Workforce - Winter 2020

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Winter 2020

WORKPLACE PRESCRIPTIONS Curing what ails employees

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From Our Editors

FROM PERSONNEL TO WORKFORCE

I’ve been around long enough to remember when the 2020 workplace was a far-off scenario.

It was a distant time when millennials took over as a majority and retiring boomers added extra fuel to a raging war for talent.

Telecommuting would become the default work mode and the “Wikinomics” of mass collaboration would bring us into a brave new world.

So here we are. Many things are indeed new and some are much the same.

The reality is we are bad at predicting the future.

Take the case of artificial intelligence.According to one study, the current consensus forecast for AI to outperform humans is 20 years.That same prediction was made in 1955.

But that doesn’t mean HR can sit tight. Smart HR pros constantly evolve their practice so that when it comes to 2030, the distant future isn’t so far off after all.

— Mike Prokopeak, Editor in Chief 4

Workƒorce | w o r k f o r c e . c o m

The workplace has changed a lot since 1922. That year The Journal of Personnel Research debuted, rebranded later as Personnel Journal and finally Workforce. Now in our 98th year, we take a look back at what was on the minds of past generations of people managers.

Treating Employees as Humans, DECEMBER 1956 “Is personnel’s power diminishing?” asked a 1956 issue of Personnel Journal.“Too many personnel officers have become yes men to executives who persist in putting human values at no better than second place,” wrote author Thomas G. Spates, professor emeritus of personnel administration at Yale.

Spates argued that the U.S. needed to focus on one of its unique competitive advantages: the freedom, liberty and equality upon which the nation was founded; the personnel department could put the focus back on treating people as individual human beings.

This issue also included arguments for and against part-time work. On the “for” side, author Dorothy Bonnell argued that using students as part-time workers was a good recruiting tool and that part-time workers helped take care of seasonal workloads. On the “against” side, she argued that hiring part-time workers meant too much extra record-keeping, supervision and training.

One solution Bonnell suggested was keeping in contact with ex-employees, especially,“women who left good jobs to be married.”These women, she wrote, could “return again when the domestic situation permitted part-time work. — This is sooner than you think!” 1950s sexism aside, there’s something to be said about taking advantage of your potential backlog of qualified candidates/former employees who did not leave for contentious reasons.

— Andie Burjek

Back When the Internet Was Fresh Faced, DECEMBER 1999 Remember back in the late ’90s when it seemed like all things were possible on the internet? The dot-com boom was in its heyday, and it was the go-go days of build a website with no viable business plan and watch the VC money pour in. Indeed, 1999 was brimming with a sort of innocent optimism before trolls and cyber-attacks and foreign bots jaded us all to the realities of “the new Wild West.”

In Workforce’s final issue of the millennium, readers got a glimpse of the internet’s future with the cover story “Employeechat.com — Bashing HR on the Web.” As writer Shari Caudron noted, company message boards and sites changed the game.

“Anybody who’s ever had a job has discussed it with others.The difference now is that people complain, seek help and gain support in a much more public manner.”The sites also gave rise to a new form of damage control: online corporate reputation management.

In a somewhat related story, the burgeoning dot-com companies loved to dole out stock options as a form of compensation. Despite the pending dot-com crash, which turned many stock options into worthless sheets of paper, one interesting note was,“There’s Jeff Bezos of Amazon.com, whose wealth on paper is somewhere in the neighborhood of $10 billion — despite a 1998 salary of $81,840.”

— Rick Bell winter

2020

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Winter 2020 | Volume 99, Issue 1 PRESIDENT Tasmin Trezise tasmin@workforce.com VICE PRESIDENT, GROUP PUBLISHER Clifford Capone ccapone@workforce.com VICE PRESIDENT, EDITOR IN CHIEF Mike Prokopeak mikep@workforce.com EDITORIAL DIRECTOR Rick Bell rbell@workforce.com MANAGING EDITOR Ashley St. John

VICE PRESIDENT, RESEARCH AND ADVISORY SERVICES Sarah Kimmel skimmel@workforce.com

VICE PRESIDENT, MARKETING, NORTH AMERICA Greg Miller gmiller@workforce.com

RESEARCH MANAGER Tim Harnett tharnett@workforce.com

MARKETING SPECIALIST Kristen Britt kbritt@workforce.com

DATA SCIENTIST Grey Litaker glitaker@workforce.com

SALES DIRECTORS Ana Dirksen adirksen@workforce.com

VIDEO AND MULTIMEDIA PRODUCER Andrew Kennedy Lewis alewis@workforce.com

Daniella Weinberg dweinberg@workforce.com

MEDIA & PRODUCTION MANAGER Ashley Flora aflora@workforce.com

CONTRIBUTING WRITERS Jennifer Benz Carol Brzozowski Kris Dunn Mark Feffer Sarah Fister Gale Jon Hyman Patty Kujawa Francesca Mathewes Jennifer Mora Rita Pyrillis Daniel Saeedi Rachel L. Schaller

TECHNICAL OPERATIONS MANAGER Skyler Gold sgold@workforce.com

DIGITAL & AUDIENCE INSIGHTS DIRECTOR Lauren Wilbur VP OF BUSINESS ASSOCIATE EDITORS DEVELOPMENT FOR EVENTS lwilbur@workforce.com Andie Burjek Kevin Fields DIGITAL COORDINATOR aburjek@workforce.com kfields@workforce.com Steven Diemand Elizabeth Loutfi sdiemand@workforce.com EVENTS MANAGER eloutfi@CLOmedia.com Malaz Elsheikh AUDIENCE INSIGHTS melsheikh@workforce.com ASSISTANT MANAGING COORDINATOR EDITOR Micaela Martinez WEBCAST MANAGER mmartinez@workforce.com Alec O’Dell Christopher Magnus aodell@workforce.com cmagnus@workforce.com LIST MANAGER Mike Rovello EDITORIAL ART DIRECTOR EVENTS GRAPHIC hcmlistrentals@infogroup.com DESIGNER Theresa Stoodley Latonya Hampton BUSINESS tstoodley@workforce.com lhampton@workforce.com ADMINISTRATIVE EDITORIAL ASSOCIATES MANAGER BUSINESS MANAGER Yasmeen Qahwash Melanie Lee Vince Czarnowski mlee@workforce.com yqahwash@workforce.com vince@workforce.com astjohn@workforce.com

WORKFORCE EDITORIAL ADVISORY BOARD Arie Ball, Vice President, Sourcing and Talent Acquisition, Sodexo

PREVIOUSLY AIRED DEC 3

Futureproof Your Organization: Succession Planning in the Skills Economy

DEC 12

Empower a Career Journey: Foster Your Workforce’s Growth and Development

Angela Bailey, Associate Director and Chief Human Capital Officer, U.S. Office of Personnel Management Kris Dunn, Chief Human Resources Officer, Kinetix, and Founder, Fistful of Talent and HR Capitalist Curtis Gray, Senior Vice President, Human Resources and Administration, BAE Systems Jil Greene, Vice President, Human Resources and Community Relations, Harrah’s New Orleans Ted Hoff, Human Resources Vice President, Global Sales and Sales Incentives, IBM Tracy Kofski, Vice President, Compensation and Benefits, General Mills

Available live on the air date and on-demand for one year after unless otherwise specified. Check them out today and keep the education going!

