Every dollar counts in today’s zero-interest-rate environment
It’s no secret that interest rates have been at historically low levels for quite some time, but the recent announcement by Federal Reserve Chairman Jerome Powell indicates that rates will stay near zero for the foreseeable future. Chairman Powell stated in his address last month that the Fed would tolerate above-2% inflation instead of attempting to preemptively control inflation by raising interest rates.
With rates likely to remain low, investors, and especially participants in sponsored 401(k) plans in the U.S. retirement system, need every dollar they can save to achieve their goals in retirement. This is particularly true this year, with the COVID-19 pandemic having inflicted significant disruption, uncertainty, and volatility on our nation’s workforce as well as the financial markets.
Even before the pandemic, low interest rates were already hitting Americans enjoying or nearing retirement very hard, because lower rates for annuities and money market accounts require people to save more when trying to convert savings into income. The indexing of Social Security benefits at lower rates also decreases income in retirement.
Stop automatically cashing out terminated participants’ small-account balances!
Since every dollar counts for plan participants in our pandemic-disrupted, zero-interest-rate environment, why are sponsors (who have a duty to adhere to the fiduciary standard) continuing to cash out small, stranded accounts with less than $1,000?
The Employee Benefit Research Institute (EBRI) estimates that a total of $92 billion in hard-earned savings leaks out of the U.S. retirement system every year because 401(k) plan participants prematurely cash out their accounts when they switch jobs. Conducting automatic cash-outs for terminated participants adds to the already sizable leakage of assets from our nation’s retirement system.
As we have noted in previous articles in this space, the primary driver of cash-out leakage is the lack of seamless plan-to-plan asset portability for participants at the point of job-change — and the resultant costly and time-consuming nature of DIY portability.
Boston College’s Center for Retirement Research has reported that, on average, premature cash-outs decrease participants’ total 401(k) assets for retirement by 25%. Cashing out 401(k) savings early is perhaps the worst blunder that a retirement-saver can make. But when sponsors automatically cash out small accounts, they potentially open themselves up to new fiduciary liability down the road.
After all, if a terminated participant has moved to a new house or apartment in the years since working for a former employer, and the new mailing address has not been updated in the files of the plan sponsor’s recordkeeper, then the check for the cashed-out small balance may not reach the accountholder. If that occurs, and the accountholder finds out the assets in their former-employer 401(k) account were lost, the employer could be sued, or the plan could be the focus of a regulatory inquiry.
Auto portability can eliminate the need for automatic cash-outs and rollovers
By adopting the technology solutions which enable auto portability, sponsors can potentially avoid having to conduct automatic cash-outs and automatic rollovers to keep their average account balances and related metrics at healthy levels.
Auto portability — the routine, standardized, and automated movement of a retirement plan participant’s 401(k) savings account from their former employer’s plan to an active account in their current employer’s plan — is powered by “locate” technology and a “match” algorithm. Together, these innovations locate lost and missing participants, and kick-off the process of moving their savings into 401(k) accounts in their current-employer plans.
Auto portability also has the power to make automatic rollovers of small accounts into safe-harbor IRAs a redundant practice. Placing terminated participants’ assets for retirement into safe-harbor IRAs in a low-interest-rate environment isn’t exactly benefiting them, since the only default investment options allowed in safe-harbor IRAs are principal-protected products. The combination of low yields and high fees in too many safe-harbor IRAs can deplete accountholders’ assets over the long term.
The capability to begin the movement and consolidation of 401(k) assets as participants change jobs, as well as reunite lost and missing participants with their 401(k) savings, can help decrease cash-out leakage — and savings depletion — at a time when every dollar in the U.S. retirement system counts more than ever.
EBRI estimates that the widespread adoption of auto portability by sponsors and recordkeepers would preserve up to $1.5 trillion (measured in today’s dollars) in our nation’s retirement system over the course of a 40-year period, primarily for the benefit of low-income workers. Based on EBRI data, Retirement Clearinghouse estimates that widespread adoption of auto portability would preserve $619 billion in savings for 67 million minority participants in the U.S. retirement system — including $191 billion for 21 million African-Americans.
Fortunately, auto portability has been live for more than three years, and it’s available to help sponsors make every dollar count for participants during these extraordinary times.
SOURCE: Williams, S. (07 October 2020) "Every dollar counts in today’s zero-interest-rate environment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/every-dollar-counts-in-todays-zero-interest-rate-environment
Here's your employee checklist for open enrollment
The COVID-19 pandemic has focused consumer attention on health care, germs and the impact a single illness can have on their lives, livelihoods and loved ones. With the fall open enrollment season almost here, you have the opportunity to think more critically about the specific plans you choose for yourself and your family, as well as any voluntary benefits that may be available to you, including childcare, elder care and critical illness. In a world where it feels like health is out of the individual’s control, we all want, at the very least, to feel control over our coverage.
As we know all too well, there’s a lot to consider when it comes to choosing and using health care benefits. The most important piece of becoming an informed health care consumer is ensuring you have access to — and understand — the benefits information you need to make smart health care choices.
