Employers: Don’t wait for the coronavirus to arrive
By Jeff Caponigro, Executive Vice President, Trion Solutions Inc. and author, THE CRISIS COUNSELOR: A Step-by-Step Guide to Managing a Business Crisis.
The hallmark of business leadership is anticipating needs and opportunities and taking the right action at the right time.
This is especially true in identifying vulnerabilities, working to prevent them from becoming problems and managing them so they don’t turn into crises for the business.
Smart companies realize the fast pace of business and the razor-thin edge of beating the competition is fraught with landmines and quicksand. We all know that today’s vulnerabilities run the gamut from I.T. data breaches to workplace harassment and discrimination – and dozens of other vulnerabilities that can trip up even the best businesses.
With most already having their proverbial hands full of vulnerabilities, hovering like hungry vultures, now comes the threat of a coronavirus (COVID-19) pandemic crippling individual businesses after already cutting the legs off the stock market indexes.
The Center for Disease Control and Prevention (CDC) warns that the coronavirus eventually will become more than a serious threat in the United States, and it has initiated a public information and education to provide caution and guidance. For businesses, the vulnerabilities abound.
The health and safety of the workforce is — or should be — the No. 1 priority of all businesses, and many valuable and productive employees could be affected. But what about other vulnerabilities?
The highly contagious nature of the virus could threaten mission-critical operations. Employees who work physically close to others may be most susceptible and need to be separated, if possible. Entire departments and operation centers may be forced to closed temporarily and affect the ability to serve customers. Even if employees remain virus free, many may need to remain home to care for an ill family member – keeping them away from the job and increasing the possibility of acquiring the virus themselves.
So, what should a business do?
First, review your policies related to sick leave. Encourage sick employees to stay home and set aside old-school beliefs that dedicated, hard-working employees should come in to work, despite an illness, whenever possible. Realize that some employees may need to stay home to take care of family members and make your policy clear about that. As the CDC suggests, consider not requiring a physician’s “note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as healthcare-provider offices and medical facilities may be extremely busy and unable to provide such documentation in a timely way.”
Second, as the CDC recommends, separate employees who appear sick at work and send them home. Explore flexible worksites (i.e., from home) and work hours (i.e., staggering times to reduce the time employees are working near others).
Third, post written encouragement perhaps in the form of a poster to employees in high-traffic areas, such as lunchrooms and near coffee/vending machines, about “cough-and-sneeze etiquette” and hand hygiene. The CDC offers sound advice here –provide tissues and no-touch disposable receptacle, and plenty of soap and alcohol-based hand rubs in the workplace. And, routinely clean all frequently touched surfaces in the workplace such as workstations, countertops and doorknobs.
As in any solid crisis-management plan, focus on advance preparation to help address the vulnerability, work to reduce the potential damage from the situation and be ready to take immediate and definitive action. In essence, know what will be done, at what time and by whom. By far, the single biggest factor in surviving a crisis is the level of preparation going into it.
If you own or manage a business, your workforce is not only counting on you to make smart decisions but also watching to see if you truly have the best interest of your employees in mind. Start taking definitive action on this today.
Jeff Caponigro, APR, Fellow PRSA, is Executive Vice President-Corporate Communications and Marketing for Trion Solutions, Inc., the President and CEO and author of THE CRISIS COUNSELOR: A Step-by-Step Guide to Managing a Business Crisis, which is published in English, Chinese, Norwegian, Polish and German. Trion Solutions, based in Troy, Mich., manages HR administration, payroll and taxes, benefits administration and regulatory compliance for more than 600 U.S. companies. Caponigro PR is based in Southfield, Mich.
Marijuana Legalization: What Michigan Employers Need To Know
Michigan is now one of 10 states that permits recreational marijuana use.
It is a big change and raises important questions for employers, including whether they need to adapt their company policies to align with the current law.
One of the most pressing, immediate questions is whether employers can maintain existing “zero-tolerance” drug policies, or if they are required to accommodate employees who use marijuana for recreational or medicinal purposes. In Michigan, the answer is clear—but perhaps only for the moment.
“The new law legalizing marijuana in Michigan does not supplant or override an employer’s policy to maintain a drug-free workplace – and does not prohibit an employer from disciplining or terminating an employee for violating its drug policy,” said James E. Baiers, chief legal officer Trion Solutions, Inc. “In fact, some businesses are required to maintain a drug-free workplace – such as those in transportation; operating heavy equipment and machinery; and, recipients of federal contracts or federal grants. It also is important to know that the new law does not require an employer to make any accommodations for medical marijuana.”