Jon Hyman, Partner, Meyers, Roman, Friedberg & Lewis Jim McDermid, Vice President, Human Resources, Cardiac and Vascular Group, Medtronic

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Randall Moon, Vice President, International HR, Benefits and HRIS, Lowe’s Cos. Dan Satterthwaite, Head of Human Resources, DreamWorks Dave Ulrich, Professor, Ross School of Business, University of Michigan Workforce (ISSN 2331-2793) is published bi-monthly by Human Capital Media, 150 N. Michigan Ave., Suite 550, Chicago IL 60601. Periodicals postage paid at Chicago, IL and additional mailing offices. POSTMASTER: Send address changes to Workforce, P.O. Box 8712 Lowell, MA 01853. Subscriptions are free to qualified professionals within the US and Canada.

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CONTENTS

36

40 SECTOR REPORT 44 RECRUITING TECHNOLOGY SOFTWARE PROVIDERS

VCs continue to court the recruiting tech sector.

46 RECRUITMENT PROCESS

OUTSOURCING PROVIDERS

Research shows more companies are turning to RPOs sooner.

8

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FEATURES 24 THE WORKPLACE MEDICINE CABINET

36 PEOPLE AND POT

30 OFFICE DETOX

40 WHAT PBMs CAN DO

Employers are trying to find a prescription for all types of drug use at work.

A workplace cleansing is helping employers fight the opioid epidemic through some clever management ideas.

Being the chief people officer in the budding cannabis industry comes with unique challenges for Angie Demchenko.

Pharmacy benefit managers can be a key ally in helping employers manage employees’ drug use and abuse. winter

2020

ON THE COVER THE WORKPLACE MEDICINE CABINET

From booze and cigarettes to pot and microdosing LSD, employers are trying to find a prescription for managing all types of drug use at work.

XX

COVER ILLUSTRATION BY CHRISTINA CHUNG

ON THE WEB TRENDING

SPEAK UP!

The Workforce online community provides you with virtual meeting places to chat about issues and trends affecting you and your workplace.

10 REMOTE POSSIBILITIES

Communities cashing in on remote workers.

LIKE US: workforce.com/facebookpage

24

FOLLOW US: workforce.com/twitteraccount

JOIN THE GROUP: workforce.com/linkedingroup

11 PEOPLE MOVES AND

BY THE NUMBERS

Siemens USA, Hines Select; you’re engaged!

12 Q&A

Author Pamela Newkirk.

WATCH US: workforce.com/youtubechannel

FOR YOUR BENEFIT COLUMNS 4

YOUR FORCE

If Hindsight Is 2020 What Is Your Vision Now?

13 WORK IN PROGRESS

Leadership Skills: Inclusion and Empathy.

14 WHAT A WASTE

Employers struggle to cut wasteful health care spending.

15 AILING SOCIAL ILLS

How do social woes factor into the workplace.

17 BENEFITS BEAT

Benefits in the Modern Workplace.

20 THE PRACTICAL EMPLOYER

Talking About Do’s and Don’ts.

50 THE LAST WORD

A Notorious Workplace Warning.

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2020

12 A NEW TUNE

Symphony Talent Acquires SmashFly.

LEGAL 18 DAZED & CONFUSED

Evolving cannabis laws require a close eye and an open mind.

19 LEGAL BRIEFINGS

Noncompetes; cannabis concerns.

15 EMERGENCY!

CORRECTION

16 SMOKE BREAK

The November/December Legal story “6 States Now Mandate Sexual Harassment Prevention Training,” under the heading “California,” should have referenced the year 2021.

401(k) emergency withdrawals continue piling up.

Veteran’s Affairs ban on smoking comes under fire. w o r k f o r c e . c o m | Workƒorce

9

TRENDING

Communities Cashing in on the Value of Remote Workers The return on investment is felt through a boosted tax base and local spending on retail and housing.

By Carol Brzozowski

I

t’s no secret that remote workers can suffer from social isolation. Some parts of the United States are experiencing another sort of isolation — sluggish population growth and a weakened tax base.

The city of Tulsa, Oklahoma, took steps in 2018 to remedy both problems by launching Tulsa Remote, which offers remote workers a relocation incentive package of $10,000. Other regions including Vermont and Alabama are following suit.

Aaron Bolzle, executive director of Tulsa Remote, said the program builds upon an ongoing effort to transform Tulsa’s downtown into a vibrant and inclusive community.

Workers are given $2,500 after signing an agreement and relocating to Tulsa, $500 monthly and $1,500 at the year’s end. The George Kaiser Family Foundation funds the program.

Vermont’s state legislature launched its own remote worker program in January 2019 through the Vermont Agency of Commerce and Community Development to address its declining population.

“There’s a need to get people here and strengthen our tax base,” said program spokesman Nate Formalarie.

Vermont’s program is structured as a reimbursement grant for those who prove residency and work remotely.

Qualified participants submit receipts for moving and office expenses.

They receive up to $5,000 for the first year and can apply for an additional $5,000 for the second year.

Remote Shoals is a program in northwest Alabama aimed at attracting remote workers making at least $52,000.

Adam Himber, vice president of the Shoals Economic Development Authority, said the region needs to grow its tech labor force and overall population. In its pilot year, final selections were expected in October with everyone in place by the summer of 2020.

Remote Shoals’ cash incentive is $10,000. Applicants receive 25 percent 10

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upfront when they decide to relocate, 25 percent after living in the community for six months and the remaining 50 percent after a year.

Funding comes from a portion of the Shoals Economic Development Fund half-cent sales tax.

Tulsa Remote workers are offered a spot in a downtown co-working space where they can access speaking engagements, food, coffee, free WiFi and printing services.

Katie Wilson, who works with human resources students worldwide for eCornell, Cornell University’s online division, chose Tulsa Remote for the sense of community the program provided both in and outside the coworking space.

ADDRESSING EMOTIONAL WELL-BEING IS KEY TO A REMOTE-WORKER INCENTIVE PROGRAM’S SUCCESS. “We have created our own little community where we have gatherings and get that social interaction you would normally get from your co-workers in an onsite position,” she said. “We have people here from all sorts of industries.

I’ve been able to learn about a lot of other companies, what their policies look like and remote jobs I had no idea could be remote.”

Additionally,Wilson has engaged with the Tulsa community as an education partner, volunteering in schools and discussing community initiatives with Tulsa Mayor G.T. Bynum.