While open enrollment may seem daunting, devoting an hour or two to reviewing your plan options, the programs available to support you and your family physically, mentally and financially, and how to get the most from the coverages you do elect, can go a long way towards providing peace of mind as we face the unknowns of 2021. Here are five tips to keep in mind as you prepare for and participate in open enrollment.
Don’t forget that preventive care is covered by most plans at 100% in-network regardless of where that care is received. Schedule your appointments as soon as possible (and permissible in their area), and research other venues for receiving care, such as pharmacies, retail clinics and urgent care facilities. Most are equipped to provide standard vaccinations and/or routine physicals.
Unfortunately, there are also the long-term implications of COVID-19 to consider. Research suggests that there are serious health impacts that emerge in survivors of COVID-19, such as the onset of diabetes and liver, heart and lung problems. And many who were able to ride out the virus at home are finding it’s taking months, not weeks, to fully recover. As a result, you should prepre for the possibility that you, or a loved one, may be ill and possibly out of work for an extended period of time. Be sure to evaluate all of the plans and programs your employer offers to ensure your family has the financial protections you need. For some, a richer health plan with a lower deductible, voluntary plans such as critical illness or hospital indemnity insurance, and buy-up life and disability insurance may be worth investigating for the first time.
As hospitals reopen, it may be difficult to schedule a procedure due to scheduling requirements and pent up demand. A second opinion may be in order if your condition stabilized, improved or worsened during the delay; there may be other treatment options available.
A delay in scheduling also provides an opportunity to “shop around” for a facility that will provide needed care at an appropriate price — especially if you are choosing to go out-of-network or have a plan without a network. Researching cost is the best way to find the most affordable providers and facilities with the best quality, based on your specific needs.
Many medical plans offer second opinion and transparency services, and there are independent organizations who provide “white glove,” personalized support in these areas. Read over your enrollment materials carefully, or check your plan’s summary plan description, to see what your employer offers. If nothing is available, ask your employer to look into it, and don’t hesitate to do some research on your own. Doing so can often result in substantial cost savings, without compromising on quality of care.
Be sure to check up on your preferred health care providers — especially those you might not see regularly — to confirm they are still in business and still in network (if applicable). If you live in a rural area, you may have to travel farther to reach in-network facilities. If you’re currently covered by an HMO or EPO, you may want to evaluate whether that option still makes sense, if your preferred in-network providers are no longer available.
When was the last time you changed your medical plan? If you’ve been keeping the same coverage for years, it might be time to look at what else is available. Your employer may have introduced new plans, or you may find that a different plan makes more sense financially based on how often you need health care. Don’t forget — the cheapest plan isn’t always the one with the lowest premiums.
You may also want to consider setting aside funds in a health savings account or health care flexible spending account (if available). If your employer offers a wellness program, this might be an opportunity to start adopting better health habits to ensure you’re better equipped physically and mentally to deal with whatever lies ahead.
3 tactics to navigate company culture in a remote world
In many respects, COVID-19 reframed our thinking about worklife balance. While this was already a fatigued concept, the pandemic and resulting quarantine fully demolished the fourth wall that stood between work and the personal lives of our team members.
In the early weeks, given our technology enablement already in place, a near immediate shift to fully virtual didn’t seem like a huge shift for many. As the weeks wore on, working parents and those with different challenges at home felt the effects almost immediately. As a working mom myself, I have first-hand experience around what it means to be a mom and an employee at the same time and in the same space, along with my partner also working from home. In fact, my daughter may or may not have “Zoom bombed” a session with our board. Of course, none of them were bothered by it and it probably embarassed me more personally than anything.
As the chief people officer of SailPoint, I’ve seen how balancing continuing to educate our children from home while working full time has taken a toll on many. Half of our workforce have children under the age of 18 living at home. To move forward as a distributed workforce in a way that is sustainable and productive, HR teams need actionable steps to empower today’s working parents.
By implementing specific guidelines that help employees navigate these waters, HR teams can better instill confidence in their employees and provide them with the resources required to drive successful and productive engagement. Small changes, simply starting with an acknowledgement of this issue, helps teams to get their work done on the terms they’re able to design to best fit their needs.
Give employees the formal gift of time
When the pandemic began earlier this year, SailPoint’s approach was centered on “returning to normal.” It’s clear now that a return to normal is not in the cards, and organizations should look at this time as an opportunity to rebuild and create lasting culture changes through new programs and initiatives.
One strategy we’ve found successful at SailPoint is implementing a 2-hour block twice a week when employees have no meetings and can focus on what is most important to them individually. This could range from taking care of their children to getting a presentation done that they haven’t had time for, or even scheduling personal appointments. Whatever it may be, this block we call ‘Free2Focus’ is about giving our crew space to balance the personal demands with the work demands. So far, the response to this time block has been very positive and it allows SailPoint crew members to use their time during the day how they wish in a flexible but formal way. Some crew members are using this time to focus on helping their children with school work, others have used it to have lunch with loved ones. Given that much of schooling from home may fall to women, we also look at this as an inclusion initiative to ensure that part of our workforce isn’t faced with a choice of one or the other.
