How to Retain Key Talent

Launched as an online and more interactive version of my "My View" column in the Advocate print newsletter, Benefit Basics now gives you, the Human Resources professional, an easy to way to ask—and discuss—some of the pressing questions that come up in our industry. Submit your own question here or e-mail them to me at mkesel@benefitadvocates.net.

Your first question is one on a lot of people's minds lately...

Q: What can our companies do to prevent a talent drain once the economy improves?

Kesel: It’s a great question and the perfect time to ask is now while we’re still experiencing job losses and not quite out of the woods of this economic crisis. If we’ve learned anything from past recessions in the 1980s and 1990s, it’s that employees take a wait-and-see approach to career advancement when economic times are tough. But that doesn’t mean they’re not looking or making contacts or doing research or getting ready to make a change. The old adage, “The best time to look for a job is when you have one,” remains true and is happening again now.

Doing nothing and assuming they’ll stay is foolhardy. When the economy turns the corner—and the economists tell us it surely will—they’ll be long gone and it’ll be too late for you to respond.Realigning your compensation and benefit programs are key weapons against talent flight. With government policy affecting both, creative solutions become even more important. That means finding innovative and cost-effective ways to combine tangible and intangible rewards.

At Benefit Advocates, we think the future of compensation and benefits is individualization. What does this individualized approach look like? Smarter use of incentive programs, for one. Employees hate the “peanut butter approach” to merit pay for good reason. Spreading the rewards to everyone deters everyone. Your stars soon will be looking elsewhere while your underperformers will continue muddling along.

Certainly, pay isn’t the only motivator. Employees often want other rewards, whether it’s more leadership opportunities, better coaching, flexible schedules that offer better work/life balance or other intangibles. Now is a great time to have that discussion and find out which intangible rewards they value the most.

One-size-fits-all benefit programs are just as bad for your business as cookie-cutter compensation plans. You may offer a number of health and welfare plans and retirement options but with so many similar options that they’re nearly alike. Not every employee needs or wants the same benefits, and benefit options should mirror the changing needs of our lifecycles.

“But, Mary,” you’re probably thinking, “Are you kidding? We can barely keep up with the administrative tasks we have now.”

You’re right. It won’t be easy, but we believe the companies that examine their current strategies and find ways to adapt to changing employee needs will be the marketplace winners: saving money and engaging and retaining their employees.

How can your company get there? Let’s talk: 800.344.5677 or 336.721.2029 (in Winston-Salem) or mkesel@benefitadvocates.net.

Kesel, CEBS, is the CEO and founder of Benefit Advocates. She teaches Human Resources Management at Wake Forest University’s Babcock Graduate School of Management.

Voluntary Benefits Sometimes Need Advocacy

Does your company offer voluntary benefits like cancer insurance? If so, these employees and retirees may need advocacy services just as much as those covered by your health insurance.

This came to our attention recently when I helped a wife whose husband died of cancer in December 2008. He had purchased cancer insurance 11 years earlier through his employer.

In February 2008, the 54-year-old man I'll call Mr. C had been diagnosed with lung cancer. He underwent chemotherapy, radiation treatment and had one inpatient hospital stay. The insurer paid Mr. C directly under the cancer policy without issue.

Unfortunately, his condition worsened and he was admitted to the hospital again in November 2008 with septicemia and pneumonia—symptoms directly related to his cancer.

After his death, Mrs. C filed a claim to the cancer insurance carrier. This time, they refused payment. Mrs. C was in shock, wondering how payment could be denied for her husband's days in the hospital under the cancer insurance policy when he had just died of lung cancer.

The insurance carrier explained that it denied the claims because the hospital admission wasn't for cancer treatment. While both the septicemia infection and his pneumonia were byproducts of the chemotherapy treatment for his cancer, his main diagnosis wasn't cancer.

Mrs. C contacted Benefit Advocates to help appeal these denials. This was a case where we felt the insurance carrier was doing all they could do to deny a rightful claim for benefits. As our first cancer insurance case, we were resolute in our goal to get these claims paid for Mrs. C.

We reviewed the cancer policy in minute detail. We contacted the hospital and doctor. We obtained medical records of her husband's hospital stay and a letter from his oncologist outlining why he had been admitted to the hospital and the reason for his death. We obtained a death certificate. The primary cause of death was septicemia, but the secondary cause was lung cancer.
We reviewed medical literature on his condition and completed a legal search of any court cases filed that were similar to Mr. C's.

Fortunately, we found a lawsuit filed in Utah in 2005 with facts very similar to his case. We compiled all of our findings and filed a formal appeal to the cancer insurance carrier. We won the appeal on Mrs. C’s behalf—a decision that brought closure, peace of mind and saved her thousands of dollars.

Though she still grieves for her husband, Mrs. C can take comfort in the fact that the premiums paid for more than 11 years were not in vain. She received the coverage they bought and, most importantly, she didn't have to suffer yet another loss.

Our advocacy service is available to all clients’ employees and retirees for any type of insurance—not just health insurance. As we all pay more for benefits, remember that we're here to help. Your employees and retirees don't have to take 'no' for an answer.

Health Care Reform: Where Do We Start?

I can send a birthday card from N.C. to a friend in California in about three days for 44 cents or register my car at the Division of Motor Vehicles in five minutes. Yet the U.S. Postal Service and DMV are the poster-child examples of critics who say the government that produced them can't possibly fix our broken health-care system. I think it’s time to shelve this old, tired argument and instead devise a plan to insure more Americans, control costs and actually improve our citizens' health. That's a goal I think we all can agree on.

