Benefits April 30, 2008

Employers Lax in Managing Flexible Work Programs

April 30, 2008 (PLANSPONSOR.com) - Employers are embracing flexible work arrangements as a way to meet the needs of a diverse workforce, but most have not structured their programs to maximize the benefits, Hewitt Associates found.
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Eighty-eight percent of U.S. employers provide some sort of flexible work arrangement to their employers, up from 77% in 1998, according to a Hewitt announcement. Of the companies who offer flexible work arrangements, almost all (98%) said the benefits of workforce programs match or outweigh the costs associated with implementing them.

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Two-thirds of survey respondents that offer flexible work arrangements said the programs increased employee engagement, and 64% said they improved employee retention. Another 49% cited enhanced recruitment results.

However, Hewitt found very few employers have formal policies and consistent procedures in place to manage their workforce programs. Just more than one quarter (27%) indicated they have companywide, formal written policies, only one-third have a formal employee application process.

According to the survey, 39% of companies have policies or guidelines that vary by location, business unit, department, or job class, and 31% offer flexibility at the discretion of individual managers. Programs offered also vary by type of arrangement: the majority of companies offer programs on an ad hoc basis, with job sharing (46%), telecommuting (39%), and flextime (31%) being the most prevalent. Part-time work is the most likely program to be offered on a company-wide basis (36%).

Hewitt found most companies do not effectively communicate their flexible work arrangement programs to managers or employees. Less than half (48%) of the companies participating in Hewitt's survey provide education and communication about their workplace flexibility programs to all employees. While 31% said they wanted to limit use of their flexible work arrangement programs, either because their company culture has not yet fully embraced widespread use of them or because they are concerned with the logistics of having too many employees using the program, 69% said they do not provide broad communication so programs can be offered at manager discretion.

However, only 39% of companies indicated that managers understand their flexible work arrangements, and less than half (42%) said they are confident in their managers' ability to manage employees who use them. Most (61%) do not provide training on how to administer these arrangements.

The majority (71%) of companies who offer flexible work arrangements do not measure the effectiveness of these programs , and just 14% measure results formally. Of those that do measure their programs, nearly three-quarters (73%) measure success through employee engagement, more than two-thirds (69%) through employee retention, and half measure success through productivity.

"Flexible work arrangements have become increasingly popular programs among employers because they are both highly valued by employees and relatively inexpensive for employers to implement. But these programs can also be terribly complex to design, manage and measure. Companies with consistent and formal policies, strong education and communication, and ongoing measurement strategies in place will truly succeed in maximizing the return on their investment-both in terms of costs and employee engagement," said Carol Sladek, principal in Hewitt's Work-Life practice, in the news announcement.

Benefits April 29, 2008

Incomes not Keeping Up with Health Premiums

April 29, 2008 (PLANSPONSOR.com) - Premiums for Americans who get health insurance for their families through work have increased 10 times faster than their income in recent years, according to an analysis released by the Robert Wood Johnson foundation.
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A news release said the study found that nationwide, the amount employees pay for family coverage increased 30% from 2001 to 2005, while their income increased just 3% over the same period. The percentage of premiums employees pay for family coverage has been relatively flat, but the dollar amount this percentage equates to has increased since the average cost of family coverage increased from $8,281 in 2001 to $10,728 in 2005.

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While the amount that workers pay for family premiums, on average, increased $664, from $1,921 in 2001 to $2,585 in 2005, the median income of people who hold family health insurance policies increased just $1,250 during the same period, from $40,818 in 2001 to $42,068 in 2005.

Other findings of the analysis, according to the release, included:

  • Fewer employees are working in private-sector jobs that offer insurance – Nationally, 4.1 million fewer people worked in private-sector jobs that offered health insurance in 2005 than in 2001.
  • Fewer private-sector businesses offer coverage – The number of private-sector employers nationwide who offered health insurance benefits to their employees fell by 30,000 from 2001 to 2005.
  • Employer share of health insurance premium costs has increased also – The average cost that employers pay for their share of family coverage increased from $6,360 to $8,143, or 28%, from 2001 to 2005.
  • Fewer people have private health insurance coverage – Americans with private health insurance fell nearly 2.4 million, or 6%, from 2001 to 2005.
  • More people are uninsured – According to the latest Census figures, 47 million Americans do not have any health insurance.

“This study makes plain what every working parent knows – that providing insurance coverage takes a bigger bite from the family budget every year,” said Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation, in the press release. “There is a clear connection between the rising cost of health care and the increasing number of uninsured Americans. As costs continue to go up, fewer people can pay their portion of the premium, and fewer employers are able to offer insurance benefits.”

The analysis was compiled by researchers at the State Health Access Data Assistance Center, located at the University of Minnesota. It uses the most recent data from the U.S. Census Bureau (two-year averages for 2001 – 2002 and 2006 – 2007) and the Medical Expenditure Panel Survey, conducted by the Agency for Healthcare Research and Quality (2000, 2001, 2005).

The report is being released during Cover the Uninsured Week (April 27 – May 3), a non-partisan campaign organized by the Robert Wood Johnson Foundation to advocate for health coverage for all Americans. The report is here .

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