The George Kaiser Family Foundation works with the city of Tulsa, the Tulsa Regional Chamber of Commerce and a young professionals’ group to help ensure participants feel supported.

Aaron Bolzle

Remote Shoals’ Himber said addressing the emotional well-being that sometimes challenges remote workers in the form of social isolation is key to a remote-worker incentive program’s success. Meetup groups and community events are planned by Remote Shoals to welcome participants.

For communities offering remote worker incentive programs, the return on investment is what Himber called the “multiplier effect” with the workers adding to the tax base and spending on retail and housing.

The major motivator for these programs is the skill sets and problem-solving techniques remote workers bring from thriving companies that support the entire ecosystem, said Bolzle.

“Purely tax-based, if these people stay for longer than a year, the cost of bringing them here is very quickly recouped,” he added.

All three programs are experiencing different success levels, primarily from applicants attracted to a lower cost of living.

“The projections for remote workers are going to be huge in the future,” said Himber. “It’s a big opportunity not just for the Shoals area but for many communities to help grow their population.” winter

2020

TRENDING

PEOPLE STEPHANIE BIERNBAUM International real estate firm Hines named Stephanie Biernbaum as chief people officer. She will oversee more than 60 professionals and all HR activities and responsibilities worldwide, allowing the firm to further embrace evolving trends in career development, diversity and inclusion, analytics and other areas changing the traditional landscape of HR. DAVID BINKLEY Vantage Leadership Consulting named David Binkley as senior adviser in strategic talent management.

The position was created for Binkley, who is the former chief human resources officer for Whirlpool Corp. Binkley has more than 30 years’ experience within Fortune 150 companies, and will launch Vantage’s HR strategy and advisory services in 2020.

MARY EDMUNDS International real estate firm Hines named Mary Edmunds as the new head of human resources for Europe. Edmunds will report to Stephanie Biernbaum, as well as Europe CEO Lars Huber, and will partner closely with Hines leaders across Europe to support the people-related aspects of their business strategies.

With 25 years of professional experience, Edmunds joins Hines from global investor and Hines partner the Abu Dhabi Investment Authority.

By the Numbers

moves

ELISA GILMARTIN Cloud communications provider Fuze named Elisa Gilmartin as chief people officer. Gilmartin is responsible for enhancing a culture of innovation and designing strategies the hire and retain top talent.

Gilmartin brings more than 20 years of experience. She most recently was CHRO at robotics technology company Symbotic.

NICHELLE GRANT Siemens USA named Nichelle Grant as head of diversity and inclusion. Grant will help Siemens USA pursue a more holistic approach to how Siemens builds a workforce mirroring the diversity of society, drive an inclusive work environment to maximize business success, use data and analytics to address customer diversity requirements, and work with stakeholders to advance D&I across U.S. industry.

LISA JACOBA Colorado-based Global Medical Response named Lisa Jacoba as CHRO. Jacoba joins GMR from CPI Card Group in Littleton, Colorado, where she was the chief human resources officer. Prior to that, she led human resources at Western Union’s B2B division and was senior vice president of HR for First Data’s Global Operations division. A seasoned HR leader, Jacoba earned a bachelor’s degree in HR from Bellevue University.

To be considered for People Moves, email a brief announcement and a high-resolution color photo to editor@workforce.com.

Include People Moves in the subject line.

winter

2020

compiled by Grey Litaker and Rick Bell

You’re Engaged! Or Not …

How’s that employee engagement going in your workplace?

Culture change initiatives started to improve employee engagement.

62

%

Source: 2019 Workforce HR State of the Industry

Trending Up And Down % Actively Disengaged

% Employees Engaged

26%

2000

26%

2005

28%

2010

32%

2015

34%

2018

18%

15%

19%

17%

13%

2000

2005

2010

2015

2018

4 Reasons Engagement Matters

Higher productivity

Better retention

Fewer accidents

21% higher profitability

Source: Gallup, 2018

Stay a Little Longer

Talk, Talk

43% — Highly engaged employees get weekly feedback.

87% Highly engaged employees less likely to leave their employer than disengaged employees.

Source: Corporate Leadership Council

workforce.com | w Work o r k f o r c e . c o m | Workƒorce

11

TRENDING

SmashFly Bought

By Mark Feffer

DIVERSITY’S DILEMMA

By Yasmeen Qahwash “Diversity, Inc.” author Pamela Newkirk, Pamela Newkirk, author an award-winning journalist and New York University journalism professor, talked to Workforce about diversity in the workplace. She questions whether these billion-​ dollar diversity programs have worked and explores why the progress has been so slow. Workforce Editorial Associate Yasmeen Qahwash recently spoke with Newkirk.

Workforce: Why did you decide to write “Diversity, Inc.”?

Pamela Newkirk: Diversity has been a preoccupation for 30 years of my career, yet two fields in which I have been most closely aligned — journalism and higher education — have numbers that show radical underrepresentation of African Americans and Latinx. Why is that? I wanted to look behind the scenes to see what is actually happening at these institutions and why it is that after so many years of hand-wringing, conversations, task forces, training sessions and hiring diversity czars, we’re still at this place where people of color are still radically underrepresented in most influential fields.

Workforce: What do you hope people take away from this book?

Newkirk: Part of what I hope to achieve in this book is contextualizing some of these racial misunderstandings that we have. A lot of it is due to our different experiences as Americans based on race. For instance, we can’t assume that a black American has the same relationship with the police force, the criminal justice system [and] higher education. … Until we truly understand the role that race plays in the myriad of interactions we have in this country, we’re always going to be in this place on misunderstanding and mistrust. Hopefully we can move the needle and not continue to resort to this same conversation that we’ve had for so many years.

Workforce: Why do you think some people are still claiming that this isn’t an issue today?

Newkirk: Oftentimes people will see one or two people of color and think, “Oh, there we go, that’s diverse.” I think — especially in fields where people of color are so radically underrepresented — that the one or two who are there are pointed out as proof that there is diversity when that is not what we’re talking about. We’re not talking about superficial, symbolic diversity. We’re talking about real diversity.

Workforce: Do you think that the current political divide in this country is amplifying this issue?

Newkirk: Fifty years ago, we had President Johnson who embraced this whole notion of diversity [and] inclusion of people of color in segments of America from which they had historically been excluded. Now, 50 years later, we have a president who has openly attacked immigrants of color, who has vilified urban blacks and who has openly attacked the whole notion of diversity. We’re going in the opposite direction at a time when the demographics are showing that we really need to make progress in this area. It’s hurting our country.

12

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S

ymphony Talent’s November acquisition of SmashFly Technologies is being called one of the most significant HR technology deals of 2019. Industry observers note the combined company will serve an estimated 750 companies out of the gate, including a number of Fortune 500 and multinationals.

Symphony Talent did not disclose financial terms.

On the surface, the deal brings together two complementary offerings. Symphony Talent is known for its employer-branding and creative services, while SmashFly is regarded for its recruitment marketing and candidate relationship management tools.

