Here are 5 things every employer needs to know about the millennials in their workforce
Source: Property Casualty 360
At the 2015 Property/Casualty Insurance Joint Industry Forum on January 15 a panel of six chief executive officers agreed that the “millennial question” is a big one for 2015 and beyond.
According to The New York Times, the total number of millennials—those born between 1981 and 1997—will reach 75.3 million this year, surpassing baby boomers (those born between 1946 and 1964) as the largest living generation in the U.S.
There are many myths and stereotypes about millennials, but here are the five factors the the panel CEOs said are the most accurate about this generation as employees.
Paula Downey, president and CEO of CSAA Insurance Group, said that millennials make up about 25% of her company’s work force. “We need a cultural change to retain them,” she added. “They’re looking for a diverse, collaborative culture."
Steven D. Linkous, president and CEO of The Harford Mutual Insurance Companies observed that millennials are attracted to the mutual insurance structure of companies like his, where they can engage the community to “make a difference.”
This generation is composed of overachievers and has a constant need for reinforcement, said Thomas A. Lawson, president and CEO of FM Global. They’ve lived with hovering “helicopter parents” who praised their every step, which makes it important to them to know when a boss approves of their work. That approval brings out their best.
“The millennial approach to work-life balance often differs from that of other generations,” noted Christopher J. Swift, chairman and CEO of The Hartford. “They’re also interested in more time off and in working in urban areas with mass transit and reasonable commutes,” he said.
This generation has been raised with a strong sense of volunteerism and “giving back” to the community, according to the panel. “Millennials are also more likely to embrace corporate efforts in social responsibility,” Swift said. That’s one reason you’ll see many groups from insurance companies helping out organizations such as Habitat for Humanity or participating in cancer walks.
The efforts to understand millennials are worthwhile, said Lawson, because properly motivated millennials can be valuable employees.
Top five 401(k) plan trends for 2015
Source: EBA Benefit News
Benefit advisers and their employer clients hoping to help employees achieve retirement readiness should be paying attention to these top 401(k) plan trends for 2015, according to Robert Lawton of Lawton Retirement Plan Consultants.
Stretch that employer match
A virtually no-cost way for employers to incent participants to contribute more is to stretch their matching contribution formulas, says Lawton. For years 50% of the first 6% was the most common matching formula. Leading edge employers have stretched their matching contributions to 25% of the first 12%, for example.
Expect this trend to continue as employers look for low cost ways to improve their 401(k) plans, Lawton says, adding that all that is required to make this change is a plan amendment and communication materials.
Re-enroll everyone every year
Plans that use auto enrollment, auto escalation and annual re-enrollment into target date funds have plan participation rates in the 90% range, says Lawton, adding that not only does automation work, but annual re-enrollments into target date funds works too. Participants can opt out of a re-enrollment, but Lawton says the vast majority do not. Just as auto enrollment has become commonplace in large plans, Lawton says to expect annual re-enrollment to become the norm in the next few years.
Use outcome based, online employee education
With every plan participant having unique retirement goals, employee education has become more personalized, says Lawton. It’s a trend he says will continue and also expects to see personalized education migrate to predominately online venues. When participants can view 5 to 7 minute learning videos online at their homes with their spouses, outcomes improve, he says. Most employers embrace this type of learning since participants are not pulled away from their jobs and employee education costs are less.
Add Roth 401(k) features
Since it is now possible to convert pre-tax 401(k) accounts into Roth 401(k) after-tax accounts, expect many more employers to offer Roth 401(k) contribution ability and an in-plan conversion feature, says Lawton. The cost of this change is a plan amendment and communication materials, he adds.
Employees paying more fees
A surprising 58% of plan sponsors pass on the record-keeping costs of their 401(k) plans to participants, according to a 2014 Towers Watson survey. Only 23% of surveyed employers pay the entire record-keeping cost. As employer cost pressures continue, Lawton says, expect more employers to pass on all plan related costs to participants.
How NOT To Motivate And Reward Employees
Originally posted January 21, 2015 by Bernard Marr on LinkedIn Pulse.
