Engaged Workforce

Agile and social models are changing performance management, rewards, coaching, goal-setting and development. How you engage with your workforce will directly correlate with how to maximize the productivity of employees whilst giving the best possible opportunities for development.

KnowledgePlanet Becomes First to Offer One Price, Bundled Training Back Office Solution

KnowledgePlanet Training Back Office offers on-demand technology and ongoing administration and operations management in one solution 

MECHANICSBURG, PA (Jun 14, 2005) – KnowledgePlanet has further integrated its Training Back Office components to become the first learning solutions provider to offer a one-price, bundled service of on-demand technology and ongoing administration and operations management. The consolidated suite advances KnowledgePlanet’s strategy to focus learning technologies on significantly increasing customers’  competitiveness and profitability

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Esurance Selects Mobility Services International to Drive Its Growing Relocation Needs

– Online Auto Insurance Company Anticipates Multiple Relocations By Years End – 

NEWBURYPORT, Mass. (June 13, 2005) Esurance is on the road to relocation success.

Mobility Services International (MSI), a leading relocation management company serving the employee mobility needs of corporations worldwide, today announced that San Francisco-based Esurance, a direct-to-consumer personal auto insurance company with more than 150,000 policyholders throughout the United States and a subsidiary of White Mountains Insurance Group, Ltd

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Managing Benefits Costs

Is there a silver bullet for hairy healthcare costs?

by HROT Staff

The high cost of health benefits is damaging the health of many an HR team. At the recent HRO World Conference, HRO Today magazine invited a number of experts in the field to give us their insight on what HR and HRO can do to help drive down costs.


Healthcare now consumes 15 percent of America’s national output, compared with 9 percent in many European countries. In fact, a recent Princeton University study concluded that healthcare will make up 28 percent of our GDP by 2030 and 46 percent by 2050, and is dragging down American companies’ productivity more than any other single factor. Nearly 65 percent of Americans get their health coverage through their employers, funded with pre-tax dollars.

While new consumer driven health plans and managed care plans can help, they do little to solve the problem, one of which is that 10 percent of patients account for 69 percent of healthcare costs. So what are your alternatives? There are some experts, like the New York Times Daniel Akst, who say that employers should stop providing healthcare altogether because it limits labor mobility and puts American firms at a big disadvantage. 

The goal of this expert panel is to give readers ideas that they can put to work in the workplace.



Jay Whitehead, President and Publisher HRO Today, HRO Europe, and FAO Today magazines, and HRO World Conference Co-chair



R. Jeff Brown, Senior Consultant, Group and Health Care Practice–Watson Wyatt Worldwide (RJB)

Arthur Leibowitz, Principal, Health Advocate Inc. (AL)

Roy Ramthun, Senior Health Advisor, U.S. Department of Treasury (RR)

Barry M. Schilmeister, Principal-Health and Benefits Business, Mercer HR Consulting (BMS)

Moderator: At NY HR Week 2004, we heard our keynote speaker, Mike Milken, say that the average GM car has $1,400 to $1,600 worth of healthcare costs in its price, with double-digit annual increases likely to continue into the next decade. In your opinion, what is the most effective way for American employers to address these cost increases?

RJB: There aren’t a bevy of alternatives out there. There are two cost-control strategies to compare: strong form managed care and integrated consumerism–engaging consumers in the marketplace. We believe that truly engaging consumers and having them take more ownership of their own healthcare offers some hope.


AL: GM is probably the worst example to use. They are trapped behind a union-based contract that enables them to transfer a minimal amount of costs to employees. They are way out in the left field. There needs to be a balance between what they can reasonably expect employees to pay and what they can afford.


RR: Consumerism is the best solution. People learn how to spend other people’s money; now its time to spend their own.


BMS: I think we need a solution that offers both short-term relief and long-term relief. Take an example from Medicare Part D, which has protection in the front and back and a hole in the middle. The concept of insurance needs to be maintained–with risks, subsidy, and equity that is considered acceptable–where money saved is spent in other areas employees’ value with costs that don’t rise as fast. 