Restructure your physical office
One aspect of corporate culture that was long overdue for restructuring is the use of the physical office space. At SailPoint, we’ve always offered our crew members flexibility, and this extends to trusting them to decide where they work. We believe that work is our identity, not our cubicle, and COVID-19 has presented us all an opportunity to rethink the office space.
As of September, we have allowed crew members to voluntarily return to the office if they wish at 25% capacity. Moving forward, we’re asking the crew to think of our offices like they would a college library. In college, you would likely go to the library for a place to focus or a place to meet with otehrs. This is how we want the SailPoint offices to operate because we know our crew makes the most impact when they have the autonomy to make their own decisions that work for the individual, their family and their work. There is not a one-size-fits-all when it comes to working styles and personal situations, which is why we want our physical office space to be as flexible as our remote office space.
Commit to community
While this time may have brought us closer to our families, it can be isolating from an employee culture perspective. Some of us are lucky enough to have family support at home, but many do not. It’s crucial that those looking for companionship and emotional support are able to find it, within our community.
Having a strong culture in place is not only invaluable for the individual’s well-being but also vital in keeping employees engaged and motivated. One strategy to achieve this is taking advantage of the technology that connects us. At SailPoint, we have several Slack channels that aren’t related to work to keep our community connected. We have channels for parents, pet lovers, beauty gurus, Texas Longhorns and more, but we also have a channel called SAIL ON. This particular channel is a place for people to post supportive messages, or to just have fun and connect with their community of crew members. So far, this initiative take on a life of its own, as we’ve seen our crew organize fitness competitions, build standing desks for each other’s homes, share their thoughts on "Feel Good Fridays.”
SOURCE: Payne, A. (23 October 2020) "3 tactics to navigate company culture in a remote world" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/list/3-tactics-to-navigate-company-culture-in-a-remote-world
Clearing Up COVID Confusion
The Workplace Routine
For many, getting back to work is a long-awaited blessing. However, as we have seen COVID-19 cases spike across Ohio over the last several days, business-as-usual it is not. More employers and employees are working to meet the challenges of COVID-19 and are attempting to understand how to properly respond to COVID-19 incidents.
Although resources related to handling COVID-19 are vast, many employers continue to be unsure of what is necessary to minimize risk to employees and others. For that reason, we thought it may be helpful to bottom-line some workplace best practices, particularly for responding to situations where someone has been in “close contact” with a person or persons with COVID-19.
First of all, where did we get our information?
The Centers for Disease Control and Prevention (“CDC”) has developed a raft of guidelines to address responding to possible exposure to COVID-19. We additionally consulted the resources available to assist employers through the Ohio Department of Health dedicated Coronavirus website.
Who can you trust?
Unfortunately, we have a pandemic that has been politicized creating a lot of hyper-partisan back and forth. Ultimately, this has led to a confusing landscape with people unsure of what to listen to and who to trust. The State of Ohio has gone through great lengths to help employers and employees in every field understand how to implement and innovate under the threat of COVID-19.
What is “close contact” with COVID-19?
The CDC has issued guidance regarding the proper response to situations where an individual has been in “close contact” with a person with COVID-19, which they updated in late September 2020. “Close contact” is defined by both the CDC as spending at least 15 minutes within six feet of a person with a confirmed case of COVID-19, or a direct exposure to possibly infected droplets of saliva or nasal mucus (e.g., being sneezed or coughed on in the face).
“Close Contact” Bottom Line
- If a person does not have COVID-19 symptoms but has had “close contact”, the person should remain in self-quarantine at home for 14 days from the last exposure if the person has tested negative (or has not been tested);
- If the person has a positive test but no symptoms, he or she should stay home in quarantine for 10 days after the test.
- If a person has had both close contact and COVID-19 symptoms, the person (regardless of COVID-19 test results) should stay in self-isolation for at least 10 days since the onset of symptoms and until at least 24 hours have passed with no fever (without medications) and with the improvement of the other symptoms.
- In addition to the above, new therapeutics are hitting treatment facilities showing merit for shortening the cycle. If in doubt, trust your health professionals to provide guidance on when it is safe to return to work.
“But, I was wearing a mask”…
Just because an employee was wearing a mask when they came in “close contact” does not mean they can skip quarantine procedures. While wearing a mask aids in the fight to control COVID-19, the CDC guidance does not give one a “pass” from the quarantine requirements due to the fact that one was wearing a mask when in close contact with a person with COVID-19. The same quarantine requirements still apply.
“But, I tested negative”…
Many employers are asking that employees that have been in “close contact” to be tested before returning to work. While this is a good step, it has caused some confusion. Given that the virus can develop and symptoms may not appear for up to fourteen days post-exposure; being exposed and then testing negative the next day does not mean an employee is in the clear. Simply put, even if an employee tests negative for COVID-19 or feels healthy, they should quarantine if they have been in “close contact” with someone with COVID-19. Today’s negative test can become tomorrow’s positive test.