When a newspaper company had to cut costs it made their entertainment writers redundant. To fill the entertainment review columns it came up with what it thought to be a novel way to both deliver reviews and motivate the remaining employees. The newspaper offered free tickets to staff for theatre, music and cultural events, but with the condition that they write reviews. The writer of the best review each month would be rewarded with a bonus of $100.
Not only did the staff immediately see that this was a way for the company to cheaply replace what it had chosen to forgo, through redundancy, by asking the remaining staff to carry out extra work essentially for free. The artists and organizers connected of the events also soon realised they were being short-changed. As the tickets are generally offered free to media outlets, on the understanding their artistic endeavors will receive professional coverage in return, they were often a little surprised to see the newspaper’s advertising sales rep, or office manager, turning up to “review” their play, concert or exhibition.
Needless to say, this “motivational measure” was widely ignored by the paper’s staff, adding to the growing sense of disconnect between staff and management during already turbulent times.
If you are thinking about how to best motivate your employees, to ensure they know their efforts are appreciated, here are a few mistakes to avoid, if you don’t want it to backfire.
Don’t just reward results
Effort is often just as important – while a select few may be responsible for a winning “result” (a big sale, or a major project for a client completed on time), don’t let those working behind the scenes feel underappreciated. Big projects may take a long time to come to fruition and it is important that you keep employees engaged and feeling appreciated for the duration.
Do not promote a “superstar” culture
Motivating and incentivizing should be carefully balanced so individual success does not appear more beneficial to the business than the work of the team as a whole. If staff feels that one “superstar” employee is constantly rewarded for the performance of the group, then motivation will suffer. Success can be recognized at individual, departmental and company-wide level – and it should always be recognized at all three.
Don’t directly and permanently link KPIs to reward
While this may be a great tactic for a one-off or short-term campaign, for example to increase sales in a certain sector which is flagging, it can lead to box-ticking behavior if implemented in a heavy-handed way, and even encourage attempts to “game the system”. KPIs should be there to check that the company is moving in the right direction, not to incentivize (or de-incentivize) staff.
Don’t delay rewards or praise
Studies show there is a direct relationship between how quickly someone is praised or rewarded for their efforts, and how appreciated they feel. It’s easy to think that you will get round to sending out congratulatory emails (or gifts) at some point in the near future, but every second you delay is another second that someone (or your whole team) may be feeling unappreciated.
Don’t become predictable
Vary the rewards and incentives you offer your staff from time to time. Familiarity breeds contempt, and once something becomes routine, it is an expectation and no longer a great pleasure. Put some time and imagination into coming up with ways to make your team feel valued.
Ongoing training about job descriptions can drive employee engagement
Originally posted on HR.BLR.com on November 26, 2014
Ongoing training about job descriptions is “essential, since no job remains exactly the same from year to year,” say Michael Houlihan and Bonnie Harvey, business, marketing, and corporate training experts and co-authors of The Entrepreneurial Culture: 23 Ways to Engage and Empower Your People.
In fact, since “job descriptions are typically out of date when the job is filled,” the authors recommend that employers “ask every employee every year to rewrite his or her job description and tell the employer what kind of training they require to stay up with the technological and procedural changes they have witnessed during that year. Involving them in this process gives them ownership of the job and will fully engage them in the training they requested to do a better job.”
“Engage employees with questions like, ‘What kinds of skills do you need to do your job better?’ When they have a hand in the training program, they will put the most into it and get the most out of it,” Harvey says.
The offering of bonuses based on overall company performance also can drive engagement in training. “Once in place, these incentives will provide a powerful consideration to learn the job, learn the company, learn the market, and become a sponge for any training that will help them achieve that bonus,” says Houlihan.
Cross-training provides another opportunity to engage employees. “We believe in know-the-need rather than need-to-know,” says Harvey. “Many companies feel that certain subjects are not necessary for the individual to do their job. They put them on a need-to-know basis.”
However, “training in other departments, together with the challenges facing those departments, provides employees with appreciation for those functions, and they are more likely to identify with them as part of the same team,” she says. “Cross-training can provide big picture thinking and reduce silo isolation, which can have a very positive impact on interdepartmental cooperation.”