Surely, people of all political stripes can agree that it's wrong for someone in America to die simply because they lack health insurance — like the cancer patient denied life-saving chemotherapy because they’re uninsured. No one argues the system isn't broken or that costs aren't out of control. The debate is over the cure. From my experience helping patients and employers navigate the health care system, these are the key issues that I believe any reform plan must address:

• Increasing personal responsibility: Since nearly 60 percent of all health care problems are lifestyle-related, Americans need to pay a larger portion of the costs of their own choices. Only then will behavior change.
  


• Breaking the health care/employment bond: Although the norm since WWII, job-based health insurance no longer meets the needs of a highly mobile workforce.
  


• Eliminating tax breaks for health insurance benefits: The revenue from eliminating tax-free health would go a long way to providing coverage for the estimated 45 million Americans without insurance.
  


• Shifting Medicare's focus to preventing disease: Too much is being spent on the last six months of life instead of earlier in life to head off disease: money for preventive care, early childhood care, immunizations; nutrition, health education and dental care. Finding a way to get folks aged 55-64 into Medicare — a high-utilizing group with pre-existing conditions — would also help close the insurance gap but must be similarly accompanied by a shift to more preventive care earlier to control costs.
  


• Ending first-dollar coverage: We want an MRI for every headache because we don't pay — and complain even about our $20 co-pays. It's only when market forces determine costs that costs rise and fall. That's why facelifts still cost about the same today as they did five years ago. Applying the same logic to health care and considering health care like homeowners or car insurance would save billions. We pay for regular oil changes; insurance pays if our car is totaled.
  
  
• Rewarding quality over quality: The Mayo Clinic, one of the nation's most-respected health care providers, is also a low-cost provider because it's a not-for-profit hospital where physicians are salaried and not incented to order more tests or perform more procedures. Not surprisingly, the area with the highest health care costs per person is McAllen, Texas, which has a higher concentration of for-profit and physician-owned hospitals.

I agree with Atul Gawande who provided that illustration from McAllen in an article on health care reform in The New Yorker. No financial incentive to do more really does equal better health care and lower costs. To put us on a different course, he recommends a national institute for health-care delivery, bringing together clinicians, insurers and employers to identify and implement the strategies that produce the best results and put the focus where it should be.

Runaway costs are the wound that has our health care system on life support. It's time to work together to stop the bleeding before it's too late.

Are We Becoming Helicopter Employers?

They're called "helicopter parents" for the way they hover over everything their self-indulged Gen Y or Millennial kids do. Give one a bad grade or a bad performance review and watch out! You'll get a quick 'why has this happened?' call from parents who function more as Facebook friends than authority figures.

The problem is that this helicopter mentality appears to be spreading beyond the coddling of those aged 13 to 28 to the way we make workplace benefit decisions.

No one discounts the vital role company benefits play in attracting and retaining talent. Yet in our quest to offer better and more diverse benefits, have we made the same mistake as Millennial parents? Instead of teaching our employees that life is not risk-free, have we programmed them to expect us to function as protectors against all uncertainty?

Especially in dire economic times, businesses serve their employees best by letting them keep more of their own money than taking it for more and more benefits. It's real money employees can use to pay the monthly power bill, boost retirement savings or pay for college.

Unfortunately, there are still too many employees who buy every benefit offered instead of making cost/benefit decisions and benefit managers who pile on the benefits because "everyone else does."

Along with medical, life (if you have dependents who rely on your income) and disability insurance and flexible spending accounts — core, needed benefits — many employers also offer dependent life insurance for children, legal insurance, cancer insurance, pet insurance, long-term care insurance and more. These non-essential benefits can boost the benefits price tag so much that they cause a real decline in wages by outpacing yearly salary increases.

The outcome will be far different if we instead step back and design a benefits program that truly meets our employees’ needs, including a realistic assessment of risk. Take two examples: life and long-term care insurance. Single employees with no dependents really don't need life insurance since the product is designed to replace income. Insuring children is equally unnecessary because no parent depends on their child's income and the risk of a child dying is low.

The same goes for long-term care. Unless you're in your 50s or 60s, you probably shouldn't even consider it. The average person is in long-term care about four years. Those with considerable assets can self-insure; those with little money can qualify for Medicaid in a short time.

While people generally buy the coverage when they are younger — when rates are lower and they are still insurable — the truth is you can still continue to buy the coverage later in life as long as you are reasonably healthy and have no problems handling the daily activities of life.

Want to help your company make wiser decisions about the benefits you offer? Here's a few tips:

• Examine plan enrollment: Find out which plans are most popular with whom and why. Is it senior management or hourly workers thinking they can insure against all of life's risks?
  
  
• Eliminate non-essential benefits: Preserve the core but eliminate benefits such as legal services. Wills can be completed online for far less money and you can save for the legal costs of mortgage closing the same way you save for a down payment.
  
  
• Listen and teach: One of the greatest satisfactions our Benefit Advocates get is from helping people learn enough to themselves choose what's best, such as seniors who realize how it can be cheaper to pay for dental care out-of-pocket instead of through insurance.

In this me-first era, it's easy to give in and try to give everyone everything they want instead of what they really need. Especially today, we can no longer afford that approach. So let’s encourage employees to begin banking the money they used to spend on unneeded benefits. Then if they ever need a lawyer, a veterinarian or get cancer, they’ll have the money to fall back on.

We can't insure away life's unexpected twists and turns. But we can help employees realize that they really can meet life's challenges themselves. We'll never get runaway benefit costs under control until we turn off the rotors.