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Welcome to The JoyPowered® Workspace Podcast, where we talk about embracing humanity in the workspace. I’m JoDee Curtis, owner of Purple Ink, an HR consulting firm, and author of “JoyPowered®” and “The JoyPowered® Family.” With me is my co-host and soon to be co-author Susan White, a national HR consultant, and we are co-authoring the book “The JoyPowered® Team,” so more to come on that later.
In today’s episode, we’re talking about benefit trends, and our special guest today is Paul Ashley with FirstPerson. Paul creates employee experience strategies for clients. He has been in the benefits industry for 14 years, and as the Executive Vice President and Managing Director of FirstPerson, he leads the sales and advisory teams toward great strategies and outcomes while still focusing on developing quality partnerships with clients. Paul holds the Certified Employee Benefits Specialist, better known as CEBS, designation and on a side note, is a sommelier.
Is that right?
Now you have my attention.
This podcast just shifted to talking about the world of wine.
Yes, please! Red, preferably.
Benefits later, let’s talk about wine. So… yeah, no, I’m impressed. And I speak from experiences on all of those things that he does well, because I personally was a client of Paul’s for many years and now also a partner of his with many of our clients. So…
Have I curated wine for you yet?
No, you have not.
Well, that’s a failure on my part.
Yes, but thanks for asking. I’m available this weekend. So… Susan and Paul, recently Stephen Miller, who is also a CEBS, released two articles from SHRM about benefit trends. One came out in December and was called “Ten New Benefits Workers Want,” and the other, which was released in January 2019, is called “Six Big Benefit Trends in 2019.” According to a SHRM 2018 survey, more employers offered benefits to meet employee demands. So I thought what we’d do is we’d just read through some of these, and Paul, chime in when areas that you have ideas or thoughts on or experiences that you’ve seen with some of your clients, and at the end, tell us what we missed. Right?
Give it a shot.
I am so glad we’re doing this topic today, because I really do believe as competitive as the hiring landscape is, is that employers really need to stay up to date on what do employees want in the area of benefits, because that could be the key differentiator in someone selecting them. So..
Alright, well, the top three benefits with the largest increases in this SHRM 18 survey was elder care resource services, disaster relief funds, and advancement initiatives for women such as women’s mentoring.
And the three that followed that were number four, telemedicine. Number five, identity theft insurance. Boy, that’s important, given all the fear we have about databases getting hacked. And then number six, unpaid sabbaticals.
I have to admit, I was surprised about the advancement initiatives for women. Not that I’m not excited about that, but surprised that it was still one of the top ones. Like, it seems like that should have been our top one 10 years ago or 12 years ago or so… I can’t decide if I’m excited about it being in the top three or not. Why, why, why was there such a big increase last year?
Well, I think there’s so much clearer science and publication I’ve read about leadership teams who include women perform at a higher level, and I think businesses who have not experienced that are finally waking up and starting to realize it’s great to have women on a leadership team and a mix of, a mix of backgrounds. And so perhaps this is the latent response of the folks who hadn’t gotten it yet finally starting to catch up with, you know, people from 10 plus years ago. That’s my hopeful side.
Why has it taken the men so long?
Well, we aren’t always as thoughtful as we should be. My wife says that while I might be the head of the family, she’s the neck that turns the head. So she’s very…she’s in charge.
Oh, I love that.
I love that.
You know, Paul, I’d be interested in the unpaid sabbaticals. Are you seeing that with many of your clients, that they’re looking to offer unpaid sabbatical?
It’s really interesting this made the list, because I’ve seen an uptick in that as well. We’ve talked about it internally at FirstPerson, because a lot of times, we like to try out things on ourselves first before we roll it out to clients or can experience it with clients. But I’ve seen a large number of nonprofits look at unpaid sabbaticals, because what tends to happen in the nonprofit world is, historically, and I think this is still generally true, they aren’t as well compensated as their for profit peers. And they’re so focused on the mission of the organization, they pour their life into it, right? And that can burn somebody out pretty quickly, and so that is a thing that nonprofits can do and I’ve seen them do. We have a relatively large nonprofit practice, so I’ve seen that happen in our nonprofit practice, and many of them are considering partial pay or even paid sabbaticals for seasons. And so it’s definitely an uptick. And I think the other reason you see it in the for profit world is the younger generation, so let’s call it millennial, Gen Z, and in coming up, what is a generational norm for them is life experiences. They value life experiences more than generations prior, not to say that other generations don’t care, but they’re willing to put life experiences ahead of pay and advancement. Sometimes.
I think you’re right, or physical possessions, you know, young people getting married often want, you know, a fund to go do life experiences as opposed to things, right? That really resonates.
And so employers responding to the demand of that generational norm are saying, well, if, you know, we’ll give you three months off to go to Tahiti, or, you know, backpack in Africa, or whatever might be your your cup of tea, so I definitely see that as well.
