Hr trends for Small and medium enterprises in 2017
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If you are an HR professional, director, manager or small and emerging business executive you won’t want to miss our insightful webinar, “HR trends for the SME in 2017.” You will learn: • How best to define your organization’s culture How to make the organization’s culture sustainable The importance of well-being within a broader workplace culture strategy • How to bring culture and well-being together to improve attraction, retention and engagement, and • How to navigate key compliance considerations when developing and implementing your strategy.
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Hr trends for Small and medium enterprises in 2017
- 1. H E A L T H W E A L T H C A R E E R H R T R E N D S F O R S M A L L A N D M E D I U M E N T E R P R I S E S I N 2 0 1 7 Presented by: Ruth Baylis, Mercer PeoplePro Richard Hill, CEBS, CLU, ChFC, Mercer PeoplePro
- 2. © MERCER 2016 1 Options, approvals W H A T W E W I L L R E V I E W T O D A Y • Focus of organizations in 2017 – Attracting and Retaining – Culture • How best to define your organization’s culture • How to make the organization’s culture sustainable • The importance of well-being within a broader workplace culture strategy • Bringing culture and well-being together • Megatrends in healthcare • A culture that promotes wellbeing has an impact on the employee value proposition
- 3. © MERCER 2016 2 Options, approvals T O D A Y ’ S F E A T U R E D S P E A K E R S Ruth Baylis has joined Mercer PeoplePro after 20+ years in HR, on the client side of the business. She has experience in a variety of industries including Financial Services, Healthcare, tech startups and environmental non- profits. Her specialties lie in the Talent Acquisition/Management and Business Partner space, although she has managed all areas of HR. Ruth holds a Master’s Degree in Industrial and Labor Relations from the University of New Haven and a Bachelor of Arts Degree from the University of Massachusetts, Amherst. Ruth Baylis PRO An alumnus of Mercer / Marsh, Richard Hill bring over 35 years of benefits, HR, and management experience helping firms align their HR and benefits goals with corporate goals working within budget constraints. Throughout his career he has worked with Fortune 500 firms like Hewlett Packard, Wells Fargo Bank, and AMI; as well as middle market organizations and smaller firms both in the private and the public sectors. Richard has the following industry designations: CLU (Chartered Life Underwriter), ChFC (chartered Financial Consultant), and CEBS (Certified Employee Specialist) and holds a Master’s degree in Counseling Psychology from Jesuit School at Berkley (JSTB- GTU) and a Bachelor of Arts from Oblate College, Washington DC and is a University of Pennsylvania, Wharton School Certified Employee Benefits Specialist. Richard Hill, CEBS, CLU, ChFC Health & Wellness Pro
- 4. © MERCER 2016 3 W H O I S M E R C E R P E O P L E P R O ? Mercer PeoplePro is the most powerful and affordable virtual marketplace for HR consulting and solutions. - An “on demand” solution - Designed to bring Mercer’s trusted brand and expertise to the small business segment - Mercer PeoplePro will power the HR engine needed by companies to grow fast, attract, and retain the best talent. MERCER PEOPLEPRO TM
- 5. © MERCER 2016 4 G E N E R A L T R E N D S F O R 2 0 1 7 Engagement/culture • Employment market trends • Culture • Generational differences • Ideas/solutions Benefit Trends • Legislative • Generational differences • Ideas/solutions
- 6. © MERCER 2016 5 E M P L O Y M E N T M A R K E T T R E N D S • As of October 2016 – unemployment rate was 4.9% • Technology sector unemployment rate (2015) 2.3% • Gig Economy • Skilled labor (Baby Boomers and Traditionalists are leaving workforce)
- 7. © MERCER 2016 6 C U L T U R E Culture is a pattern of beliefs, values and expectations, shared by the members of an organization, which produce rules for behavior. These values, beliefs and expectations powerfully shape the behavior of individuals and groups within the organization.” Culture is the way we do things around here
