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October 2011

10 REASONS TO ENCOURAGE FITNESS IN THE WORKPLACE

By Employment Resources

Every employer knows that the most important assets to any company are its employees. The ultimate goal employers want from employees is to reach maximum productivity levels. To accomplish this, employees need to be at their best. Promoting fitness is one of the most beneficial choices any employer can make to encourage their workers to reach their full potential. Exercise supports an optimal weight, better overall health and has many other benefits. Consider the following important reasons for promoting employee fitness:

1. Fit employees are less likely to use sick days. When employees use fewer sick days, they contribute more to overall productivity. They also reduce the hassle of trying to find replacements at the last minute. Employees who exercise are much less likely to get sick than those who don’t exercise. Fit employees are also less likely to take an extended leave of absence, require surgery or quit because of health reasons.

2. Employees who are fit are more confident. Exercise gives employees the feeling that they’re doing what they’re supposed to be doing. This creates a sense of confidence, which allows them to set higher goals and strive for excellence. Since they don’t settle for less than meeting their goals, they are very successful.

3. Exercise gives employees more energy. Although many people think exercising drains energy levels, it actually creates more energy. Exercise promotes better circulation, which allows ample amounts of blood to reach the brain consistently. This makes employees more focused and alert.

4. Exercise encourages goal achievement. Fitness programs demand commitment and goal setting. Since employees are familiar with these important tasks, they’ll also carry them into the workplace. Employees who can achieve goals consistently are an asset to any company.

5. Employees who are fit make good leaders. Since they’re disciplined by nature, fit employees tend to do well at leading others. Their confidence is high, and they tend to use that to help direct others. They’re usually the first ones to jump in with a solution to a problem. Every employer knows that having a problem solver is an asset.

6. Exercise contributes to a better attitude. When people exercise, the chemical changes in their body create a better mood. People who are in a good mood make excellent employees because they are more balanced mentally.

7. Employees who exercise inspire confidence in others. Fellow employees are likely to look up to an employee who is fit. The fit employee’s discipline to follow an exercise program gives other employees the sense that they’ll always have someone to provide solutions to problems. Fit employees are also more likely to speak up when something isn’t right. If there are problems with other employees, a system or equipment, they’re not too timid to confront their supervisors.

8. Encouraging exercise is a good way to promote teamwork. Planning employee softball games, hikes or other activities is a good way to encourage fitness. However, these examples also promote teamwork. When employees can learn to work as a team outside of work, they’ll have an easier time working together as a team during business hours.

9. Fitness reduces employees’ stress levels. Exercise has the phenomenal ability to lessen the amount of stress felt from physical and emotional tensions in life. Employees who aren’t stressed are more focused, positive and happy. Their clear minds allow them to focus on work, which means they contribute to a much higher level of productivity.

10. Encouraging employee fitness shows that employers care. Many employees feel that their employers don’t appreciate them or their contributions. Employee turnover is reduced in work settings where employers show genuine concern for employees. Providing free gym memberships, employee sports leagues or other enjoyable fitness opportunities is an excellent way to say “I care about you.”

HRAs AND HSAs: WHICH IS RIGHT FOR YOUR COMPANY?

By Employment Resources

Health reimbursement arrangements (HRAs) and health savings accounts (HSAs) share important characteristics: Both allow for tax-free reimbursement of medical expenses and both can encourage employees to have more awareness of how they’re spending their health care dollars, and thus develop more conscious health care consumerism. However, HRAs and HSAs differ in a number of important ways. Therefore, if you are considering adding some type of health care account to your health benefits program, you should exercise care and be sure to understand the ins and outs of both types of accounts, so as to choose the one that is a better fit for your company, as well as your employees.

The following are some of the points that distinguish HRAs from HSAs:

Funding. Only the employer contributes to an HRA (the HRA is a notional account, with contributions made to cover claims as they are incurred). The employer, the employee, or both contribute to an HSA, which is set up as a trust or custodial account. Contributions to both HRAs and HSAs are tax-advantaged (as a deductible business expense for the employer, or made on a pretax basis by the employee; and employer contributions are not taxable to the employee).

Design requirements and flexibility. HSAs must be offered in conjunction with a high-deductible health plan, and are subject to annual account limits and limits on annual out-of-pocket expenses. HRAs do not have these requirements. Other than preventive care, an HSA will cover expenses according to the accompanying high-deductible health plan’s deductible and copay requirements. In contrast, the employer can design coverage features in the HRA as it chooses and, for example, provide first-dollar coverage for selected benefits (or providers).

Unspent money and portability. An HSA is an account owned by the employee. As such, unused amounts stay in the account year to year, with no limit on accumulations, and the account goes with the employee when leaving the company. With an HRA, the employer will determine by plan design whether unused funds roll over from year to year, and whether employees will receive any remaining account balances upon termination (and, generally, they do not).