Ben Slater, vice president of marketing for recruiting platform provider Beamery, said the deal underscored the importance of technology to today’s talent acquisition strategies.

“It’s not enough to have career site and brand collateral.You need functionality for building and nurturing talent pipelines, managing events and campaigns,” he said. “In short, you need a platform to do the heavy lifting once you have developed your employer brand strategy.”

For Symphony Talent, making such a move is particularly important, said industry consultant Chad Sowash.

He said the company has struggled with a number of organizational, operational and marketing issues. Symphony Talent “hasn’t done a great job when it comes to letting the market know who the hell they are,” he said. “SmashFly has done a better job.”

Sowash also thinks Symphony Talent acquired SmashFly to compete with TMP Worldwide Advertising and Communications. Since early 2019, TMP has purchased social media firm Carve, recruitment tech company Maximum, programmatic recruitment platform Perengo, and employer branding and recruitment marketing firm CKR Interactive.

Symphony also acquired SmashFly’s customers, revenue and engineers. winter

2020

TRENDING

LEADERSHIP SKILLS: INCLUSION AND EMPATHY

By Kris Dunn |

J

Wo r k i n P r o g r e s s

enny just walked into your office and confessed her life is falling apart due to an addiction to Vicodin.

Tom just showed up in a dress and used what appears to be the wrong bathroom.

Your reaction to these events says a lot about how ready you are to be a manager in the coming decade.Your company is not likely to be of much help.

I recently finished reading Mike Isaac’s “Super Pumped: The Battle for Uber.” It’s the story of how Uber rose from humble beginnings to become a Silicon Valley unicorn, then stumbled from the top as its bro-tastic culture caused it to be tone-deaf to the world around it via repeated PR fiascos.

The cultural challenges led to the ouster of founder and CEO Travis Kalanick, who was replaced by former Expedia leader Dara Khosrowshahi (still CEO at Uber).

To illustrate the cultural overhaul underway at Uber, let’s look at some old founder-driven values under Kalanick, then compare those to new values rolled out under Khosrowshahi: Old Uber Values: Meritocracy, toe-stepping, always be hustlin’.

New Uber Values: We build globally/live locally, we celebrate differences, we do the right thing.

Company values must evolve over time. Uber was late to make the cultural change, which underscores an important reality in most workplaces. Almost every people manager faces change happening faster than organizational infrastructure or company values can accommodate.

Great managers adapt before they are forced to and usually before the company sponsors cultural change.

Change is everywhere in society and comes at us fast.

You’re reading about the drug use facing corporate America in this issue of Workforce. Opioid addiction, legalization trends and more are upon us. Company policy regarding hot button issues naturally trails the change we see outside the workplace.

The fact that cultural change happens faster than companies can pivot is why one of the most important manager competencies in today’s world is rapid inclusion and empathy.

Consider the following realities: 1. You’re a leader.

2. You’re full of personal thoughts, a specific background and some bias.

3. When change comes and you’re asked to consider the rights of yet another special class of people or individuals, you may react as if it’s a burden or worse.You can say it’s all gone too far. Some will agree with you.

4. But you’ll ultimately acknowledge the rights and needs of the segment of people in front of you, or you won’t be allowed to lead anymore.

5. History shows this cycle of events to be true. Look at all societal change and trailing legislation from yesterday’s Title VII to today’s LBGTQ+ conversations and emerging laws. Once societal change reaches critical mass, mandates come to the workplace. It’s just a matter of time.

Most of us don’t work for a company like Uber in crisis and as a result, cultural expectations related to inclusion and empathy are less clear. That means you’re on your own as policy at your company trails societal change. What if you weren’t late the game? What if you as a leader made it a priority to make all feel welcome and equal in your company and on your team?

If that was your approach, you’d find the people in question — the special class of people currently causing others discomfort — incredibly willing to work for you and, just as importantly, freed to do their best work.You’d be maximizing your ability to get great work from the employees you have.

Many of you are HR pros and leaders working for companies stuck in the middle.Your company is slow to pivot on societal change for many reasons.

But that glacial corporate reaction to change is an opportunity. While you likely can’t change corporate policy in an agile fashion, you can still lead and train others on the business opportunity that happens when you treat people the right way.

When you’re early on inclusion and show empathy, a funny thing happens. Performance and the ability for someone to do their best work goes up.Word spreads about your empathy and the candidate pool expands. Managers start to have their own gravity from a cultural perspective None of us are perfect when it comes to the change required as society evolves. But the best managers and leaders are moving quicker through the cycle to acceptance, and they’re viewed as a manager of choice as a result.

Uber was not an inclusive or empathetic company until it was forced to change.You don’t have to wait on your company to dictate inclusion. Be early on acceptance.

GREAT MANAGERS ADAPT BEFORE THEY ARE FORCED TO AND BEFORE THE COMPANY SPONSORS CULTURAL CHANGE.

winter

2020

Kris Dunn, the chief human resources officer at Kinetix, is a Workforce contributing editor. To comment, email editor@workforce.com.

w o r k f o r c e . c o m | Workƒorce

13

FOR YOUR BENEFIT

Employers Struggle to Reduce Wasteful Health Care Spending With annual numbers approaching a trillion dollars, employer coalitions are studying what can be done.

By Rita Pyrillis

E

mployers have found ways to manage health care costs, but need to step up their efforts to tackle a more vexing problem — eliminating wasteful medical care spending.

A recent Journal of the American Medical Association study found that 20 to 25 percent of medical spending is unnecessary.

“As long as we are in a fee-for-service world we will get services whether we need them or not,” said Mike Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions.“We need to shift from paying for volume to paying for value, and employers need to put pressure on providers to get this right.

They should be asking for spending reports from vendors, like Blue Cross Blue Shield, and they should be analyzing claims and identifying waste.The problem is not new and neither is value-based medicine, but there are new efforts to address wasteful spending.”

The estimated waste hovers between $760 billion and $935 billion, with administrative costs such as claims processing, billing and transferring medical records making up the largest share at $266 billion annually, according to the JAMA study.

Yet, more than half of employers aren’t actively doing anything about it, according to a 2018 report by the NAHPC. While the first step for employers should be identifying the problem, nearly two-thirds of businesses surveyed don’t collect or analyze data to track waste.

THE WASHINGTON HEALTH ALLIANCE LOOKED AT 48 COMMON MEDICAL TREATMENTS, TESTS AND PROCEDURES AND FOUND THAT AN ESTIMATED $341 MILLION WAS SPENT ON UNNECESSARY HEALTH CARE IN THE COURSE OF A YEAR. “Employers should be asking for reports from the vendors and analyzing claims data to identify waste,” he said. “Part of the reason why vendors don’t offer this information is because they’re responsible of getting rid of it.”

