVE SHOWN THAT WORKERS WHO ARE AUTOENROLLED IN 401(k) PLANS TEND TO BE BETTER SAVERS. Right now, HSAs are mostly seen as health checking accounts, and moving to a combined platform shows workers how their benefits interact, Forsythe said. “By integrating the HSA with other retirement savings accounts, participants begin to think about their HSA as a long-term savings account rather than a current year spending account,” he said. Meanwhile, PwC is using artificial intelligence to simulate clients’ financial snapshots. The program, called Secure, which they stylize as $ecure, takes into account the things employees would expect like income and spending but peppers in personal financial risk preferences, health issues (or lack of), age, market effects and other “what if ” scenarios like job loss or illness, to offer advice. While this technology is fairly underway, the manner it will delivered in for the future will be groundbreaking, said Pia Ramchandani, director of PwC’s analytics practice and co-lead for PwC’s artificial intelligence accelerator lab. In the future, conversational agents or chatbots like Siri or Cortana will talk with the understanding that productive conversations involve a give and take, not just a dialog using if/then statements. A user of this service will be able to ask more than one question at a time, and the chatbot will be able to make a response in a way that adapts a response based on how the user talks. “It will almost be like talking to another person,” Ramchandani said. “It will have memory and deep understanding of prior components to the conversation.” Eastman Chemical has been using MyFiTage since 2016 with positive results. More than half of the company’s employees are using the tool to understand their financial situation and to make improvements where they can. In looking at the company’s main savings vehicles, Eastman’s 401(k) plan has a 94 percent participation rate, compared to Fidelity Investments’ benchmark 85 percent average for the industry. Also, workers contribute nearly 10 percent of pay to their 401(k), compared to the 8.8 percent industry norm. For the health savings accounts, 95 percent of workers participate, 11 percentage points higher than Fidelity’s industry average. “We are excited about seeing people take action,” Eastman’s Glawe said. “It gives them tools so they can make decisions in an educated way.” Patty Kujawa is a writer in the Milwaukee area. Email editors@ workforce.com to comment.

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READY?

LIVE TO 100? Implications for Work, Employers and Retirement

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The vision of retirement for workers depends on employers’ willingness to embrace older workers, support flexible transitions into retirement and help employees of all ages financially prepare for long lives. BY CATHERINE COLLINSON

P

eople have the potential to live longer than any other time in history as a result of advancements in scientific knowledge about the aging process and breakthroughs in medicine.Today’s workers are already thinking in terms of longer lives. In our 2017 survey of more than 6,000 workers across the United States, nonprofit Transamerica Center for Retirement Studies asked an uncomfortable question: “What age are you planning to live to?” Workers who provided an answer to the question are planning to live to age 90 (median) and 14 percent plan to live to age 100 or older, a finding which is even higher among millennials (18 percent). As a researcher, I’m intrigued by the prospects of longer lives and how people will spend this gift of extra time. Do they plan to work longer or spend more

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RETIREMENT

READY?

time in retirement? Whichever path they choose, will they be financially secure? Our survey finds that many workers are envisioning retirement as a chapter in life that includes both work and leisure. Many are expecting to work beyond age 65 out of financial necessity and for healthy aging-related reasons such as to “be active” and “keep my brain alert.” More than half are planning to work past age 65 or do not plan to retire, and more than half plan to continue working in retirement. Moreover, few are envisioning the so-called “gold watch” retirement of prior generations in which they reach a certain age and immediately stop working. Instead, many envision a transition that involves reducing work hours or working in a different capacity that is either less demanding and/or more personally satisfying before they fully retire. Unfortunately, as compelling as their vision may sound, it is unclear to me whether older workers wanting to work longer will be able to remain in the workforce. The U.S. Census reported that only 19.3 percent of people age 65 and older were in the labor force in 2016. It projects that the percentage will increase to 21.8 percent in 2026. Workers cannot achieve their vision of retirement on their own.Their success is highly dependent on employers’ willingness to embrace older workers, support flexible transitions into retirement and help their employees of all ages financially prepare for long lives.