I love it. I love it. I think it’s great. I, you know, at least for me, I think of sabbaticals as being something in the university space, it’s certainly been around for… professors for many, many years have done that. And then you guys know, I come from the world of public accounting, and that became a trend maybe in the early 2000s, but it was only for partners, right? So it started there. So it still seems to me like it’s taken a while for that to catch on, because I worked at a firm in 2000 that was doing it, but still, again, it was only at the highest level in the firm.
As a self-employed HR consultant, every day I don’t work is an unpaid sabbatical.
There you go! Look at you beating the trend. And then the last two trends on our list, which I really have heard a lot about this in the past several months, but even specifically, just in the past few weeks, is paid parental leave and student loan repayment assistance. A couple of stats on that on paid parental leave. 29% of US employers offered paid paternity leave in 2018. That was up 8% just in the past two years. I will say, I know some companies that offer paid paternity leave, and it’s it’s one day or it’s two days, so I’m not… I mean, I think the trend is to extend that to six weeks or eight weeks or 12 weeks, but I know we’re probably still including some companies that might just have a couple days in there as well.
Well, I’ve definitely seen a lot of our clients go over to parental leave, and not distinguish between mother or father, right, and just sort of say, in the same way they’ve gone to PTO banks or unlimited PTO and just say, it’s all time off, we don’t care if you’re sick, you’re on vacation, you know, whatever. They’ve kind of gone to this parental leave model that doesn’t differentiate between, you know, man or woman, that doesn’t differentiate between natural birth or adoption. And so we’ve seen that happen. I think it’s an influence of the globalization, because Canada and Europe for decades have been very generous with paid leave for parents. I think in Canada, if I’m not mistaken, a mother almost gets an entire year off paid. Right? So that’s just north of the border. Europe has very similar models. And as we’ve globalized the workforce we’ve, we’ve sent US expats over to Europe to work and we brought in foreign-born folks to work in the United States. I think it just, kind of, people sort of say, what are we doing?
You know, what… this is crazy. And, you know, President Trump made it one of his objectives when he was running for president to tackle parental leave, and he hasn’t done it yet. He seems distracted by other things. But we won’t discuss that on this podcast.
I’d love to, but JoDee and I’d get into a fight.
So one of the things he said he would tackle, which surprised a lot of people, because it was generally not a conservative Republican agenda item, was parental leave being dictated at the federal level.
And so I think that that push coming… Hopefully he’ll get to it. I think it’s important. I think you’re starting to see for profit companies begin to respond to that ahead of what will come likely federally, if he can get his act together. But that’s a whole different conversation.
Yeah. Well, and it is interesting, you know, you – I’m not sure about in Europe, but I do know in Canada, it’s a governmental benefit. It’s not a corporate benefit.
So the government has chose to subsidize that paid maternity leave, at least, right? I’m not sure about paternity leave, so… and then that, that last benefit trending up was student loan repayment assistance, there was a 2% increase for large companies in this area, and now 15% of large companies now help employees repay college loans. And that was up from a percent just a year before, so really significant increase.
It really surprises me that it’s that many, but boy, I think it’s so important given the, you know, the amount of debt that people have from student lending. I think what a great employee benefit, are you seeing much of that?
Big time. So while it may be only 10, 15, 20% are offering it today, almost 100% are talking about it and whether they should do it and how they would do it. And I think where they get tripped up is when they start to realize the amount of money they have to spend. So there’s kind of two ways to go about offering student loan repayment assistance. One is simply curating a program that helps people consolidate loans and has and pay for the administration of a third party entity that’s an expert in it to come in. And there are companies that exist around the country that do this work with employers to help their employees consolidate, then the second version of it is that, plus are we going to put some employer dollars directly into the repayment of the funding of the loan? And then you get into this whole conversation around budget, and as a fiduciary, is that money better spent on their qualified retirement plan where the money can grow over time, or is that money better spent on repaying student loan? And there’s no right answer. It’s a, it’s a philosophical debate. So there are lots of programs emerging out there, and what’s interesting locally is Strada Educational Services, which is a nonprofit headquartered here in Indiana, but does work nationally, has one of their branded initiatives, Student Connections, and Student Connections exists not to sell products in this area, but literally help people consolidate their student loans, and, you know, so we have a ripe, ripe knowledge base here in Indianapolis for this area. And I’ve heard economists talk about that the next great recession or even depression could be triggered by the student loan bubble that’s gonna burst at some point, right? Just like we had the housing bubble of the late 2010, or single digits. The student loan bubble is massively growing, and at some point, folks will have so much loan and so little income potential that they’ll just default, and it will ripple through the economy. So it’s a serious deal.