Employers need to take a more proactive role in tackling wasteful spending, according to Daniel Wolfson, executive vice president and chief operating officer for the American Board of Internal Medicine. He urges them to speak not only to health plans but also to health care providers about what they are doing to minimize the problem.Wolfson leads Choosing Wisely, an ABIM initiative designed to encourage patient-doctor dialogue around the overuse and misuse of medical services.The program, which was launched in 2012, publishes a list of more than 400 recommendations on treatments that patients and physicians should question.

“I think employers are absent from the conversation,” he said.

“They have not used their leverage to impact this problem.

Employers have had a tremendous influence on quality issues but they are not using their leverage, their power, their influ14

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ence and their thinking when it comes to wasteful health care spending.They should be saying ‘If we’re going to be purchasing health care services from you we want to hold you accountable.’ ” Some employers are using the Choosing Wisely recommendations, which were created by 17 national medical specialty societies. Each list offers information on when tests and procedures, such as imaging for lower back pain or breast cancer treatments, are appropriate.

In Washington state, the Washington Health Alliance looked at 48 common medical treatments, tests and procedures and found that an estimated $341 million was spent on unnecessary health care in the course of a year. Of the 2.9 million services examined, nearly half were found to be unnecessary.

The prescription of opioids for lower back pain was the most wasteful treatment, followed by the use of antibiotics for upper respiratory and ear infections, annual EKGs for low-risk patients and imaging tests for eye disease.

In Missouri, the St. Louis Business Health Coalition partnered with the Midwest Health Initiative in 2016 to identify unnecessary care. It found $303 million in wasteful spending to vision screenings, imaging tests, EKG services and pre-op lab studies in 2016.

In 2017, the coalition examined emergency room use for upper respiratory infections and found that $2 million a year could be saved if patients went to an urgent care clinic instead of a hospital emergency department.

Louise Probst, executive director of the employer coalition, said that benefit plan design can help through increased copays for ED visits.

“We all have a problem with low-value care,” she said. “It’s important to ask employees to think about that as an individual and then as a company. Look at incentives in your plan design, look at contracts, look for partners. Get the best data that you can and keep track of it. Employers, hospitals, physician organizations, labor unions, and other community partners need to come to together with a single focus of improving value in health care.” winter

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FOR YOUR BENEFIT

Social Ills Can Ail All

Emergency Withdrawals Pile Up

The workplace is not immune.

Providers looking at leakage as hardship cases increase.

By Rita Pyrillis

By Patty Kujawa

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ublic health experts have been studying for decades the role that poverty, race, environment and other external factors play in citizens’ overall health, but an increasing number of employers are seeing how social ills impact their workforce.

The concept of social determinants of health, which the World Health Organization defines as “the conditions in which people are born, grow, live, work and age,” is gaining momentum in the employer world.

In 2019, UnitedHealthcare and the American Medical Association teamed up to create medical insurance codes so that doctors can identify social factors that lead to poor health. If accepted by the Centers for Medicare and Medicaid Services, the new codes would become effective Oct. 1, 2020.

Also in 2019, bipartisan legislation called the Social Determinants Accelerator Act was introduced to provide grants and technical assistance to underserved communities. It’s considered to be the first federal proposal on social determinants.

“It seems to have entered employer conversations in the past two to three years,” said Karen Moseley, president of the Health Enhancement Research Organization, a nonprofit think tank focused on workplace health. “Public health has been talking about this issue for years and years and now employers are adopting the same language. It started out as employee and employer collaboration to improve public health and has evolved into companies and communities working together.”

In a recent report on the relevance of social issues to employers, HERO outlines steps that companies can take to address community problems that affect their employees and highlight employers with innovative programs. For example, Cisco, LinkedIn and Pure Storage help fund a nonprofit in Silicon Valley that supports affordable housing initiatives, and Tom’s of Maine pays its lowest-paid workers more than 25 percent above a living wage.

The report recommends that employers create a corporate philosophy that values the needs of its employees and adopt policies and practices that support that.

“It often starts with one issue that is the greatest need in the community,” Moseley said.“Employers need to shift their focus from shareholder value to employee value. I really love this metaphor I heard at a conference about a fish tank. If we feed the fish but ignore cleaning the tank, ultimately the fish are going to die.” winter

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akia Whittaker-Woody was stressed out earlier this year because her disability benefits didn’t kick in after rotator cuff surgery. Bills were mounting while she was out of work and she needed cash, so she took a $1,500 hardship withdrawal from her 401(k) account.

“It was really hard. I was in a lot of pain,” said Whittaker-Woody, who runs consultancy Kiss Virtual Services in Richmond, Virginia. “Meanwhile, my bills were not being paid. I didn’t feel like I had a choice.”

She filled out paperwork online with her provider,Vanguard, and within five days, Whittaker-Woody had the money deposited into her account.

Today, many employees can go straight to their 401(k) accounts for quick cash thanks to a 2018 law that makes it easier for 401(k) participants to take hardship withdrawals without having to take out a loan first. As might be expected, a recent study from Fidelity Investments has shown a slight decrease in participants taking loans and an uptick in hardship withdrawals.

“It’s causing a shift in participant behavior, and not one we would encourage,” said Eliza Badeau, Fidelity’s director of workplace thought leadership.

“This undermines the long-term impact on retirement readiness.”

The rule, tucked in the Bipartisan Budget Act of 2018, reverses the law that said participants had to exhaust the loan process before taking a hardship withdrawal. It also expands and modifies what qualifies as a hardship. In addition, the Bipartisan Budget Act changed an old provision and allows participants to rebuild their savings more quickly by contributing to 401(k) plans after taking a hardship.The old rule required a six-month suspension from contributions.

The rate that participants had been taking withdrawals and loans from their 401(k) accounts had been fairly consistent up until 2019, Badeau said.

Participants taking hardships spiked to 4.4 percent this year, compared to 2.7 percent only two years ago, Fidelity data show. Loans remained consistent at 9.2 percent in 2017 and 2019. The average hardship withdrawal was $3,800 at the end of September 2019, Fidelity reported.

Experts agreed that this change could increase the leakage that already occurs from 401(k) accounts. Leakage is when participants take money out of their 401(k)s before retirement. Loans and hardship withdrawals are the primary sources of leakage, and can damage a participant’s ability to build retirement assets.

Loans from 401(k) accounts are expected to be paid back and are not subject to the 10 percent penalty for the transaction. Hardship withdrawals need to meet certain criteria to qualify, but once that requirement is met, participants have no obligation to pay the money back. Hardship withdrawals do come with an income tax payment as well as a 10 percent penalty for those under age 59 and a half .

“I’m still scratching my head as to why the liberalization of this rule has been pushed through,” said Rennie Worsfold, executive vice president of Custodia Financial. “That money will never come back.”

The rule allows plan sponsors to tinker with their plan design to require participants to take a loan out before moving to hardship withdrawal.Worsfold said plan sponsors are taking a closer look at plans loan and hardship situations. w o r k f o r c e . c o m | Workƒorce

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FOR YOUR BENEFIT

Veterans Affairs’ Smoking Ban Comes Under Fire The American Federation of Government Employees claims that the ban violates a 2008 agreement.