What About Flexible Retirement? Our most recent survey of employers, in 2016, finds good news in that employers’ perceptions are in sync with workers’ expectations. Nearly three-quarters of employers believe that many of their employees expect to work past age 65 or do not plan to retire. Seventy-seven percent of employers think that many of their employees plan to continue working after they retire.

NEARLY THREE-QUARTERS OF EMPLOYERS BELIEVE THAT MANY OF THEIR EMPLOYEES EXPECT TO WORK PAST AGE 65 OR DO NOT PLAN TO RETIRE. Flexible retirement offerings, however, are less likely to be found among employers. Just 39 percent of employers offer preretirees flexible schedules. Even fewer enable preretirees to shift from full time to part time (31 percent) or to take on positions that are less stressful or demanding (24 percent). Only 27 percent encourage preretirees to participate in succession planning, training and mentoring. By not offering flexible retirement options for pre46

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About the Retirement Survey of Employers The 17th annual analysis contained in “All About Retirement: An Employer Survey” was prepared by the research team at Transamerica Center for Retirement Studies. The surveys were conducted within the United States by Harris Poll on behalf of TCRS. Potential respondents were targeted based on company size. The 21-minute employer survey was online between Nov. 20 and Dec. 20, 2016, and surveyed a nationally representative sample of 1,802 business executives under specific titles who make decisions about employee benefits at their company, and work in a for-profit company that employs five-plus employees across all locations. The survey included 901 small companies (5-99 employees), 301 medium-sized companies (100-499 employees), and 600 large companies (500-plus employees). — Catherine Collinson

retirees, employers are missing out on a win-win opportunity that can help them optimize workforce management, improve succession planning and facilitate the transfer of institutional knowledge — while at the same time generating good will among employees. To help illustrate this point, when I am speaking at conferences I often hear from older members of the audience who are working full time and want to transition to retirement. One audience member was a long-tenured employee at her company. She expressed her desire to work part time throughout the year, along with her willingness to train her successors and increase her hours as needed by her employer during its peak season that falls at a time of the year that employees are vying for time off. Like so many I hear from, she has not approached her employer because she is afraid of being marginalized or shown the door if the answer is no. Because she and others are not offered flexible retirement options, their employers risk losing them altogether without the ability for a smooth transition when they leave. The Government Accounting Office recently released a report, “Older Workers: Phased Retirement Programs, Although Uncommon, Provide Flexibility for Workers and Employers,” which highlights the body of research on the topic, discusses the widespread lack of formal programs offered by employers and some of the reasons why they don’t offer them (scheduling-related, regulatory, potential liability regarding age discrimination), and shares best practices among employers that have programs in place. I’ve had many conversations with employers on the topic. One of their common arguments against flexible retirement is that their employees would be unwilling to work for a smaller paycheck or give up the prestige of their job status. In 2017, I set out to validate this in our march/april

2018


survey of workers. The survey found, to the contrary, that among workers who envision transitioning into retirement, most have reasonable expectations. Most say that if they were to: • Reduce their work hours at their current employer, they would expect to be paid the same hourly rate for hours worked that they are earning now (79 percent). • Take on a new role at their current employer with fewer responsibilities, they would expect their job title to change (78 percent). • Take on a new role with fewer responsibilities at their current employer, they would expect to be paid the market rate for the duties involved, even if it means a reduction in their current level of pay (71 percent). With that said, employee benefits may be a sticking point. In fact, 3 in 5 workers say that if they shift from full to part time at their current employer, they would expect to receive the same level of employee benefits, which is an expectation that may not be realistic because many employers offer no or reduced benefits to their part-time workers.

