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Karen Choi

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Health-Insurance Costs Remain Concern for Employers

Posted by Karen Choi on Mar 28, 2016 2:58:15 PM

Massachusetts employers have apparently decided that increasing deductibles and co-pays is a better way to control health-insurance costs than providing financial incentives for employees to seek care from low-cost, high-quality doctors.

2016_AIM_Benefits_Report_Cover.thm.pngThe 2016 AIM Benefits Report from Associated Industries of Massachusetts finds that controlling the cost of providing health insurance for employees remains the dominant benefits concern for Bay State companies. Ninety-four percent of the 197 employers who participated in the survey remain “very concerned” about escalating health insurance costs, while 76 percent are concerned about increased employee cost-sharing for benefits.

Employers are addressing those escalating health insurance costs by adopting high-deductible, consumer-driven health plans. Half of survey participants offer a consumer-driven health plan, with the most common cost-containment strategies being increased deductibles (28 percent), increased employee premiums (26 percent) and increased out-of-pocket maximums (21 percent).

There is far less enthusiasm for tiered networks, which health-care economists tout as an effective method of managing costs by paying more for medical care rendered in lower-cost settings and less for care delivered in high-cost academic medical centers. Just nine percent of survey participants offer a tiered network plan, even though a third of those companies have experienced a decrease in premiums.

Seventy-one percent of companies say they have no plans to offer a tiered network product in the future. Companies that have declined to adopt tiered networks most often cite not wanting to change the levels of benefits for employees as the reason.

“The survey seems to illustrate the ‘hallway effect,' ” said Russ Sullivan, Vice President of Health-Care Solutions at AIM.

“It is difficult to potentially disrupt the health-care choices or increase out-of-pocket costs of someone with significant medical expenses who you see each day.  Incremental changes to payroll contributions and co-pays are a more comfortable decision.”

Other structural changes face similar resistance. More than three-quarters of employers do not use health risk assessments to identify opportunities to improve the health of workers.

The share of employers who say they are “very concerned” about establishing a wellness program dropped to 31 from 37 percent in 2014 and 40 percent in 2012. Almost two-thirds of employers with 200 or fewer employees eligible for the Massachusetts Wellness Tax Credit said they did not know about the program.

Management of health-insurance costs will take on renewed significance for employers in 2016 as premium inflation in Massachusetts accelerates after several years of muted growth. Health insurance rates paid by small employers and individuals in Massachusetts surged 6.3 percent during the first quarter while major insurance companies are raising overall average premium rates anywhere from 3 to 13 percent. 

The AIM Benefits Survey found that the average premium for coverage through a health maintenance organization (HMO) rose 9 percent this year versus 7 percent in 2014. Premiums at preferred provider organizations (PPO) will also increase 9 percent in 2016, up from 6 percent two years ago, while rate increases for high-deductible plans have almost doubled from 2014 to now.

Insurance carriers attribute the premium increases to increases in drug costs, increased levels of plan utilization and costs associated with the implementation of federal health-care reform.

The average cost to provide health insurance to a family ranges from $1,011 per month for a high-deductible plan to $1,494 per month for an HMO, according to the AIM survey. Employers, on average, pay anywhere from $607 to $986 of those premiums depending on the insurance product.

The trend toward increased deductibles and co-pays is national. Research by the Kaiser Family Foundation indicates that deductibles for all workers have risen almost three times as fast as premiums and about seven times as fast as wages and inflation since 2010.

Other highlights of the survey include:

  • 87% of employers offer short-term disability benefits;
  • 93% of employers offer life insurance benefits;
  • 13% of survey participants still offer a defined-benefit pension plan, through 14 percent of those companies have closed to new participants;
  • Two-thirds of employees, on average, participate in their company’s 401(k) plan;
  • 58% of employers offer a paid time-off bank; and
  • 80% of employers with a work force outside of Massachusetts plan to offer the same earned sick-time benefits required for employees who work a majority of the time in state.