At present, the law generally leaves it up to employers to set their own policies regarding marijuana use by employees—but employers would be well advised to consider the possibility that this could change in the future.
The Michigan Regulation and Taxation of Marihuana Act (MRTMA) of 2018 was the ballot initiative which overturned the state’s longstanding ban on pot. In and of itself, the Act doesn’t inflict any additional constraints on employers’ rights to establish their own drug policies, stating that the Act “does not require an employer to permit or accommodate” marijuana use in the workplace or on work premises, nor “does it prohibit an employer from disciplining an employee for violation of a workplace drug policy.”
Likewise, the act “does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking adverse employment action against a person with respect to hire, tenure, terms, conditions or privileges of employment because of that person’s violation of a workplace drug policy or because that person was working while under the influence of marijuana.”
So, from an employer’s viewpoint: So far, so good. At present, maintaining a blanket prohibition on pot use does not pose an immediate regulatory or litigious risk for Michigan employers. As is often the case, however, additional factors are worthy of careful consideration when implementing or enforcing workplace policies about pot use. These include changing societal attitudes and potentially precedent-setting events taking place in other states.
Public opinion surrounding pot use, as evidenced by the victory of the MRTMA and the previous initiative legalizing medical marijuana at the ballot box, has clearly shifted substantially in favor of pro-legalization and pro-usage forces, with little indication of any impending reversal. For better or worse, legal pot usage by adults over 21 is now a fact of life in Michigan, albeit with restrictions. The law still prohibits driving under the influence, public consumption and possession or consumption on the grounds of schools and correctional facilities, for example.
The medical marijuana question is threatening to create a hazard for Michigan employers. While the law does not currently mandate that employers permit medicinal pot use, on or off the job, some courts in other states have recently ruled in favor of employees who sued employers for their right to use medical marijuana and maintain their jobs with reasonable accommodations. State courts in Connecticut and Massachusetts have interpreted their medical marijuana laws to prohibit adverse actions against employees who depend on medical marijuana, and employers in those states were required to make reasonable accommodations under state disability laws.
While these rulings are not of direct concern to employers in Michigan, another recent ruling may be. A federal judge in Arizona recently ruled against Walmart for firing an employee with a valid medical marijuana card, despite the fact that pot remains illegal at the federal level. If this decision stands on appeal and is accepted as precedent in other federal districts, Michigan employers may find themselves at similar risk should they discipline or terminate medical marijuana patients.
While Michigan law is currently clear regarding employers’ rights, the broader attitudinal and legal environment surrounding the marijuana question is becoming increasingly hazy. Trion Solutions will remain vigilant to emerging legal challenges and societal shifts, according to Baiers, and Michigan employers are wise to do the same.
Recruiting When Talent Is Scarce
Competition for qualified employees becomes more fierce, leaving employers scrambling to fill key positions as unemployment rates edge lower.
Business isn’t necessarily booming across all industries and regions – but employment certainly is. National unemployment rates are edging ever closer to the statistical “full employment” figure that economic and political leaders always claim to strive for. It’s seldom mentioned that it’s a number that gives a lot of employers a lot of headaches.
In actuality, “full employment” certainly doesn’t mean that everyone has a job – the same rules of economics and human behavior continue to apply, and a baseline pace of firings and layoffs will continue to apply. Full employment can mean, however, that everyone you’d actually want to hire is already gainfully working elsewhere – and not especially anxious to make a move.
According to the Bureau of Labor Statistics, the U.S. National Unemployment Rate currently stands at 3.9%. At 4.3%, Michigan’s rate is nominally higher. Both rates are less than half of their recession-era peaks (at around 10%), and a full percentage point lower than 2017.
While in theory a 4.3% rate, to use Michigan as an example, would indicate that there was still a reasonably-sized pool of potential employees to recruit from, the number is deceiving on a number of levels:
- The aggregate rate is skewed by higher unemployment rates in urban areas. Detroit’s unemployment rate still hovers near 10 percent, raising the average; the real unemployment outside of the metropolitan area is likely to be substantially lower than 4.3%.
- Unemployment rates do not automatically factor out undesirable and/or unemployable workers. Those who are not practically willing or able to work in a preponderance of available positions are still included in the statistics – even if they are geographically ineligible, lack the qualifications for available positions, or lack the practical means of performing them (i.e., transportation to work).