Tailoring voluntary benefits to meet employees' generational needs
Originally posted November 21, 2014 by Elizabeth Halkos on www.ebn.benefitnews.com
Well-designed benefits plans should be based on the desires and needs of employees in addition to supporting the employer’s business objective of providing a benefits package that aids in recruiting and retaining its workforce.
Once considered just a nice extra for a more comprehensive benefits package, voluntary benefits are now an essential element of the employee benefits program because they allow workers to customize their benefits and assist with the employee’s overall financial wellness.
There’s no doubt financial wellness is a concern for most of today’s employees. In a July 2014 Harris Poll on behalf of Purchasing Power, 80 percent of employees working full-time said they have financial stress today. Their stress is related to both long-term and short-term financial needs. Specifically, 67 percent indicated the stress is related to long-term financial needs (savings, retirement plan, etc.), while 60 percent said it was short-term related (everyday living expenses as well as unexpected financial needs such as a car repair, appliance replacement, or emergency medical expenses).
With such varying concerns among employees, employers need to know what voluntary products will most benefit their workers’ demographics. Today’s workforce spans three generations from millennials to baby boomers that look at work, life, money and finances in totally different ways. Likewise, they have different benefit needs and with voluntary benefits, workers can choose what suits their particular situations.
Traditional voluntary benefits are mostly self-explanatory. Let’s consider the growing list of non-traditional voluntary benefits in the marketplace today which give a wide scope of opportunity for meeting employees’ needs. Based on focus groups with employees from all generations, here are the non-traditional voluntary benefits that help address their financial situations.
Baby boomers (born 1946 – 1964)
Baby boomers are worried. For the most part, if there’s something baby boomers want, they are able to buy it. However, many will question if they should buy it or rather save that money. Instead, they are trying to be financially responsible and scaling back from a materialistic lifestyle. Baby boomers, even if they are high earners, worry about retirement – both having enough money for retirement and wondering when the right time is to retire.
Non-traditional voluntary benefits that would appeal to baby boomers include:
- Discount Programs
- Financial Counseling
- Legal Assistance
- Group Auto Insurance
- Home Warranty Insurance
- Wellness Programs
- Long-Term Care Insurance
Generation X (born 1965 – 1979)
Generation X is stretched thin. Gen Xers’ work ethic is balanced and flexible with a “work hard, play hard” attitude. This generation’s financial stressors come from multiple angles. They are raising children, preparing for care of their aging parents and trying to save for their own financial futures. They appear to be having the toughest time financially. They find it difficult to meet their household expenses on time each month and are the most likely to carry balances on their credit cards.
Non-traditional voluntary benefits that would appeal to Gen Xers include:
- Discount Programs
- Employee Purchase Programs
- FSAs
- Financial Counseling
- Wellness Programs
- EAP
- Child Care
- Cyber Security Insurance
- Homeowners’ Insurance
- ID Theft Protection
- Long-Term Care Insurance
Millennials (born 1980 – 2000)
Millennials are confused. They often juggle many jobs and move from job to job frequently. Their greatest fear is silence, unplugging, routine and eternal internship. Keys to job retention for millennials are personal relationships, multiple tasks and fast rewards. Their benefits needs include portable benefits, forced savings, financial education and concierge services. Key values for millennials include future financial security and better quality of life. To improve their financial situation, they need a better job or a promotion and expert advice on how to make the most of their money in addition to beginning a 401(k) or other retirement plan. The average millennial has $29,000 in student loan debt alone. Not surprisingly, they are also more worried about getting rid of or incurring additional debt than their day-to-day expenses.
Non-traditional benefits that would appeal to millennials include:
- Employee Purchase Programs
- Discount Programs
- Tuition Assistance
- Employee Assistance Program
- Wellness Program
- FSA
- Financial Counseling
- ID Theft Protection
By recognizing the value in voluntary benefits and adding to their voluntary offerings, employers not only can provide for their employees’ financial wellness, but can retain a loyal, motivated workforce as well.