Yeah. Yeah. And I think we could probably do a whole podcast on this topic, but I have to be a little bit of a devil’s advocate. I’m not sure I, I am supportive of that particular benefit. I’m sort of an advocate that I think too many students take out too much debt. I’m, I’m all about education, but sometimes students who are going to private colleges and need to be rethinking about, oh, I’ll, I’ll just borrow all these loans and I hope my company’s going to help me pay it off when I get out of school, and I think there’s some irresponsibility or looking to employers to pay this, this loan back for them.
Has Pete the Planner brainwashed you?
That’s exactly where I get that concept! Pete the Planner, yeah.
And I would say that if I had a really talented individual working for me, and they were having difficulty in their life because of this debt weighing on them, and there was another employer out there that said, listen, come work for us because we can help you with this great, you know, debt load you have, I think it’d cause me to say I’m happy to put some dollars there.
Right. And I think that’s gonna happen, if 15% of companies are already doing that, there’s a significant benefit.
Well, there’s ways to do it, you know, properly structured, that have tax advantages, you know, so it’s, it’s coming whether people realize it or not. So if you’re listening to the podcast, it’s the first time you’ve heard of the concept, you better know why or why not you’re doing it, right? Because it’s it’s probably the quickest growing trend of the ones that you’ve listed here.
Right, right. Interesting. So those are the the trends that happened in, in 2018 and what companies did do. Now we’ll also talk about the trends going forward in 2019. In this second article by Stephen Miller, he reported that six areas of growth for 2019 were account based health plans, direct contracting with healthcare providers, more family friendly policies, more personal voluntary benefits, emotional health, and benefits technology. So let’s take a look at each one of these, and I have to admit, I wasn’t even sure what about half of these even meant, so…
Well, I just read up on them right before I got here, so we’ll, we’ll get through this.
Oh, that’s great because I’ve got number one and I was going to ask Paul all about it. Number one, they say, is account based health plans, and this is where a large employer soon will be able to offer health reimbursement arrangements, HRAs, as if we need another acronym to remember in the benefit world. It’s going to allow employers to purchase individual coverage for themselves instead of receiving employee employer sponsored group coverage. So it sounds to me like it’s shifting it to be more employee-driven than employer-driven. Paul, can you give us some insights on these HRAs?
Yeah, so prior to the Affordable Care Act passing in 2010, HRAs existed, and they still exist today. Where most employers use HRAs today is reimbursing employees for out of pocket health care expenses that the plan doesn’t cover. Meeting the deductible, paying for co-pays, right? So HRAs have multifaceted use. An HRA can be structured any way an employer wants as long as it meets the federal guidelines. And so what used to happen before the Affordable Care Act is an employer would say, we don’t have a group plan, but we have a Health Reimbursement Arrangement that is specifically designed to reimburse your out of pocket expenses you paid for premium, right? So it’s a tax free benefit, a tax deductible expense to the employer that allows them to pay for premium. Well, the Affordable Care Act came along and said you can’t do that anymore. A couple years ago, they, they passed what’s called QSEHRA, a Aualified Small Employer HRA, which brought this exact concept back for small employers. So less than 50 full-time employees can do this type of HRA now, and there’s legislation afoot to bring it back the way it used to be before the Affordable Care Act. Now, having said that, there is… for so long we’ve tied your health insurance benefits coverage to employment. That’s been, that’s been a trend since World War Two. And we are the only nation in the world that does that.
Yeah. And to undo that literally might take an act of Congress, where, you know, we go Medicare for all or something like that. So I think this will be a nice tool for employers to use, larger employers, over 50 full-time employees, but I don’t think there’s going to be a huge groundswell of them wanting to undo their, their growth plan and say, here’s money, go out in the market. And the reason is because go out in the market means what? It means go out and try to buy individual coverage, try to buy through the exchanges that were established. And I think if anybody’s looked at how the exchanges work, they’re not exactly… depending on what state you live in, they’re not exactly the best marketplaces that they were envisioned to be. There are some states that are fantastic. Indiana is a good example, where we’re recording this, that there aren’t a lot of choices, so if you go out to the exchange, you can get coverage, guaranteed insurability, no underwriting, no pre-existing condition issues, guaranteed you can get coverage. The question is, what’s the access? What’s the benefit design? What’s the cost? There aren’t a lot of choices. Yeah.
And still, I guess I thought maybe that had gotten better, but…
Well, it was bad, then it got better, and now it’s worse. But again, it depends state by state. Some states have really robust exchanges, and some states have where there’s only one choice in each county, which doesn’t really feel like choice.
No, it doesn’t. Well, I guess the good news on that is that Andy Edeburn, who’s Director of Customer Insights at Jellyvision, which is a benefits communication tech firm, believes there’s going to be increased focus on HSA education to help employees better understand their HSA. And it’s really a logical next step for companies that have made the move to high deductible health care plans, so I do think education is needed in every aspect of health benefits, because I think it’s overwhelming for most people.