Given that the most experienced, skilled, or qualified workers are those who tend to get jobs first, the likelihood is that the pool of qualified applicants for any given position is likely to be pretty small with unemployment rates at medium-term lows. That makes it a lot more risky, time consuming and expensive for companies to bring in the people they need – if that is even possible.
Consider the position of Foxconn, who are looking to hire some 13,000 new staff in Wisconsin – a state with a current unemployment rate of 2.9%. With a new 20 million square foot facility to fill, Foxconn’s problems would appear nearly insurmountable – but the strategies they are adopting argue against that. In all likelihood, they are strategies that may help your business as well.
Here’s some of what Foxconn is doing:
- Hiring from outside the immediate area. People will move for the promise of a good job – and neighboring states have bigger potential pools of applicants to draw from.
- Hiring from nontraditional sources. Students, veterans, the disabled population, and retirees are all potentially untapped pools of talent.
- Offering incentives. Beyond standard wage and benefit packages, perks like student loan repayment assistance and transportation assistance are powerful attractants for potential employees – and often stand to improve loyalty and longevity as well.
Hiring in the current climate isn’t easy, and traditional approaches likely aren’t enough to attract all the applicants that many businesses need. Running an ad or putting out a sign might have been fine in 2009, but different times call for different measures. Understanding the nature of the current recruitment challenge and devising an effective strategy for meeting it will be increasingly important to growing companies in the months to come.
Trion Solutions helps employers of all types and sizes successfully recruit and retain the talent they need. To learn more, visit www.trionworks.com.
The (Other) Best Reason To Run A Business
Ask any entrepreneur, business owner and CEO the primary reason why they’re in business and chances are most of them will give the same natural, logical answer: To make money. Making money, after all, is a necessary part of the equation: We all have to earn a living; we have employees and families to support; we have a company infrastructure to sustain. And we have to make sure the doors stay open tomorrow. All in all, it’s a great reason.
There are some other reasons, though, that are just as good: Doing good and giving back. For a long time now, companies have been focusing on the broader impact of their businesses upon their communities, and the significance of considerations other than just their bottom lines. Businesses are recognizing the power for transformation that accompanies success, and how that power – when properly applied – can not only benefit society, but can enhance their own overall success and prospects for long-term survival. Providing strategically placed support to selected nonprofit organizations and charities can do precisely that.
Trion Solutions is privileged to provide our support for one organization that we consider extraordinarily special, and whose positive impact upon the surrounding community and upon the lives of those it works with seem almost incalculable: Rochester, Michigan’s Dutton Farm.
From the outside, Dutton Farm looks to be a typical traditional American farm. Inside, it is anything but typical. Dutton Farm is working to create opportunities, build skills, and generate acceptance for differently-abled clients by providing them with training and meaningful work, and helping them transition to paying jobs in the community. The Dutton Farm mission is “to celebrate, educate, and employ people with special needs,” which it fulfills by progressing differently-abled individuals through a coordinated five-stage program.
The farm is a 501(c)3 nonprofit organization, but a business sensibility guides its activities. Individuals with differing mental and physical abilities participate in an ordered series of discrete programs which gradually help them to develop the essential social and practical skills needed to gain and keep meaningful employment, helping them to lead more fulfilled and independent lives.
Dutton Farm’s CEO and Founder Jenny Brown had a highly personal motivation for establishing the organization – her desire to support her older sister with Down syndrome. Through her work with differently-abled people at a variety of area organizations, Brown understood the tremendous need for the services Dutton Farm would provide, and understood the obstacles – logistical, social, and cultural – that stood between differently abled individuals and the jobs, independence, and acceptance they longed for.
Today, Dutton Farm program participants are gainfully employed in area retailers, restaurants, manufacturing facilities and other businesses, as well as on the farm itself. More people are progressing through its programs, preparing to join them. And the Dutton Farm organization is making a substantial impact, not only by changing the lives and fortunes of program participants but by changing attitudes, dismantling prejudices, and opening up new opportunities in the wider world.
Trion Solutions’ support for Dutton Farm may help them, but it likely enriches our company to an equal or greater degree. By applying our resources and efforts on behalf of an organization that is a tremendous force for good, we enhance our own reason for being and increase our own positive impact upon our community and the world. Support for an organization like Dutton Farm enables companies like ours to strengthen our internal culture, and to establish a shared commitment to ensuring that our ultimate impact is a positive, beneficial one.