“I vacationed or traveled to a hot spot, now what?”
Hot spots are popping up in a variety of areas across the country. If an employee travels for personal or professional reasons to a COVID-19 hot spot (classified as such due to the high rate of spread in the area), a traveler is exempt from the self-quarantine requirement if he or she has had a negative COVID-19 test in the seventy-two (72) hours prior to arrival back in Ohio or since returning. However, if while visiting a hot spot a person was in “close contact” with someone with COVID-19, then it is recommended to follow the CDC guidelines for potential exposure.
More Resources Available
Ohio Department of Health, as mentioned at the top of this post, has assembled many resources for employers. With the September 14th law, HB 606, Ohio Governor Mike DeWine provided employers legal protections when it comes to their efforts to stem the spread of COVID-19, making Ohio one of a growing number of states granting similar civil immunity. However, it is important to note, HB 606 does not offer blanket protection for employers, as it additionally provides protections for employees who can prove “reckless disregard for consequences” by an employer.
One particularly useful area of resources on the Ohio Department of Health website is a section dedicated to common questions around COVID-19, as well as a number of downloadable checklists and employer resources. We would encourage you to check that out: COVID-19 Checklists
3 small business leaders on what it takes to survive the pandemic economy
Now more than ever, business leaders are having to take the roads less traveled when it comes to allowing their businesses to succeed. The pandemic economy has caused many to struggle, and many are stepping out to talk about what they've learned. Read this blog post to learn more.
Building a business is never easy, but 2020 has been a unique calamity. In the U.S., which has suffered more COVID-19 deaths than any other nation, the economy entered its worst downturn in generations. Although central bank stimulus and government programs such as the Paycheck Protection Program have helped cushion the blow, a return to growth will depend on the creativity and resilience of millions of entrepreneurs and business managers.
Lindsay Gibson, COO, TextNow
Over a decade, TextNow built its business, an app that allows users to send and receive calls and text messages for free, by hosting ads for hotels and airlines and the like. Within weeks of the COVID-19 pandemic hitting the U.S. and Canada, one-quarter of TextNow’s revenue disappeared. The company closed its Waterloo headquarters, as well as offices in Portland, Ore., and San Francisco. All employees started working from home.
Lindsay Gibson, the chief operating officer, stayed relatively calm. A 16-year career at cellphone maker BlackBerry taught her how to navigate an organization on “a downward slope,” as she puts it. At BlackBerry, she once had to cut 250 jobs on her first day in a new role. She remembers it as the beginning of five years of doing more with less.
Her strategy then, and now, was to make plans. Plan A at TextNow was to slash revenue targets and cut expenses. The company eliminated 19 jobs, froze hiring, and ended employee perks such as personal trainers and free lunches. Biweekly companywide Zoom meetings were instituted to keep staff up to date and fortify plunging morale. For three months the mood became “very conservative, very heads down, and very focused,” Gibson says.
The company quickly found opportunities for growth. With so many people unable to visit friends or relatives, TextNow started testing a video chat function. Amid the economic downturn, hundreds of thousands of people could no longer afford to pay their AT&T or Verizon bills, so TextNow’s appeal increased. As school moved online, teachers began using TextNow to communicate with parents and students.
By July, TextNow was growing again. It lifted the hiring freeze and recruited a chief growth officer to beef up marketing and help win customers. TextNow is on track to meet or exceed its new revenue targets, Gibson says.
Brian Butler, president and CEO, Vistra Communications
Brian Butler is used to dealing with disaster. The Gulf War veteran — who still suffers from injuries and hearing loss sustained during his Army service — oversaw a munitions plant in Virginia at the time of the Sept. 11 attacks, helped coordinate Hurricane Katrina relief from the Pentagon, and started his marketing and communications business just before the 2008 financial crisis.
So in January, when he first read about a virus sweeping China, he started to prepare. In February he ordered five laptops for a core group of employees and by March had purchased 35. When other companies found themselves struggling to find equipment, his staff was settled and working from home. “I was a planner in the military,” Butler says. “I heavily rely on my ability to think and plan before I do.”
Still, in just a few months, Vistra lost two clients and three major contracts, including a hospital, a large beverage company, and a tourism agency that canceled events, contracts, or big projects. The company responded with an online campaign it called “V Positive.”
“We put up positive messages on a weekly basis,” Butler says. “That generated more good leads for us, just by doing that. So while in some areas we lost a few customers, in some areas we gained a few.”
In late May, the video of George Floyd’s death led to worldwide protests against police killings of Black Americans. Butler is Black, and 48% of his employees are people of color. Vistra started a new business line that offers tailor-made diversity training to customers.
As the months of working from home passed, Butler says he focused more on his staff’s well-being. He gave each employee $150 to “buy something that will help them work better.” The company, which already holds weekly and monthly video calls for staff, started including more informal Thursday morning coffees and Friday afternoon sessions with his father, a chaplain. Butler says the idea stemmed from his experience in the Army, where every battalion has its own chaplain. “And I thought, Hmm, why does it have to be different in the workplace?”
