Holy Smokes!

I am sure you have heard. CVS/Caremark is the first national drug store chain to announce it will no longer sell tobacco products by October of this year. Good? Bad?Indifferent? This decision will cost CVS/Caremark (and its shareholders) $2 billion USD a year in revenue annually. That is a lot of tobacco sales.

Was this a prudent business decision? If you listen to Chief Medical Officer Troyan A Brennan, M.D., it was. This bold stance on tobacco sales has set the bar high for drug stores across the nation. The company is moving to the direction of becoming part pharmacy, part grocery store and part primary care provider. The intent is that stopping the sales of tobacco products will position CVS/Caremark, the second largest player in the chain drug store industry (Walgreen’s is #1), as a new type of company committed to the overall health of its patrons. The future will tell if the formula works. CVS has to work on its image in order to achieve these goals. The tobacco sales decision is a step in that direction, for sure.

So, what does this mean for the workplace? Many companies have some sort of tobacco use policy and banned or limited smoking and use of tobacco products on their campuses. CVS’s decision is certainly in alignment with this trend. Will insurance plans start credentialing CVS stores as primary or urgent care facilities? If CVS sees their vision to fruition, it will offer a fast and convenient alternative to physician offices and urgent cares. The hospital where I work has a CVS within walking distance. From time to time, I see employees go to that CVS for cigarettes and even see them smoking in the parking lot of CVS. Will CVS join the ranks of companies prohibiting the use of tobacco on its premises?

I wonder how CVS’s transformation to health care provider will shape the market share for the retailer. I am not sure I see CVS as a place to get my blood work done or have a physical. They do give flu shots, though. And I can always get a bag of chips when I pick up my Advil.

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#19 in the Fortune 100 Best Places to Work For in 2014!

For those in the know, Baptist Health South Florida (BHSF) is a great employer. I have worked for BHSF since October 2011 and have seen first hand the great things we do for our employees and their families. As the article states, BHSF has “Culture of Caring” Caring for patients, guests and employees. With so many great benefits and other perks, our employees can have long, fruitful careers at the “Best Place to Be Your Best”. Find out more at BaptistHealth.net.

Here is some of the press

CNN Money

Sun-Sentinel

Great Rated

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What Does EVP Mean to You?

What gets you out of bed in the morning and gets you to work? Your coworkers? The work you perform? Your paycheck? Maybe it is to try to find another job outside your current employer?

EVP, Employee Value Proposition. EVPs delineate a company’s employee expectations and what, in turn, that employee gets for fulfilling that expectation. It is what drives employees to go to work and what keeps them coming back day after day and year after year. The EVP includes total rewards, work environment, leadership stamina and compassion and the employee’s personal connection to the company. A balanced EVP helps retain organizational knowledge, customers, values and, of course, employees. Some of the best companies in the world build total reward strategies that are both sustainable and are uniquely employee-centered, thus tapping in to and maximizing each employee’s discretionary effort to the benefit of the company. A solid and robust EVP is a win-win for the company and employee.

As we all know, the cost of turnover is high and growing every day. In healthcare, the cost of RN turnover can range from $35,000 to almost $50,000 for each bedside nurse who leaves. And with economic recovery and a lowering of unemployment rates, companies are seeing rising turnover costs. A phenomena of sorts that I am seeing where I live is a sharp increase in the value of real estate. While this can be a good thing for sellers in the market, it is creating a bit of a “perfect storm” for my company. Employees who have been trying to sell their homes are finally doing so and they are relocating to less expensive parts of the state – outside of our area. This in turn drives the living expenses higher and higher and thus shutting out certain employee levels from living locally. Coupling this with an unemployment rate hovering around 4%, recruiting can be a challenge with affordable housing supplies very limited and access to public transportation almost non-existent. This makes the case for our hospital to have an even more vigorous EVP in order to attract and retain stellar talent. Fortunately, our employment brand is well known and respected locally and regionally however some other companies I know are not as lucky. Either they will have to raise their stake in employment valuation or find alternatives to staffing predicaments. Either way, the EVP standard will continue to rise and companies with high levels of employee engagement will have to find new ways to attract and retain talent.

What is your company’s EVP?