Employers Helping to Save, Plan and Retire Employer-sponsored retirement benefits are an important tool for workers to save for retirement and for employers to attract and retain talent. Eighty-one percent of workers say that the retirement benefits offered by a prospective employer will be a major factor in their decision to accept an offer or not. Current retirement plan participation is high. Among the 71 percent of workers who are offered a plan, 4 in 5 participate in the plan with a contribution rate of 10 percent (median) of their annual salary. While this level of savings is impressive, workers are financially vulnerable. Many face competing financial priorities such as paying off debt while others have little to no emergency savings. Some have dipped into their retirement accounts by having taken loans and/or early withdrawals as a result of these issues. Taken together, these factors indicate that many workers are inadequately preparing financially for their later years. Our research identifies opportunities in which employers can enhance their retirement benefits in ways that can improve planning and outcomes for their employees, including: • Consider offering a financial wellness program to help employees increase their financial literacy and gain insight into their overall finances. • Prompt employees to use online calculators to estimate their retirement savings and income needs. • Encourage employees to formulate a written retirement strategy through the plan provider (if available) or a professional financial adviser. • Remind employees about the Saver’s Credit, a tax credit available to eligible tax filers who save in a qualified plan or IRA. march/april

2018 

About the Retirement Survey of Workers The 18th annual analysis contained in “Wishful Thinking or Within Reach: Three Generations Prepare for ‘Retirement’ ” was prepared internally by the research team at the Transamerica Center for Retirement Studies. The 25-minute online survey was conducted within the U.S. by Harris Poll on behalf of TCRS between Aug. 9 and Oct. 28, 2017, among a nationally representative sample of 6,372 workers, including 2,593 millennials (born 1979-2000), 1,586 Generation Xers (born 1965-78), 2,076 baby boomers (born 1946-64) and 117 workers who were born before 1946. Potential respondents were targeted based on employment status and company size. Respondents met the following criteria: U.S. residents, age 18 or older, full-time or part-time workers in for-profit companies with five or more employees. Results were weighted where necessary to bring them into line with the population of U.S. residents age 18-plus, employed full time or part time in a for-profit company with five-plus employees, and to adjust for attitudinal and behavioral differences between those who are online versus those who are not, those who join online panels versus those who do not, and those who responded to this survey versus those who did not. No estimates of theoretical sampling error can be calculated. — Catherine Collinson

• Notify employees when they become eligible to make catch-up contributions, which are available to people 50 and older. • Adopt automatic enrollment and automatic escalation plan features to make it more convenient for employees to join the plan and increase their savings rates. • Offer financial counseling about distribution options for preretirees who are getting ready to financially transition into retirement. Employers can also help their employees achieve longterm financial security by offering voluntary benefits that complement retirement and health care benefits.Voluntary benefits such as life, disability, critical illness and similar types of insurance can help employees protect their finances in the event of unforeseen shocks. If at all possible, employers should extend eligibility for retirement, health care and other voluntary benefits to their part-time employees. Extending eligibility can enable preretirees who are transitioning to retirement as well as other part-time employees who may be parenting, caregiving or going to school to save for retirement and help them safeguard their financial security. LIVE TO 100 continued on page 53 w o r k f o r c e . c o m | Workƒorce

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SECTOR REPORT

Dental Benefits Providers

The Bright Shine of Dental Benefits Dental holds the unique distinction of being a benefit everyone wants but few want to use. By Sarah Fister Gale

A

nyone who’s ever had a root canal or a teenager with crooked teeth knows how expensive dental care can be, which is what makes dental benefits so appealing. According to MetLife’s 15th annual “U.S. Employee Benefit Trends Study,” dental insurance is among the must-have benefits for employees, behind medical insurance, prescription drug coverage and 401(k) plans.That interest spans the gamut from millennials to baby boomers. “Dental benefits meet the unique needs of all the generations in the work-