Moderator: In a recent cover story in HRO Today magazine, I interviewed Former House Speaker Newt Gingrich, who is a big fan of tax-sheltered, consumer-driven health plans (CHDPs) as a way to save employer-provided healthcare. CDHPs are basically a pretax Health Savings Account welded to a high- deductible, catastrophic coverage plan. Opponents of CDHPs say they are just a cost-shifting device, throwing the cost of healthcare from employers onto employees. In your opinion, is this cost-shifting accusation the case or not?

RR: There is no tax effect argument whether insurance or healthcare costs should be subsidized.

Moderator: Would you consider the U.S. Treasury to be a fan of CDHPs?

RR: We are fans but under improvement of tax preferences.


BMS: It is fundamentally a cost-shift with two goals–one, an attempt to address employers’ short- and long-term concerns and two, impacting utilization by certain levels of out-of-pocket increases.


AL: I’m not sure shifting responsibilities to employees will help–just because you can spend your own money doesn’t mean you know how to do so. The government is invested in the health and well-being of every American after the age of 65. From a public policy perspective, we don’t know the consequences of CDHPs years from now.


RJB: If CDHPs are offered only as an option, they will be adopted by relatively healthy, low-utilizing consumers and will not have a substantial impact on healthcare economics. I often say Why introduce incentives for rational consumption to people who don’t consume to begin with? If CDHPs are deployed broadly, to 70 to 80 percent of the population, they have the power to be much more than just a cost-shift. They might create more rational pricing and capital spending decisions that are made throughout the entire market.

Moderator: Employer adoption rates for CDHP plans were pretty low in 2005. What do you think the adoption rates will be like in 2006? Will they ever be as high as the rates for 401(k) plans?

: Everything is being called consumer-driven plans. There is hardly an employer in America that is not limiting coverage and shifting costs to employees.


RJB: If you take 401(k) adoption as a proxy, the adoption curve is not that steep. It took 12 years for that market to really develop. However, in the case of CDHPs and HSAs, policy makers and regulators are enabling these accounts instead of just allowing them; so we might expect more robust adoption, especially in light of the state of crisis we are currently in with healthcare.


RR: The small and mid-sized employers will have high adoption rates, but HRA (health reimbursement accounts) models will still be used by large employers.


BMS: We surveyed employers, and a quarter of them are looking to adopt CDHP plans/high deductible plans for large companies. There will be significant interest and proposal requests.

Moderator: Harvard’s Martin Feldstein says that by eliminating the employer tax deduction for healthcare, federal income tax collections would go up $120 billion a year. Is cutting these tax breaks a good idea?

RR: Maybe.


AL: It doesn’t matter when looking at the actual cost of health care; we are going to spend what we are going to spend. The question is: How will the individual pay for it? Through taxes or as a premium out of their pay check?


BMS: It is fundamentally a bad thing. It would lower the bar on benefits across all employers. The money employers pay in the system will trickle down to consumers as higher costs.


RJB: It is an interesting idea. A lot of the dysfunction in the current system is related to the employers’ role as agent for employees. This move would lessen the incentive for employers to intervene in health care delivery, thus making this an individual responsibility. To the extent this happens, it might help create a more efficient system.  

Moderator: What about another cost cutting alternative we’ve heard of: pharmaceutical discount cards. Do they really give you discounts, or are they just a scam?

RJB: They aren’t terribly effective in delivering real savings. I wouldn’t buy them. I would go to Sam’s Club instead.


AL: Some of the cards can be downloaded for free, and you save 20 percent at the pharmacy. They represent better deals than walking in and paying retail. Why wouldn’t you get one? It doesn’t mean it is a great deal, but it’s still some savings for consumers.


BMS: It is better than nothing. It offers some value, but it’s not a good deal for most.

Moderator: Some employers are using draconian measures to manage healthcare costs, including firing employees who smoke or requiring them to lose weight. Have any of these enforced-lifestyle requirements ever worked to actually cut costs?

: When I was senior medical director of U.S. Healthcare, we used to run a program to pay people to go to the gym. We ended up having higher medical costs from injuries. If you were to take a pocket of the employee population that is obese, offer them these incentives, then observe them, you’d find it doesn’t save money from the employers perspective because the pay off is many years down the road. At age 42, working out and dieting means no heart attack when you reach your 60s. This is a broad, long-term strategy, but don’t expect short-term results.