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Healthcare for EVERYONE?!

On June 28, 2012, the Supreme Court of the United States found the Affordable Care Act constitutional. This decision was long awaited by both sides of the aisle, healthcare providers and, of course, HR professionals and benefits administrators. While many employers had already implemented parts of the law including the lengthened coverage for adult children. However, the brunt of this law would start to become imperative in 2014 including the Insurance CO-OP and eradication of pre-existing condition clauses in existing healthcare plans. In fact, there will be (and, according to HealthCare.gov is currently available in some areas) Pre-existing Condition Insurance Plan or a High Risk Pool.

But at what cost? The CO-Ops (Consumer Operated and Oriented Plans) will be available in Affordable Insurance Exchanges. These new competitive markets for health insurance will be administered on a state by state basis. Many states are in the planning stages. It won’t be long until these exchanges will have to be up and running. The planning stage grants given by the Federal government are valued up to $1 million and were offered to all states (but Alaska) and Washington, DC. This grant was the first of many that would become available for the creation of these exchanges.

The question is – will this plan work the way it is intended? Will EVERYONE be getting healthcare? I am sure there will be more to come on this ever changing healthcare initiative. As HR professionals, we need to be on top of the changes and how they will impact our employees, workplaces and communities. Are you ready?

Find out more and follow the progression of this law at http://www.HealthCare.gov.

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Please Refer Me! A Guide to Establishing an Employee Referral Program

Recruitment is tough even in times of higher unemployment and recruiting professionals need to resort to non-traditional methods of finding candidates. The costs of placing ads in either newspapers or on websites can be high and can lead to a glut of unqualified candidates that need to be weeded through to find the hidden gems. The process can be exhausting and some recruiters have become jaded by the onslaught of candidate interest. Its times like this that we have to dig into our HR Bag of Tricks and find ways to get what we need while saving
time and money. A good way to find qualified candidates is to use an employee referral program (ERP). An ERP uses your existing employees to help find “warm” candidates who might be contenders for open positions. There are advantages and disadvantages to ERPs and these types of programs should be looked at carefully to put the right plan together for your company.

Here are some potential pros to using an ERP

  • Reduced recruiting costs by lowering advertising expense
  • The generation of warm leads by employees reduces days to fill
  • Increased engagement among existing staff who feel invested in the company where their
    friends and families work
  • Increase in retention rates for all staff which results in a quantifiable reduction in
    turnover costs

There are many ways to implement a fruitful ERP; the key is to first look at your company for guidance on what aspects would work best for you. An incentive to have employees refer qualified – and potentially those passive candidates which all recruiters crave – is to tie the referral to some sort of bonus. Depending on the position or the company the budget for referral bonuses might vary. A good rule of thumb is to put parameters on the referral to maximize the cost of the bonus. For example, require the referred candidate to remain employed for a
specified period of time (i.e. 90 days) or achieve a production benchmark (i.e. meeting 100% productivity requirements) before the payout is made. The potential payout should be well communicated to your employees so that they understand what types of position(s) are needed and what they will get and when. Even offering a cash referral bonus can quickly become cost effective when tied to production standards or time with the company. And your employees will even help you keep the new hires employed so they can get their payout. You might
even want to look at doing some sort of bonus for the new hire. The value of this program can be seen almost immediately in many situations.

Now with the good comes the bad. There are a few things that might tarnish your stellar ERP so be aware and make provisions for these potential situations. If your company has been guilty of historical discriminatory hiring practices or has goals to increase minority representation, an ERP might not help. Employees tend to refer people like them and if these are not the type of candidate you are looking for then the ERP might cause more work than it is worth. Also, your shining star employees might refer a dud and your steady eddy employee might
refer your next CEO. Essentially, employee perceptions of what might be valuable for the company may not be reality for the hiring manager. Communication of the ERP and specific information about the values and characteristics of the wanted applicant pool can help alleviate these types of situations. There is also a possible opportunity cost with an ERP. What if your perfect candidate does not know anyone who currently works at your company? Have a contingency in place for those candidates that may not find your opportunity through word of
mouth. In other words, traditional job postings might be necessary to complement the ERP.