More on the EEOC and Wellness Programs
Source: ThinkHR.com
The U.S. Equal Employment Opportunity Commission’s (EEOC) recent litigation against employers over incentives granted to employees participating in wellness programs may be a concern for other employers. Specifically, the EEOC has asserted that the size of the incentive that is lost by employees that refuse to participate could render an employer’s wellness program “involuntary” and in conflict with the Americans with Disabilities Act (ADA). Our recent blog post on this issue highlights the concern.
The EEOC’s action raises issues that have confused employers and benefit advisors for many years: What types of wellness program rewards or penalties are acceptable under the ADA? Will programs that comply with other federal laws for employer-sponsored health plans avoid claims of discrimination under the ADA?
The ADA generally prohibits employers from requiring employees to answer disability-related questions or to undergo medical exams (except certain health/safety exams in specific professions or industries). The EEOC, which regulates various ADA provisions, has confirmed that employers may conduct health assessments or exams as part of a voluntary wellness program without violating the ADA. Medical records must be kept confidential and separate from personnel records.
While the EEOC has not published clear guidance as to the meaning of “voluntary” participation, the need for clarification is apparent. The Health Insurance Portability and Accountability Act (HIPAA), has long permitted health plans to make wellness rewards (incentives or penalties) up to certain limits — those limits were increased under the Affordable Care Act (ACA) starting in 2014. These ACA limits may inform strategy on employer implementation of incentives to promote participation in wellness programs.
Penalties and Rewards
The ADA speaks of penalties, but in the vernacular of the ACA, the term “reward” refers both to an incentive payment or a penalty surcharge. Further, the ACA categorizes wellness programs as either “participatory” or “health-contingent” and applies different rules for each category.
Participatory programs do not depend on health status and no specific health outcome is required. For example, a program that rewards all employees that complete a health risk assessment, without regard to the results, is a participatory program. A health-contingent program is one that offers the reward only to employees that either meet an initial health standard (such as satisfactory biometric screenings) or do not meet the initial standard but meet a reasonable alternative standard (such as attending an educational program).
Starting with 2014 plan years, the maximum allowable reward (incentive or penalty) in a health-contingent wellness program under the ACA is 30 percent of the health plan cost, or 50 percent if the program is designed to prevent or reduce tobacco use. (Health plan cost generally is the COBRA rate minus the 2 percent administrative fee.) If the program is merely participatory, however, there is no limit under the ACA for the amount of reward an employer can give an employee.
Regardless of the ACA provisions for wellness programs, the EEOC presently believes that compliance with the ADA prevents employers from offering rewards amounting to steep or enormous penalties — even in a participatory-only program. In its recent case, the EEOC cites the difference between employees paying 25 percent versus 100 percent of the cost for health insurance based on whether they participated in a wellness program as an “enormous penalty.”
Considering the EEOC’s public comments endorsing voluntary wellness programs, and that their enforcement activity is focused on programs imposing penalties that they describe as enormous or steep, it appears likely the use of wellness program incentives will continue to be permitted. However, compliance with the reward limits and reasonable alternatives required under the ACA needs to be complimented with awareness of the EEOC’s concern over excessive penalties. Formal guidance from the EEOC is still pending.
For more information about wellness programs under the ACA, read the Final Rule.
Taking the Long View of New Hires
By Mark McGraw
May 22, 2012
Source: Human Resource Executive Online
Don't be too quick to measure the impact of new hires, experts say. Even though many companies are "concerned" about the way they appraise new professional and managerial-level hires, it's important to allow them to develop and grow before determining their worth to the organization. It's also important to establish meaningful metrics.
Professional football franchises are big businesses that depend on frequent injections of new talent to remain successful.
Look at the recent NFL draft, where each of the league's 32 clubs carefully selected a handful of college athletes they hope will lead their organizations to success for the next decade or so. These pro prospects are poked, prodded and closely scrutinized for months leading up to draft day, and teams have become increasingly thorough in testing the physical and mental capabilities of these young men before making sizable investments in them.
Still, predicting a just-drafted player's career trajectory is an inexact science. Highly touted players with big-name college pedigrees don't always pan out at the pro level, while unheralded, under-the-radar picks from smaller schools sometimes blossom into superstars.
And NFL teams and their highly paid talent evaluators are left to contemplate their methods for measuring the potential impact of these skilled, but unproven, new employees.