So which type of fund makes the most sense for your company? Consider what you are trying to accomplish through the account. Both HRAs and HSAs can encourage conscientious health care spending. However, because unused funds carry over year to year, stay with employees when they leave your employment, and may involve the employee’s own money – all factors which generate a feeling of having a greater stake in the money – HSAs are likely to make employees most conscious of their health care spending. The selling point for many employers that choose an HRA is flexibility, in design and in funding. An employer can link an HRA to a health plan of its choosing-and not just a high-deductible health plan-and tinker with HRA design to encourage/discourage use of certain services or providers. Furthermore, an HRA can be easier on a company’s cash flow, since regular contributions are not required and claims are reimbursed as they are incurred.

Both an HRA and an HSA can add a new dimension to your health plan program, in addition to creating the prospect of saving money on your company’s health plan costs. Carefully consider what you are trying to accomplish through the account, and how it fits in with your health benefits and overall benefits program. Regardless of which approach you take, it’s likely to be a new way to look at health care for your employees, so be sure to use comprehensive communications when implementing any changes.

DESIGN AND COMMUNICATE YOUR 401(K) PLAN TO ENCOURAGE EMPLOYEES’ RETIREMENT SAVINGS

By Employment Resources

Workplace-based retirement savings plans, such as 401(k) plans, play a crucial role in ensuring retirement income security for U.S. workers. These plans have risen in prominence, as traditional pension plans now cover a shrinking number of workers, and as the future of Social Security continues to be questioned. But as they say with the Lottery, “You gotta play to win,” and a 401(k) plan isn’t worth much unless workers enroll and contribute. 401(k) plan features, design and communications can make or break the success of a plan, so if your company’s employees aren’t flocking to the plan as you expected them to, it might be time to consider where improvements could be made.

Automatic Enrollment. Almost unheard of as recently as a decade ago, this plan feature quickly has become recognized as one of the most effective ways to have an immediate, positive impact on plan participation. According to a report from the SPARK Institute (a coalition of retirement plan service providers and investment managers), the national average participation rate in 401(k) plans increased from an estimated 75% to between 85% and 95% when automatic enrollment was used. Among workers with incomes of less than $30,000, the increase was more dramatic – 44% to 80% – as it was among younger workers (age 25-34) – 56% to 86%.

A survey from Aon Hewitt indicates employers are well aware of the foregoing statistics, with 57% of plans using automatic enrollment in 2010 (up from 24% in 2006), and 36% of the remaining plans expecting to add it for 2011. Related plan features like automatic escalation and automatic rebalancing also are gaining prominence among plan sponsors: 47% of surveyed employers automatically increase participant contributions (up from 17% in 2006), and 26% of the remaining employers were likely to add it in 2011; 49% use automatic rebalancing, with one-third of the rest expecting to add it for 2011.

Employer Match. Traditionally, an employer match has been considered one of the most effective ways to boost plan participation. Research from Watson Wyatt examined the effect of the match rate (the percentage of the first dollar of an employee’s pay that the employer matches). Increasing the match rate from 25% to 50% increases average participation by roughly eight percentage points, according to the research. Employees are 15% more likely to participate in a plan with a 75% match than in a plan with a 25% match. If an employer offers a 100% match, employees are almost 20 percentage points more likely to participate

Other research from the Bureau of Labor Statistics shows that among lowest income workers, an employer match had little effect on plan participation, but among middle-income workers a match had effects that might be greater than the effects of automatic enrollment.

Financial Education Programs. Richer education programs can raise participation rates to an estimated 84%, compared with 62% in firms with very basic plan communications, according to the Watson Wyatt research. “Rich” education programs encompass comprehensive financial education, retirement projections, and the availability of Web-based planning tools. The research indicated that financial education had significant effects on all workers, but particularly on those at low earnings levels.

Appropriate Investment Choices. Although providing too many investment options can be overwhelming for participants, providing too few can give employees a reason to invest their money elsewhere. Increasingly, plans are offering help to employees to pick the funds that are right for them. Aon Hewitt found that 56% of the employers it surveyed included online investment guidance in their plans, and 83% offered target-date funds.

  • The Best of the Rest. Other plan design features might not be documented by research to increase employee interest in the plan, but common sense indicates they should reduce barriers to enrollment. By eliminating, or at least shortening, the waiting period to enter the plan, you showcase the benefits of plan participation during orientation meetings (and use the excitement of being a new employee to encourage enrollment). By providing loan and hardship withdrawal options, you negate the concern of reluctant employees that they won’t be able to get to their money in an emergency.
  • Many opportunities are available to employers interested in creating more employee interest in the company 401(k) plan. Look at design and communications options, and try those that seem to be a good fit for your workforce, and for the goals you have for the plan.

SAFETY INCENTIVES: PLAYING GAMES

By Risk Management Bulletin

A debate over the value of incentive programs has split the workplace safety community. Advocates say that using some type of “carrot” that encourages employees to choose safe behaviors over unsafe ones can help them stay focused on avoiding hazards – an awareness that contributes to long-term behavior change and fewer accidents. Opponents argue that these programs offer a poor substitute for good safety management and only encourage employees to underreport injuries.