ERPs are a great, cost effective way to mine and generate warm candidates who hit the ground running and are engaged. The business case for ERPs is also solid and can be an easy sell to management. The program can be self-funded and can be easily aligned to business needs. Take time to look at the way an ERP would work best for your company. They are certainly worth the effort.

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Healthcare Reform – An Update

Healthcare Reform is upon us! Are you and your company ready? Yesterday, our local SHRM chapter hosted out monthly meeting where a local benefits administrator, Palmetto Benefit Management (www.PalmettoBenefit.com), gave us a comprehensive update of the legislation; where it is, what is next and how to prepare. I thought I knew about the upcoming changes, but I quickly realized that I need to get on the stick and learn more about what to expect.

To date several pieces have been implemented including dependent coverage to age 26, no caps or maximums for coverage and the requirement of a dedicated lactation room.  Fortunately, we already had a dedicate lactation room but this could be a challenge for some workplaces since there are specific parameters that must be met. And the addition of  dependents to age 26 can cause some significant cost increases for some plans. Be sure that you are adhering or you will when your next open enrollment happens. There are also many  changes in the hopper for 2012, 2013 and 2014 as long as future legislation does not change their timeline or verbiage. Check with your benefits team or counsel to make sure you know how each stage will impact your organization.

Currently, there are several lawsuits in various stages contesting different parts of the Healthcare Reform laws. These include the Medical Loss Ratios (MLRs) and the Independent Payment Advisory Board (IPAB) as well as suits contesting the Constitutionality of the whole or parts of the Healthcare Reform law. But until there is a formal decision or legislative vote, the bill is law and needs to administered and followed in its current form. Companies should (or already have) determine their healthcare band position, plan options and which employee(s) will be grandfathered.

There is little doubt that there will be no changes up to, during and after the 2012 elections. In 2012, there are several congressional seats up for election as well as the Presidency. A new administration would and could have significant impact of the course of the law and any new measures that are implemented. If President Obama remains in office, the Healthcare Reform legislation will more than likely remain the law of the land in some form.

The Healthcare Reform law continues to be fluid and has changed very recently. For example, on August 1, 2011, contraception was added to the list of free preventative services under
the law. What will be next? There are many ways to stay on top of the changes like joining benefits organizations like WorldatWork (www.WorldatWork.org) and the International Federation of Employee Benefit Plans (www.IFEBP.org). For more information, please check out http://www.whitehouse.gov/healthreform and www.Healthcare.gov.

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Pay for Performance – Some ABCs

We have all heard about Pay for Performance (P4P) and some of our companies have implemented a P4P program and are seeing positive results. But what is P4P and how does it work best? There are forms and incarnations of P4P that work better than others. Here is my take on it.

P4P is essentially rewarding highly productive workers with higher income. The top performers drive the business and provide the highest income potential for the company and therefore should receive higher cash rewards. P4P looks at compensation differently than traditional seniority or time/step based plans in that increases in income are generated by achieving – and sometimes surpassing – quantifiable contributions to the company. The program usually offers no guarantees for increases or incentives until certain performance measures are met. P4P is a great alternative for a company instead of a traditional compensation plan. The performance pay can come in the form of incentives (typically how they are paid) or by incremental increases to base pay.

P4P plans are a great way to build engagement among your staff and line the pockets of top performers with cold hard cash (and hopefully keep them from predatory recruiters who try to lure them away to better opportunities). But in order for this type of program to be a success there needs to be a few things in place. These are some of the basic steps to creation of a P4P plan.

Budget – Can your company afford the start up costs of a P4P program? The plan can be tailored to fit any company structure however some companies might have existing salary programs that include high base salaries. In these cases, there could be a higher budget requirement to both pay the salary and the incentive. Be sure to look at this before you work on developing a P4P plan.

Consistent Measurement – How does your company measure success? Be sure to come up with goals that are in line with the corporate strategy and vision of the company. Measures can and might vary from department to department but all goals should be tied to a greater corporate good. Some traditional measures are revenues per share, net income and operating profit. While these are good, there are more companies looking at earning before tax, depreciation and amortization (EBITDA) which gives a more succinct indication of how the company did financially as well as cost reductions and savings. Of course the ability of a company to stay liquid (statement of cash flows) is a good measure. Whatever you chose to measure, be sure it is important to the company.