- 8. © MERCER 2016 7 ECO-SYSTEM Enabling mechanisms that ensure culture success Are the structures, rules and regulations enabling the achievement of the culture? Are decisions made at the right level in the organization? How is performance measured and rewarded? How transparent are the communication channels in the organization? Is everyone pulling for the team? CORE BEHAVIORS Behaviors expected of all employees Expectations vary based on career stage/level Embedded within talent programs D E F I N I N G Y O U R C O M PA N Y C U LT U R E How is culture defined? How is culture enabled? CORE VALUES Foundational beliefs of the company Core traits expected equally of employees Less scope for scalability Non- negotiables
- 9. © MERCER 2016 8 B U I L D A S U S TA I N A B L E C U LT U R E Reinforce Build into the culture of the organization by reinforcing through programs & processes, with fun, engagement and ownership from the top. Communicate (“Leading in the Company Way”) Develop a communication and change management plan and cascade effectively through different levels. “Teach” the culture, what it means and how you live it and make decisions based on it. Current State Assessment Gain understanding of current state data and perspectives from leaders and employees. Understand the pain points and barriers to change. Future State Vision Explore best practices, envision the future and understand gaps from current state. Clearly define what the future looks like. Culture implementation plans generally progress along four dimensions starting at the bottom and working up over a 18-24 month period. 1 2 3 4
- 10. © MERCER 2016 9 E M B E D B E H A V I O R S I N T A L E N T P R O C E S S E S CAREER FRAMEWORK Rewards Performance Management Selection and Retention Career Development Workforce Planning Succession Management Hire, On-board, measure, grow and reward talent on the basis of the behaviors they demonstrate
- 11. © MERCER 2016 10 R E T E N T I O N F I R S T • Fulfilled employees help attract great candidates • Dissatisfied employees market their perception of issues to the masses
- 12. © MERCER 2016 11 M E G A - T R E N D : M U L T I - G E N E R A T I O N A L L A N D S C A P E Baby Boomers (Age 51–69) Gen X (Age 35–50) Millennials (Age 34) Traditionalists (Age 70–87) Base pay Retirement plan Type of work Health care benefits Incentive pay Paid time off Flexible schedule Working for org. I respect Career opportunities Training opportunities Base pay Retirement plan Flexible schedule Health care benefits Incentive pay Paid time off Type of work Career opportunities Working for org. I respect Training opportunities Base pay Career opportunities Incentive pay Retirement plan Flexible schedule Health care benefits Paid time off Type of work Working for org. I respect Training opportunities Base pay Retirement plan Paid time off Health care benefits Incentive pay Type of work Flexible schedule Working for org. I respect Career opportunities Training opportunities 1 2 3 4 5 6 7 8 9 10 …AND A DEEPER LOOK AT GENERATIONAL PREFERENCES DEMONSTRATES VARY ING TOTAL REWARDS PRIORITIES BY GENERATION Source: Mercer “Inside Employee Minds” 2015
- 13. © MERCER 2016 12 R E A S O N S F O R D I S S A T I S F A C T I O N • Management • Growth – Millenials • Interesting Work – Gen X and Boomers • Day to day annoyances (lack of resources or technology to be successful) • Lack of organizational support • Lack of recognition
- 14. © MERCER 2016 13 W H A T T O D O A B O U T D I S S A T I S F I E R S • Identify what is appropriate for your company • Train Managers – Emotional Intelligence • Evaluate Mission/vision and engagement with both • Consider implementing opportunities for employee engagement such as employee resource groups • Culture Champions
- 15. © MERCER 2016 14 A T T R A C T T H E B E S T • Start with the basics, review your ATS process and career site • Remind your Talent Acquisition team AND managers that they are the face of the company to candidates • Keep your employee referral program relevant • Have managers and SMA represent the company at speaking events – coach them on networking • Invite high school and college students to hear an interesting discussion, give them a tour and keep in touch with them • Design an alumni program – they may be gone but they know a lot of people • Be creative – make sure what you are presenting is representing the messages you want