We are happy to be a “for-profit” organization, but happier still to be “for profit with purpose.” Our good fortune in working with a superb organization like Dutton Farm helps us be just that.
Trade War Trauma – Business’s Next Big Challenge
The economy and the business environment have been doing well – at least in the broadest sense, though particular employers and regions may beg to differ. With unemployment at a comparatively-low 4.0% and healthy consumer demand for goods and services, recent trends would seem to be generally favorable for an economically-healthy 2018 – in spite of what seems to be a looming trade war.
Recent tariff increases, particularly reciprocal rises imposed by the U.S. and China, have so far had little major U.S. economic impact; economists have suggested that the effects could be limited to as little as .1 – .2 percent of U.S. and Chinese GDP in the near term. While that figure would seem to be easily absorbable by the economy as a whole, the impact is not evenly distributed – in fact, it is likely to be tightly focused on specific regions and industries. This stands to magnify its ripple effects, particularly in Michigan.
Regionally, the economic shock is focused on agriculture and manufacturing, with soybean exports threatened and the cost of imported woods and metals rising. As China and Canada turn away U.S. soy, dairy and citrus and the cost of wood, aluminum and steel rises, Michigan and Florida stand to be disproportionally affected. For employers throughout the value chain, this adds up to increased uncertainty as agricultural and manufacturing businesses start to constrain expenditures, limit production, and prepare for contraction in their markets.
It’s impossible to know how significant these effects will ultimately be over time; consequently, each new hire becomes an increasingly risky proposition for businesses in affected industries. At the same time, a smaller pool of available labor has left many companies struggling to meet demand, and needing to increase capacity. When it’s possible that market conditions can significantly shift at any moment, companies need to find ways to become more flexible and adaptable if they are to maintain their footing.
While flexibility is best for business in normal circumstances, it is absolutely essential during periods of change and instability; as companies are called on to adapt to higher material prices and pressures on demand in the coming months, the “winners” are likely to be those which can dynamically adjust their head counts to reflect current conditions. Trion Solutions helps our partners to achieve this level of flexibility. By working with us, our clients gain the agility they need to respond quickly to market conditions, right-sizing their operations on the fly as changing circumstances demand.
Right now, there’s little sign of trade disagreements diminishing any time soon. New punitive measures seem to be announced on at least a weekly basis by the U.S or one or more of its trading partners. In the meantime, other economic factors are showing some worrying trends: Inflation has recently increased sharply, effectively erasing recent gains in personal income. While no one yet expects a full-fledged recession in the near term, it seems reasonable to expect that there will be some serious turbulence in many business sectors. Trion Solutions will be keeping an eye on these trends, and helping our clients to adapt as quickly as possible to any changes – for better or worse.
ICE Audit Risk Likely To Rise Dramatically This Summer
The U.S. Immigration and Customs Enforcement Agency, or ICE, has drawn a lot of attention in recent months as a result of its increasingly rigid and expansive efforts to locate, prosecute, and deport undocumented immigrants.
While the TV cameras’ focus has largely been on the United States’ southern border, many of the Agency’s more sweeping and impactful activities have taken place beyond the media’s view – and far from any border.
While people often think of ICE agents in the context of airport checkpoints or a desert border fence, workplace raids have become an increasingly significant activity. Already this year, ICE has conducted a series of high-profile raids targeting convenience stores, farms, restaurants, manufacturers and others in an effort to identify and extricate undocumented workers – and penalize their employers.
The Agency has already announced a planned increase in workplace sweeps this summer. In nine months, the agency has already exceeded the numbers of raids it has executed by about 25% over the total from the previous fiscal year. In addition, ICE is expanding the scope of raids beyond individuals targeted for arrest, routinely reviewing records for other employees and both pursuing criminal and civil prosecutions against employers.
A company doesn’t necessarily have to employ undocumented workers to run afoul of ICE in the case of a raid or an audit. The agency is aggressively targeting paperwork violations as well; employers who fail to maintain I-9 and other mandatory recordkeeping are subject to an increasingly onerous schedule of monetary penalties, with the amount of assessed fines and costs mounting for each instance of an error or omission. A recent article explains how this can rapidly add up to tens of thousands of dollars – and in cases where a similar mistake is repeatedly made on multiple employees’ documentation, each instance counts as a separate infraction.
