Company WellnessCompany wellness programs and company wellness consulting

When it comes to wellness programs, it could be tough to get past all the hype. Here is how to avoid the three most common traps companys fall into.

Trap #1.  The “one-size-fits-all” approach

For good reason, your organization does not simply copy other firms’ 401(k) plans or compensation designs. Yet, all too often, firms adopt ill-fitting wellness programs based on things that have worked elsewhere.

Your CFO might have seen data on the cost savings other employers have achieved via certain wellness incentives. Or an old peer of your CEO swears by the wellness program at his or her own firm.

In response, the top brass pushes for a copycat wellness program – for instance, offering smoking cessation incentives.

That could  be a good idea, if use of tobacco-related diseases are a key driver of your company’s medical costs. But how can you be sure? is it good enough to have your staff undergo a health risk appraisal?

Normally, the answer is no.

Health risk appraisals are a great beginning place, but it’s often a mistake to stop there.  The assessments help you get a feel for what your employees’ baseline physical problems are before you attempt to design a wellness program around them.

This creates rough outlines of what your wellness program goals must be and where to target employee programs. If you want the maximum bang for your wellness buck, you’ll have to dig a little deeper for information. Key places to look –

• your organization’s medical-claims breakdown for the last three years

• prescription-drug claims

• employee absence information

• employee assistance program (EAP) use

• disability claims, and

• staff member demographics (workers’ ethnic, gender, age and dependent coverage status points to greater – and lesser – health risks associated with each category).

Trap #2. Leaving the wellness program on autopilot

A lot of health promotion programs often get off to a good start and then fizzle out. Companys are left wondering what went wrong. Their mistake –  They failed to revisit the health promotion program on an ongoing basis – at least every other year.

Why it’s critical –  Your cost-drivers can easily shift as personnel come and go from the organization.

Example –  This year, emphysema and other smoking diseases may  be your largest cost driver. But two years from now, it may be obesity and diabetes.

Unless you continuously track the health promotion program and adjust your objectives as necessary, you could not be prepared to meet those new challenges.

Trap #3. Unrealistic expectations

Generally, it takes at least a year and a half for businesss to break even on the cost of a wellness program.  As a rule of thumb, the average program cost per employee per month to the business is about $3 to $5.

If, after three years, you still aren’t seeing results, something went wrong. Currently, the benchmark Return On Investment after the third year of a wellness program is $4 to $5 saved for every dollar spent.

Just how can you manage the cost in the short-term? In many cases, employers pass the cost of the health promotion program on to the workers. for example, let’s say you want to roll out a health promotion program effective January 1 (or whatever your first day is of the new plan year).

You can roll that $3 to $5 per employee per month cost directly into the employee’s monthly share of their health care premium. That makes the wellness program a budget-neutral expense for your company.

But remember –  You get what you pay for – both in time and money invested.  The less guesswork that’s involved in the planning and execution, the better the chance for success.

Variable compensation could be a great way to satisfy demand for higher pay while addressing upper-level management’s need to boost productivity and keep base salaries under control.

But there are some major pitfalls.  Here are two proven ways to avoid the most common legal and return on investment risks.

Non-exempt employees

Beware when you use variable comp as a pay-for-performance strategy for hourly staff members. Reason –  It’s easy to inadvertently run afoul of the Fair Labor Standards Act (FLSA) overtime rules.

Under FLSA, you must recalculate employees’ hourly wages to include all variable pay (such as individual or departmental bonuses) when figuring overtime compensation.

Failure to do so could cost your organization more in penalties and back-wage payments than the variable comp plan saved on the front end.

So it’s a good idea to double-check with Payroll to be sure the department knows to make OT adjustments after hourly employees receive bonuses.

Reward the right things

In order to make the criteria for bonuses easier for staff to understand and management to measure, many firms prefer using strictly objective measurements. Example –  the plan may pay out based on how much money staff save their department in a year.

But what happens if employees cut corners – on safety, service, quality, etc. – to reach the goal?

At some firms, personnel are still rewarded with additional pay, even though their actions potentially did more harm than good to the bottom line. for best results –

• set behavioral criteria for bonuses as well as economic ones, and

• consider using a mix of firm-wide, departmental and individual economic performance measures.