Purchase the 2016/2017 AIM Benefits Report

Topics: Health Care Costs, Health Insurance, Benefits

HR Practices Survey - Predictable Wage Growth, Unpredictable Laws

Posted by Karen Choi on Dec 22, 2014 7:34:31 AM

The year 2015 will be anything but business as usual for Massachusetts human resource professionals.

HR.Practices.2014Sure, compensation increases will average a predictable 2.9 percent amid a persistently slack labor market. And Massachusetts will continue to keep pace with national projections of an overall average 3 percent increase in pay for American workers.

But the annual HR Practices Report published by Associated Industries of Massachusetts finds that beneath that placid surface lurk new state laws ready to roil the waters for anyone who manages pay and benefits at a Massachusetts company:

  • The impending three-year phased increase in the Massachusetts minimum wage from $8 per hour to $11 per hour. The $9-per-hour minimum that takes effect on January 1, 2015, will force some employers to raise entry-level pay rates while also bumping up wages for workers who currently earn slightly more than minimum. Employers face another $1-per-hour increase in the minimum wage in January 2016 and a third in January 2017. The result is that human resource professionals are scrambling to develop multi-year approaches to the minimum wage that will require both actual paid rates and salary ranges to be adjusted.
  • Federal health care reform kicks into high gear for employers on January 1, 2015. Employers with 100 or more full-time plus full-time equivalent employees face possible assessments. All employers with 50 or more full-time and full-time equivalent employees must start to collect data to meet the reporting requirements of the Affordable Care Act (ACA). These companies will need systems to track employee hours, health-care eligibility dates, number of full-time employees each month, employee participation in health insurance, and employee contributions to health insurance to meet ACA reporting requirements. Added to these calculations are the establishment and tracking of standard and initial measurement and stability periods. HR professionals will need some combination of new processes, systems, or partnerships to avoid adding staff to comply with these regulations.
  • The new Massachusetts paid sick days law approved by voters on November 4, 2014. The measure will force many employers to restructure their paid time-off policies prior to the July 1, 2015, effective date. The specific accrual, usage, and carryover provisions of the law do not mesh well with existing employer policies. Employers will need to develop separate time-off tracking to accrue, deduct, and carry over time pursuant to the new law. Once again, processes, systems, and the assistance of key partners such as their payroll providers will be important to meeting the requirements without adding staff.
  • The Massachusetts Wellness Tax Credit. It is available to employers with 200 or fewer employees. Qualifying employers may receive an annual tax credit equal to the lesser of 25 percent of their wellness program investment up to $10,000. Employers must demonstrate that they have taken steps to determine the health needs of their employees and developed a program tailored to address those needs.

That’s a full menu of challenges, especially for small companies that struggle to implement complex laws and regulations. So fasten your seatbelt—it’s going to be an interesting ride.

Topics: Compensation, Health Care Costs, Human Resources

Wage Growth Remains Muted Despite Labor Shortages

Posted by Karen Choi on Jun 10, 2014 12:10:00 PM

Economic theory holds that rising employment and widespread labor shortages drive up wages.

Compensation and WagesWell, so much for theory.

At a time when employment in Massachusetts has finally surpassed its all-time high set in 2001 and employers in multiple industries cannot find qualified workers, wage and salary growth in the Bay State remains strangely muted.

The 2014 AM General Wage Survey finds that Massachusetts employers increased wages and salaries by an average of 2.71 percent this year, a slightly faster pace than the 2.53 percent posted in 2013, 2.55 percent in 2012 and 2.4 percent in 2011. Fifty-five percent of the companies taking part in the survey are giving raises of exactly three percent as employers coalesce around what appears to be a safe wage increase level that does not get out ahead of the economy.

The percentage of companies providing no wage increases dropped in half from 14 percent in 2013 to 7 percent this year.

Wages at 2.71 percent are growing faster than prices, which are increasing at 1.7 percent annually in the Boston area.