- 16. © MERCER 2016 15 T H E H E A L T H C A R E M A R K E T T I P P I N G P O I N T M E G A T R E N D S 2 0 1 7 … …WITH POOR CARE QUALITY ACCELERATING COST PRESSURE… Explosion of technology and data Growing consumer accountability Multi-generational behaviors and needs Dramatic changes to payor/provider roles Broad regulatory changes Preventive health Acute care Chronic care Patient compliance 50% 70% 60% Care delivery 99% 70% 80% Efficiency 50% 49% 48% Health cost outpacing inflation US: Highest per capita health care spend worldwide Employer trend expected to continue risingBEFORE PLAN CHANGES AFTER PLAN CHANGES INFLATION EARNINGS Employees not seeing care improvement 50% efficiency not acceptable in any business MEGA-TRENDS COMPOUNDING DISRUPTION
- 17. © MERCER 2016 16 M E G A - T R E N D : B R O A D R E G U L A T O R Y C H A N G E S 3 6 12 22 40 0 25 50 2014 2015 2016 2017 2018 Enrollment(MM) PRIVATE EXCHANGES PUBLIC EXCHANGES MULTI-CARRIER, OFFERED BY BENEFIT CONSULTANTS/BROKERS • Collaborative buying focused on cost reduction • Access to multiple carriers • Focus on self-insured, fully-insured, or both • May offer range of ancillary benefits in addition to core health SINGLE-CARRIER, OFFERED BY INSURANCE CARRIERS • Access primarily to plans offered by the providing carrier • Primarily focused on fully-insured employers • Typically offer fewer ancillary benefits • Offer a viable individual market (guaranteed issue, age rating) • Subsidies available for <400% Federal Poverty Level • Spur new product offerings • Create new cost benchmarks Source: The Kaiser Family Foundation REGULATORY CHANGES ARE SPURRING NEW DELIVERY OPTIONS FOR EMPLOYERS, AND EXCHANGES ARE BECOMING A MAINSTREAM OPTION Employers adopting private exchanges within 5 years – most major surveys estimate ~ one in three. Projected lives on private health insurance exchanges: Estimated Actual Projected Source: Accenture
- 18. © MERCER 2016 17 M E G A - T R E N D : M U L T I - G E N E R A T I O N A L L A N D S C A P E H E A L T H C A R E P R I O R I T I E S EMPLOYERS MUST CONSIDER MULTIPLE GENERATIONS’ NEEDS AND PRIORITI ES WHEN CRAFTING THEIR HEALTH STRATEGY AND EMPLOYEE VALUE PROPOSITION… 29% of today’s workforce Live to work – “Office face time” Baby Boomers (Age 51–69) 34% of today’s workforce Work to live – “Work should not define life” Gen X (Age 35–50) Millennials (Age 34) 35% of today’s workforce Work my way – “Own careers, meaningful work” 2% of today’s workforce Company loyalty – “Same company forever” Traditionalists (Age 70–87) • Choose lowest cost plan – maximize take home pay • Use social tech platforms to find doctors, make appointments, research health conditions • Benefits: Not a major factor in whether I stay or leave • Choose plan that fits the needs of my family • Have disposable income but need to save where possible • Benefits that meet my family’s needs: Can affect my decision to stay • Choose plan that can help me maintain my health • Make more each year, but lots of competing expenses • Post-retirement medical benefits can play a role in my decision to stay or leave • Not sure how I’ll pay for healthcare in retirement or which supplement I need • Want to know how to make the most of what I’ve saved • Looking to protect/maximize my benefits so I can retire Sources: Mercer “Inside Employee Minds” 2015, Pew Research Center, 2015
- 19. © MERCER 2016 18 T H E H E A L T H C A R E M A R K E T I S F A I L I N G A L L O F U S R E S U L T S G E N E R A T E D B Y T O D A Y ’ S S Y S T E M C O S T 34% e s t i m a t e d w a s t e i n U S h e a l t h c a r e s p e n d i n g Q U A L I T Y M e d i c a l e r r o r s a r e t h e 3rd l e a d i n g c a u s e o f d e a t h S AT I S FA C T I O N H e a l t h p l a n s h a v e a n e t p r o m o t e r s c o r e o f 1 8 o u t o f 1 0 0 – p l a c i n g t h e m i n t h e b o t t o m q u a r t i l e D o y o u t o l e r a t e r e s u l t s l i k e t h e s e i n a n y o t h e r p a r t o f y o u r b u s i n e s s ? Sources: see page 15