Shopping for healthcare plans through a broker is a fact of life for the vast majority of businesses. But how well is your broker meeting your needs?

And how can you work together better to minimize costs while getting maximum bang for your organization’s benefits buck?

What’s New in Benefits and Compensation conducted an exclusive survey of 195 subscribers to determine how they view their company’s relationship with their brokers. Here is what they said –

Half see room for improvement

The good news – Almost half of your peers rate their relationship with their current broker as “excellent.” But that means the other half see some room for improvement.

Thirty-nine percent of respondents rated their broker relationship as satisfactory and said they were at least “reasonably happy.” the remaining 11 percent noted “unpleasant surprises” while 4 percent are actively considering a switch.

Tools for making buying decisions

Of course, the No. 1 reason any corporation works through a broker is to find the best deals on health benefits. But many of your colleagues pointed to a few areas where their brokers could help make their lives a little easier.

First and foremost, your colleagues say they’d love for their brokers to provide user-friendly – but thorough – return on investment data they can use to benchmark different plans.

It’s worth discussing with your broker how much arm-twisting the broker can do with medical plan carriers to get key data in your hands. Two specific areas of data benefits pros say they’d like help from brokers –

• obtaining and sharing claims cost data to compare to premiums, and

• benchmarking your average plan costs against those of similar-sized firms in the region.

Unfortunately, claims cost data is usually hard to pry loose from insurers, at least for smaller companys’ plans.

Reason –  Without this data, it’s tougher to judge if your premium rate adjustment at renewal time is fair. Fewer than half of respondents (46.3%) say they’ve ever discussed such information with their brokers.

Obtaining benchmarking data on similar-sized plans assists you see how comparably your costs and plan designs stack up in your area. Roughly 43 percent of respondents say they’re armed with at least some of this info when it comes time to decide whether to stay with the existing plan.

Earlier renewals

It’s worth talking with your broker about ways to push for the earliest possible renewals – and strategies for making sure your carrier doesn’t hit you with any unpleasant surprises.

One notorious game insurance companies play with businesss’ plans is to wait until the last moment to reveal the new premiums at renewal. That way, there’s less time for negotiation – or to shop around with the insurer’s competitors.

About 28% of respondents report getting their renewals about 30 days before the rate kicks in. Different brokers use different benchmarks for securing renewals. A minority of respondents (19.5%) have seen them as early as 90 days ahead.

Taking work off HR/Benefits’ plate

The benefits brokerage marketplace is highly competitive. Some brokers attempt to set themselves apart by offering patrons so-called value-added services.

Among your colleagues, the most popular services are those which relieve the company’s HR/ benefits manager of time-consuming tasks. Some examples –

• reviewing  plan documents

• Auditing (and, if needed, reconciling) carrier bills for errors

• monitoring plans for compliance (HIPAA, COBRA, etc.)

• offering tech support for a benefits intranet and/or staff member self-service software, and/or

• assisting with worker education.

Which costs your company more – personnel who miss work or ones who show up physically but take a mental PTO day?

For most companys, it’s the latter. So why do even savvy senior managers and finance directors (we’re not just talking about the bean-counters) worry about absenteeism while downplaying so-called presenteeism as a drain on corporation productivity, not to mention the compensation and benefits budget?

In some cases, senior managers seem to think that admitting that presenteeism even exists at the firm is akin to saying, “We’re a poorly run business.” In reality, presenteeism exists in every worksite.

Virtually every staff member, manager, supervisor and executive who has ever tried to “tough it out” at work when he or she’s been sick has been a presentee on those days.

So has anybody who’s ever been distracted at work by non-work issues – whether it’s spending the day attempting to resolve an individual financial matter, checking on a sick child at home or constantly checking for scoring updates from a sporting event.

In brief, unless we’re to believe that every staff member is productive every single day, no company in the world is immune from presenteeism.

Some corporations that don’t bury their heads in the sand about presenteeism still don’t track it. Why? Usually, there’s a belief that chronic presentees eventually get rooted out of the company.

And short of watching over every other employee’s shoulder throughout the workday, it’s too difficult (and even counterproductive) to attempt to estimate the cost to the business.

Here are some strategies that firms have used to not only measure the cost but also reduce the problem.