Analysts believe employers still fear economic and political uncertainty, even though incomes, balance sheets, credit availability and other factors driving consumer and business spending are improving. It is a fear that kept the AIM Business Confidence Index locked in a narrow, four-point range for 18 months before turning upward in April and May.

"The ongoing strengthening of the economy still feels more like a prolonged convalescence than like robust health,” said Raymond G. Torto, Global Chairman of Research at CBRE and Chair of AIM's Board of Economic Advisors (BEA.)

“Consumer confidence reports are mixed; federal spending cuts continue to affect Massachusetts companies and institutions; quantitative easing is winding down; the Affordable Care Act is raising more issues for many employers than expected; and financial problems in emerging economies cast a shadow on global prospects.”

Wage and salary increases are fairly steady across industry and employee types. Average raises for 2014 fall between 2 and 3 percent across manufacturing, service and other companies. Executives are seeing the smallest jump in paychecks at 2.55 percent, while exempt employees lead the pack at 2.75 percent.

Only one percent of companies plan salary reductions for any class of employee in 2014. One in five companies, meanwhile, maintains a formal incentive compensation program that offers bonuses ranging from 7 percent to 30 percent of salary.

The conservative approach by employers to compensation may be consistent with a state unemployment rate that has dropped only haltingly to 6 percent after peaking at 8.7 percent in October 2009. But the numbers also belie a growing body of evidence that both the US and state economies are strengthening:

  • U.S. equity markets surged between 25 and 30 percent during 2013.
  • The national economy has created an average of 183,000 jobs per month during the past year.
  • Massachusetts economy grew at an annual rate of 3.5 percent during the most recent period for which statistics are available.
  • Bay State venture capital firms raised $5.4 billion for new investments, more than triple the amount raised in 2012.
  • The commonwealth posted 3.396 million jobs in March 2014, finally surpassing the previous high of 3.391 jobs recorded in February 2001. Employment gains in Education & Health Services (+34%), Leisure & Hospitality (+20%), Other Services (+11%) and Professional, Scientific and Business Services (+2%) offset declines in Manufacturing (-39%), Information (-22%), Financial Activities (-11%), Construction (-11%), and Trade, Transportation & Utilities (-6%).
  • Worker shortages caused by both skill gaps and demographic changes are pervasive throughout the Massachusetts economy. The 2013 Massachusetts Job Vacancy Survey indicates that five percent of all jobs in the Bay State – 135,000 positions in all – stood vacant at year end. Vacancy rates ran 6.1 percent in computer and mathematical occupations, 4.8 percent in healthcare support occupations and 2.7 percent in manufacturing.

Economists believe that continued steady job growth coupled with increasingly critical skill shortages will inevitably push wages beyond the 3 percent comfort barrier for employers. The question is, how soon?

It’s already happening in a few specialized technical areas. Software engineers command six-figure paychecks and companies such as Cambridge-based Hubspot are paying bonuses of up to $10,000 for referring engineers.

Manufacturing, heavily represented in the AIM General Wage Survey, may provide a more interesting long-term test case. The significant decline in manufacturing employment since 2001 has clearly created a short-term buyer’s market for labor among companies that build things. But a projected 100,000 job vacancies through retirements during the next 10 years and relentless technological innovation will at some point exert upward pressure on wages, especially in advanced manufacturing occupations.

It’s shaping up to be an interesting decade.

Topics: Compensation

AIM Report: Projected Raises Finally Top Levels Prior to Recession

Posted by Karen Choi on Jan 21, 2014 8:48:00 AM

Massachusetts employers plan to increase wages and salaries by an average of 2.96 percent during 2014 as pay raises finally surpass the levels that were in place prior to the Great Recession, according to the AIM Human Resource Practices Report released today.