25

%

NO ONE WANTS TO GO Despite all the savings and the health benefits of preventive dental care, consumers are still loathe to go the dentist. “About 40 percent of the population with dental benefits don’t go,” said Preble. Concerns about the cost, the pain and the time away from work can all contribute to this low usage rate. And until they make that first appointment, there is no one there nudging them in the right direction. “The dentist doesn’t know they exist so they can’t reach out,” he said. This is where employers should step in. “If they are going to provide the benefits, they should encourage employees to go to the dentist,” he said. It ensures they are taking advantage of the programs they are paying for and reduces the risk of emergency care, which can lead to absenteeism and lost productivity. Along with targeted reminders, employers can provide employees with tools updates to track how much of their coverage they have used to date, and educate them about the health benefits of good oral care. Some programs also eliminate preventive care costs from premium limits to encourage proactive care and avoid higher cost claims. These combined efforts can increase the usage rate and value of dental benefits offerings to employees and employers. “There is mounting evidence that increased oral health reduces medical costs,” Preble said. “If you want a healthy workforce, this is an easy way to get it.”

OF CONSUMERS HAVEN’T GONE TO THE DENTIST IN THE PAST YEAR OVER FEAR OF THE COST

force,” said Randy Stram, senior vice president of group benefits for MetLife in Bridgewater, New Jersey. “It’s valued by everyone.” Virtually all large organizations, and 67 percent of small organizations, now offer some form of dental benefits, according to the Kaiser Family Foundation “2017 Employer Health Benefits Survey.” However, few of these plans are fully covered. Instead, dental insurance generally falls under the “voluntary benefits” category, where employees pay most or all of the costs themselves. “Over time, the cost of these benefits have shifted to the employee,” said Evelyn Ireland, executive director of the National Association of Dental Plans. She noted that last year 30 percent of dental benefits programs were paid for entirely by employees, up from 22 to 23 percent three years ago. “It’s a big shift,” she said. These programs also have modest caps, usually between $1,000 and $1,500, which may not be enough to cover the full cost of major dental care. This can frustrate patients who don’t realize dental benefits are meant to offset the cost of care, not replace it, said Dave Preble, senior vice president of the American Dental Association’s Practice Institute in Chicago. “Patients don’t always understand this distinction.” Even when employees cover the full cost of dental benefits, it’s still typically more cost-effective than paying for care directly. The benefits payment is pretax so it costs

48

them less than actual premium cost, and by participating in group plans, employers can generally secure discounts and lower rates for care than if employees paid directly for services, Stram said.

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77

%

OF THE U.S. POPULATION HAS DENTAL BENEFITS

Sarah Fister Gale is a writer in the Chicago area. To comment, email editors@workforce.com.

march/april

2018


HOT LIST Dental Insurers Listed alphabetically; compiled by Alexis Carpello; editors@workforce.com TOTAL REVENUE FOR MOST RECENT 12 MONTHS

TOTAL NUMBER OF PLAN MEMBERS

NUMBER OF MEMBERS IN EMPLOYER-SPONSORED PLANS

DELTA DENTAL deltadental.com

$22 billion

140,000

57 million

GUARDIAN LIFE INSURANCE COMPANY OF AMERICA guardiananytime.com

$2.6 billion

84,972

6.9 million

WND*

34,300

20.5 million

$699.5 million

35,629

1,809,018

$1 billion

25,000

8.9 million

HEALTH CARE SERVICE CORP. hcsc.com

$34.5 billion

12.5 million

15 million

HIGHMARK INC. highmark.com

$53.5 billion

4,643,500

13,993,400

HUMANA INC. humana.com

$18.2 billion

WND

5 million

WND

14,000**

50 million

$230 million

38,096

3,162,106

WND*

8,000

2 million

$52.3 million

15,186

539,146

$4.5 billion

60,000

85 million

COMPANY NAME & Web Address

METLIFE DENTAL metlife.com PRINCIPAL principal.com UNITED CONCORDIA DENTAL unitedconcordia.com /dental-insurance

Health Insurers

Vision Insurers EYEMED VISION CARE eyemed.com GUARDIAN LIFE INSURANCE COMPANY OF AMERICA guardiananytime.com METLIFE metlife.com THE PRINCIPAL principal.com VSP VISION CARE vsp.com

Note: **The 2017 Hot List should have read as 13,000 clients, not 37,000. *MetLife does not report revenue on a per product basis for its group benefits business. Source: Companies march/april