Yeah, we – we’re huge fans of health savings accounts at FirstPerson, I think, almost in some ways biased over what the different version of HRAs can be. And HSAs are so good because they, literally an HSA is an account that the employee actually owns. Where an HRA is merely a promise to pay, an HSA is an account that I own. It goes with me in life wherever I go, I can fund it, my employer can fund it, the money rolls over from year to year. It can be invested if I want to, if I want to take on that risk. And so it literally puts skin in the game. And the idea is it is a health purposed savings account. Right? And it’s, a custodial bank administers it, so it’s a bank account, really, it’s, it’s an interest bearing checking account, just like any checking account you have, except that’s very unique tax benefits for you as the employee. And the downside of a health savings account, like, well, that sounds great, let’s sign up. The downside of a health savings account is you can’t simply put them with any plan you want to, you have to have a federally qualified high deductible health plan. And for a lot of employers, they haven’t wanted to make that move to those higher deductible, no copay, you have to pay out of pocket for a lot of services, plans. They’ve been fearful of that. And so it takes, as you said, education to prepare a workforce to know when they walk into a pharmacy, you used to have a copay. Now you are subject to what the actual retail price of the drug is, are you ready for… to be a consumer? And that’s not an overnight transition. You have to prep people for that, and then you have to give them tools once you’ve made that transition to be able to access care and knowledge around how to be a smart shopper. And in theory, these consumer driven plans tied to HRAs and HSAs should drive down the cost of care, because employees have skin in the game and are supposed to be smarter consumers in theory. The challenge is getting transparency to healthcare data is not easy. You know, if I asked you to go out and shop for a MRI on your back, you could do it, but it would take you a couple of days to figure it out.
You know, and it’s interesting. When I’m sick, I want to get fixed, you know, and the whole array of shopping for it or shopping for a drug just really wears me out.
Right. Well, two thoughts on that. Number one, I like the way you emphasize savings account because my husband consistently says to me, oh, I can use my money in my HSA, or the pharmacist said you can use your HSA money, and I constantly tell him, savings is the key word in that statement. Like, it’s also a vehicle to save money that is not taxable. So, remember that. And then secondly, it continues to be fascinating to me that we’re still talking about HSA education. I know exactly when HSAs came out, or at least…
Yes, because Paul and his team educated me on that in 2004. And I worked at a highly educated professional services firm, and I was beating my head against the wall, educating people on that. And now here we are 15 years later, and we’re talking about education around HSA programs. So it’s fascinating to me that we have not moved the needle. I – well, I’m sure we’ve moved the needle, but that this is still a trend. It’ss still a demand and it’s still even a trend so… Well, Paul, I’m even more glad you’re here, because number two, I still need help with as well. Well, I understand the concept of it, I think, but number two is direct contracting with healthcare providers will grow. So I guess I was surprised to see that went on the list, because I think we’ve had direct contracting with networks, healthcare networks, but now it sounds like maybe it’s the same idea. But even specifically, directly, not just with a network of doctors and hospitals, but directly with doctors and hospitals. Is that right?
That’s exactly what it is. And so the idea is this, this tends to have a play when you’re a larger, self-funded employer and so you have to have the mass of people, spouses, and dependents. And instead of saying all of our, all of our employees are going through insert network name here, we are going to have a direct contract with health system, and basically becomes a trade for the number of patients we can send your way for a better price unit cost. Now, that, that can be a dangerous game, because employers have historically not had to be in the direct contracting game, and so do they know how to assess value and do they know how to assess actual unit cost? But for a larger employer that’s concentrated in one area, if they can find a high quality healthcare provider or facility and create a direct contract for services, good example would be for labs, but that’s an easy example. So instead of telling your employees, you know, we use x network and you can go to any lab in the network, we, the employer are very close to lab x and so if you go to lab x, the costs are free, versus go any lab you want that’s in the network, because they’re directing volume to this lab and the lab is then returning with better unit, unit base pricing. That’s, that’s a good example of how it happens. But again, it tends to only be with a larger employer who’s self-funded, and therefore can create that direct contract. The other thing you’ve seen happen, which is sort of adjacent to this, is a lot of employers been obscenely frustrated with health care costs, going to what we call a Medicare plus or a cost plus model. And what that basically says is we don’t have a network. We don’t contract with Anthem, United Healthcare, Cigna, Aetna, there is no network, employees can go wherever they want. And our self-funded plan document, we’re saying we reimburse we the plan, we, the employer, through our plan, reimburse at Medicare plus a percentage, and every facility knows what Medicare rate is. And then they can add 20, 30, 40%, that is guaranteed to save the plan money. However, because there is no contract in place that the doctor has to accept that payment from the plan as payment in full, because they’re not part of a network, there can be abrasion from the hospital to the member, the, you know, and so there are some concierge services that get wrapped around that to protect people. But it’s a new trend that we’re seeing. And so that idea can then be fixed by saying wait a second, let’s put a direct contract in place so that there is an agreement to accept x for full and that’s where it started.