Sound familiar? There's an almost 50/50 chance it does, if findings from theFuturestep Global Talent Impact Study 2012 are any indication.
The survey of more than 1,500 HR professionals in five continents finds that 40 percent of respondents report they "are concerned" about the metrics and measurements they have in place to assess the impact of new professionals and managerial-level recruits on their organizations.
There is no one-size-fits-all approach to measuring a new hire's potential impact, says Byrne Mulrooney, CEO of Futurestep, a global recruitment company with U.S. headquarters in Los Angeles.
More than half (52 percent) of survey respondents say they rely on two to five metrics to assess a new hire's potential value within the organization, he says.
Measurement tools will vary based on the industry and type of position, but there are broader measurements that an organization can use to assess the possible worth of a new hire, according to Dave Ulrich, professor of business at the Ross School of Business at the University of Michigan and a partner at the RBL Group, a Provo, Utah-based consulting firm.
For example, he says, "there are some generic metrics such as perceived performance (perceptions of those that work with the person), behavior (the extent to which the new hire's time is spent on the appropriate business issues) and 'time to productivity,' which is the time before the new manager or hire is fully productive in the new job."
Ideally, these essential processes should be in place before hiring a candidate for a managerial-level position, adds Ulrich, "then those expectations can be the standards to determine if someone is doing the right job."
A new hire's impact will evolve over time, and companies and their HR leaders should rely on a combination of metrics to assess value in the short-, medium- and long-term, says Mulrooney.
"There are three distinct dimensions to a new hire's impact," he says. "First is the immediate impact, when a candidate with the right skills arrives to get the job done. The consequential impact is when an individual's contributions transition from the actions within their own role to influencing others. The third dimension is when additional value is brought to the organization over time, and an employee shows potential to be promoted and grow within the company."
A key reason many companies wind up questioning their assessment tools is that they place too much weight on short-term results as a predictor of future, rather than more long-term success, says Mulrooney.
He notes that about two-thirds (67 percent) of respondents identify the immediate performance of a new professional and managerial-level employee as a critical indicator of a successful recruitment process.
"Our study unearthed an alarmingly short-term approach, with one-in-three respondents (35 percent) measuring impact within a new hire's first six months. Although it's encouraging that measurement is taking place, it's essential that a meaningful process is engaged to maximize impact in the long-term and retain staff," he says.
Indeed, HR leaders should take the long view when evaluating new managerial-level employees, says Keith Strodtman, research fellow of HR strategies at HfS Research, a research-analyst organization with U.S. headquarters in Boston.
"Most would acknowledge that it's more important to hire a quality employee than it is to hire a poor employee quickly," says Strodtman. "Yet, when it comes to hiring metrics, speed-of-hire or cost-of-hire are much more commonly measured than quality-of-hire. Speed and cost are important, but don't forget the big picture."
In the grander scheme, HR must be instrumental in defining the processes and measurements of the recruiting process that are meaningful to their organization and industry, and can often find reliable predictors of new hires' performance within their own organizations, says Strodtman.
"Profiling existing successful employees will provide the key indicators required to assess the potential value of a new hire," he says.
"HR leaders must also work with line-of-business hiring managers to define the metrics and processes that provide insight into the success of a new hire. The metric will vary depending on the goals of the business and the type of role being filled," he says.
"Companies may want to consider a global metric to measure overall quality-of-hires and specific metrics for key roles in the organization. A key is to focus on business outcomes and how successful employees deliver against the desired outcomes," he says.
Ultimately, HR professionals are "like architects who design the processes that capture the desired meaning within the company," says Ulrich. "And, like architects, HR professionals need to listen carefully to the desires of their clients -- in this case, line managers -- so that they can design the right systems."
Job Gains by Demographic
May 21, 2012
By Michael J. O'Brien
Despite the weakening jobs data of late, signs of an economic recovery abound. But is the rising tide lifting all demographic boats equally?
Economists continue to argue about the overall significance of jobs-report figures released by the U.S. Department of Labor, but debates notwithstanding, data from earlier this year shows that older workers -- those ages 55 and older -- may be making a better argument for their employment than their slightly younger competitors.