By Yasmeen Qahwash

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he Department of Veterans Affairs’ deceit,” Lewis said. new smoking ban took effect on The idea of taking away all designated Oct. 1, prohibiting all patients and non- smoking areas from veterans using VA staff from smoking on VA hospital facilities is also seen as cruel and unfair. premises. In January the ban will extend Based on the affiliation between tobacco to employees. products and the military, it is common The smoke-free policy was created for veterans to rely on smoking as a to initiate a healthier environment source of comfort. Pat Englewood, an and improve care for veterans, but the organizational psychologist and counAmerican Federation of Government selor said that the use of tobacco products Employees argues that the ban violates can be part of good and bad memories the labor union’s contract. of the military service that a veteran may A 2008 contract that is still in effect choose to not let go of, or can’t let go of. states that all VA facilities will provide A Centers for Disease Control and Preemployees with “reasonably accessible vention study released in 2018 found that designated smoking areas.” However, the about 30 percent of veterans use tobacco ban does not allow any smoking while products, which is a much higher rate on VA property, including parking areas. than most of the non-veteran population.

Because of the conflicting policies, the The prior culture of tobacco use in the AFGE filed a national grievance, which military is considered a significant influthe VA’s Office of Labor Management ence on this issue.

Relations denied.The 670,000-member labor union has invoked arbitration and A 2008 CONTRACT THAT IS is waiting to schedule a hearing once the STILL IN EFFECT STATES THAT arbitrator is selected.

“Although we believe that the ALL VA FACILITIES WILL agency violated the PROVIDE EMPLOYEES WITH law and our contract by implementing “REASONABLY ACCESSIBLE the directive for AFGE’s bargaining DESIGNATED SMOKING AREAS.” unit employees, we encourage employees Englewood said that part of the upset to comply with the toward the smoking ban may be derived Alma Lee directive to avoid the from the veteran’s addiction to these threat of discipline while we continue products. to challenge the policy,” said Alma Lee, “The craving has become a necessary AFGE National Veterans Affairs Council habit in their daily routine,” said Englepresident, in a statement. wood, who is also a Vietnam era and Gulf In addition to the contractual dispute War veteran. “If there is any threat that between the union and the VA, the ban this craving will not be satisfied, then has received pushback from veterans the big guns come out and they blame and their families who don’t think the others through their defensive comments policy is necessary. Al Lewis, author of and behaviors.”

“Cracking Health Costs,” said that the Although taking away the designated ban is only a good idea in theory and smoking areas will make it difficult to questions whether it is a wise decision take smoke breaks, Englewood saw the for the overall productivity of the orga- new policy as a responsible step toward nization. “Instead of creating a culture better protecting the health of the VA’s of health, you are creating a culture of patients and staff.

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“It is not an overstepping of power to look out for the health and well-being of all service members and hospital staff,” she said. “No one is taking anyone’s control of their lives away.”

Gary Kunich, a spokesman for the Milwaukee VA Medical Center, also supports the ban as he considers it to be a positive and healthy change toward maintaining a healthy work environment.

“We’ve actually gotten a lot of positive comments from people who are happy that we’re doing this, that there’s not a cloud of smoke outside or that there aren’t cigarette butts on the ground,” Kunich said.

Since the Milwaukee VA Medical Center has undergone this change, Kunich said that the ban has “changed things for the better.” According to Kunich, a majority of the employees and veterans at the Milwaukee facility don’t smoke and have wanted a healthier environment to provide and receive better care.

In the 10 years that Kunich has worked at this facility, he recalls town hall meetings where some of the veterans would ask why they still allowed smoking on the property. “It just seemed to be a logical step forward and the right thing to do for all of our employees and all of our veterans,” he said.

For veterans who are struggling to quit smoking or using other tobacco and nicotine products, Kunich encourages them to take this as an opportunity to find healthier habits by taking advantage of the programs that the VA offers. winter

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FOR YOUR BENEFIT

UNINTENDED COSTS OF THE MODERN WORKPLACE

By Jennifer Benz |

A

Benefits Beat

lot of conversation focuses on helping people manage the day-to-day stress that comes with modern life and the modern workplace.

Whether it is looking at financial well-being (or the lack thereof), the stress of constant change, and the greater demands placed on an always-on workforce, we know there’s a problem. Diagnosing the root cause can be difficult, and that’s why I was so struck by my friend Aaron Hurst’s summary of the six unintended consequences of the modern workplace. He presented it at Purpose 2030, his company Imperative’s annual conference that focuses on aligning people and organizations around purpose and connection. (Full disclosure: I’m on Imperative’s board.)

One of the most important insights from their recent research is that creating deeper connections among people is a vital element to the success of organizations. I left their event inspired about how to build those connections on our team and thinking a lot about the idea that a leader’s job now includes creating an environment that supports deep and meaningful connections among colleagues, whether they are sitting side by side in an office or working in various locations around the world.

But that’s hard to do if we don’t examine why work has become a place that often creates the opposite of connection — loneliness and isolation. Looking at some of the unintended consequences we’ve created gives us a path for starting to solve them.

Productivity and communication tools like Slack can increase efficiency and collaboration, promoting quicker decision-making and information sharing. But the volume of communications can be a challenge.

As quantity increases, stress can too, and many interactions feel transactional rather than personal. For benefits teams, these new tools can be a daunting new feedback channel to manage as well. Several of our clients use them to promote benefits in creative ways, but keeping up with employees’ dialog and questions can become a full-time job.

Questions to consider: How do we support conversations that are meaningful? And how can benefits teams with limited resources embrace new tools?

Remote work is an amazing thing. It has expanded the possibilities for the way we work and with whom. For our team, it has been a vital tool for us to bring on key talent, and I think supporting remote work is beneficial in countless ways. But, with less room for casual and

face-to-face interaction, authentic connection among employees can be lost.

Questions to consider: How can we enable a sense of belonging and connection with those working remotely? How can benefits create ways for people who work remotely to feel connected and supported by their organizations?

Diversity and inclusion are key goals for most of us.The connection to benefits and the ways we build support programs for various employee groups is a hot topic.

But fully embracing a diverse and inclusive environment creates unique new challenges that require a lot of intentional new behaviors.This side of D&I is not always fully acknowledged or discussed.

As Aaron Hurst says,“The workforce is growing more diverse in every way. It is building a more inclusive society and economy as well as bringing new perspectives to work that drive innovation.When we work with people who are similar to us, the norms of communication and interaction are pretty clear, and it is easier to feel psychologically safe. When we have a diverse workforce, the old models of communication and collaboration are no longer adequate.”

Questions to consider: What does a workplace look like that can fully address the psychology of diversity?

How do benefits and other programs build connections and support full inclusion?