Right. And both of those concepts, I think they sound somewhat simple and straightforward, but yet…
Not in practice.
Yes. I mean, I can tell you even, as you know, when I was an HR director, and we were talking about switching networks, and you talk to people about switching their doctor they’ve been going to for 15 years or 20 years or they want to go to this particular OB/GYN or pediatrician and you’re trying to get them to go to someone else. That is not an easy…
They’d sooner give up their first child, right, sometimes.
Right, right, right. Or, you know, maybe 80% of your employees live close to one hospital, but 20% are driving an hour every day and then their spouse or kid gets sick or is in an accident and you’re directing them to only one hospital, those… real life is complicated.
Well, and it’s what’s been interesting, if you look at trends on the coasts, east and west coasts, they’ve tended to be more focused on or more accepting as a, as a consumer culture of narrow networks, right? So HMOs, narrow networks, where you can self-refer, but a small network in the Midwest, we who live here tend to be more, you can’t tell me where to go. So employers have talked a lot about either direct contracts or narrow networks where it narrows to access to higher quality, lower cost providers. They’ve talked about it in theory, but then when they go to pull the trigger, for whatever reason, employers are not open to that concept in the Midwest as much as they are on the east and west coast. But I – eventually something will have to give, and we’ll see Midwest employers begin to adopt that, the more narrow network solutions.
Yeah, it’s interesting, when I got out of college and started my first job, not, not too long ago, right? I was on an HMO plan. And then it was not until I, I moved to the Indianapolis area that I was on my first PPO and then later, high deductible plan and I thought, wow, I can go lots of places. So I sort of started out with that mentality of I only could go one place and I didn’t know any differently, but when you’ve had the choice, hard to go backwards.
Well, number three is employers will get family friendly faster. And it goes back, I think, to the other article that we were talking about that employers are implementing more parental leave programs, but many are also adding paid caregiver leaves and other types of family friendly things, even, I’ve seen a lot of focus on pet friendly, giving people time to care for pets and more, as they travel, more consideration for the fact that you may have to hire people to, to care for your pets. What are you seeing on this front, family friendly?
Yeah, definitely an uptick. And we talked about the leave, as you said, for maternity, paternity leave. But just being more generous with paid time off, volunteer time off. In other words, giving employees the time they need to have the work life fit. I don’t like the word work life balance, because it’s hard to balance work and life. But there is a way to make it fit in different seasons, and I think employers are adjusting their leave policies, their paid time off policies, their volunteer time off policies, to allow them to take care of their family, to allow them to take care of the community they live in, work in. So I’ve definitely seen that.
I think it’s great. I think it’s really in alignment with employee engagement. You know, you’re really looking at the whole person and helping them bring their authentic self, well, you’re helping them with their whole life. So I think that’s great,
Right. Number four is that voluntary benefits will become more personal. So voluntary benefits have been around for a long time, in terms of additional short term or long term disability or life insurance or cancer insurance or those, but now it looks like we’re in for personalizing this a little bit more. Tim Weber, who is Mercer’s voluntary benefits leader, says that the offerings will become more personal with targeted education to help employees on a need to know basis, so to really think about what type of benefits might be better for them, whether that’s navigators, concierge services, virtual resources, that might take some of the complexity out of accessing care, and to better anticipate and address individual unique needs.
The voluntary benefits world is growing fast. Historically, voluntary benefits were more sold to employees than bought by them, and that’s where you get into the sort of one-on-one and roller models that have existed where it was almost more of a high pressure sales technique. And now you’re starting to see a demand, because multi-generational workforce and the different, aging Baby Boomer versus Gen Z in the workforce, they have completely different needs. And so for them to be able to sort of pick and choose voluntarily what they want to round out the core benefits has been something that has really fostered and I think more employers have become more comfortable with it because of technology, both with decision support, right, so we mentioned the gentleman from Jellyvision talking about HSA education, they have a really unique product called ALEX, A-L-E-X, that is this really interesting, almost gamified decision support tool that employers can turn on so people can make better decisions about what benefits they do and don’t need. And then you’ve got the different enrollment tools as well, that don’t require you to have to sit one-to-one with an enroller, necessarily. Telephonic support is also available a lot of times, and so it’s making employees have a broader array of choices, but giving them the tools they need to make better decisions to meet the demands that maybe the core benefits package doesn’t do.