Creating a cost estimate

If your organization is like most, senior management worries endlessly about health benefit costs without realizing undetected presenteeism is just as expensive, but easier to control.

Consider these facts from a recent CSG study – Almost 10 percent of the typical each year pay and benefits

budget is spent on non-productive (but treatable) staff.

Add in workers who call out at the last second and the percentage rises to 17%, as reported by SHRM.

But how do you estimate the actual dollars-and-cents cost to your firm?

Let’s assume you have 50 staff, who make an typical $40,000 a year. Over the while the year, the typical staff member is non-productive 2.5  percent of the time, due to assorted personal issues or minor diseases that serve as distractions.

In this instance, presenteeism costs your corporation $50,000 a year. If you’ve a 5 percent presenteeism rate, the figure shoots up to $100,000.

While it’s impossible to entirely stamp out presenteeism, even small reductions in presenteeism add up to large bucks in controlling compensation and benefit costs.

The next step, of course, is doing something about the issue. Broadly speaking, the process generally works in three phases –

• review current policies and procedures for things that accidentally increase presenteeism

• get supervisors and personnel involved on the front end, and

• stress the importance of work-life programs to senior management and supervisors.

Let’s look at each area to see how they work in real-life practice.

Unintentional effects

Three common ways many firms attempt to cut absenteeism often increase presenteeism –

1. Over-stressing attendance in employee’s annual reviews

2. Having supervisors check up on employees who take sick days to verify they’re really ill, and/or

3. Disciplining employees for last-moment sick callouts.

From a practical and cost standpoint, the best solution could  be to switch from separate vacation and sick-day benefits to a single paid time off (PTO) bank.

When folks have no-questions-asked control over their off days, they’re sometimes more likely to use a PTO day if they’re sick.  Of course, you know that PTO carries some risks of its own.

Early detection

Fewer than one company in 10 gets both managers and staff involved in the process of spotting and eliminating presenteeism.

That’s too bad, says advisor Mary Beth Chalk, because it can been done pretty easily.

Ask a sampling of personnel to rate how energetic and productive they generally feel at work, on a percentage scale. Have supervisors estimate their staff as well. Then split the difference.

The result is a pretty good barometer of your organization’s current and future presenteeism risk.

Work-life balance

Anything you are able to do to promote work-life programs at your firm can have a positive effect on the bottom line. Proven ideas include –

• rewarding supervisors who support flexible work arrangements

• sending sick workers home

• cover onsite flu shots, and

• Actively promote your existing Staff Member Assistance Program.

Any benefits HR/manager can adopt these ways to make staff members feel more appreciated.

The common thread –  using your own communication skills as a powerful tool for improveing morale.

1. Put in face time

When time permits, managers may want to put in some “face time” with workers. This in and of itself is a kind of staff member recognition. Example –  There’s a lot of value in simply walking around the building, chatting with workers.  Ask workers about the personal items they display at their workstations.

In the short-term, folks will notice and appreciate your interest.  Long-term, this may inspire ideas for rewards and incentive programs.  The same technique works at  firms with multiple locations.  Make a site visit to get a feel for the morale. This is much cheaper – and often more effective – than designing a formal benefits survey.

2. Send ‘em personalized stuff

Looking for a simple way to show staff that HR/Benefits cares? Develop a template from which you can send customized “Welcome” letters to new hires or “Happy Anniversary” notes for employees’ organization anniversaries.

3. Target overlooked employees

Most firms have personnel (e.g. part-timers) who aren’t eligible for the 401(k), health plan and other company-sponsored benefits.  Small gifts help firms connect with these often-overlooked personnel.

Example –  on the first day of spring, send them a packet of flower seeds and attached a note from Benefits. Burston-Marsteller Worldwide has used this simple, low-cost idea and gotten good results.

Looking for recognition ideas that get results?  Here are two keys to success –

The most common characteristics of high-Return On Investment recognition programs – regardless of their monentary value – are their spontaneity and perceived value by staff members themselves.

In reality, the cost of some of most effective spot awards and bonuses often amount to less than 1% of base pay – and the awards don’t even have to be given in cash.