2014 HR PracticesThe projected raises for this year continue a trend that has seen salary growth climb from a low of 1.7 percent in 2009 to 2.1 percent in 2010, 2.4 percent in 2011, 2.55 percent in 2012 and 2.8 percent last year. The prospect of employers offering fatter pay envelopes to recruit and retain talent comes despite the fact that the Massachusetts unemployment rate rose from 6.4 to 7.2 percent between April and November.

The HR Practices Report indicates that Massachusetts employers appear to be on the same compensation page as their colleagues around the United States. National surveys from World at Work, Mercer and Hay forecast 2014 salary increases of 3 percent across industry sectors, while the Economic Research Institute forecasts a 2.9 percent increase.

But Bay State employers also face a wild card in their compensation calculations for this year – the prospect that the Massachusetts Legislature will increase the commonwealth’s $8-per-hour minimum wage. The state Senate last year passed a bill that would boost the base wage to $9 per hour in 2014; $10 per hour in 2015; and $11 per hour in 2016 and thereafter index it to inflation.

The House of Representatives is expected to take up the issue soon, potentially in tandem with an overhaul of the Unemployment Insurance system.

The issue for employers is not simply increasing hourly pay to meet the new minimum wage. A $3 increase will require employers to plan for dealing with wage compression when inexperienced and new employees are brought up to pay rates currently given to experienced workers. 

Companies with salary ranges will also need to adjust them annually between 2014 and 2016.  Salary ranges are developed by setting range widths (difference between minimum and maximum) and relationships between range midpoints.  The result will be an overall increase in compensation spending.

The bottom line: employers need to review their wage structures to determine budgetary impact and assess their internal compensation expertise to carry out a multi-year compensation plan responsive to the potential changes in the minimum wage.

The other major compensation challenge facing Massachusetts employers remains the cost of providing health insurance to workers.

Companies continue to rely heavily on cost shifting to control health premiums, but an increasing number of employers are moving gingerly into the world of plan-design options ranging from high-deductible policies to tiered health programs in which workers pay smaller amounts to be treated at high-quality, moderate-cost community health facilities.

This fifth annual HR Practices Survey from Associated Industries of Massachusetts is intended to provide employers with timely information about compensation, health care, recruiting, training and development.

Watch for our biennial Benefits Survey Report to be published in February.  Our annual General Wage and Executive Compensation survey data collection period will kick off the first week of January and the report will be published in May.

Topics: Compensation, Associated Industries of Massachusetts, Human Resources, Benefits

Massachusetts Employers Remain Ambivalent about Telecommuting

Posted by Karen Choi on Mar 26, 2013 3:17:00 PM

More than half of Massachusetts employers allow at least some employees to telecommute under certain circumstances, with the primary benefits being increased employee satisfaction and retention, according to a survey by Associated Industries of Massachusetts.

The downside of telecommuting, according to the survey, is a loss of collaborative creativity and close working relationships.

AIM surveyed 44 Massachusetts employers in the wake of the hotly debated decision by Yahoo CEO Marissa Mayer to end telecommuting at the Internet company. The results underscore a lingering ambivalence among Massachusetts employers about the value allowing employees to work offsite:

  • Fifty-two percent of the 44 companies completing the survey offer some level of telecommuting options to their employees.
  • Sixty-one percent of survey respondents are manufacturers with the remaining thirty-nine percent spread among a wide spectrum of industry sectors.
  • Companies of all sizes offer telecommuting options:
    -69% of companies with fewer than than 50 employees
    -36% of companies with 50 to 100 employees
    -36% of companies with 101 to 500 employees
    -100% of companies with greater than 500 employees (only 3 companies responded)
  • Positions most commonly eligible for telecommuting:
    -52% sales
    -29% management and marketing
    -24% finance and HR
    -19% administration, consultants, IT and technical positions
    -14% customer service
    -5% operations
  • Seventy-six percent of companies report 10% or fewer of their employees telecommute
    -10% report 11-20% of their workforce telecommutes
    -10% report 21-30% of their workforce telecommutes
    -4% report 51-60% of their workforce telecommutes
  • Three out of four companies provide cellphones and or laptops to employees who telecommute.  Approximately one in four provide internet service and or a printer.