That’s great. Now, number five trend is emotional health will move to the forefront. And so access to behavioral health services, really, to address a wide variety of emotional, behavioral, and mental health issues, including things like stress, anxiety, addiction, depression, any other type of mental disorder, really has become more frequently addressed or will be, continue to become more frequently addressed by employers. Sandra Kuhn, of Mercer, who’s the national lead for behavioral health consulting, said we’ll see more partnerships between traditional medical and behavioral health carriers on smaller, targeted point solutions, such as telehealth consulting and strategies to combat out of network utilization and costs. Are you seeing… I think we’re going to be talking actually in another podcast very soon about mindfulness, companies that are really working out ways to bring in emotional health tools and resources to their employees. Are you noticing that with your clients?
Yeah. And, you know, it’s interesting. I, we talked about Certified Employee Benefits Specialist. And one of the things that I do every year is go to the national symposium, or I should say, global symposium, because Canada and the US are there, makes it global. And it’s really interesting to see the differences in how Canada as, as a, as an employer workforce deals very proactively and out front with mental health, and how traditionally, mental health in the workplace has been sort of pushed under the covers in the United States. And I guess what I would say is we kind of stink as a culture talking about mental health, certainly in the workplace. It’s been a taboo and something you’re not supposed to talk about. So there’s definitely finally emerging some employer-sponsored ideas to give people the tools and resources they need to deal with mental health in the workplace. Thank God, because it’s been long overdue, and we shouldn’t, as leaders, be embarrassed about talking about our own struggles, like, I think that’s half the battle, right? And I think we should also be helpful in supporting our employees when they’re ready to deal with whatever challenges they’re facing from a stress or, you know, mental health aspect, because it’s real, and it’s not slowing down. And you then, then you think about what’s happening with the opioid crisis, and, you know, that’s clearly a mental health problem as well, and how that’s affecting employers. It’s just, it’s, it’s an overdue need and so it’s great to see these things come along.
Right. Well, and you see statistics or articles all the time, again, the opioid crisis is one, but about the number of college students or young adults that have anxiety or mental health issues that is just growing and growing and growing like crazy. So… Well number six, Paul, you just referred to this one a minute ago in Jellyvision’s tool called ALEX, but specifically it’s benefits technology will simplify employees’ decision making. So how can we become better as employers in helping our employees make better decisions? Until recently, many employers, especially those with fewer than 500 employees, and I don’t even want to say this next part out loud, but this was per Ryan McCostlin, who’s a team member with a benefits advisory firm Bernard Health, says these employers with less than 500 employees are still using paper. That just… it makes me cringe to even say that out loud. So not only are many companies still not having good technology solutions, they don’t have technology at all, and as millennials become influencers and employers seek out technology solutions, people are demanding this as an option. So we need those ALEX tools out there to help people.
Yeah, we do. So here’s, here’s my take on HR technology, it is the most underdeveloped area of technology that employers use. They’ve got, finance and accounting has been around forever. They’ve got CRMs. They’ve got – marketing tools were kind of the big thing a few years ago that developed and it feels like the HR technology tech stack that employers deal with is kind of just not developed really well and starting to make a change. Think about this. Everybody in your workforce probably has a smartphone. I mean, close to everybody, maybe not 100%, but north of 85 or 90%. And when you think about how we’ve been wired to pull out our smartphone and have a personalized digital experience, that’s how we’ve wired our brains to think about interacting with technology. Then they come to work and these HR systems they have to deal with are generally not best in class, because these are clunky at best, right? We’re being kind. A lot of these systems are more sold and bought particularly downmarket under 1,000 employees, and employers failed to understand the driving why of a system, how to select the proper system, how to implement the proper systems, they might actually make the right selection, but they botched the implementation, and then how to iterate that system over time and make it user friendly. And so this is a huge growing area for employers to tackle correctly, particularly below 1,000 employees, because they have, historically, have not gotten the attention they need. And there are new disruptors in the marketplace. Good examples are Paycor and Paylocity are really good payroll company examples, where they have, you know, they’ve been able to create a tech stack that basically becomes the hub, and then has open API to go out to other systems. Well, historically, that’s not something that the ADPs of the world have wanted to do, right, who have dominated the space, so it’s changing the market. And it’s going to get the players like ADP to, to come along as well. So it’s been ignored, it’s starting to not be ignored and there will be rapid change in HRIS and payroll space and other related tech systems. And I think employers who take on a hub and spoke philosophy, let’s find a hub that’s our core system, and then let’s make sure that core system is willing to talk to other systems so that when we want to plug in and plug out different systems, applicant tracking, you know, whatever it might be, we can plug and play as we need to grow and evolve. And that’s what’s happening in this space.
It’s maybe no wonder that’s why it’s taken us 15 years to see HSA education as a trend, right. I mean, people just struggle to understand what their benefits are, how they can best utilize their benefits, and having an enrollment system that’s on a piece of paper or a clunky technology system doesn’t help that process.