According the Labor Department's March 2012 figures, those older workers gained 2.8 million jobs since March 2010, compared to a net job loss of 258,000 for workers between the ages of 45 and 54 during that same time period.
Such figures should not come as a surprise, says John Challenger, CEO of Chicago-based Challenger, Gray & Christmas.
"The 55-plus population is expanding rapidly and, whether by choice or by necessity, many of these older workers plan on working beyond the traditional retirement age of 65," he says.
Some of these older workers are continuing in the occupations and industries where they spent most of their careers, he says, but many others are starting entirely new career paths.
"Because they may be more willing to work fewer hours or accept lower pay in exchange for better health benefits," Challenger says, "employers are welcoming these older job seekers.
"The older worker's experience makes it more likely that he or she can hit the ground running with little or no training and, in many cases, can do the job of two younger workers, simply by knowing the 'tricks of the trade,' " he says.
But, despite the advantages that many older workers offer to employers, Challenger says, recent college graduates should be stepping into a labor market that is more positive than in the recent past.
"Each year, we continue to see improvement in the college-graduate job market," he says. "Last year was slightly better than 2010, and this year should be slightly better than 2011."
Challenger points to two surveys to support his theory: one from the National Association of Colleges and Employers that finds employers plan to increase hiring of spring graduates by 10 percent over last year; and a survey from Michigan State University's Collegiate Employment Research Institute, which finds that employers are planning to hire bachelor-level graduates at a 7-percent higher clip than last year.
Indeed, according to DOL data from March, workers ages 20 to 24 gained 939,000 jobs during that same March 2010 to March 2012 period -- second only to the 55-plus segment.
Challenger says that, while the slowly improving economy is creating more opportunities for all job seekers, many companies have started looking beyond recovery toward expansion, and those organizations have to make sure they have started to develop the talent they will need to fuel the next period of growth.
"That means beginning to build the entry-level ranks now," he says, "so that, over the next five or six years, it is possible to identify and cultivate the high potentials who will drive the company forward."
There is also new data confirming that the economic recovery is impacting passive candidates.
According to the Corporate Executive Board, for the first time in five years, the ranks of passive candidates -- or employees who aren't actively looking for a new job -- shrank in the first quarter of 2012.
While still below pre-recession levels, active job seekers now make up 27 percent of the employed workforce, which the Board calls "another sign that the job market is recalibrating."
"Overall, this is a positive trend," says Christopher Ellehuus, managing director of the Washington-based Corporate Executive Board. "It means candidates in the labor market are feeling more bullish about job opportunities in the labor market and are more willing to take risks and move to another job with better career opportunities or better pay."
Ellehuus says the Board's new data also finds that employees who left their old companies in the second half of 2011 received 10-percent higher pay with their new employer, up from 8.5 percent in the first half of the year.
"While the global downturn provided organizations with selective opportunities to 'trade up' on talent for bargain prices," he says, "that opportunity appears to be fading quickly as the market begins to re-equilibrate in favor of candidates."
But one demographic that is not enjoying any effects of a revived economy is disabled workers, according to a new study based on DOL data analyzed by Allsup, a Belleville, Ill.-based provider of Social Security disability representation.
The Allsup Disability Study: Income at Risk finds that the unemployment rate for people with disabilities was nearly three-quarters (74 percent) higher than for non-disabled workers during the first quarter of 2012: 15 percent for disabled workers versus 8 percent for non-disabled workers.
And compared to the first quarter of 2011, the figures show no positive movement for either group: 13 percent for disabled workers versus 8 percent for non-disabled workers.
Allsup has been tracking such figures since the first quarter of 2009.
"People with disabilities often face a much greater challenge in securing employment," says Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. "Their health condition may make it difficult to continue to work for extended periods, or it worsens so they are forced out of the labor market entirely."
With all this data, it's no surprise many HR executives are unsure of their next step, says Challenger.
"This is complex time for HR executives," he says. "HR has to manage staffing demands for the next six months without losing sight of what will be needed over the next six years.
"Unfortunately," he says, "those expecting a rapid turnaround and sudden burst in hiring will be disappointed."