2018

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SECTOR REPORT

C o r p o r a t e We l l n e s s P r o v i d e r s

Is Wellness Just an Employee Perk? Wellness programs may be more about brand building than employee health, but that’s OK. By Sarah Fister Gale

C

orporate-sponsored wellness programs continue to be popular, but not for the typical reasons. While sponsoring health club memberships and Fitbit leaderboards is a great way to get employees focused on healthy living, the real benefit of these programs is cultural cachet. “These offerings are moving to closer to being a perk than being about wellness,” said Michael Maniccia, specialist leader for Deloitte in Los Angeles. According to the International Foundation of Employee Benefit Plans’“Workplace Wellness 2017 Survey Report,” while 75 percent of employers now offer wellness initiatives, only 1 in 4 said the main reason was to control or reduce health-related costs. Instead, they are looking at these programs as a way to drive engagement and improve employee satisfaction. Companies also use these programs to lure top talent, offering increasingly over-the-top offerings — think climbing walls and laser tag — to brand their corporate culture as a cool place to work. It makes sense, said Maniccia.“These programs are fun, they aren’t expensive, and they increase employee engagement, all of which is good for a company.” Whether they actually improve the health of the employee population — or reduce medical costs — is less clear. Even when the goal of a specific wellness program is related to improving health, measuring the impact is difficult. Even if health care costs drop, it’s impossible to isolate wellness as the reason, Maniccia said. Instead, companies should consider more short-term measures, such as program participation and employee satisfaction. “If no one uses the wellness program, it isn’t contributing value,” he said.

BEYOND THE PHYSICAL Fortunately, today’s wellness programs have something for everyone.Along with traditional weight loss and smoking cessation programs, wellness now extends to healthy living, social and emotional health, healthy sleep habits and financial guidance.“It’s about focusing on the well-being of the entire employee,” said Ann Wyatt, vice president of program management for HealthFitness, a health management company based in Minnesota. It’s good for business. Research shows that poor sleep, emotional stress and financial troubles have a direct impact on employee performance and absenteeism,Wyatt said. For example, PWC’s 2017 “Employee Financial Wellness Survey” shows nearly one-third of all employees are distracted by personal financial issues while at work, with almost half spending three hours or more each week handling personal finances at work.

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Such findings have driven the popularity of financial coaching, consulting and other programs, she said. “It is the new cornerstone of the wellness offering.” Maniccia believes the next big thing in wellness will be volunteer options.“A person’s well-being is linked to whether they are fulfilled by what they do every day,” he noted. When their job doesn’t provide this intrinsic satisfaction, having opportunities to give back to the community can help fill that gap. It is also another way for companies to brand their corporate culture as a company that gives back. “There is a natural connection between wellness and volunteerism,” he said. This is still a new idea in wellness, but he anticipates stronger links will emerge between benefits administration and corporate social responsibility programs in the future. Regardless of what types of programs a company offers, the key is making sure employees are aware of them, see value in them and are encouraged to take advantage.“Employees often feel like they need permission to use wellness offerings,” Wyatt said. If taking an hour off for a yoga class or financial seminar is frowned upon, people won’t use them. To get the most value, leaders need to promote the programs through communication campaigns, participate themselves and celebrate success stories as a way to drive engagement, she said. Companies also need to think beyond what young active employees want from wellness. While CrossFit classes and paleo lunch menus may appeal to health-focused millennials, companies need to think about the needs of all employees and provide enough variety to motivate those who aren’t inherently fit.“Health is personal,”Wyatt said. “You have to have a program that speaks to everyone or it is not going to work.”

88

%

OF ORGANIZATIONS WITH A WELLNESS PROGRAM RATED THEIR INITIATIVES AS SOMEWHAT OR VERY EFFECTIVE IN IMPROVING EMPLOYEE HEALTH

Sarah Fister Gale is a writer in the Chicago area. To comment, email editors@workforce.com.