Use Long Term & Short Term Incentives – Keep in mind that a good and appropriate mix of incentives that are both short (within a year) and long (more than a year) term will help add value and success to the plan. Long term incentives (LTI) are usually paid in stock or shares in the company. With the current stock market situation, be sure to look at LTIs objectively as they might not provide employees with drive to outperform. Short term incentives (STI) are best used for meeting goals on quarterly, semi-annually or annually. STIs could be tied to quarterly business objectives and then annual EBITDA, for example. The decision of which measure(s) to use should be based on what would work best for your company. There have been some big changes to how executive compensation plans are built so be sure to integrate the new rules and regulations into your LTIs for top executives.

LTI & STI Tip – be sure to cap your LTI and STI payout potential. If you don’t, you will inevitably have some shining stars that could break the bank. It is imperative to have a maximum payout so your top performers don’t go over their maximum. Or worse yet, upon review of the plan after implementation you see that some employees have gone over what was budgeted and then a cap is put in place. This could seriously reduce morale and invalidate the integrity of the plan in the employee’s eyes.

Communication of the Plan – The lynchpin out a successful P4P program is its communication to the staff. There might need to be a change in mindset among long term employees when implementing a new plan. The concise and clear communication of the new plan, how it will be paid and what measurements will be used is crucial. Consider your audience and put together an airtight communication plan that has buy-in from the top.

Review & Evaluate (and Realign, if necessary) – How did it go? This is the step where you look at how the first reporting period went and how the plan paid to employees. Perhaps the measures need to be tweaked or the incentive payouts need to be reviewed. Hopefully you found that the plan is working the way you anticipated it would. If so, hurray for you! Take time to carefully evaluate your plan and weigh the results against the intended outcome.

Putting together a P4P plan can be simple or complex based on the needs of your company. Organizations like WorldatWork, SHRM and IFEBP offer great ideas, webinars and information on the creation, development and implementation of these types of plans so be sure to get more information before charging in. Pay for Performance programs can give your company the edge it needs in attracting and retaining the highest performers.

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The Case for Wellness

One of the benefits I love about my current employer is our onsite fitness center. It is great to have the flexibility to hit the gym during a daytime break or lunch. I try to go 4 to 5 times a week and do cardio and weights. Sometimes I even can make it to our group exercise classes. It helps to relieve stress and keeps me healthy. Ah, the convenience….

Corporate wellness programs have taken a hit in recent years due to the expense. Ironically, a well administered wellness program can potentially save a company big money in lower absence rates, increased productivity and lower insurance costs. Wellness programs can come in a variety of shapes and forms. Some companies offer health screenings, fitness center
memberships, tobacco cessation and nutritional training. While many employees will take advantage of these benefits, the company needs to communicate the value and encourage participation to optimize the overall benefits of the program. And this communication and message of the importance of wellness needs to be consistently maintained; employee commitment to continue the programs can wane over time.

Putting together a wellness plan can be as simple or complex as you need it to be. As with many programs, garnering support from the company officials is essential in the success of the plan. After the senior leaders give their buy in to a wellness program, the planning process can begin. The next step, find out what the employees want. One of the ways to secure employee
dedication to the new plan over time is to find out what the employees desire in the plan before a wellness program is developed and implemented. If the employees have preliminary input they are more willing to commit to the project and use the facets of the program. After employee input is gathered it is time to figure out what to do and how to pay for it. There are many ways to fund the program and these can vary from company to company. Many wellness plans are self funded by the savings they generate from increases in productivity and reductions in healthcare costs.

One of the nice things about wellness programs are the incredible flexibility. Many companies start off small, maybe offering flu shots to all staff or by promoting a running club. Then the program can grow from there. Other companies jump in feet first and develop robust plans that are comprehensive.

For more information on wellness programs and offerings, visit the Wellness Council of America at www.WELCOA.org.

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What’s the Reward?