- 20. © MERCER 2016 19 I N N O V A T I V E A P P R O A C H E S P R O V I D E A C T I O N A B L E C O S T C O N T A I N M E N T L E V E R S F O R E M P L O Y E R S A P L A T F O R M F O R A C T I O N Condition Focus Emerging Core Components Across Programs Navigation • Directing members to the right solution at the right time Type of Program Advocacy • Concierge level assistance to streamline the member experience Delivery Infrastructure • Delivery either through an employer-sponsored plan or an exchange Incentives/Challenges • Intrinsic or extrinsic motivators to promote program engagement Communications • Broad-based or personalized marketing materials to promote programs Physical Activity/Wellness Financial Wellbeing Sleep Weight/Nutrition Resiliency/Mental Health Condition-specific (e.g., Diabetes) Pregnancy/Family Smoking Pharmacy Transparency Telehealth 2nd Opinion Care Coordination Onsite/Near-site Narrow Networks Centers of Excellence NarrowBroad NarrowBroad
- 21. © MERCER 2016 20 M O V E T O W A R D W E L L B E I N G F R O M W E L L N E S S W H Y C O M P A N I E S I N V E S T I N W E L L - B E I N G • Improve the health of employees and their families • Manage health care cost—for employees as well as employers • Attract and retain employees—especially Millennials • Improve work performance • Happier, more engaged employees • Maximize business results
- 22. © MERCER 2016 21 F R O M W E L L N E S S T O W E L L B E I N G - P O T E N T I A L I M P A C T O N T H E P E R S O N A N D T H E B U S I N E S S Improvement in… Person Business Physical Health More energy for living Alertness Lower medical expenses Improved productivity Better work performance Fewer accidents/injuries Lower medical expense Emotional Health Living a full life Resiliency with challenges Ability to manage stress Improved focus on the job Financial Health Improved security Improved focus on the job Social Health Stronger relationships Sense of belonging Happier, more engaged employees Cultural/Workplace Health Feeling valued/respected Ability to have an impact Happier, more engaged employees Lower turnover/better attraction
- 23. © MERCER 2016 22 T H E H E A L T H C A R E M A R K E T E X P L O S I O N O F T E C H N O L O G Y A N D D A T A Smoking Advocacy Employer-Sponsored/Exchange Communications Incentives/Challenges Navigation M E M B E R Assessments/Testing Broad Big Data Analytics Provider Networks Healthy Habits
- 24. © MERCER 2016 23 T H E C O N N E C T E D H E A L T H C A R E N E I G H B O R H O O D Onsite/Near-site Pharmacy Retail Clinic Dental EAP Disease Mgmt. Care Mgmt. Pharmacy Benefit Mgmt. Mental Health Nurseline Doctors Hospital COE Narrow Networks ACOs EMR Telemed Biometric Testing Provider House Calls Wearables/Trackers Nutrition/Meal Prep Exercise Equipment Social Support Consumer Ratings Workplace Challenges Grocery/ Farmer’s Markets Gyms Spas Community Resources Education/Awareness Wellness Cost Transparency Concierge/Navigation Incubators, Accelerators, Investors, Entrepreneurs, Associations HOME WORK/RETAIL PROVIDERS HEALTH PLAN NON-CLINICALCLINICAL
- 25. © MERCER 2016 24 K E Y S T O S U C C E S S Socialization—find passionate employees Employee feedback/engagement channel Quick wins (and quick fixes, where needed!) Leadership endorsement and sponsorship Solid communications Simple strategy + a good plan + flexibility
- 26. © MERCER 2016 25 E M P L O Y E R - L E D T R A N S F O R M A T I O N C O N V E R G I N G O N T H E V I T A L S F O R C H A N G E M O M E N T U M I S A C H I E V E D T H R O U G H R E L E N T L E S S A N D C O L L E C T I V E E M P L O Y E R F O C U S O N A L L F O U R V I T A L S P A Y F O R V A L U E Aligning reimbursement with value, not volume D R I V E T O Q U A L I T Y Delivering the right care at the right time, in the right setting, error free P E R S O N A L I Z E T H E E X P E R I E N C E Leveraging better data and technology to engage employees in the right behaviors, every day. Move toward Wellbeing. E M B R A C E D I S R U P T I O N Injecting change into the system – with internal stakeholders and external partners – to be future-ready
- 27. © MERCER 2016 26 Q U E S T I O N S ? P l e a s e t y p e y o u r q u e s t i o n S P E C I A L O F F E R To help you kick off the New Year, register today at https://mercerpeoplepro.com/culture and receive a free employee handbook review by a PeoplePro specialist, compliments of Mercer PeoplePro.
