Human Resource Hat

Clayton & McKervey

Human resource options and issues can be complex. Combine complexity with changing personnel, products, and prevailing practices, and they become overwhelming and costly. The focus of the March 22 CFO/Controller Roundtable revolved around HR issues CFOs and Controllers face on a daily basis. Topics included health care insurance, healthy living and wellness, social media, HR software, and flex-time.

Health Care Insurance 

The discussion started with the observation that the number of health care consultants has grown as premiums have gone through the roof. Along with legislative changes, there are fewer carriers and available plan options. This participant advised other attendees to carefully qualify contractors and use legal counsel when appropriate to make sure the consultant has the knowledge and qualifications.

One attendee uses a consultant to make sure employees are classified correctly, especially with regard to benefits – are they exempt or non-exempt, seasonal, part-time or full time, or non-seasonal part-time or full time? Sometimes an employee might have more than one work qualification. While HR can keep tabs on classifications, one attendee uses outside counsel to keep tabs on employee classifications, review plan status, and advise on plan changes. Another attendee has internal systems in place to make sure classifications are correct, thus avoiding being stuck at a higher rate.

Self insurance was widely explored during the event. One attendee, with a 250 person company, has self-insured from dollar one, with a stop loss for individuals, not for the group.

Another participant suggested from their experience, to not change over 100% from an aggregate plan to a self-insurance plan in one plan year. In their situation, they started with changing just prescription coverage the first year. The transition was made over time and the process was more easily managed and implemented.

Another attendee related her company has a high deductible plan at a very low cost. In this scenario, the consultant works with employees individually, helping them select the best plan option for their needs. The company also contributes to employees’ Health Savings Accounts (HSA), and also tries to promote wellness.

One attendee shared the evolution of their health care coverage over time. About ten years ago they had a very rich aggregate plan. They decided to go to self-insured for cost savings. As the employee group got older over a period of 7-8 years, the stop losses for individuals increased, and it made more sense to go back to fully insured.

Experience ratings changed in another attendee’s company when the economy faltered and they dropped from 250 employees to 100 employees. With insurance based on claims, they found as their work force changed due to layoffs, they had significant claims on a couple of individuals, which drove premiums up. Three or four employees upset the apple cart. Another attendee commented that it only takes one employee in a smaller group. The conclusion drawn from these comments was, “the smaller the company, the bigger the risk in being self-insured.”

Healthy Living and Wellness

Proactive measures to address health issues, such as healthy living and wellness programs, were a popular discussion topic. Specific comments included:

• Blue Cross offers Blue Care Connect with some of their coverage options. Blue Care Connect offers discounts that support healthy living , including sporting goods stores, health clubs, and health food stores
• We incent in a couple of different ways. We surcharge smokers, and give a credit to employees for participating in the pre-screening. These measures are integrated into the health plan, but don’t require participation as a requirement for health insurance
• We offer $50 for employees to get a free annual physical, $10 to join a fitness facility, up to $50 for entry fees in walks/runs for charity. We may add an incentive for purchase of home exercise equipment
• One company offers a one hour walk with the CEO
• Another has fresh fruit in all conference rooms
• American Heart Association has a great program they will bring to you
• We bring in a nutritionist and offer free one-on-one consulting. We also offer free flu shots
• Change Anything is a consulting group that offers behavior modification that could support life style changes in health and wellness
• For mental well being, we offer company time to see a psychiatrist or therapist. It’s a great benefit for those dealing with loss, divorce, and other challenges
• Other proactive offerings from attendees for mental well being include bringing in a masseuse, having a meditation room, and strongly encouraging employees to take a lunch break

While employees are incented and educated in the benefits of a healthy life style, reaching spouses and dependents is a common challenge attendees face.

Some attendees are reducing health care costs by asking employees’ spouses to use other coverage if it is available. One attendee’s organization offers employees a reimbursement if they can provide proof that other insurance is being used. Caution was given, to “Look at the big picture and make sure every family is insured, and that reimbursements are not leading to uninsured family members.”

Social Media

Current policies and guidelines for social media usage were discussed, as were a few legal implications to consider.

To resolve the challenge of allowing Facebook use on company time, one attendee’s company blocks Facebook and prohibits usage on non-company equipment. Others have found that if they leave it up to the employees, they haven’t faced any decline in productivity.

One attendee talked about coaching their management team to not friend, or in some cases to unfriend subordinates. Peer to peer friending is acceptable in this organization, but up and down friending opens up a whole new field of legal implications. They will be adding this to their social media policy.

One attendee from the legal profession commented on risks that are now being identified. For example, what if a manager who terminates an employee happens to be a Facebook friend. It could be argued that the termination decision was not related to performance, but to personal information learned on Facebook. Hiring decisions may involve the same risks. An applicant who was not hired could argue that the decision was not based on qualifications, but on personal information that is public on their Facebook page. It could be wise to not muddy the lines between personal and professional time with information that could be learned via any type of social media – Facebook, blogs, tweets, etc.

Other legal considerations would be exposure to a third party, especially by an unsophisticated user. Leaking proprietary information via social media channels could also be a huge liability.

HR Software

Several HR software solutions are being used by attendees. These include:

• Kronos – time, HR and payroll
• Success Factors – performance related
• Paylocity – payroll and HR

Flex-time

The last area of discussion was flex-time. Identified as an important issue in employee retention, one attendee reported overall success with implementing a paid half day off every other Friday, from May to August.

The general consensus was that flex-time is hard to implement on a company wide scale. It needs to be for certain individuals, in certain jobs. One attendee concluded that with the careful selection of qualified candidates for flex-time, it is a huge success. The counterpoint to that policy was brought to the groups attention by another who feels that if you categorize employees as eligible or not for flex-time, it creates an environment where the message is that certain employees are not mature enough, have enough experience and or are not trustworthy.