RJB: Behavioral change in employees is a complex issue that requires a rigorous approach to be effective. The measures you sight may achieve small gains, but larger scale behavior change requires a more comprehensive set of interventions. This point notwithstanding, I admire the courage required to take drastic actions, because the status quo is simply not sustainable.


RR: It amazes me that employers keep chasing their tails. Plans such as these are not what the government expects when allowing employers tax breaks for health care saving.


BMS: These measures have several problems. Number one: You can’t operate in a vacuum. Number two: There is no one size fits all answer. Such measures can affect morale and publicity. But the door has opened to pull in programs for incentives/disincentives and to help employees understand how bad behavior of others affects everyone’s costs.

Moderator: Some employers complain that the reason costs keep going up is lack of comparative pricing information for doctors and services. Unlike hotel customers who can see a room rate chart, health consumers can’t always know what their costs will be. Is better price transparency, like California’s new law requiring that hospitals disclose prices for goods and services, a potential solution to the cost conundrum?

RJB: Yes.


AL: It doesn’t matter. It is a different issue, psychologically, when someone is sick.


RR: Yes.


BMS: Yes. I think people are going to look for more transparency, although, of course, during emergencies all bets are off. But this is not unique to healthcare.

Moderator: If you had to list one big idea that employers could take back with them after this session to manage their healthcare costs, what would it be?

BMS: There is no linear thinking or straight forward solution. Changing the culture of the organization, communicating to executives on how healthcare affects business costs–there is not one straight line to the end. There are continuums of change that will take time to execute.


RR: Encourage your employees to understand that they are part of the problem and part of the solution; otherwise they will not embrace any changes you implement. You need to engage employees in solving the problem.


AL: Instead of trying to tell employees what we want them to do, we need to ask them what they need to be a better health care consumer.


RJB: In the next 24 months, implement a high-deductible health plan for your entire population, deploy consumerism in a holistic and integrated fashion, and attack healthcare in the same way employers attacked workers compensation and safety issues in the 1990s.


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Drivers for WLM Solutions

How workforce realignment forces strategic thinking in HR organizations.

by Phil Fersht, Jason Corsello

The massive workforce expansion of the 90s has dramatically reversed with the combined forces of economic recession and global outsourcing. HR leaders are challenged to ensure that the workforce delivers on the corporate business strategy. At the same time, the dynamic economic environment is constantly forcing organizations to reshape the workforce. Many organizations that have traditionally focused on driving down costs by automating or outsourcing non-strategic, transaction processes are now looking at new approaches to create a flexible, sustainable workforce. Workforce lifecycle management (WLM) solutions are being deployed to extend internal mobility, improve the quality and timeliness of new hires, and increase the performance of the workforce.



With workforce reductions in place, leading organizations are creating a performance-driven culture based on measurable results that are aligned with corporate goals. The aggressive recruitment of high-performing talent will intensify, making competition tough for organizations that dont excel in WLM. Key areas of interest for performance- driven organizations include pay-for-performance programs and succession planning initiatives that accelerate the performance and growth of employees. Organizations are migrating HR BPO vendors in pursuit of cost reduction and to enable HR to think more strategically about their human capital. Recent case studies show that high-performance organizations consistently outsource administrative HR functions. Organizations of all sizes have adopted global outsourcing strategies to maintain initiatives in cost reduction and margin improvement. Self-service is a key enabler driving WLM adoption. As workforce mobility increases, organizations are empowering employees to be more self-sufficient. Using employee selfservice applications has lessened dependency on HR to provide administrative support. Self-service applications provide a single destination for all HR issues, consequently increasing the use of WLM solutions. In addition, self-service applications enable employees and managers to track career development and progress, further enhancing the performance of the organization. As M&A activity continues to pick up, organizations continue to implement processes that accelerate integration. WLM solutions can help organizations define their internal hierarchy, making it easier to analyze workforce requirements. WLM solutions can also enable integration by quickly identifying the right candidates for the merged entity. In addition, WLM can rapidly eliminate redundancy in the workforce and create a more cohesive and progressive organization.