What do Massachusetts companies have to say about the advantages and disadvantages of telecommuting?

Telecommuting2013
 

Companies shared that telecommuting is effective during weather emergencies, when an employee has a sick child or an appointment during the day or when an employee is too sick to come to the office but is well enough to work from home.

In the spirit of full disclosure – the AIM Employers Resource Group heavily relies on telecommuting – with approximately 90 percent of our ERG staff working remotely when not at a customer site.  It works for us.  When we need to work face to face – we do. Not every job is conducive to working remotely and not every personality is suited for this work style.

Topics: Human Resources

Are Employers Re-Defining Compensation Norms?

Posted by Karen Choi on Nov 26, 2012 9:59:00 AM

Perhaps it is uncertainty surrounding the January 1 fiscal cliff, which has cast a pall over business spending for much of 2012.

HR Practices ReportOr perhaps companies have re-defined compensation norms.

In either case, Massachusetts employers are planning to award virtually the same 2.9 percent to 3 percent average salary increases in 2013 as they did this year, according to the Associated Industries of Massachusetts HR Practices Survey released today.

Overall salary growth has remained in a narrow range of 2.5 to 3 percent for the past three years as employers have faced a balky economic recovery, a recession in Europe and a series of governmental debt crises both here and abroad.

The AIM survey found that a company’s perception of business conditions is a key ingredient of its approach to employee compensation. Ninety-three percent of companies that view business conditions as “excellent” expect to grant pay increases of 3 percent or more, while only 47 percent of companies that believe conditions are “fair” have budgeted the same raises.

Uncertainty surrounding the fiscal cliff - the simultaneous expiration of tax breaks, introduction of tax increases and spending cuts at the end of 2012 if Congress fails to enact long-term deficit reduction - has been pervasive for employers. Nonresidential fixed investment fell 1.3 percent during the third quarter, and more than 40 percent of companies surveyed by Morgan Stanley this summer cited the fiscal cliff as a major reason for spending restraint. Bottom line: The days of six, seven and eight percent salary increases appear to be a distant memory.

Not all the news is grim, however. Employers in Massachusetts and throughout the nation are enjoying at least temporary relief from the spiraling cost of health insurance. Rate increases for health insurance appear to be holding steady in the range of 4 to 6 percent as the weak economy dampens demand for medical services and employers manage costs through plan design.

And employers have only scratched the surface of controlling health costs. A paltry 15 percent of Massachusetts employers plan to implement tiered or limited network health insurance plans, while twenty-eight percent expect to take no steps to control health-care costs.

Topics: Compensation, Health Care Costs, Human Resources

Pay and Payback | Navigating Wage and Hour Compliance

Posted by Karen Choi on Oct 3, 2012 9:01:00 AM

PayandPaybackCompanies navigating federal and state wage-and-hour laws often find themselves on the wrong side of right.

Consider this example: The federal Fair Labor Standards Act (FLSA) requires companies to determine whether a position is exempt or non-exempt from overtime.  Companies make their best effort to properly classify their positions but may not classify them the same way the U.S. Department of Labor (DOL) will. Guess who wins that dispute?

Companies struggling to meet wage-and-hour responsibilities need to understand:

  • the intricacies of how to calculate overtime
  • what to consider “work time”
  • how to handle lunch and rest breaks
  • what can be deducted from a final paycheck
  • how to handle non-exempt remote employees
  • who qualifies as an independent contractor
  • whether the company can use paid or unpaid interns; and
  • hundreds of other wage and hour scenarios

Even the most knowledgeable HR professional can be left scratching her or his head.