By late August, most of the clients the company had lost in the early days of the pandemic were back on Vistra’s roster. Butler says he’s working from his home for the foreseeable future, just a few miles from the office — and a few feet from the bedroom where he founded his company 13 years ago.
Melissa Wirt, founder, Latched Mama
Melissa Wirt thought she knew about juggling responsibilities. She founded Latched Mama to provide affordable, functional clothing for nursing mothers six years ago, when she had just two children. Today she’s the mother of five.
Then in February, the coronavirus shut down the factories of some of Latched Mama’s suppliers in China. It took a few more weeks before it hit her team — most of them working mothers — in Virginia. “So many moms’ lives, within a 24-hour period, were turned upside down,” she recalls. “Kids stopped going to school on a Friday and didn’t go back on a Monday.”
Wirt’s mother came up from Florida to help take care of her kids. Another mom couldn’t come to the office anymore when school and day care closed. “So her husband is now coming into work” and is on Latched Mama’s payroll, Wirt says, and the woman is doing social media work for the company from home.
In other ways, the work-from-home lifestyle proved a boon to Latched Mama’s business. Women are treating themselves to more comfortable clothes, boosting sales from last year, Wirt says.
Her staff, many at home or working half-shifts, weren’t able to pack and ship fast enough to meet the elevated demand. One of her employees got COVID-19 during the summer, and fear of the virus remained high.
So Wirt recruited teenagers, including a 16-year-old neighbor, to work part time. She also hired two people to manage shipments and warehousing, scooping them up from a nearby distribution company that went bust during the pandemic. “In some ways it’s an amazing problem to have,” Wirt says. “But it’s also hard as a small business because you also have to keep your employees safe. It’s just a lot of balls in the air at the same time.”
Productivity has ticked down. But Wirt says she feels that’s a small sacrifice in an unprecedented year.
“If we need to cut some profit to be able to make sure that people can relax and take a deep breath and be there for their kids and get through this pandemic together, then that’s what we’re going to do.”
SOURCE: Dmitrieva, K.; Kazakina, K.; Greenfield, R. (07 October 2020) "3 small business leaders on what it takes to survive the pandemic economy" (Web Blog Post). Retrieved from https://www.benefitnews.com/articles/3-small-business-leaders-on-what-it-takes-to-survive-the-pandemic-economy
3 Ways to Motivate Your Team Through an Extended Crisis
Another month of working remotely has passed, and many employers are beginning to flag a lack of motivation, performance, and well-being coming from team members. It's important for managers to re-energize their teams and to identify the struggles which are holding them back. Read this blog post to learn more.
As we flip our calendars to yet another month of our large-scale Covid-19 remote-work experiment, it's no wonder that motivation, performance and well-being are flagging for many. Months in, managers need new tools to reenergize their teams, to accurately identify and diagnose recurring struggles and to empathetically help employees address their problems.
A large part of a leader's responsibility is to provide structure, guidance and regulation; yet many workplace studies point to the fact that the most important gauge for a healthy work environment isn't a strong external framework, but whether individuals can foster internal motivation.
Using a well-established theory of motivation called self-determination theory, or SDT, we have identified three main psychological needs that leaders can meet to help their employees stay engaged, confident and motivated.
1. Relatedness
This means that your employees feel cared for and that you've fostered a sense of belonging. Make time to listen to your employees' perspectives and make them know that they are heard and valued. A few simple practices may help:
- Acknowledge and validate your employees' emotions as well as their reactions. ("I know it can be tough to stay focused right now, but we'll figure it out together!")
- Don't let people get lost in the crowd: Reduce team size and acknowledge each member's work and achievements to the extent possible.
- When problems arise, make sure to get full feedback from those involved. This helps you identify the biggest issues and obstacles, while strengthening connection and encouraging communication.
- Emphasize that people's contributions are unique and necessary; do not let good work go unacknowledged.
- Communicate that you care about employees' well-being, not just their productivity.
2. Competence
This refers to when a person feels effective and experiences growth. Research shows that holding employees accountable for achievable goals can improve performance, and motivational science also suggests that trust begets trust. Try these approaches to help ignite your team's internal motivation:
- Involve your employees in decisions where their input could be valuable. Asking for suggestions to optimize an ongoing process, for example, can help maximize a sense of empowerment, progress and ownership.
- To demonstrate their mastery of a particular task or skill, ask an employee to explain to their colleagues what they're working on or why they chose a particular strategy.
- Set up check-ins to regularly discuss progress on individual goals and create strategies to meet them.
3. Autonomy
Effective leaders foster internal motivation by empowering employees' sense that they are the authors of their actions and have the power to make choices that are aligned with their own values, goals and interests, as well as their team's. Leaders should encourage autonomy and be genuinely caring while also recognizing that each employee carries responsibilities for achieving team objectives. To help foster a sense of autonomy we recommend that leaders:
- Encourage self-initiation and participation. Perhaps ask, "What part of this project can you see yourself leading?"