Understand your organizations key performance indicators (KPIs).

Organizations must understand the key attributes that drive their financial success and link those drivers with their WLM strategy. For example, highturnover organizations should define a strategy for talent management and improving workforce quality. Lowturnover organizations should center on performance management and improving employee development, pay-for-performance, and succession planning.


Assign an executive sponsor.

A vision for human capital that is sponsored from the highest levels within an organization is key to transformation and leading strategic initiatives. Take inventory of past technology investments in workforce and learning management and identify the future strategic fit toward a closely aligned, integrated approach. Build integrated WLM capabilities incrementally.


Combine your WLM strategy with your HR BPO strategy.

If your organization is currently considering HR BPO or is an early adopter, this is an opportunity to establish a WLM solution with minimal or no additional cash investment. Todays leading providers offer WLM functionality within their platforms. Some are building their own proprietary tools, whereas others are offering best-ofbreed solutions integrated with their own platform. Ensure the BPO supplier can establish an effective program that provides you with the tools and support you need to manage these solutions.


Get started.

Adopting a WLM solution will not cure bad internal processes. Start by getting executive sponsorship that will spearhead the transformation process. Then begin due diligence immediately. Best-practice methodologies from HR service providers must be combined with technology and business transformation expertise. A WLM strategy should consider where an organization would like to be in several years. Although the integrated WLM approach is still in the development stage, it provides a great opportunity to create a leadership position for workforce excellence. [HRO]   

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An Outsourcing Insiders View of HRO World

We are all learning as we grow.

by Matt DeLuca

Jay Whitehead did it again at this years HRO World Conference. Always ready to push the edge, he boldly reminded all within earshot of the late Pope John Paul IIs message do not be afraid and fondly attached it to a major need for those of us in the HRO spacelearning. Learning is especially important at a time when we are constantly seeking new ways to be effective, while constantly delving further into outsourcing.

Ironically, Jays bold reminder was just before Susan Olivers presentation. She is Senior Vice President of Human Resources at Wal-Mart. Intrigued by her prepared keynote presentation that not even once included the O word, I first wondered about her abilities and those of the leadership at Wal-Mart. From Olivers speech, it is clear that she represents a model that Wal-Mart wants for HR that recalls the traditional line/staff support approach. While this seems the antithesis of the direction that most companies are moving, it is their company and they do employ 1 percent of the total U.S. workforce, so they must be doing something right. However, the success must be coming from other areas, as I am hard pressed to see where it is coming from their proposed HR model.

Taking a completely opposite approach, another attendee at HRO World and head of HR for another big retailer was Randy Ross, SVP Human Resources from Best Buy. Entering the Best Buy suite was an otherworldly event. People were buzzing and Randy greeted everyone who caught his eye. It seemed he was going to explode with ideas and excitement if the session did not immediately commence. And what a session it was!

Here is the future of HR. Ross is a bright strategic thinker with a strong action orientation. He quickly took charge of the session while sharing the podium with COO Diane Shelgren from Accenture HR Services. She had been the senior person responsible for the completion of the outsourcing agreement. It was clear that Best Buy and Accenture are still learning after a full year of implementation already behind them. Both Randy and Diane were articulate and extremely informative. They challenged the audience to ask demanding questions and they were quick with brief and insightful responses. This is the model that offers a glimpse of the future of HR outsourcing one that includes the challenges that need to be addressed and the rewards to follow.

If these two events werent memorable enough, on Wednesday, along came Andy Stern, head of the largest U.S. union, SEIU, with a rousing keynote that was thought provoking for a variety of reasons. In case you are wondering, he did mention the O wordin fact, he mentioned it many, many times. He is the one who has challenged the second generation leadership of the AFL-CIO to think as they have never thought before, and he is the one who continues to encourage them to expand and threatened them with the possibility of a walkout by the SEIU. To think he agreed to attend the conference and to do so after appearing on the cover of HRO Today magazine led to heightened expectations from those who rose early to hear his address in person. His suggestion that employers consider outsourcing to unions is certainly a radical way of thinking and even worth considering, until one realizes that a major systemic problem facing the unions continues to be redundancies within their own ranks. The problem starts with the traditional and current union model that has always considered the basic organization to be the union local with its benefits and training functions. Union locals are basically small businesses that refuse to consolidate themselves in the interest of eliminating redundancies and gaining expertise that, in fact, HR outsourcers provide. As bright as Andy Stern is, he has yet to recognize what HRO could provide to his organization.