To further complicate the picture, Massachusetts implemented the Treble Damages law in July of 2008.  The law mandates treble, or threefold, damages for a wage-and-hour violation, regardless of whether it was the result of a good-faith mistake, difference of opinion or interpretation, or willful or egregious conduct.  Employers found in violation prior to 2008 would be assessed treble damages only when willful or egregious conduct was found. The potential for huge damage awards has brought a host of plaintiff’s attorneys into the field, looking for clients and anxious for a chance to file a non-payment of wages claim.

In 2010, U.S. Wage and Hour Deputy Administrator Nancy Leppink announced the agency would pursue an aggressive auditing and enforcement policy.  Although audits can be focused on any area of wage and hour compliance, two areas specifically mentioned were misclassification of workers as independent contractors and misclassifying non-exempt employees as exempt to avoid the need to pay overtime.

What should a company do? 

AIM provides clear solutions with a new whitepaper entitled Pay and Payback | Navigating the Minefield of Wage and Hour Compliance. The whitepaper poses 10 common questions about wage and hour issues and provides plain-English answers. Read the questions below. Then download the whitepaper for the answers.

If you get one or more questions wrong, or you were unsure of the answer, it may be time to get more information.  Keep in mind, this is just the tip of the iceberg.

1. The Department of Labor estimates what percent of employers are out of compliance with wage and hour laws?
a)  35%
b) 50%
c) 70%
d) 100%

2.  How many collective actions were filed in federal court in 2011 alleging wage and hour violations?  An FLSA Collective Action is a lawsuit (enforcement action) on behalf of a large group of similarly situated non-exempt employees within a company.
a) 4,000
b) 5,000
c) 6,000
d) 7,000

3. The Massachusetts Minimum Wage is currently:
a)  $7.25 per hour
b)  $8.00 per hour
C)  $8.10 per hour
D)  $8.50 per hour

4.  True or False - Employers are free to hire interns as either paid or unpaid interns.
a)  True
b) False

5.  True or False - An employer who has a formal policy requiring employees to get supervisory approval prior to working overtime may refuse to pay the employee for non-authorized overtime work.
a) True
b) False

6. True or False -  If a job requires a college degree, it will meet the criteria to classify the job as exempt under the FLSA regulations.
a) True
b) False
 
7.  If someone supervises two or more people, would the supervisor be classified as exempt or non-exempt?
a) Exempt
b) Non-exempt

8.  When calculating overtime, what discretionary compensation needs to be factored in when determining the regular rate of pay?
a) Incentive pay
b) Bonus pay
c) Shift differentials
d) Retro pay increases
e) All of the above

9. Many companies have an automatic lunch-period deduction for non-exempt employees consistent with lunch-break policy.  Which one or more of the following presents an issue to the auto lunch period hours reduction?
a)  Technology – the employee has a smart phone or tablet and can review emails during lunch breaks.
b) The employee sits at his/her desk during the lunch period.
c) The employee is asked to take a call, or help a customer for a couple of minutes during lunch, but can finish his/her lunch break after the call.
d) The company has employees attend lunch-and-learn sessions during the lunch break to review company policies or to participate in training.
e) The employee is too busy for lunch, but will leave a half hour early at the end of the day.

10.  The FLSA requires  companies to pay for breaks when the break is equal to or less than:
1) 10 minutes
2) 15 minutes
3) 20 minutes
4) 25 minutes

 Download the Whitepaper

Topics: Compensation, Employment Law, Human Resources

Sluggish Recovery Finally Changing Bay State Job Market

Posted by Karen Choi on Jun 5, 2012 1:04:00 PM

The 2012 Associated Industries of Massachusetts General Wage Report released today indicates that the lurching economic recovery has finally begun to transform the job market for both employers and employees in Massachusetts.

2012 GenWage Exec CoversEmployers are planning the largest wage increases in three years, changing their emphasis from compensation freezes and other defensive tactics to long-term compensation objectives for star performers.

Employees, meanwhile, are moving to new jobs in numbers that have almost doubled the voluntary turnover rate at Massachusetts companies to 7.8 percent. The U.S. Labor Department reports that the number of Americans leaving their jobs hit 2 million in February, the highest number of resignations since November 2008.