- Avoid controlling language ("Get this to me by tomorrow!") and minimize coercive controls like unrealistic deadlines and constant monitoring of your employees. Instead, find ways to motivate them through encouragement and positive feedback, such as, "I know it's a tight deadline, but having your skills on this team will be so helpful to our client."
- Be transparent by providing the rationale behind demands. People are more willing to put in their full effort when they understand why a given task is important.
A person's work environment plays a big role in whether these three channels surge or jam, so it's no surprise that motivation is especially at risk in these pandemic times. No matter what the circumstances are, we are most energized and committed when we are internally motivated by our own values, sense of enjoyment and growth — in short, internal motivation inspires us to be our best selves. By meeting the three psychological needs, leaders help employees be engaged and feel valued at work (relatedness), feel motivated by growth (competence), and feel empowered and confident in their skills (autonomy). Employees who feel unappreciated or coerced will, at best, often half-heartedly comply with a boss's orders without whole-heartedly committing to excellence. At worst, they will lose all sense of motivation and fail to meet goals and deadlines.
SOURCE: Bradford, A.; Ryan, R. (02 October 2020) "3 Ways to Motivate Your Team Through an Extended Crisis" (Web Blog Post). Received from https://www.shrm.org/resourcesandtools/hr-topics/employee-relations/pages/3-ways-to-motivate-your-team-through-an-extended-crisis.aspx
Companies to shrink offices as work stays remote after pandemic
The coronavirus pandemic has taught companies many things, one of those being that it may be time to allow employees to work remotely full-time when the pandemic ends. Read this blog post to learn more.
More than half of companies plan to shrink their offices as working from home becomes a regular fixture after the COVID-19 pandemic ends, according to a survey by Cisco Systems.
Some 53% of larger organizations plan to reduce the size of their office space and more than three quarters will increase work flexibility. Almost all of the respondents were uncomfortable returning to work because they fear contracting the virus, the poll found.
Cisco, the largest maker of networking equipment, recently surveyed 1,569 executives, knowledge workers and others who are responsible for employee environments in the post-COVID era. The findings suggest many of this year’s radical changes to work life will remain long after the pandemic subsides.
The poll, conducted for Cisco by Dimensional Research, concluded that working from home is the “new normal.” More than 90% of respondents said they won’t return to the office full time. 12% plan to work from home all the time, 24% will work remotely more than 15 days of each month, while 22% will do that eight to 15 days every month.
Cisco’s Webex video conferencing service has benefited from lockdowns that have kept millions of people working and studying from home. It’s also faces rising competition from Zoom Video Communications.
For employees who do return to the office, Webex is adding environmental sensors that plug into its current video-conferencing gear. That will help companies identify over-used and under-utilized spaces, while complying with room capacity limits and checking if workers are wearing masks.
SOURCE: King, I. (06 October 2020) "Companies to shrink offices as work stays remote after pandemic" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/articles/companies-to-shrink-offices-as-work-stays-remote-after-pandemic
Working from home in a pandemic is not shirking it
Juggling work and personal lives was a challenge before the coronavirus pandemic, but now as many are still continuing to work from home, employes are beginning to become worn down from having to manage their home life and work-life all at once. Read this blog post to learn more.
Working from home, once jokingly dismissed as “shirking” from home, is back as a pandemic lifeline for economies amid a resurgence of COVID-19 cases in Europe. Governments in Britain and France, having goaded workers back to the office after lockdown, are now urging them home again. The sound of frustrated bosses gritting their teeth can be heard across the City of London, as big firms from Goldman Sachs Group to Citigroup pause the back-to-work push while keeping the office open.
There’s a sense of whiplash among white-collar workers, who just weeks ago were told that it was time to put the economy first and get back to their cubicles and open-plan desks. There should also be palpable relief. Being able to pull in a salary while safe at home is a privilege hospital staff, care workers and supermarket cashiers can’t have.
Still, we know from the first wave of lockdowns that those stock images of remote workers logging on from bed with a smile and tousled hair, or of barefoot parents deftly bouncing toddlers on their knee while firing off an email, are a fantasy. While surveys suggest working from home is popular among employees crushed by the grind of the daily commute, the grumbling of CEOs that productivity and company culture are vulnerable isn’t entirely wrong.
The mass push to work from home earlier this year was unprecedented. It represented an estimated 42% of the U.S. labor force (or more than two-thirds of economic activity when weighted by contribution to GDP), but it had drawbacks. The apparent productivity gains of being at home instead of on the subway began to look more like the result of a steadily lengthening work day, according to multiple network operators, rather than supercharged efficiency.
Juggling Zoom calls and childcare made matters far worse, one reason governments in Europe put so much emphasis on reopening schools this fall. “We are home working alongside our kids, in unsuitable spaces, with no choice and no in-office days,” Stanford economist Nicholas Bloom said in March as he warned of a looming “productivity disaster.” He’s usually much more positive: His past research has linked working from home to a 13% rise in performance and a 50% drop in employee departure rates.