Less sense of entitlement

Part of the problem with traditional end-of-year or quarterly bonuses (apart from the fact that they cost corporations an average of 10% of base pay) is that employees expect to receive them for reaching certain objectives.

Sometimes staff simply expect it no matter what. for example, at many firms, an annual holiday bonus is viewed as an entitlement and individuals  inevitably grumble that it’s not high enough. on the flip side, with spontaneous awards and bonuses, staff are often pleasantly surprised.

Benefits advisor Ken Stahlmann spells out four keys to making the latter type of awards work, even if they’re lower in cost –

1. Creativity is crucial

The most effective programs ordinarily give out awards weekly or monthly.  To avoid over-stretching the budget – and avoid a ho-hum attitude establishing in – creativity is a must.

One way that never gets old –  combining time off with a second, non-cash award. Example –  One firm gives a half-day off in combo with movie passes once a month.

Another, at weekly staff meetings, holds a random drawing for a dinner gift certificate, plus permission to leave work early once.

2. Make it personal

Rewards have more lasting impact when they’re geared to individuals ’s personal needs or interests. Two examples –

• one firm with many foreign-born, low-wage workforce awards a $20 pre-compensated phone card after 90 days of service, and a $100 card for outstanding work, and

• Another company with a lot of sports nuts took several top-performers to a ball game. Managers said it was the best $200 they’ve ever spent for creating ongoing enthusiasm.

3. Add structure

The awards might seem spur of the moment, but top programs have a fixed budget and structure set before anything is handed out. Example –  One retail firm awards “points” for good work. Folks can then trade in their points for store merchandise.

By letting individuals  bank points for more valuable rewards, the employer saw a solid jump in retention.

Other organizations prefer to let workers reward each other. for  instance, a small health care provider keeps a “goodies box” on-site – compensated for in petty cash and stocked by workers themselves.

When someone spots a peer going the additional mile, he or she pulls out a prize and awards it.

The program is a enormous hit –  It’s immediate and personal, yet structured.

4. Don’t let good intentions backfire

Most spot awards go over well. But keep these four issues in mind –

• For most cash or cash-value awards, there are tax implications (just as with traditional bonuses)

• Awards need to be spread around or else resentment can creep in

• Make sure honorees don’t mind being the center of attention (some firms have accidentally alienated people  they tried to reward), and

• Be sure the reward is something people  actually want. One firm that awarded a VIP parking space next to the Chief Executive Officer (CEO) found no one used it. No one wanted the Chief Executive Officer (CEO) knowing what time he or she came and left.

Looking for ways to increase morale, productivity and retention? Spot awards may  be the way to go.

They are the most popular recognition incentives among personnel, a recent research study  shows.  The best part –  the incentives generally amount to less than 1% of base pay. That also can makes this option attractive to C-levels.  And the awards don’t even have to be given in cash.

Spontaneity grabs ‘em

Traditional end-of-year or quarterly bonuses cost corporations an average of 10 percent of base pay yet often have a lower payoff in morale and retention.

Reason – Staff Members appreciate them less because they expect to receive them for reaching certain goals. By their nature spot awards are spontaneous and compensated out immediately. Honorees are pleasantly surprised and see the organization values their work.

Here are four keys to successful spot bonus programs, as reported by benefits consultant Ken Stahlmann –

1. Creativity is crucial

The most effective programs usually give out awards weekly or monthly.  To avoid over-stretching the budget – and avoid a ho-hum attitude establishing in – creativity is a must.

One way that never gets old –  combining time off with a second, non-cash award.

Example –  One firm gives a half-day off in combo with movie passes once a month. Another, at weekly staff meetings, holds a random drawing for a dinner gift certificate, plus permission to leave work early once.

2. Make it personal

Rewards have more lasting impact when they’re geared to people ’s personal needs or interests. Two examples –

• one firm with many foreign-born, low-wage personnel awards a $20 pre-paid phone card after 90 days of service, and a $100 card for outstanding work, and

• Another firm with a lot of sports nuts took a few top-performers to a ball game. Managers said it was the best $200 they’ve ever spent as for building ongoing enthusiasm.

3. Add structure

The awards might seem spur of the moment, but the most effective programs have a fixed budget and structure set before anything is handed out.

