October 8, 2013

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Industry Outlook: Human Resources

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Article

Industry Outlook: Human Resources

October 8, 2013


Human resources professionals bring more to the table than hiring and firing, often serving as strategic partners with the C-suite. Our group of industry insiders discuss a range of HR issues, including the Affordable Care Act, immigration and E-Verify compliance, and the pros and cons of social media in the workplace.

We’d like to give a special thank you to David Cherrington, professor of organizational behavior at Brigham Young University, for moderating the discussion.

Participants:

  • Jeff Herring, University of Utah
  • Will Powley, Nelson Labs
  • Dusty Fenwick, KLAS Enterprises
  • Roger Tsai, Holland & Hart
  • Brian Lee, Performance Progression
  • David Cherrington, BYU
  • Bryan Inkley, ProPay
  • Ann Thomas, Mercer
  • Debbie Cragun, State of Utah, DHRM
  • Sharron Ngatikaura, Employer Solutions Group
  • Michael Dash, Parallel HR Solutions
  • Janeen Bullock, Connect Marketing
  • Taylor Cotterell, MRI
  • Leslie Hackett, Express Employment Professionals
  • Cammie Cable, CLEARLINK
  • Sharon Roux, The Summit Group
  • Erika Atwood, The Presidio Group

What do you see happening with respect to the new healthcare law?

CRAGUN: At the state level, a challenge we have is we’re above market on benefits, but way below market on salary. We’re struggling to figure out how to balance that, because the newer generation isn’t that interested in benefits right out of the gate. Right out of college when they get their first job, they want money. We’re not able to attract that segment in the workforce right now. It’s easy to say, “Well, then, cut benefits and get it back in pay,” but our long-term employees are staying because of the benefits. So we have that balance that we’re struggling to figure out.

Someday, we’re going to need a comp and benefit structure that is more flexible, that offers more choices for the diverging groups.

THOMAS: I met with a senior leadership board the other day. When we did the numbers and they realized that just the fees alone are going to cause a 10 percent increase to their employees’ portion of the costs of health plans, they said, “We can’t afford this. The company can’t afford it. The employees can’t afford it.”

In this particular instance, the employees are going to be looking at a 30 percent increase. That’s not affordable for either side. In the boardrooms that I’m sitting in, they’re talking about how do we take something that’s really bad that we can’t afford and say, “OK. In 10 years, maybe we’re out of the benefits game.”

Now what do we do? Let’s talk about whether health is the underlying issue—not healthcare, not the benefits—but the underlying health as part of your culture. Do you care? Do you change your culture and make your benefits much more flexible?

In the 401(k) world, a new employee has very different investment patterns than people who are going to retire in five years. Well, new employees have very different health needs than people who are retiring in five years. They have different money pressures. So it’s really taking this whole health and healthcare issue and reframing the discussion away from, “How much am I going to increase my benefits this year and what’s it going to do to our bottom line?” to, “How much can I afford to attract and retain those employees? What do I put into that bucket? How do I structure the deal?” Does everybody’s deal have to be, “Here’s your salary, here’s your two weeks” time off, and here’s your medical plan,” or is it a different discussion? We’ve got this much money. How much do you want in salary, how much do you want in time off, and how much do you want in benefits?

LEE: One of the problems is the whole definition of risk sharing, which is fundamentally what insurance is all about, has changed. Nobody really knows for sure what that looks like now. It used to be that when somebody has a good year, somebody else is having a bad year. Well, now if they’re having a good year, you’re going to have to return some of that. So how does the risk get shared in this new environment? The insurance companies have already taken their cut. They did that a couple years ago when this was implemented. They started raising premiums.

The small businesses that I deal with are confused about where this is going. They know the costs are going up, they just don’t know how far and how fast and what to do about it.

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