While corporate bean counters dream of one day dumping costly commercial real estate for digital offices in the cloud, the reality of the cost of living in big cities means home offices aren’t up to scratch.
More than half of Americans working from home do so from shared rooms or bedrooms; more than one-third have poor internet connections or none at all. A June survey of Japanese workers found that even among early adopters of remote work, only a third found it more productive than working in the office, citing poor equipment. Deutsche Bank AG’s monthly survey of financial-market professionals found their assessment of whether they were on balance more productive or less productive at home declined from 20% in June to 11% in September. (It had plunged to -13% in April as everyone was forced home full-time all at once.)
That’s the short-term assessment. We don’t yet have evidence of mass remote work’s impact of longer term on company productivity, but the current outlook is mixed at best. It’s hard to see how the field of research and development — already being thinned out by recession-related cuts — is going to win out in this environment.
Given there’s little freedom right now to create a hybrid model combining office and home — the preferred option for the majority of workers surveyed at French carmaker PSA Group, for example — bosses should do more to make the work-from-home experiment palatable and safe for all involved. Subsidizing utility bills, workspace equipment like ergonomic chairs, and even expenses such as rent (as one Swiss firm was ordered to do in May) would increase satisfaction. Managerial habits should also change, with more trust given to employees, if companies are serious about attachment to “culture.”
The right to disconnect, which had begun to spread worldwide before the pandemic, is critical. The output gains of remote work come from contented and engaged workers, not the cheaper transaction cost of being able to hire, fire and manage via the Internet.
None of this is to idealize the world of physical offices, so easily skewered by the likes of Scott Adams’s Dilbert. And complaining about neck pain, or bosses constantly “checking in” online, might ring hollow to medical staff and delivery drivers who are on the frontlines. But given remote work is now such a critical lifeline for the economy, it would be a shame to let the current experiment fail as others have before. Choosing between your job and your health is a grim trade-off, and one that really shouldn’t exist in a pandemic like this one.
SOURCE: Laurent, L. (25 September 2020) "Working from home in a pandemic is not shirking it" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/articles/working-from-home-in-a-pandemic-is-not-shirking-it
Strategies for maintaining employee trust during executive turnovers
While being in the midst of the COVID-19 pandemic, it's important to keep employee trust and confidence intact. As there may be turnovers and layoffs happening with executives, it's key to communicate with employees that their employers are listening. Read this blog post to learn more.
As businesses struggle with the obstacles of maintaining a new workplace normal in the midst of the coronavirus crisis, ambiguity and unpredictability can threaten employee trust and confidence.
Sweeping layoffs across all industries are putting more pressure on that delicate relationship between employers and employees. Employers increasingly must reassure employees about their job security and the stability of the company, and how they respond will have long-term ripple effects on loyalty and potential turnover, experts say.
“A CEO’s exit or a round of layoffs can have a detrimental effect on employee retention and well-being if not addressed properly,” says Laura Hamill, chief science officer and chief people officer at Limeade, an employee experience company. “It’s important to show employees as soon as possible that you are listening, that you understand their concerns, and that you are working to address them.”
Just before the virus took root in the U.S., former Walt Disney CEO Bob Iger unexpectedly stepped down at the end of February. Around the same time, Expedia laid off 12% of its global workforce, which came on the heels of Wayfair’s January layoffs. Online travel agency Booking announced in early April that CEO Glenn Fogel has tested positive for coronavirus but still plans to continue with his responsibilities.
These major changes can create a lot of uncertainty within an organization, leaving HR and senior leadership in charge of keeping the business on track and reducing employee turnover.
“CEO shake ups [and layoffs] can create two disharmonies,” says Dania Shaheen, vice president of people operations at Kazoo, an employee experience platform. “There is always a lot of noise created with things like this, gossip about why someone stepped down. This tends to be very distracting from what the business is actually doing.”
The often abrupt departure of a CEO can also lead to a shift in strategy, Shaheen says. While a CEO’s vision for a company can be a rallying cry within the organization when that changes, it can upset the company culture. But there are steps employers can take to get out ahead of this.
In the case of Disney, Iger has remained on board to insure the strategy he has established remains in place. This can help ensure a smoother transition of power.
“The more transparent [a company is] and the more open they are internally about what’s going on is going to be key,” Shaheen says.
Frequent and open communication is another necessity for employers during times of business tumult, Hamill says. By planning for the worst-case scenario and having a clear communication policy, organizations can address employee concerns, collect feedback, gauge sentiments, and implement change quickly. Employers shouldn’t wait until they have all of the answers buttoned up.
“When a major change occurs, organizations need to put employees first,” Hamill says. “Be transparent with employees and offer two-way communication – ensure that people feel supported. This needs to come from all angles — from leaders, managers, and internal teams like human resources.”
An organization’s culture is only as strong as the example being set by its senior leadership. In response to mass layoffs and financial losses, many CEOs and other executives have decided to take pay cuts or forego their salaries. New Disney CEO Bob Chapek will take a 50% pay cut, while Iger — who remains with the company as executive chairman — will forgo his entire salary.