Positive recognition in the workplace is great (usually). It means, “They noticed me”, and something that occurred. Recognition can come in many forms including financial incentives, additional leave time and gift certificates. Have you ever heard that the best things in life are free? Well, this holds true with many recognition programs. The freer the better is music to the ears of many companies affected by today’s economic environment. In the fast paced business world, leaders can sometimes forget to stop and say, “Job well done”, to a deserving employee. Rewards as simple as a “thank you” often hold the most meaning for the recipients. It is important to show a team they are performing at or above expectations.

Giving rewards has a few ground rules. First, the reward should be given for doing something above and beyond the normal job duties. Don’t rewards someone for performing satisfactory work or coming to work on time. These should be regular expectations in the workplace. Reward things like completing a project early and under budget, coming up with an efficiency that saves significant time and/or money or superior customer service ratings. In other words, reward the behavior you want to see more of. The reward should not be the reason for the behavior but rather reward an employee’s initiative to exhibit the behavior. If an employee pursues a reward for the reward itself, the work done to achieve the reward can be hollow. The best rewards are those that come from being acknowledged for something that your heart is in.

ideally, knowing what makes your employees tick will give you some great ideas for how to reward them. Employees will respond better to things that are of interest to them. Here are some ideas for low cost or even FREE rewards you could offer.

  • special parking spots
  • acknowledgement in a company newsletter or communication
  • having a reward named after the employee given to other employees who exhibit the same behavior, e.g. The Myra Smith Customer Service Award
  • gift certificates to local restaurants, movie theatres, etc.
  • lunch with a company leader
  • casual dress down days
  • flexible work schedule
  • participation in special training programs
  • company promotional items (SWAG)

Making the reward memorable to the employee and all staff will help reinforce the behavior that prompted the reward. When presenting the reward, be sure to acknowledge the person(s) and what they did to achieve it. This gives a clear message to the entire audience. Regardless of the tangible value of the reward, the intangibles can be priceless.

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Technology Working for (and Against) Us

I read yesterday that the Department of Labor (DOL) is launching a Wage and Hour application (app) for Smartphones. This app will allow employees to track their hours worked and when their paycheck does not accurately reflect their records, they can submit their complaint to the DOL. There is even a connection the DOL has to the American Bar Association that offers attorney referral services to employees whose cases the DOL chooses not to take on. Sounds good, right?

According to the DOL, there was a significant increase in 2010 of wage and hour lawsuits (close to 6,800 about 700 higher than 2009). While that number may seem low in the grand spectrum of employment, the DOL has added a few hundred more examiners to combat the forecasted increase in these types of claims. The DOL’s thought process is that this app will make it easier for effected employees to issue complaints and receive their proper pay. Employees who work for companies that may not follow all wage and hour regulations (whether intentionally or out of ignorance) will surely be benefitted. For those companies that follow the rules, this could be a problem. Wage and hour claims can take up valuable resources and cost companies large amounts of money – even if the company is compliant with the law!

From an employer standpoint, this new app should be concerning – if not alarming. As with any computer related application, the information that is input is only as relevant and factual as the person entering it wants it to be. Therefore, any unhappy or disgruntled worker could potentially wreak havoc for a company who follows the guidelines. Most Wage and Hour claims are related to improper classification of exempt employees and not paying non-exempt employees the right amount of overtime. Having a firm grasp on your company’s pay practices is the best remedy to future claims.

This is a great time to make sure your pay policies and compensation programs are in line with the law. Using the exemption tests to check the status of each position helps to alleviate wage and hour complaints. Also, communicating to all non-exempt staff that they must log all hours worked is a good idea. There is always an employee who might stay an extra 15 minutes to finish a project or who may come in early to help cover the office and not log this extra time (for whatever reason). One area that seems generate questions is off site training classes that may or may not include work hours. Check with your compensation team or consultant to find out the criteria paying employees correctly. If an employee happens to work unapproved overtime, they can be disciplined but they must be paid for that time. The important thing to remember is that they must log and be paid for all time worked.

If you follow the DOL rules and regulations, it does not guarantee that you will be safe from wage and hour allegations however you will have a solid standing and response if there is a case brought against your company. Another to remember is to not give any impression of retaliation against an employee who brings either a false or legitimate Wage and Hour claim. That could lead to a whole other set of problems.

The rule we should always remember is – Do what you can to prevent the DOL from knocking on your door.

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