Many modern corporations have adopted open-plan designs, hoping it will increase collaboration and productivity. In reality, workers often find that removing physical walls can decrease the quality of connection with those we work with and make focused work more challenging.

Questions to consider: How can we retain the benefits of open spaces while also restoring more intentional connection? Can benefits like mindfulness training or well-being challenges help individuals and teams get better connected inside and outside of the office walls?

The negative side effects of engagement as a main measurement tool and the challenges of shrinking tenure are also among the unintended consequences Aaron covered.

What are the other unintended consequences of your modern workplace? And how are you going to use this year to solve them?

CREATING DEEPER CONNECTIONS AMONG PEOPLE IS A VITAL ELEMENT TO THE SUCCESS OF ORGANIZATIONS.

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Jennifer Benz leads Segal Benz, a national leader in HR and employee benefits communications. She was honored as one of Workforce’s “Game Changers” in 2013. To comment, email editor@workforce.com.

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Legal Employers Feeling Dazed and Confused By Marijuana Laws Evolving state laws promote and require a close eye and an open mind.

By Jennifer Mora n the past few years,“weed at work” has grown as a workplace issue.

More and more Americans appear to be turning to marijuana as a way to treat various ailments, including epilepsy, migraines and anxiety. Moreover, public sentiment about marijuana has shifted, with polls showing that more people support marijuana legalization at the federal level.Yet, the issue might not be so easy for the nation’s employers. While marijuana remains illegal as a matter of federal law under the Controlled Substances Act, states are taking matters into their own hands by enacting medical and recreational marijuana laws.

Currently, 33 states, the District of Columbia and Puerto Rico have passed laws broadly legalizing marijuana in some form. As of Jan. 1, 2020, 11 states — Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington — and the District of Columbia have adopted laws legalizing marijuana for recreational use.

While most of these laws still allow employers latitude in enforcing their drug and alcohol testing and substance abuse policies, recent legal developments at the state and local level may be a sign that employee protections are on the horizon. For instance, Illinois’ new law is the most expansive recreational law to date and has created a lot of uncertainty for employers.

In addition, Nevada now prohibits employers from taking adverse action against applicants who test positive for marijuana with exceptions for, among others, safety-sensitive positions and motor vehicle drivers who are subject to testing under state or federal law. And, starting next year, New York City, with some similar exceptions, will bar employers from requiring any pre-​ employment marijuana testing.

The issue becomes more complicated when applicants and employees use marijuana for medicinal purposes. Approximately a dozen states — including Arizona, Connecticut, Illinois, Massachusetts, Minnesota, New York, and Pennsylvania — have employment protections for medical marijuana users, with such protections directly in the statute or derived from case law.

These laws generally protect off-duty medical marijuana use and prohibit employers from discriminating against individuals for either being a registered medical marijuana cardholder or testing positive for marijuana. In addition, an employer may (depending on the state at issue), have a duty to engage in an

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interactive process to determine whether a reasonable accommodation might be necessary.

Litigation involving employers and their responses to medical marijuana users continues to make the news. This summer, a New Jersey appellate court held that employers may have a duty under the state’s anti-discrimination law to accommodate an employee’s off-duty medical marijuana use.

Because marijuana can remain in a person’s system for days and even weeks, the fact of a positive test result, without more, says nothing about impairment.

And the American Civil Liberties Union recently filed suit against the District of Columbia Department of Public Works claiming that a worker was denied reasonable accommodation and placed on an indefinite leave of absence after disclosing that she was a medical marijuana cardholder under the District’s medical marijuana program. The worker at issue claimed that she had been prescribed medical marijuana for off-duty use only.

When she requested a temporary transfer to a clerical position during the fall leaf-raking season as an accommodation winter

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for her disability, she was purportedly denied the transfer, and after she disclosed that she possessed a medical marijuana card, she was allegedly placed on an unpaid leave of absence and told that she could not resume her duties as a sanitation worker until she successfully passed a drug test (which she would inevitably fail due to her medical marijuana use) because she was working in a position that the District considered to be “safety sensitive.”

This rapidly evolving legal landscape presents new challenges for employers, especially multistate employers. Employers must balance complying with conflicting federal, state and local laws, maintaining a safe work environment, and protecting applicants’ and employees’ privacy and other legal rights.

Because of these changing laws and social norms, some employers are even considering eliminating preemployment testing of applicants for marijuana or marijuana testing altogether, while maintaining other drug testing requirements.

Employers also are now beginning to reconsider their practices as they relate to possible accommodations of medical marijuana users and whether to accept medical marijuana use as a medical explanation for a positive test result.That said, however, no state requires an employer to tolerate an employee being under the influence of or impaired by marijuana while they are at work or during work hours.

Because marijuana can remain in a person’s system for days and even weeks, the fact of a positive test result, without more, says nothing about impairment. On this point, earlier this year, an Arizona federal district court judge entered judgment against a national retailer for terminating the employment of a woman who had been prescribed medical marijuana because the employer had not established through expert evidence that the employee was actually impaired by marijuana at work despite high levels of marijuana in the results of her drug test.

Developing a well-defined employment policy on marijuana use can minimize the risk of harm from a workplace safety perspective and decrease the likelihood that drug testing and disciplinary action based on marijuana use will open the door to liability for adverse employment decisions. Employers operating in states where medical and recreational marijuana use is allowed should consider taking a fresh look at their substance abuse policies.

It is imperative that employers review the laws of the states in which they operate and work with employment counsel to help navigate this complex and rapidly evolving area of the law.

Jennifer Mora is senior counsel in Seyfarth’s Labor & Employment department and member of the firm’s Cannabis Law Practice in Los Angeles.

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Legal Legal Briefings WASHINGTON JOINS NONCOMPETE LAW PARADE Washington state employers now must comply with one of the strictest noncompete laws in the country, which the Legislature determined will apply retroactively to restrictive covenants entered into before Jan. 1, 2020. Washington House Bill 1450 declares that noncompetes are unenforceable against employees who make less than $100,000 a year (and in the case of independent contractors, $250,000 a year). The law also requires significant disclosures to be made to the employee at the time they sign the noncompete — the absence of which could also invalidate the clause. The law requires compensation to be paid to the employee during the period that it will be enforced at a rate not less than the employee’s previous salary, minus any compensation earned through subsequent employment during the period of enforcement. Further, noncompetes lasting longer than 18 months are presumptively void. Under the law, any attempt by an employer to noncompetes against Washington employees or independent contractors in another state (i.e., through a forum clause) will render the covenant unenforceable. Finally, the law states that in the case of a noncompete being declared unenforceable or enforceable in part or as modified, the party seeking enforcement must pay the aggrieved person the greater of actual damages suffered or a $5,000 penalty, plus reasonable attorney’s fees and costs.

IMPACT: Employers should be aware of any state restrictive covenant laws that may impact portions of the workforce.