Unfortunately, it’s easy for many small to medium-sized businesses to make precisely these kinds of mistakes, even when making a good-faith effort to remain in complete compliance with immigration law. Misplacing copies of employee identification materials, use of outdated forms, following outdated procedures, failing to account for visa expirations, or unwittingly accepting counterfeit eligibility documents all can make companies and managers criminally and civilly liable. For many, determining employment eligibility and maintaining appropriate records to ICE standards is becoming an increasingly difficult and hazard-prone process.
At Trion Solutions we’re finding that more and more small to medium-sized businesses are turning to us to help navigate the ICE minefield. Just as with other areas of regulatory compliance, our thorough and extensively vetted approach serves to minimize any possibility of error and correspondingly reduce risk. We are able to quickly determine an individual’s eligibility, or lack thereof, to work within the United States, and our systematic handling and maintenance of necessary forms, records and documentation ensures that clerical and administrative errors subject to onerous fines are prevented. In light of ICE’s stated objective to ramp up I-9 audits to 15,000 in the near future, that becomes an increasingly valuable service that we’re able to provide to our customers.
There is no sign that ICE will be relaxing either its vigilance or the severity of its penalties any time soon – and as recent events have shown, employers of all types and virtually anywhere in the U.S. face substantial risk of business disruption, even if in full compliance. That disruption magnifies exponentially when problems are found. The risks and the potential impact are both real and significant. Trion makes it our business to help our clients carry that burden, and maintain “business as usual.”
The Seasonal Employer’s Struggle
Running a business isn’t easy, even in the most stable and favorable of environments.
It becomes exponentially more difficult when the demand for the products and services you offer, as well as your need for the resources it takes to supply them, varies by the season.
Nowhere is this truer than in Northern Michigan’s resort country: After months of snow covered shops and icy streets, warm weather brings a deluge of new arrivals to Charlevoix, Traverse City, Mackinac Island, Leelanau wine country, Petoskey, and virtually all points north, south, east and west. Visitors want food, rooms, recreation, agricultural products, and entertainment – and that means that local businesses have to ramp up fast in order to supply it.
For vast numbers of Northern Michigan businesses, springtime is panic time: The last chance to secure the staff, materials, and suppliers needed for a busy successful summer season (to be followed by a corresponding shift in the fall). Gone are the days when businesses could count on returning college students to meet the demand; seasonal recruitment in the restaurant, hospitality, retail and manufacturing sectors is an increasingly competitive affair, with qualified and dependable employees hard to find. When you factor in the time and expense involved with onboarding, training, insuring and vetting these new recruits, it can seem amazing that any business is done at all.
Trion has found that many of our clients have been able to both accelerate seasonal hiring and streamline management of the abundance of onboarding/offboarding related tasks that seasonal businesses experience at least twice a year. Our ability to provide enterprise-quality benefits and perks to workers provides employers with a powerful recruiting advantage, helping them to win top talent away from competitors.
Meanwhile, our ability to streamline the hiring, onboarding, and offboarding processes from an HR standpoint means that companies need to invest less (or nothing at all) on in-house HR activities, both in terms of capital and effort. While we handle vetting, compliance and related non-revenue generating paperwork, owners and managers are able to focus their efforts on issues that matter, like sales, marketing, manufacture and delivery.
Working with Trion provides businesses with the same flexibility that employing temporary seasonal help does: The ability to have the right resources available when you need them – and to not have to pay for them when you don’t. It’s a flexible, scalable arrangement that enables businesses to be “right sized” at all times, not incurring high fixed costs during off-peak periods.
As we’ve grown our operations in northern Michigan and worked with an increasing number of seasonally-based businesses, we’ve found that this approach often provides our clients with a new measure of stability and security they hadn’t experienced before. Freed from the need to devote time and resources to routine HR services, confident that compliance is maintained and risks are mitigated, business owners gain the ability to do things that the annual upsizing/downsizing ritual had precluded before: Innovate, expand product and service offerings, improve market outreach, and build stronger customer relationships. The results show up in the form of improved competitive positions – and a better bottom line.
As the 2018 “Up North” season gets underway, we’re looking forward to helping all of our northern Michigan clients build upon their recent successes – and we’re ready to help new Trion customers realize the same benefits for themselves.
Essential Considerations for Managed Business Growth
Your business is growing? Great! That’s just what it’s supposed to do – in moderation.