The changes in the job market reflect an underlying level of comfort among employers and workers even as the economy continues to struggle with issues such as the European debt crisis, slowing job growth and stock market declines. The Associated Industries of Massachusetts Business Confidence Index (BCI) edged off three-tenths of a point in May to 56.8, but remains 5.1 points above its reading in May 2011.

“What is evident is a lack of sustained upward momentum in the economy, even though business conditions and business confidence have improved over time,” said Raymond G. Torto, Global Chief Economist at CB Richard Ellis Group, Inc., the chair of AIM’s Board of Economic Advisors (BEA).

Employers in Massachusetts, where the 6.3 percent unemployment rate stands nearly two points below the national average, plan to boost wages at about the same rate as companies around the country. The General Wage Report finds that those employers planning to provide salary increases have a 2012 merit increase budget of 3.0 percent (2.55 percent when factoring companies not providing increases), showing a continued upward trend since 2009 when reported merit increase budgets were 1.7 percent.

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National survey data for planned merit increase budgets fluctuates between 2.8 percent and 3.0 percent. The Economic Research Institute reports budgeted merit increases at 2.8 percent, Mercer Consulting reports 2.9 percent and the Hay Group reports 3.0 percent. Three years ago these national numbers barely reached the 2 percent mark.

Only 11 percent of respondents to the AIM survey implemented a pay freeze last year, compared to 66 percent in 2009. None of the 2012 survey respondents reported plans for a hiring freeze this year, compared to fourteen percent of survey respondents in 2009.

Growing confidence is changing behavior on the employee side as well. In 2009, survey respondents reported that 4.5 percent of employees voluntarily left their positions. This year, respondents report a 2011 voluntary turnover rate of 7.8 percent.

As employees increasingly look to outside opportunities, it will be necessary for employers to focus on retention strategies. Survey results indicate an awareness of this need. The percent of companies concerned with communicating the value of total compensation, for example, has nearly doubled over the past three years from 26 percent in 2010 to 50 percent in 2012.

Survey responses indicate that employers will focus retention efforts in 2012 on top performers. Forty-six percent of employers are concerned about focusing compensation on high-potentials.

The job-market shift is prompting long-term changes as well. Companies are reviewing their current compensation packages and gradually increasing the money spent on performance incentives. Companies are advised to monitor their turnover and consider any budgetary impact these factors may drive. You may not want to lead the market direction, but failing to keep up with the market will impact both your ability to attract and retain staff.

Topics: Compensation, Business Center, Human Resources

AIM Benefits Report: Health Insurance Changes Slow to Reach Employers

Posted by Karen Choi on Mar 7, 2012 3:01:00 PM

Breathtaking changes that hold the promise of controlling the cost of health insurance in Massachusetts have not yet reached most employers and their workers.

2012 AIM Benefits ReportThe 2012 AIM Benefits Report provides a compelling snapshot of the time lag that always falls between revolutionary changes and their implementation throughout an economy. Benjamin Disraeli had it right when he said that “great revolutions, whatever may be their causes, are not lightly commenced, and are not concluded with precipitation.”

Health care and health insurance costs remain the dominant benefits challenge for the 236 Massachusetts employers who participated in the benefits survey. A staggering 98 percent named providing health insurance to their workers as the primary concern of their companies.

But despite the development of cost-reducing health insurance plans that encourage patients to seek care in reasonably priced settings, and the development of payment structures that reward doctors for good outcomes rather than tests, most employers continued to use traditional cost shifting to address their health premium issues in 2011.

The report indicates that only 2 percent of employers offer a tiered network plan, which provides workers low co-pays for treatment in community settings, and 1 percent of companies offered a limited network plan that reduces costs by requiring patients to seek care in within a defined group of providers.