Yes, I agree.
So, Paul, what do I listeners need to know that we’ve not brought up today?
You know, there’s one more trend that I’m starting to see, started seeing it last year and it’s continued this year, is this sort of shift in mindset from wellness peanut buttered across everybody that’s the same. Maybe not stop doing that, because that becomes a talent attraction and retention tool, because they, it’s just nice to show that they care about everybody. And employers are starting to realize I’m not going to get a lot of ROI from that, but it’s gonna be the way I attract and retain employees, because it’s just sort of table stakes, and shifting that focus of spend and time away from wellness peanut buttered across everybody to targeted cost containment solutions for certain populations within your workforce, like people who have type two diabetes, or people who have other chronic conditions. And that’s, that’s kind of the shift in spending. And so you’re starting to see new providers crop up that are targeted disease state that come in and target you know, 2% of your population and completely change their experience of navigating the health care system and hopefully get higher quality care at a lower total cost. And you can show an ROI that way. So that shift is something we’ve seen, for sure.
Well, I’m one of those rare individuals who doesn’t like peanut butter, so I really…
What is your problem?
I know, there’s not very many of us around, but…
I’m glad… I don’t like that either, it still tastes like peanut butter to me. But that’s, so I’m glad to hear it’s not gonna be a peanut butter approach for all.
So, Paul, how do you, how would our listeners reach you if they want to do work with you or learn more?
Well, they could send up a bat signal, but that probably wouldn’t work, so I’m reachable a couple of ways. FirstPerson has a website, because it’s 2019 and you have to, right? So it’s firstpersonadvisors.com, A-D-V-I-S-O-R-S, firstpersonadvisors.com. I can also be found on Twitter, I’m active on the, on the Twitters. You’ve seen me on there.
He’s very active on Twitter.
You might have to deal with some of my kids and talk about St. Louis Cardinals baseball and wine.
Or University of Missouri.
University of Missouri, Butler, certain things that I enjoy. But that’s P as in Paul, E as in Edward, Ashley. So P E Ashley, @peashley. So those are different ways you can get a hold of me or folks that are in our company in our different practice areas that we have at FirstPerson.
Yeah. Well, and really as employers tackle this issue of benefits, I mean, they really need to be thinking, as you were alluding to, I think, about what is their culture? What is their branding? Do they want to be paid higher and spend less money on benefits or pay more benefits and less on compensation? What’s that balance, what’s, what’s their employee population looking for and asking for, for them? I mean, I’m sure there’s no one size fits all that you’re recommending. Is that fair?
I totally agree. And I think that what – employers who win are those that don’t, particularly in this benefits area, don’t react year to year during the renewal, but instead have maybe laid out a simple roadmap of two to three years of where they’re trying to go. And there’ll be things that will happen to them along the way that’ll deviate from that path. But do you have a guiding philosophy statement around total rewards, benefits compensation, and you have a roadmap that takes you from where you are today to where you want to be in three years, and you won’t get there exactly the way you thought you would. But if you can have that roadmap, it helps you adjust better to the unexpected things that’ll come along with each renewal or each each trend that emerges.
So Paul, tell us a little bit more about FirstPerson in the benefit arena, like, what industries are you working with, companies? What size of companies do you work with? Who is your ideal client?
Yeah, that’s a question we get often, and I think the tie that binds our clients is a singular one, not in any particular industry per se, but that they deeply care about the employee experience, because our sort of driving why at FirstPerson is we want to help make the employers we work with have nationally recognized employment experiences. That’s kind of our driving vision. And, you know, our core practice areas being benefits and compensation, you’re like, well, that’s not very sexy. But the idea is that benefits and compensation are table stakes. They’re kind of the base of Maslow’s hierarchy of needs in employment, that if they’re messed up, people aren’t going to give you the opportunity to do the really interesting cultural things around training and development, succession planning. And so we feel like if we could help employers get that right, we’re gonna help them go to the next level. So what does that mean? We tend to attract a lot of, a lot of professional service firms because they get that, we also tend to attract the most thoughtful manufacturers in the state. A lot of nonprofits, as I mentioned earlier, because by nature, nonprofits are mission driven, and so they get that whole concept. And so what we’ve developed are practice areas, benefits consulting, compensation, HR technology, HR strategy, and we partner heavily with Purple Ink on that, we kinda are the funnel and then Purple Ink gets to do the real work in that area, communications, because no matter what you do in any of these areas, it’ll land flat if you don’t have a thoughtful way to communicate it internally. And those are kind of the primary areas of where we work. And then last year, we launched a sister company called The Performance Lab that helps employers measure are they high performing cultures, and it has five drivers, five of them are sort of engagement, sort of what you would think about in the Gallup Q12 area, are they engaged, and the other five drivers are business metrics, and they’re given equal weighting. And so the idea is we can help employers measure their cultures of high performance, both metrics of business and metrics of engagement together. And so that tends to be who we work with from a client standpoint.