Example –  One retail firm awards “points” for good work. Folks can then trade in their points for store merchandise. By letting people  bank points for more valuable rewards, the employer saw a solid jump in retention.

Other companies prefer to let staff reward each other. for example, a small health care provider keeps a “goodies box” on-site – compensated for in petty cash and stocked by staff themselves.

When someone spots a colleague going the extra mile, he or she pulls out a prize and awards it.

The program is a immense hit –  It’s immediate and personal, yet structured.

4. Don’t let good intentions backfire

Most spot awards go over well. But keep these issues in mind –

• For most cash or cash-value awards, there are tax implications (just as with traditional bonuses)

• Awards need to be spread around or else resentment can creep in

• Make sure honorees don’t mind being the center of attention (some firms have accidentally alienated individuals  they tried to reward), and

• Be certain the reward is something individuals  actually want. One firm that awarded a VIP parking space next to the CEO found no one used it. No one wanted the CEO knowing what time he or she came and left.

In the last few years, there’s been a lot of publicity about the fast-growing crime of identity theft. More than half happen in the worksite. Benefits and compensation files are the most vulnerable targets.

The scariest part –  Victims of benefits-related ID theft often make out worse than those who fall prey to the more common variety.  The bad guys are ahead of investigators after such thefts occur, and are often very good at covering their tracks.

Also, because benefits ID-theft is a relatively new type of crime, there’s no well-established system for victims, plan sponsors and providers to set things straight after the fact.

401(k) accounts a prime target

Not surprisingly, employees’ 401(k) accounts have become the main target for benefits thieves.  An alarming MSNBC news report showed just how easy it may be for thieves to tap into an employee’s 401(k) accounts – If an web-based account gets hacked into or account paperwork falls into the wrong hands, it takes only a few mouse clicks to wipe out the victim’s retirement savings.

With average credit-card or bank account fraud, victims need only call their card issuer or bank, report the crime and refuse to pay for an item. But 401(k) theft is much, much harder to resolve.

Three enormous obstacles –

1. Money in 401(k) accounts is not federally insured, like a bank account.

2. 401(k) accounts rarely – if ever – come with automatic identity theft protection from the vendor, like credit cards.

3. Even when the theft is successfully resolved, the situation becomes an ERISA nightmare for plan sponsors, because your corporation also has to account for the way the theft affected the growth of the employee’s account before the money was restored.

A lot of EAPS fall into a common – and hazardous – category –  Management thinks the program is excellent, but personnel think it’s a waste. But it doesn’t have to be that way when you have an EAP or are considering one.

Seventy-three percent of all firms (59 percent of small employers) have an EAP. But how well does the average employee assistance program work? Not in addition to we’d hope. A Mid America Coalition on Healthcare study found –

• just 50 percent of 6,400 employees surveyed said they’d use the employee assistance program when they felt overwhelmed by personal issues, and

• one-third said they didn’t even know how to access its resources.

The good news –  Firms like yours have seen dramatic improvements in three relatively simple steps

1. Worker attitude surveys

The best starting place –  Take the pulse of your workers with a short, confidential attitude survey.

Goals –  Ask employees when they know how to use the EAP’s resources. Then test workers’ knowledge and opinions of depression and other personal issues that might affect their worksite performance and/or safety. In the final section, find out how employees would handle a serious personal issue.

In other words, determine where your people  would likely turn for help. Would employees seek out the EAP? Would they prefer to discuss the issue with their family doctor? A mental health expert?

The Mid America Coalition’s survey remains an excellent design model from which to craft a recent survey for your own staff members.

2. Promote employee assistance program (EAP) through education

Your survey data ought to help you pinpoint areas where personnel need more education about your EAP. Some awareness-improveing techniques that have gotten results –

• Lunch-and-learn sessions. Possible topics include dealing with personal-finance stress, caring for elderly parents, understanding depression or dealing with a dependent who’s potential mental health issues.

• Worker newsletter. When you have a benefits newsletter, spotlight the EAP from time to time. Some businesses without newsletters have done e-mail campaigns or targeted mailings instead.

• Worksite posters spotlighting EAP.  The ones that work best are often posters designed around a specific theme (e.g., anxiety about personal debt) rather than a general “need help?” message. In addition to posters, you may want to distribute wallet cards with employee assistance program contact info.