- 28. © MERCER 2016 27
Editor's Notes
- Different segments of the workforce have different benefit priorities, and employers are trying to balance these factors for their population.
- Key themes to hit: The left side of this page isn’t new: cost pressure is real and quality continues to be a challenge. Health cost continues to outpace inflation in the US, indicating continued rising costs for individuals and employers alike, and we are not seeing corresponding improvements in care quality. But when you combine these cost and quality issues with broad environmental factors/disruptive trends on the right , you can understand the unique tipping point for employers today. Broad regulatory changes: Broad regulatory changes are spurring new delivery options for employers, and exchanges are becoming a mainstream option. Dramatic changes to payor/provider roles: In today’s transformation from fee-for-service to fee-for-value, nearly half of health care spend is expected to be attached by vbc by 2020. Employers need to understand what VBC-related fees they are already paying and how they will choose to respond/leverage this evolution. Growing consumer accountability: Today’s health ecosystem is engaging the consumer in new ways, leading to important employer considerations in areas like benefit program design, transparency and customization options. Multi-generational behaviors and needs: With more generations in the workforce at the same time, employers must consider multiple generations’ needs and priorities when crafting their health strategy and employee value proposition…and a deeper look at generational preferences demonstrates varying total rewards priorities by generation. Explosion of technology and data: Having a thoughtful strategy is critical. Unprecedented funding for digital health brings explosion of new options for employers – along with corresponding challenges to evaluate and integrate Details/sources: “Accelerating cost pressure”: Health cost continues to outpace inflation in the US (Mercer trend guidance, updated May 2015) US now ranks highest per capita on health care spend worldwide (Commonwealth Fund report, Nov 2014) The average health care cost for employer-sponsored plans is projected to increase by 4.6% in 2015 after plan changes (Mercer National Survey of Employer-Sponsored Health Plans 2014 Survey Report) Note: Can also mention excise tax in up-front cost stat: “33% of employers will be subject to the tax in 2018 if they make no changes to their current plans” (Mercer National Survey 2014) “Poor care quality” - Adapted from IOM (Institute of Medicine) Study: Crossing the Quality Chasm (originally published in 2001, with data updated every two years) Talking points for IOM table: Basic premise of the table is that the current health care system is only 50% effective – meaning that between a combination of patient compliance with treatment and the correct delivery of care (the right medicine, surgery, treatment and setting) by health providers, the result is 50/50. The analogy could be that anytime you pick up a phone in the US you are connected to the right person 50% of the time due to either dialing incorrectly or AT&T’s systems did not make the right correction. Patient compliance is best explained by example, in Chronic care the example could be compliance with high blood pressure medication reduces the chance of heart attack or stroke, the straight line example is that in Chronic Care Patients comply with their doctors recommendation on 60% of the time. Delivery is showing how often the physician or the system delivers the correct care. For example in the case of high blood pressure above it would be like saying the doctor accurately diagnosed and prescribed the right medication for HBP 80% of the time. And efficiency is simply showing the math of the two (patient compliance and delivery) – with 60% compliance on Chronic and 80% delivery means the overall system only works 48% of the time.
- There are many stats around private exchange adoption in the marketplace. These stats are from an external source (Accenture) and it reveals both current and projected take up rates. Participation in private exchanges has grown to meaningful levels and is projected growth is expected to accelerate. There are a number of different versions of exchange We’ve captured general attributes by type of sponsoring agent.....for both private and public exchanges There are differences within each category and it’s important to understand the nuances.