I’ve worked with FirstPerson at two different employers in my career, and so, obviously, I want to make a plug for what they do in that they’ve served me well, but also just in general, wherever you may be, if your organization is not working with a benefits consultant advisory firm, you should be. I’m amazed sometimes at the number of our clients who are trying to navigate all of this by themselves. And they’re not aware of, they’re not familiar with, they think they might be too expensive. You need to invest in working with…
It’d be so tough to be a subject matter expert at this, if you’re…
Oh my goodness.
…not doing this each day, every day.
So I totally agree.
Right. Right. And if you’re not getting some of this advice from your own advisor, you should be looking at a different one.
So, would you have a benefit broker and a benefit advisor?
Not necessarily. I would advise no. As long as you select a good partner, they should be able to do both. Yeah, yeah. And, and a lot of times, kind of what separates in some people’s minds broker from advisor is how we’re compensated. So a broker traditionally is compensated with commissions. They’re tied to the products. An advisor’s compensated a fee basis. Our belief is we don’t care how you compensate us, there’s money available, let us take that commission and let it be the fee, and let’s talk transparently about what we’re being paid, and here are the scope of services for that amount, we can either lower the commission, raise the commission, take it to zero, turn it into a fee, as long as the scope matches the needs of the organization, and really start not with product sales, which is what brokerage is, but start with strategy development. And it will be obvious what products and solutions and partners you need to have. And that’ll just be the filament, right. And we can let that offset costs, we… it doesn’t matter. So I think the basic answer is no, you don’t, you shouldn’t need both.
Gotcha. Thank you. Very helpful.
Well, thank you so much for joining us today, Paul. I know I’ve learned a lot and I’m sure our listeners have as well.
It’s good to see you both.
Great, thank you.
Thank you very much.
Thank you, Paul.
Break a leg on the rest of the segment.
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So, JoDee, we’ve got a listener question today. “We are expecting to terminate about 10% of our workforce this year. Any suggestions of things that we should consider?”
Yeah, so many different things, and thanks for asking this question. First of all, which, we have a podcast on this one also, is considering outplacement. How can you help the individuals that are being terminated to find a new position? Not only is that obviously a benefit to the people who are leaving, that really shows compassion and attention to the employees who are staying, that they can understand that you’re helping those who are also leaving. Severance, of course, is another option where you might be able to pay the outgoing employees, many times that’s a calculation of how many years of service they’ve had with the organization, but there’s no real magic on what that number is. Some organizations pay the same, might not be the same amount, but maybe as the same percentage of their salary, the same number of weeks of salary or typical pay that they might have. Training for those people leaving, so whether or not you’re offering outplacement, you might have some group training for those, and then also training for those who are staying there. Teams obviously are changing, so how will you get the same amount of work done with less people, or how will you figure out how to serve your internal or external customers in a different way with less people? And also offering training for the supervisors to maybe be able to understand the message of the why. Why did the organization have to go through this RIF or termination of employees, and how can they feel good about the organization and their work going forward? And then one other option, and probably lots more too, is to think about COBRA and making sure that those outgoing employees are offered COBRA, which is a continuation of that health insurance plan which is very highly regulated and there are very specific rules around what has to be offered for COBRA, so we won’t get into those today, but ensuring that you understand what those benefits must be.
And I would just add two other things. One is if you know you have to get rid of 10% of your staff, spend some time thinking, can we do any type of a voluntary out program? There may be some people who would just welcome this chance to leave with some severance pay, with some outplacement, you never know, and if that’s an option, I think you really want to think that through. The second thing is make sure if you have to do a selection process that you really put thought, energy, and effort into doing it right so that you can explain to individuals the why and you have either developed a matrix of the competencies needed for the remaining jobs, if you’re going to take tenure into account, make sure that you’ve got that on there, if performance is a factor, put that on there. But you really want to come at it in a… it’s never a science, it’s an art, but that you have it based in some type of good, strong, reasonable thinking.
Right, and legally, just to make sure there’s no intentional or unintentional discrimination being applied as well, too.
Good luck with it.
In our in the news section, employers need a workplace violence plan. HR professional jobs are more dangerous than many realize. An HR manager and an HR intern were among five employees killed at a warehouse in Aurora, Illinois back in February by a worker who was being fired. So how can HR professionals and others in the workplace protect themselves? Well, employers should have a plan in place to protect employees and themselves in the event of workplace violence. A zero tolerance of violence policy is a good place to start. And don’t be afraid to seek help. Consider hiring security or calling police immediately if a difficult situation is expected and or if there is any concern at all. Obviously, you never know what’s gonna come up on a given day, but having a plan in place that people can default to can be very helpful.
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