Human resources.

• Position: Industry Outlook - Discussion

Human resources professionals bring more to the table than hiring and firing, often serving as strategic partners with the C-suite. Our group of industry insiders discuss a range of HR issues, including the Affordable Care Act, immigration and E-Verify compliance, and the pros and cons of social media in the workplace.

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We'd like to give a special thank you to David Cherrington, professor of organizational behavior at Brigham Young University, for moderating the discussion.

PARTICIPANTS:

Back Row:

Jeff Herring, University of Utah

Will Powley, Nelson Labs

Dusty Fenwick, KLAS Enterprises

Roger Tsai, Holland & Hart

Brian Lee, Performance Progression

David Cherrington, BYU

Front Row: Bryan Inkley, ProPay

Ann Thomas, Mercer

Debbie Cragun

State of Utah, DHRM

Sharron Ngatikaura, Employer Solutions Group

Michael Dash, Parallel HR Solutions

Janeen Bullock, Connect Marketing

Taylor Cotterell, MRI

Seated:

Leslie Hackett, Express Employment Professionals

Cammie Cable, CLEARLINK

Sharon Roux, The Summit Group

Erika Atwood, The Presidio Group

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What do you see happening with respect to the new healthcare law?

CRAGUN: At the state level, a challenge we have is we're above market on benefits, but way below market on salary. We're struggling to figure out how to balance that, because the newer generation isn't that interested in benefits right out of the gate. Right out of college when they get their first job, they want money. We're not able to attract that segment in the workforce right now. It's easy to say, "Well, then, cut benefits and get it back in pay," but our long-term employees are staying because of the benefits. So we have that balance that we're struggling to figure out.

Someday, we're going to need a comp and benefit structure that is more flexible, that offers more choices for the diverging groups.

THOMAS: I met with a senior leadership board the other day. When we did the numbers and they realized that just the fees alone are going to cause a 10 percent increase to their employees' portion of the costs of health plans, they said, "We can't afford this. The company can't afford it. The employees can't afford it."

In this particular instance, the employees are going to be looking at a 30 percent increase. That's not affordable for either side. In the boardrooms that I'm sitting in, they're talking about how do we take something that's really bad that we can't afford and say, "OK. In 10 years, maybe we're out of the benefits game."

Now what do we do? Let's talk about whether health is the underlying issue--not healthcare, not the benefits--but the underlying health as part of your culture. Do you care? Do you change your culture and make your benefits much more flexible?

In the 401(k) world, a new employee has very different investment patterns than people who are going to retire in five years. Well, new employees have very different health needs than people who are retiring in five years. They have different money pressures. So it's really taking this whole health and healthcare issue and reframing the discussion away from, "How much am I going to increase my benefits this year and what's it going to do to our bottom line?" to, "How much can I afford to attract and retain those employees? What do I put into that bucket? How do I structure the deal?"

Does everybody's deal have to be, "Here's your salary, here's your two weeks" time off, and here's your medical plan," or is it a different discussion? We've got this much money. How much do you want in salary, how much do you want in time off, and how much do you want in benefits?

LEE: One of the problems is the whole definition of risk sharing, which is fundamentally what insurance is all about, has changed. Nobody really knows for sure what that looks like now. It used to be that when somebody has a good year, somebody else is having a bad year. Well, now if they're having a good year, you're going to have to return some of that. So how does the risk get shared in this new environment? The insurance companies have already taken their cut. They did that a couple years ago when this was implemented. They started raising premiums.

The small businesses that I deal with are confused about where this is going. They know the costs are going up, they just don't know how far and how fast and what to do about it.

HERRING: It is a true paradigm shift of the healthcare system. I don't know that we know the long-term outcome in terms of access or cost. We know costs will go up immediately. But I don't know long term, because someone is subsidizing the emergency care. So it is fundamentally a different method of delivering healthcare. Right now, all it is addressing is access for insurance. Whether that's good or bad, it's a real paradigm shift.

ROUX: We are all a little bit unsure. Nobody quite knows exactly what it will look like. Things get pushed off, you've got to get extra guidance on everything; so how do you communicate that to your people?

Ultimately it's about the healthcare that our people get, so how do we adequately explain and give them the tools and knowledge to take more control? Because they're going to have to participate and have more control over their choices, deciding which plans are right for them, that kind of thing. It's a real communication challenge to give people timely and accurate information. They're more confused than we all are, so we're going to have to develop good communication plans.

POWLEY: One of the things that we're facing is that we're a self-funded program. Our claims are up year over year. Our benefits plan is above market. The ratio of what the company pays is quite a bit more than what I've been used to seeing.

But this is the time of year where we're looking at new plans for next year. And we're looking at wellness programs they've never had, so it's a discount off the premiums. We haven't had an HSA option. That's something we're going to be adding. That will be a huge communication piece for employees. We're one of the world's leading microbiology laboratory testing companies, and our workforce is young. A lot of them aren't thinking about some of these future things, particularly around their healthcare.

HERRING: Since we have a medical institution and a health plan, we're looking at bringing that more internal to where we can control some of the parameters through all aspects of the health system. So we'll have some micro-changes with the access and the 26 eligibility, all those type of issues. We're large enough and set up enough that we can try and manage those internally through the entire system of the healthcare provider, the doctors, the employers.

COTTERELL: The confusion among employees is still there, and there's a lot of uncertainty. As the dust is settling, a lot of the fringe benefits that maybe haven't been considered important are going to become more important. People value their time, so they want to be able to earn the right to take half of Friday off They want to have the opportunity to earn X percent more paid time off per year. So some of the other fringe benefits, from bringing in a masseuse on a Friday afternoon to breakfast on Thursdays and small things like that, are going to become more valuable, especially as the playing field gets more level among the benefits from company to company.

CRAGUN: In government, especially at the state level, you can only be so creative, because we have the misperceptions that we also have to deal with. A lot of things that we know as HR people might be really good attraction and retention tools. The decision-makers at the legislative level see those as perks and the citizens often ask "Why should state employees get those things?"

We continue to retire people faster than the private sector. Our retirements this year went up 25 percent from the year before, and so we are losing people. We're not attracting new people. We can only get so creative before we start getting pushed back.

INKLEY: You mentioned healthcare savings and high-deductible healthcare. We had an HSA at ProPay three years ago, and we helped fund that. When we got acquired, our benefits were incorporated into this new company. They don't have an HSA. More than half of our staff were benefits eligible on the HSA, and they really liked it. Having the option taken away was a huge dissatisfier to our employees.

Also, we had been on SelectHealth, and now we're on a predominantly East Coast plan, and it's not a very good plan in Utah. The company that purchased us didn't really understand how integrated SelectHealth is in the state. I've spent the last six months dealing primarily with disgruntled spouses when they're at the doctor's office. They're calling me saying, "What have you done? I can't even take my kid to my pediatrician."

Changing benefits is huge--I didn't realize how big of an HR nightmare it was going to be, and I only have 68 bodies that are insured in our facility. But I spend the majority of my time dealing with that at the moment.

ATWOOD: One of the factors that I've seen, working with such a...