- Pew Research Center 2015 source: Millennials surpass Gen Xers as the largest generation in U.S. labor force (http://www.pewresearch.org/fact-tank/2015/05/11/millennials-surpass-gen-xers-as-the-largest-generation-in-u-s-labor-force/) Speaker’s notes: Millennials Choose lowest cost plan – maximize take home pay Use social tech platforms to find doctors, make appointments, research health conditions Benefits: Not a major factor in whether I stay or leave Gen X Choose plan that fits the needs of my family Disposable income but need to save where possible Benefits that meet my family’s needs: Can affect my decision to stay Baby Boomers Choose plan that can help me maintain my health Make more each year, but lots of competing expenses Post-retirement medical benefits can play a role in my decision to stay or leave Traditionalists Not sure how I’ll pay for healthcare in retirement or which supplement I need Want to know how to make the most of what I’ve saved Looking to protect/maximize my benefits so I can retire
- Not only is the current healthcare system failing employers – it’s failing all of us. The results in the areas of cost, quality and satisfaction are below what employers would tolerate in other parts of their business. And those results impact everyone who interacts with the healthcare system. Note: Net Promoter Score is an index that measures the willingness of customers to recommend a company’s products or services to others. It is used as a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand. CONSULTANT NOTE: If needed, here are some additional stats you can use in your client conversations. Cost: At 17.1% of GDP, the U.S. devotes at least 50% more of its economy to health care than do other countries. (The Commonwealth Fund: U.S. Health Care from a Global Perspective, http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-from-a-global-perspective) Quality: The U.S. had the lowest life expectancy at birth of the countries studied, and among the highest prevalence of chronic diseases. (The Commonwealth Fund: U.S. Health Care from a Global Perspective, http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-from-a-global-perspective) It’s estimated that medical errors kill roughly 200,000 patients in the U.S. each year.( http://www.forbes.com/sites/learnvest/2013/05/16/10-things-you-want-to-know-about-medical-malpractice/#558312a42323) United States ranks last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity, and healthy lives. (The Commonwealth Fund, http://www.commonwealthfund.org/publications/press-releases/2014/jun/us-health-system-ranks-last) Satisfaction: Patient satisfaction is down 3.2 percent to an ACSI score of 75.1, the lowest level in nearly a decade. (American Customer Satisfaction Index (ACSI) Utilities, Shipping and Health Care Report 2015, http://www.theacsi.org/news-and-resources/press-releases/press-2015/press-release-utilities-shipping-and-health-care-2015)
- Our process: Platform for Action Key inputs and evaluation criteria – helps us organize a client’s current state, objectives, barriers, etc. Levers – strategic areas to tap in order to maximize the value and achieve competitive advantage articulated in earlier slides Blocking/tackling; proven innovation; leading edge – identifies a spectrum of solutions within each lever and supports a discussion with the client about where they fit Results – the output of our strategic process While the levers look like our traditional set of tools… Some of these are new to the toolkit (e.g., care delivery – capitalizing on the provider value revolution) New solution sets arise when we think about the intersection points of these five levers and view them holistically Workforce health – holistic view of health delivered in a personalized and targeted way Absence & disability – optimize integration points between absence, disability and workforce health Care delivery – impact the triple aim by capitalizing on changing provider environment – how care is delivered and reimbursed Consumer accountability – as employees develop into consumers, employers need to provide program choice and support tools to employees who are ready to accept this accountability shift Delivery infrastructure – apply a strategic lens to vendor management to maximize resource allocation and investment
- Point to hit with clients: “Each one of these vendors is going to be calling you/knocking on your door. Understanding which innovations truly add value in your organizational context will be a critical piece of your strategy in today’s climate of change.”
- We have identified four foundational opportunities, which are interdependent and mutually reinforcing; progress will be most successful if they advance together. If employers want a more rational healthcare market, they will need to drive change through relentless and collective focus on all four vital areas. Pay for Value: Aligning reimbursement with value, not volume. Drive to Quality: Delivering the right care at the right time, in the right setting, error free. Personalize the Experience: Leveraging better data and technology to engage employees in the right behaviors, every day. Embrace Disruption: Injecting change into the system – with internal stakeholders and external partners – to be future-ready.