Like all good things, too much of anything – including expanded services, staff, client lists, and revenue – can be too much. A growing business is not necessarily a scalable one; too much uncontrolled growth, particularly in too short a time frame, can do every bit as much damage to a company as stagnation can, and sometimes even more.
It may sound unbelievable to many entrepreneurs and senior managers. After all, increased demand, sales and revenue is a good thing, right? It’s only logical to believe that increased profitability, improved corporate stability, and a better competitive position is the natural consequence.
That’s true, up to a point – the point at which your company infrastructure, workforce, technological infrastructure, and management systems fail to support the increased activity.
Growing companies who grow too fast typically encounter roadblocks in a uniform set of key areas:
Workforce Size and Skills. Growing demand for products and services usually means that your workforce needs to grow too – but it can be hard to attract and retain employees with the right skill sets and commitment.
Quality Control. Selling more means producing faster – but that doesn’t mean that inspection or testing processes suddenly take less time to properly execute. If defect rates rise significantly, costs will too.
Customer Service. More clients and customers will mean more need for interaction, handholding, and issue resolution. Your company will need the people and procedures to handle them.
IT Infrastructure. Small companies can often limp by with sub-par computers, networks, security and applications, so long as the cost of potential downtime isn’t catastrophic. The bigger your business grows, though, the more expensive that downtime becomes.
Processes and Procedures. If you started out small, the policies and practices governing virtually everything you do – from bookkeeping to tax filing to ordering snacks for the break room – were designed with a small business in mind. These seldom scale well as facilities, revenues, and headcounts grow.
Legal and Regulatory Compliance. The more business you’re doing, the more compliance matters. Your company and its practices will be under greater scrutiny as you grow, and it will become increasingly essential that all compliance matters be managed professionally.
How do you manage these challenges? By managing growth. One company we’re familiar with has done precisely that, growing at a pre-planned rate of no more than 20 percent per year. Operating in accord with a serious of multi-year plans, this IT services firm makes it a point to grow all aspects of its business in proportion to one another, recruiting and training new managers and staff according to a set schedule in conjunction with strategic additions to its service offerings and client roster. The result has been nearly two decades of steady, uninterrupted growth and profitability; its current workforce and revenues stand at ten times what they were a decade ago.
Growth must be carefully and closely managed if it is to serve the interests of the business without overwhelming it. To do it effectively, companies and their leaders – particularly if they have historically been hands-on, deeply involved managers – usually need to move beyond both their prior practices and their preconceived ideas. The practices that effectively serve a proprietorship, LLC or S Corp are unlikely to scale well to a public company; likewise, many of the people who were effective company stewards in the early stages may lack the skills, energy or vision to effectively transition to a parallel role in a greatly expanded enterprise.
At Trion Solutions, we’re often called upon to help companies manage their growth and transform their HR operations to accommodate it. On other occasions, we’re brought in to help companies that have previously failed to do so on their own. We can definitively state that proactivity rather than reactivity is almost always better for the business. Planning for growth beforehand, managing it effectively, and getting the professional reinforcements the company needs when they’re needed is the surest way to build a scalable, successful business.
Businesses Likely To Reconsider Healthcare – Again
Healthcare has been a particularly problematic topic for businesses for almost a decade now.
While it’s hard to identify the exact point at which the “old” healthcare model – affordable, employer-provided insurance provided by a major company – began to break down, its impending demise seemed apparent once serious discussion of the Affordable Care Act began in 2008. Its fate seemed sealed once the ACA passed into law.
To paraphrase Mark Twain’s comment about himself: Reports of employer-sponsored insurance’s death have been greatly exaggerated. Unexpectedly, some unforeseen events stand to breathe at least some temporary life into the employer-sponsored insurance model, starting with the ongoing controversy and rising costs associated with the ACA itself.
Leaving aside any political or popularity considerations, the ACA in its current form. is not succeeding in either creating stability or containing costs. Significant changes to the law, including elimination of the individual mandate, are causing significant premium increases. Early 2019 cost projections in Virginia, one of the first states to release an estimate, suggest increases of up to 64%. While this will vary in other states, it suggests an unwelcome – and possibly unsustainable – strong upward trend likely to be repeated elsewhere.
At the same time, the U.S. has returned to what are considered to be “normal” unemployment figures for the first time since the 2008 downturn. The Bureau of Labor Statistics has posted a 3.9% rate for April, effectively considered “full employment.” The H1B and H2B visa programs enabling recruitment of foreign workers – primarily for highly skilled and seasonal employment respectively – have also been curtailed. As a result, many employers are having to compete more aggressively to recruit new talent.