Dick's Sporting Goods announced that CEO Ed Stack and President Lauren Hobart will forgo their salaries and Marriott CEO Arne Sorenson will not take home any salary for the rest of the year. The rest of the executive team will take a 50% pay cut.
When organizations set an example that you’re focused on protecting your employees, it will instill trust and create a more loyal workforce.
“Culture is absolutely critical for growth and success and you want to make sure that the culture stays steady,” Shaheen says. “You have to make sure you’re continuing to build a very purpose driven culture.”
SOURCE: Schiavo, A. (06 April 2020) "Strategies for maintaining employee trust during executive turnovers" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/news/strategies-for-maintaining-employee-trust-during-executive-turnovers
Employers Still Hiring During Coronavirus Pandemic
As many companies begin to temporarily close their doors due to the COVID-19 pandemic, there are several companies that are beginning to hire mass amounts of employees. Although employers run the risk of hiring effectively, they are in need of employees. Read this blog post to learn more.
When one door closes, even temporarily, another often opens. As people practice social distancing to avoid contracting COVID-19—the disease caused by the coronavirus—restaurants, bars and retailers across the U.S. are closing their doors and laying off tens of thousands of workers. But needs must be met, so online sellers and a host of other businesses are mass hiring for delivery, security, warehousing and distribution personnel.
Amazon announced a push to add 100,000 workers to address customer need. National grocery chains are ramping up hiring for delivery staff, Walmart is looking for more than 1,000 distribution-center workers, and health care providers are ramping up hiring to address the expected surge in patients. Retailers and pizza chains are boosting their payrolls to meet takeout and delivery demand, even as their locations are closed to guests. A security company just announced mass hiring to fill full- and part-time security vacancies to help provide public-safety services.
The challenge for these organizations will be to hire quickly and effectively at scale, without putting recruitment professionals and the public at risk. Technology is driving the effort. Online applications, video interviewing, online onboarding and more are being leveraged to enable fast, effective hiring.
Meeting the Need—Safely
Josh Tolan, CEO of video-interviewing company Spark Hire, said, "Technology gives hiring pros a huge leg up in their processes. Especially during this pandemic, tools like video interviews and online applications achieve the goals of continuing recruitment efforts, learning more about applicants and speeding up the hiring process—all from an appropriate social distance."
Amy Champigny, senior product marketing manager at Deltek, a software provider for project-based work, said that competition for workers may require employers to actively self-promote. "Organizations should focus on posting job requisitions online and focus on boosting their LinkedIn branding, as well as employer presence, during this time," she said. She recommended that employers, along with making sure their brand is visible, move candidates through the hiring process as quickly as possible. "Businesses should consider candidate pools to speed up recruiting cycles for all roles and especially critical, hard-to-fill positions."
Many companies are practiced in mass hiring, said Peter Baskin, chief product officer at recruitment software company Modern Hire. "Similar to mass hiring for seasonal positions, companies should adopt purpose-built, on-demand text and video interviewing tools," he said. "This will allow them to reach a larger audience of candidates, provide candidates with the information needed about the open jobs, allow for both parties to complete the interviewing process quicker, and, in return, roles can be filled at a faster rate."
From Start to Finish
Effectively employing technology in hiring begins with an online application process that's seamless and at scale. Baskin suggested that recruiters work from home whenever possible, utilizing on-demand text and video technology instead of scheduling in-person interviews.
"HR teams must ensure any technology they use—whether for recruitment, prehire assessments or video interviewing—is purpose-built, not only for the task at hand, but also for the specific company and industry in which they operate," he said.
"From home," Tolan said, "candidates can conduct one-way video interviews that they record on their own time and the hiring team can review at their convenience, as well." Further along in the process, he added, "live video interviews allow the hiring team to connect with the candidate face to face without the handshake and any potential exposure to the [coronavirus]."
Good Hires vs. Fast Hires
Even when time is of the essence, quality can't be ignored. Many organizations use prehire assessment questions, which a candidate can answer during the video application process. These allow recruiters to quickly make a determination on moving the job seeker through to the next step.
For some organizations, artificial intelligence is being leveraged to boost hiring metrics. "Data-driven insights can predict hiring success by measuring personality traits and problem-solving skills," Tolan said, "and compare candidates to job benchmarks customized for your company."
Onboarding at Scale
When candidates are selected, onboarding at scale is the next hurdle for organizations. "Onboarding needs to be standardized and repeatable to help organizations onboard a greater number of candidates during periods of growth or at scale," Champigny said. "Comprehensive [applicant tracking system (ATS)] solutions include onboarding portals to help companies provide a consistent experience for new hires, while ensuring that those new hires have a good experience as they come through the door."
SOURCE: O'Donnell, R. (29 March 2020) "Employers Still Hiring During Coronavirus Pandemic" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/talent-acquisition/Pages/Employers-Still-Hiring-During-Coronavirus-Pandemic.aspx