Need help locating educational material? There’s lots of free EAP-related flyers and FAQs here. Do not forget –  When doing EAP education, constantly remind staff members that the program is strictly confidential.

3. Be sure to work with supervisors

For legal reasons, supervisors need to tread carefully when they suspect an employee has a psychological health issue.

What you don’t want –  supervisors taking disciplinary actions without consulting HR or playing amateur psychologist and “diagnosing” the employee’s problems. Here’s a PDF of some proven tips and talking points for doing supervisor-specific employee assistance program (EAP) education.

HIPAA compliance –  Beware non-discrimination issues

HIPAA’s non-discrimination rules impact both mental health benefits and general health plans. Under current interpretations, health care plans can no longer have benefits exclusions that deny benefits for injuries resulting directly or indirectly from pre-existing mental health issues.

That’s true even when the psychological condition wasn’t diagnosed until after the injury and even when the injury was self-inflicted. Example –  Suppose an staff member gets hurt in a worksite accident he or she caused. After the fact, the staff member is diagnosed with a mood disorder that previously escaped detection by the employee’s physician.

Under current regs, HIPAA-covered plans can’t deny benefits. This puts companys in a bind. Mental health issues like depression, anxiety or bipolar disorder are one of the health conditions that’re most likely to go undiagnosed or underdiagnosed.

That’s why, in most businesses, having a strong EAP is one of your best compliance tools.

For many personnel, telecommuting and flex-time are highly desired work-life benefits. But a growing number of companies are reluctant to offer these programs.

Demand for these benefits remains high.  One study found that 87 percent of job applicants are familiar with the idea behind telecommuting and flex-time, and the majority express a desire to have at least periodic access to such programs.

Environmental interest groups have pushed the feds for years to develop incentives for businesss to encourage telecommuting.  The pressure has risen as gas prices have continued to soar.

Nonetheless, flex-time programs have leveled off in some sectors, and there’s been a decrease in telecommuting.

Today, about half of all corporations where telecommuting is feasible permit workers to work from home on a case-by-case basis. But the percentage of employers offering full-time telecommuting has dropped in recent years.  Nowadays, only about 20% to 25% of employers offer the benefit year-round.

Even some national companys that are well-known for their telecommuting programs have scaled back. AT&T, for example, recently asked a few thousand home-based staff members to come back into the office.

Hewlett-Packard and Intel have done the same thing.  and the federal government recently noted a 7.3% drop in telecommuting staff members. Why the cutbacks?

Staff Member Assistance Program – Pros and cons

Offering workers telecommuting or flex-time could be a good recruiting and morale-improveing tool, in addition to a way to retain workers who need to relocate, would otherwise have a need to quit or take leave or commute long distances to work.

But the programs are not without their drawbacks. Some of the main reasons businesss give for scaling back or eliminating them –

• Business culture – It’s easier to build a sense of organizational stability and a personal connection between workers, peers and supervisors when people  interact face-to-face on a daily basis.

• Security – One of the hidden costs of allowing workforce to telecommute (or else come in early or stay late) is keeping sensistive information safe. Some the cutbacks are being driven by companies’ IT departments.

Especially, managers have raised concerns about stolen laptops, identity theft or other crimes driven by hackers gaining access to information via workers’ home Internet connections.

• Productivity – A lot of supervisors find it easier to ensure high productivity when everybody is working under one roof at the same time.  There’s also a widespread view that most workforce get things done faster and more accurately when they’re not distracted by things at home.

The bottom line on the bottom line

Work-life programs such as flex-time and telecommuting remain a useful benefit to offer staff, and a lot of organizations still provide these benefits for economic reasons.

But once the potential hidden costs are weighed, it’s often better for the bottom line to limit the scope of these programs.

Organizations that are thinking about starting a telecommuting program ought to look closely at job descriptions and telecommuting candidates. Some positions are poorly suited for remote work, and some staff are more up to the challenge than others.

But unless the corporation creates objective criteria for allowing or denying flex/telecommuting requests, such programs can actually damage morale.

The last thing any corporation wants is to open supervisors(and the company) up to accustations of favoritism or discrimination because of seemingly random decisions on which employees in their department can and can’t flex their schedules or work from home.