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2018


HOT LIST Corporate Wellness Providers Listed alphabetically; compiled by Alexis Carpello; editors@workforce.com

COMPANY NAME & Web Address

% OF BUSINESS REPRESENTING CORPORATE WELLNESS

NUMBER OF CORPORATE CLIENTS

NUMBER OF EMPLOYEES SERVED

TYPES OF WELLNESS PROGRAMS OFFERED

NOTABLE CLIENTS

4,500

Complete biometric screenings; customizable and data-driven wellness curricula for all employees

Clearlink; Instructure; Ken Garff Automotive Group

50

10,000

High VOI risk/cost reducing on-site and virtual wellness solutions

WND

50

3,000

Biometric screenings; body composition analysis; weight-loss programs

WND Stanley Black & Decker; Kohl’s; Nielsen; USAA; Jamba Juice

AXUM CORPORATE HEALTH STRATEGIES axum.co

100 percent

10

CORPORATE HEALTH PARTNERS LLC chp-inc.com

100 percent

CORPORATE WELLNESS PARTNERS cwpil.com

80 percent

LIMEADE limeade.com

100 percent

165

1 million

Whole-person well-being assessment; social activities; interactive learning

MARINO WELLNESS marinowellness.com

100 percent

55

22,000

Office massage; meditation; fitness/health education programs

TOMS; Netflix; Dollar Shave Club; Verizon; National Geographic

100,000

Weight management; disease prevention

Advocate Health Care; American Medical Association; Aon; Domino’s; Dr. Pepper

2.1 million

Employee well-being; hub technology

St. Joseph Health; Medtronic; Florida Hospital; Hewlett-Packard Baylor College of Medicine; DaVita HealthCare Partners; McKesson Larry H. Miller Auto Group; Allied Solutions

RETROFIT, INC. retrofitme.com

VIRGIN PULSE virginpulse.com

VITALITY GROUP vitalitygroup.com

WELLRIGHT wellright.com

95 percent

100 percent

150

3,000

WND

350

7 million*

Wellness; insurance; technology solutions

100 percent

215

130,000

Physical, emotional, social, occupational and financial solutions; biometrics

Note: *Global figures; Vitality Group does not break out only U.S. employees publicly. Source: Companies march/april

2018

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LIVE TO 100 continued from page 47 Employers also can nudge their employees to be more proactive about preparing themselves for longer working lives. Our survey asked workers what steps they are taking to help ensure they can continue working past age 65 and the findings were surprising. Only 62 percent say they are staying healthy. Just 56 percent are focused on performing well at their current job and even fewer, 46 percent, are keeping their job skills up to date. Disappointing as these findings are, they underscore the positive influence that employers can have on their employees’ current and future productivity by offering workplace wellness initiatives, encouraging lifelong learning vis-a-vis training and continuing education, re-

quiring regular performance appraisals, and providing actionable feedback on a frequent basis. The potential for longer lives, perhaps to age 100 or even older, is an exciting proposition but it’s not an entitlement. It requires a fundamental rethinking of work, retirement and employment practices and will likely involve changes in public policy. Workers, employers and policymakers must all do their part and work together to make the best use of this gift of extra time. Catherine Collinson is CEO and president of Transamerica Institute and Transamerica Center for Retirement Studies and is a retirement and market trends expert. To comment, email editors@workforce.com.

ADVERTISING SALES Clifford Capone Vice President, Group Publisher 312-967-3538 ccapone@CLOmedia.com Derek Graham Regional Sales Manager 312-967-3591 dgraham@CLOmedia.com

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w o r k f o r c e . c o m | Workƒorce