One of the most powerful tools available to them: Health insurance. While traditional motivators such as higher wages remain effective in attracting new recruits, the ability to offer affordable group health plans provides powerful incentive for them to stay. Workers unable to afford ACA exchange premiums, or unwilling to pay for them, are more likely to be drawn to – and stick with – jobs where insurance is an option. The Society for Human Resource Management reports that 46% of employees cited health insurance as a determining factor or a positive influence in accepting their current job.
Of course, the rapid rise in insurance costs isn’t limited to the ACA marketplaces. Group insurance rates have risen too – but at a rate well below those of individual market plans. It’s still possible in most locations for employers to “shop around” for a cost-effective solution. Quite often, that shopping leads them to a PEO.
We’ve noticed this effect in action here at Trion Solutions. Many companies subject to federal insurance provision mandates find that by virtue of our size, we’re able to access group plans that would be unavailable to them on the open market. At the same time, smaller companies who aren’t obligated to offer insurance are finding that it provides a powerful competitive advantage in recruiting high quality personnel, and are following bigger firms through our door, eager to take advantage of the comparative stability and cost-containment that our benefit plans provide.
The U.S. health insurance climate is likely to remain unsettled for the foreseeable future. The only factors that appear to be reasonably certain are rising costs and insurance market instability. In those circumstances, the ability to provide employees with access to coverage may become a recruitment and retention tool that businesses can’t afford to go without.
Taking Workplace Gender Bias Seriously
The wave of recent public attention to workplace sexual harassment and discrimination started by consuming a movie mogul, continued by swallowing a sitting senator, and has ultimately claimed the careers and reputations of TV personalities and corporate executives. These high-profile cases have had a highly visible impact on businesses of all types, as well as on the way Americans are inclined to view sexual harassment in the workplace.
That creates risks for employers of all types and sizes – as well as powerful new motivation to consider the issue of workplace harassment very seriously. To their credit, many companies have done precisely that, and are protecting their female employees by instituting appropriate guidelines and measures, or reinforcing those that they already have.
Naturally, there is considerable reluctance on the part of some companies to address the issue at all – particularly, those for whom sexual harassment has not yet become a significant operational or legal issue. The normal human inclination not to “stir things up” may lead many managers and leaders to ignore sexual harassment questions in hopes that as media attention subsides, the risk will too. In Trion’s view, that’s likely to be a very risky strategy.
Just because harassment isn’t currently a known issue at a given company doesn’t mean that it will stay that way – and chances are good that it won’t. The statistics tell the story: 27 percent of women say that they have been harassed in the workplace in the course of their careers, making it altogether likely that it has happened – and continues to happen – in your company as well.
In an environment where authorities, the media, and the civil justice system are all placing a renewed and highly visible emphasis on fighting back against workplace harassment, such a statistic should be sobering. The persistence of even low-level workplace harassment that is unknown to management places a company at significant risk, in terms of public image as well as criminal and civil liability, particularly if it does not have a robust, enforced harassment policy in place. A single complaint or lawsuit can cause plenty of problems on its own; should harassment prove to be endemic or persistent within an organization, the legal and monetary risk rises exponentially.
For companies, the safest course of action is to assume exists, and to be both proactive and aggressive in addressing it. That begins with the implementation of robust harassment policies and sound mechanisms for reporting and handling complaints. While a number of organizations and government agencies, including the Society for Human Resource Management, provide general guidance in formulating a viable harassment policy (and some even provide policy templates), a one-size-fits-all approach is likely to leave a company at least partially unprotected. State and local regulations and other distinctions likely will require a good deal of customization if a company is to adequately protect both its employees and itself.
Trion Solutions works closely with our clients to ensure that sound, effective anti-harassment policies are in place, and that appropriate training is provided to ensure that risks to companies and employees are minimized. We find too that implementation of sound standards provides a significant additional benefit: By reducing incidences of harassing behavior and by making potential harassment victims feel safer in the workplace, overall morale and productivity can improve significantly.
Recent events have shone a bright spotlight on the pervasive problem of harassment – but there is a clear pathway to its resolution. Getting in front of harassment before it becomes a significant issue is the surest way to safeguard your company from serious risks – and an opportunity businesses can’t afford to ignore.