Seth Marshall is president of Safety Pays, a company he founded in the 1990s targeting employees who found safety messages dry, and those who already considered themselves safe workers. Marshall took an off-the-shelf bingo game and kicked it up several notches to entertain workers and keep them engaged while communicating essential safety messages and best practices, integrating safety into daily consciousness, and making employees feel a sense of ownership over what occurs in the workplace.

The mechanics of the Safety Pays game are relatively simple. The bingo-style game usually has a relatively small number of people – a work group, team, or division. At the start of a round, every player receives a bingo card with a safety message, and one number is called per day. The jackpot is set at $25 at the beginning of each new game. The prize increases by $1 a day until there’s a winner. At that point, the next game starts, with the jackpot in the amount at which the last game ended. The prize increases up to a limit preset by management. However, if job-safety incident (as defined by the company using the game) occurs, the jackpot reverts to $25.

“What’s going on here,” Marshall explains, “is that every day there’s a reason to think about safety because employees know they’ll be going to the bingo board.” The board not only reveals the day’s number, but also is located near an attractive display that features safety advisories on selected topics and other information.

Safety Pays is working well, according to Marshall. The approximately 10,000 companies that have used the game have seen workplace safety loss reductions of 50%, according to such metrics as injuries, dollars, and claims frequency.

As for the criticism that safety incentive programs encourage employees to “bury” incidents, Marshall says he’s never seen it in the businesses he serves, in part because the system guards against the practice. When employees sign in for a new card, they also sign a statement that says they have not experienced an incident during the previous game round.

TEN WAYS TO REDUCE EMPLOYEE STRESS

By Risk Management Bulletin

Worker stress levels have increased within the past few years as the economic downturn has led to layoffs, heavier workloads, a higher percentage of workers taking second jobs to make ends meet, and declining household incomes, due to family members’ lost wages.

In a recent “Stress in the Workplace” survey by Buck Consultants (www.buckconsultants.com), more than four in five participants (82%) reported that employee stress has a significant or moderate impact on their company’s healthcare costs. A large majority of respondents also said that stress has had a significant or moderate impact on absenteeism (79%) and on workplace safety (77%).

In response to rising employee stress levels, many employers are taking steps to help their workers manage stress. According to the Buck Consultants survey, 66% of participants have implemented four or more programs to reduce on-the-job stress, while 22% have at least eight programs in place.

The survey listed these Top 10 stress-reduction strategies:

  1. Employee assistance programs (78%)
  2. Flexible work schedules (63%)
  3. Work/life balance support programs (46%)
  4. Leadership training on worker stress (45%)
  5. Online healthy lifestyle programs (45%)
  6. On-site fitness centers (43%)
  7. Physical activity programs (38%)
  8. Stress awareness campaigns (35%)
  9. Financial management classes (32%)
  10. Personal health/lifestyle management coaching (29%)

The more effective these programs, the lower the stress on your workers – which adds up to higher productivity and a healthier return on investment.

SIGN UP FOR SAFETY

By Risk Management Bulletin

They might not be exciting or high tech, but safety signs in the workplace can be worth their weight in gold! Says a recent article on businessknowledgesource.com: “The importance of workplace safety signs can’t be stressed enough. [If properly designed and used], “signs can overcome a number of losses due to language barriers, reading abilities, and insufficient work experience. Wherever there’s need for general instruction, there should be a safety sign to help avoid potential injury.”

Of course, even the best signs won’t help if poorly designed or improperly used. Although OSHA uses ANSI standards to specify the design of such common signs as EXIT or CAUTION, there’s no way to regulate how every sign will be made and used.

An effective safety signage program should meet these standards:

  • Visibility. It sounds basic, but signs can’t do any good if people can’t see them. There are plenty of reasons they might not be able to. Check your break room bulletin board. Is one sign plastered over others? Are the signs so old they’re now the color of the Declaration of Independence? Are they hidden in corners or in hard-to-reach places on the equipment they’re designed to explain? To enhance visibility, especially from a distance, choose such contrasting color choices as yellow on black and put borders around every sign.
  • Noticeability. Qualities that make a sign stand out include shape and color – most people recognize a “stop” or “yield” sign without even reading it. Perpendicular signs are among the most noticeable, which is one reason that stores use them to stand out in a streetscape, and why they can help identify areas of special hazard.
  • Legibility. One reason it’s hard to read government regulations as published in the Federal Register is the size and grayness of the type. In the same way, type size can make important safety signs stand out more, as does spacing between words and individual letters. Printing a sign’s message in a second color improves retention of the message by 82%.
  • Durability. Signs need to survive the environment in which they’re placed. High heat, humidity, or corrosives can wilt or stain a sign beyond recognition. Don’t use cardboard when sheet metal is required.

Even if your signs meet all these criteria, OSHA still requires you to post and maintain them properly. This leads to the classic compliance issue of how to make sure that workers are observing all regulations when you can’t be everywhere at once to check.