How to sum up this barrage of messages gleaned from HRO World 2005? Do not be afraid to learnespecially when the experts themselves are still seeking the appropriate, relevant, and effective answers.

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ADP TotalSource Introduces Health Savings Accounts Through JPMorgan Chase

HSAs Help Business Owners and Their Employees Control Health Care CostsMIAMI–(BUSINESS WIRE)–May 31, 2005–ADP TotalSource, Inc., oneof the nation’s largest Professional Employer Organizations (PEOs),and part of the Employer Services division of ADP, Inc., todayannounced it is expanding its benefits program to offer health plansthat are compatible with health savings accounts (HSAs). EffectiveJune 1, 2005, clients may select HSA-compatible high deductible healthplans (HDHPs) as part of the comprehensive suite of health benefitsoffered by ADP TotalSource, Inc. Clients who elect an HDHP through ADPTotalSource, Inc. will make their worksite employees eligible toestablish Health Savings Accounts (HSAs) through JPMorgan Chase BankN.A., a leading provider of HSAs.

HSAs, which were authorized by the Medicare Prescription Drug,Improvement and Modernization Act of 2003, are portable health savingsaccounts that individuals can use to pay for qualified medicalexpenses.

“With health care costs far outpacing wage growth during the pastseveral years, employers large and small are challenged to provideaffordable coverage,” said Carlos Rodriguez, ADP TotalSource’sdivision president. “We’re regularly evaluating benefits that we canoffer to our clients to help them attract and retain the bestemployees. The availability of HSA-compatible HDHPs means thatemployees will be eligible to establish HSAs, and this will provideour clients and worksite employees with a means for reducing theoverall cost of health insurance while encouraging employees to besmarter health care consumers. To help our clients decide whether theHDHP/HSA option is right for their business, we offer access toexpertise from our human resources representatives and a variety ofself-service decision support tools, including cost calculators,educational Web casts and plan comparison tools.”

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Human Capital Institute and MENTTIUM Corporation Announce Agreement

Washington D.C. – May 26, 2005 – The Human Capital Institute (HCI), a non-profit think tank, association, and educator in talent management strategies, and MENTTIUM Corporation, the global leader in corporate mentoring, announced today that MENTTIUM will sponsor HCI’s Mentorship Strategies learning and research track.

“This alliance is the first step to building a panel of thought leaders for this key track within HCI’s Talent Development community,” said Allan Schweyer, HCI’s Executive Director, “Mentorship, while not a new concept, is becoming a talent management strategy for which organizations are seeking new approaches and technologies

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Weichert Relocation Strengthens Market Position With New Client Signings & HRO Partnerships

MORRIS PLAINS, N.J. – Building upon a record sales year in 2004,Weichert Relocation Resources Inc. continues to expand its clientroster, adding some of the world’s most recognized and respectedcompanies.

Recent client signings include such leading corporations as Ahold USA;U.S. Foodservice; Temple-Inland Inc.; Foot Locker, Inc.; RR Donnelley;Computer Associates; and The Wrigley Company.
The company has also bolstered its foothold in the Human ResourcesOutsourcing market by virtue of being selected as the primaryrelocation partner for the HR Services division of Accenture, one ofthe world’s leading management consulting and outsourcing companies.Through this partnership, Weichert Relocation Resources will serve asthe preferred relocation and assignment management supplier forAccenture HR Services’ clients.  

“Our recent successes can be attributed to strengths that distinguishWeichert Relocation Resources in the marketplace,” said Aram Minnetian,President. “These include our flexibility, financial management acumen,custom reporting capabilities, in-house policy and tax consultingexpertise, assignment management solutions and, perhaps mostimportantly, our personalized approach to customer service.”

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