Thirty-eight percent of employers, meanwhile, increased co-pays for employees. Forty-one percent boosted deductibles and 37 percent increases co-payments for visits to the hospital emergency room.

Analysts expect those numbers to change drastically this year as employers get their first taste of innovative new insurance plans:

  • Tiered network plans, with premiums 12 percent below those for an average HMO, now make up 15 percent of the Massachusetts market.
  • More than 1.2 million Bay State residents are now covered by cost-reducing health plans that pay doctors for outcomes instead of procedures and reward consumers for seeking care in high-quality community facilities.
  • Steward Health Care System received approval in December to market a limited-network health plan that the company says will cost 15-30 percent less than a typical health maintenance organization.
  • Small employers in Massachusetts face average premium increases of 1.8 percent in 2012, down from 16.3 percent two years ago.

The changes in the health care market can’t come soon enough for frustrated employers who realize that cost-shifting ultimately erodes their ability to attract and retain key employees. Lower health premiums are just the prescription for increased economic growth and job creation.

Topics: AIM Benefits Report, Health Care Costs, Benefits

Is Your Company on the Human Resources Hot Seat?

Posted by Karen Choi on Jan 24, 2012 9:12:00 AM

Massachusetts companies often delegate human resources to the office manager, finance department or receptionist.  Some employers are just too small to hire a full-time HR manager. Others simply view HR as overhead.

HR HotseatBut in an age of complex regulation and unrelenting competition, running your business without an experienced HR manager is the equivalent of playing corporate Russian roulette. The companies that hire AIM professionals to serve as their HR managers tell us frequently that the world now moves too fast for them to run their businesses and simultaneously monitor changing employment laws and implement best management practices.

How do you know if you need an HR manager?

Associated Industries of Massachusetts has issued a new white paper Are Your on an HR Hot Seat?  that will help you take stock of where you sit. The white paper poses five common but challenging HR questions that your company will encounter during 2012.

If you can answer all of the questions without hesitation, congratulations. You know the basics. Get ready for the hard stuff.

If these questions leave you scratching your head, it may be time to rethink your HR strategy. Remember that any missteps may have significant financial and legal implications for your company.

Here are the questions. We invite you to download the white paperto check the answers.

1.  Which of the following statements describes requirements for an employment application in Massachusetts?

a.  All inquiries regarding an applicant’s criminal history should be removed from the employment application.

b.  Companies are prohibited from inquiring about a person’s health (past/present) on an employment application.  This includes questions concerning past absences, disabilities, workers compensation claims and non-work related illnesses or injuries.

c.  Massachusetts requires that all employment applications include specific language prohibiting the use of lie detector tests before or during employment.

d.  Due to Massachusetts Data Security Regulations, companies are required to remove social security number questions from an employment application.

e.  Job applications in Massachusetts must include a specific statement summarizing employer obligations pertaining to the acquisition and use of genetic information of applicants, employees, and family members.

f.  Employment applications must include language in the employment history section that invites applicants to list any verifiable volunteer work.

2.  Is a company allowed to employ “independent contractors” to perform work…

a.  that is seasonal in nature?

b.  to supplement existing staffing levels?

c.  in cases when a person prefers to be classified as an independent contractor rather than an employee?

d.  is temporary in nature?

3.  True or false: An employee may be classified as Exempt as long as he or she is paid on a salary basis?

4.  May an employer refuse to pay overtime to a non-exempt employee who works unauthorized overtime?

5.  Are employers required to keep completed I-9 forms in the employee personnel file?

AIM’s On-Site HR service allows Massachusetts companies to bring in an experienced human resource professional on a temporary, part-time or full-time basis. AIM HR practitioners are currently on the job in more than a dozen businesses, providing reliable services for companies too small to have a their own HR function; helping other companies bridge an employee leave or HR vacancy; or working with still others to set up an HR department.

Contact me at KChoi@aimnet.org for more information.

Topics: Associated Industries of Massachusetts, Human Resources

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