53


LAST WORD

Rick Bell

SAYING GOODBYE TO A GAME CHANGER

O

ur Workforce Game Changers are special people.They are the young shakers and movers who will be shaping people management for decades to come. One Game Changer in particular really captured our attention in 2016. We saw Jonathan Flickinger as a unique talent — a background in law and an advanced certificate in strategic HR management from Cornell University just for starters. He was someone who “didn’t just get his foot in the door to begin his HR career — he kicked his way through it,” as writer AnnMarie Kuzel summarized in his Game Changer profile. It’s not surprising that Jonathan was tagged with the moniker “mixed-martial HR generalist.” During the week between Christmas and New Year’s, I noticed an unusually large spike in page views for Jonathan’s 2016 Game Changer profile. Considering that web traffic is notoriously slow at that time of year, out of curiosity I Googled his name. My search revealed the stunning news that Jonathan died in a three-car accident while on his way to work on Dec. 28. Tragically, the story continued, Jonathan left behind his wife Jenna, a 3-year-old daughter and an 8-week-old son. Just a month earlier, Jonathan started a new job as chief human capital officer for Quality Life Services, a home health care company in Butler, Pennsylvania, not far from his home in the Pittsburgh suburb of Bridgeville. It was a well-earned position for him, especially after he endured much adversity in the 18 months since his recognition as a Game Changer. Jonathan was a lifelong resident of western Pennsylvania’s coal country.Working in that dying industry had its risks, which unfortunately struck when Jonathan was laid off after his selection to our Game Changers Class of 2016. Workforce never had an unemployed Game Changer in the program’s history. Admittedly, his new work status gave us pause … for about five seconds. Jonathan was a special talent, and despite the hard luck he remained a solid choice as a Game Changer. His versatility and command of his profession was further evidenced in an opinion piece he authored for Workforce on President Trump’s declaration to restore jobs to the ailing coal industry. Following his selection as a Game Changer, former Workforce Managing Editor James Tehrani called Jonathan to hear firsthand what happened with his job situation. Like a true HR pro, Jonathan did not fault his former employer.There was no bad blood, no sour grapes, no “woe is me” at being dealt a rotten hand, despite any worries he might have had about having to provide for a young family. And while his former employer declined to comment, they said it was because of company policy and not because of our questions about Jonathan. 54

Workƒorce | w o r k f o r c e . c o m 

And now we learn of a much bigger misfortune — a car crash from which there can be no recovery. It’s hard to fathom why someone as talented and committed to his profession, community and family was tragically taken at just 34 years old. While we at Workforce and others who Jonathan touched through his work try to rationalize his death, the hard reality is that there re m a i n s a family coping with the loss every day. I recently talked to Jonathan’s older brother, Christopher. “We’re all functionIsaiah, Jonathan, Lydia and Jenna Flickinger. ing,” he said of the family. As most big brothers would do, he proudly talked up his little brother’s achievements. He also recalled a conversation over the holidays. A growing family and finally a new gig in the profession he loved, Jonathan radiated with an air of satisfaction, Christopher said. “He said, ‘I finally got everything I wanted.’ ” Sadly, that world was shattered three days after Christmas. And while the family still grieves, Jonathan’s wife and children are struggling to get by. Christopher asked me to pass along that a GoFundMe page has been set up for them (search jonathan-flickinger-memorial). Like many young families, Jonathan had no life insurance. His young family also has no health insurance benefits because he had taken the CHRO position just a month prior and insurance hadn’t kicked in yet. “Perhaps your story would move others to donate, which would truly help Jenna, Lydia and Isaiah,” Christopher added. In short, it’s an HR leader’s nightmare scenario. But if I have learned one thing about HR people, it’s that they live to turn adverse situations into something positive. Jonathan Flickinger was a positive force, a bright, shining beacon of HR’s future whose life and influence on the workplace ended too soon. Jonathan always wanted to make a difference, his brother said. Now it’s our turn to rally, to support the recovery of one young family from the HR community. To be game changers. Just like Jonathan. Rick Bell is Workforce’s editorial director. To comment, email editors@workforce.com.

march/april

2018


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Profile for Workforce

Workforce - March/April 2018  

NEW FACE OF RETIREMENT: Sharen Emek launched a company that places retiring baby boomers in work-at-home jobs.

Workforce - March/April 2018  

NEW FACE OF RETIREMENT: Sharen Emek launched a company that places retiring baby boomers in work-at-home jobs.

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