EMPLOYERS’ GROWING CANNABIS CONCERNS In 2019, Illinois became the 11th state to legalize recreational cannabis and the first to do so through the passage of a bill in the state Legislature. The Illinois Cannabis Regulation and Tax Act makes it legal to possess and use up to a certain amount of cannabis and also provides several rules for employers. While one section allows for zero tolerance policies to remain in effect, another section amends the Right to Privacy in the Workplace Act, making it illegal to discipline or take other adverse workplace actions against employees who use legal cannabis outside of work. It also provides a “due process” requirement; employers must provide an employee a reasonable opportunity to explain symptoms or a positive drug test before the employee is disciplined or terminated. The act also provides safe harbors for employers acting in good faith to discipline or terminate employees for cannabis use or possession in the workplace, or being “impaired” by cannabis at work. Employers in states with legal cannabis should generally follow these four steps: (1) document objective, observable symptoms suggesting the employee is impaired in the workplace, including how such symptoms lessen the ability of an employee to perform job duties; (2) send the employee for a drug test; (3) if the employee tests positive for cannabis, allow the employee a reasonable opportunity to explain their side; (4) issue discipline and make termination decisions consistently and in accordance with lawful policies.

IMPACT: Special consideration must be given to the laws and regulations of each state so as to provide employers with best practices regarding cannabis-related discipline in the workforce.

Rachel L. Schaller and Daniel Saeedi are attorneys at Taft Stettinius & Hollister LLP. To comment, email editor@workforce.com.

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Legal

Pro-Union Do’s and Don’ts Jon Hyman |

The Practical Employer

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our former Google employees claim that their ex-em- tion and a valuable opportunity to communicate its beliefs. ployer fired them Thanksgiving week in retaliation for What can an employer communicate to its employees? their efforts to organize a labor union. The NLRB is now What are your values as an employer? investigating the firings. For its part, Google denies that antiWhat are the benefits of working for your company? union animus played any role in the firings. “We dismissed Wages, benefits, steady work, responsive management, etc. four individuals who were engaged in intentional and often Explain to employees what union authorization cards, repeated violations of our longstanding data security policies, how the secret-ballot election process works, and that just including systematically accessing and disseminating other because an employee signed an authorization card does not employees’ materials and work. No one has been dismissed bind that employee to vote for the union in a secret election. for raising concerns or debating the company’s activities.”

Remind employees that just as you will not retaliate The NLRB will ultimately have the final word. Suf- against any employee who is pro-union, you will not tolfice it to say, however, an employer cannot terminate a erate any employee who retaliates against a co-worker for pro-union employee if the being pro-management. employer’s anti-union animus Explain the meaning is a substantial or motivating of “dues checkoff,” and let factor for the termination. employees know that union But that’s just the tip of dues will almost certainly be the iceberg of an employer’s deducted from their paychecks prohibited conduct when conwhether or not they support fronted with union organizing. the union or use its services.

And my use of the idiom “tip Inform employees of the of the iceberg” is no coincipotential disadvantages of labor dence, as T.I.P.S. is the acronym unions, such as the possibility commonly associated with the four main categories of of strikes and work stoppages, that in the event of a strike employer prohibited conduct in a union organizing campaign. you might hire replacement workers to take their jobs, that Threaten: Employers cannot threaten employees, or, a collective bargaining agreement might require promotions worse, carry out those threats against employees, because and raises to be granted on seniority and not merit, and that they support unions or unionizing. For example, a man- employees might lose direct access to management to adjust ager cannot tell employees he will lower their wages or issues in favor of a formal grievance and arbitration process. demote them if they support the union. Or, in the Google Tell employees of your prior experience with labor example, fire employees. unions, and any facts you know about the particular union Interrogate: Employers cannot ask employees about their that it trying to organize them. own, or other employees’, support of unions or unionizing.

Remind employees of the advantages of your benefits For example, management cannot ask employees if they package, especially as compared to union fringe benefits signed a union authorization card or how they intend to vote. that they might have to accept in lieu of your traditional Promise: Employers cannot promise employees some benefits (which will still be offered to anyone outside of reward for not supporting a union. For example, man- the bargaining unit). agement cannot offer raises or bonus if the union loses.

Finally, you are always free to express your hope that Surveil: Employers cannot spy on union activity. For employees vote against this or any union. example, management cannot photograph or video record These issues can be nuanced, and if handled incorrectly, union activities or eavesdrop on employee conversations. can expose an employer to significant liability at the NLRB. And, if it’s not already clear (Google), you cannot fire When in doubt, there are professionals you can hire (labor employees because they support the union. lawyers or other consultants that specialized in union Yet, just because an employer cannot engage in T.I.P.S. does avoidance campaigns). The bottom line, however, is that not mean that an employer is powerless to oppose and fight you cannot ignore a union organizing drive, because if the a labor union that is trying to organize its employees. Indeed, only viewpoint your employees hear is that of the union, an employer has its own legal rights under the National Labor it’s not hard to guess how the election will turn out.

Relations Act to a fair and balanced secret-ballot election prior to the NLRB certifying a labor union as the bargaining Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in representative for its employees. An employer that does not Cleveland. To comment, email editor@workforce.com. Follow take advantage of these rights is omitting valuable informa- Hyman’s blog at Workforce.com/PracticalEmployer.

Just because an employer cannot engage in T.I.P.S. does not mean that an employer is powerless to oppose and fight a labor union.

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SPONSORED CONTENT

Innovation generation: the HR tech disconnect Not quite delivering: HR tech today is not fit for purpose

HR teams today increasingly see themselves as technological innovators.

They recognize that technology has transformed the HR and employee benefits landscape—enabling and empowering professionals working in this sphere to play a strategic, global role within their organizations.

But more needs to be done. Delve down into the findings of this research and an interesting disconnect between how organizations view their use of technology and the reality reveals itself.

Drivers of change: the HR strategy shift

Instead of reacting to change, HR professionals are increasingly driving the change organizations need for a competitive advantage at a time of growing digital disruption—whether that is upskilling employees to work in a datadriven world or tackling declining employee engagement through an increased focus on wellbeing. As a result achieving, a ‘globally consistent employee experience’ has shot up the list of priorities for HR professionals in 2019. However, there is a mismatch between how organizations view the way they are delivering on this key objective and what is happening in practice. As consumers in the workplace, the personalized consumer-grade tech experience we are used to in our personal lives is still not being delivered.

When HR offer employees access to around 10 different tools and apps, satisfaction scores rise significantly and employee engagement score targets are met or exceeded. However, not every organization has the capability to ‘plug-and-play’ new apps and tools into a global HR tech ecosystem. Even among those that do, many say that the ‘tools are not fit for purpose’.

So, in the coming years we can expect to see greater investment in technology to deliver a ‘globally consistent employee experience’, as well as tech innovations to create a truly integrated, connected and holistic global ecosystem.

The data disconnect: if you don’t ask, you don’t get

While technology has played a pivotal role in enabling the HR function to achieve more than ever before, without the data to support their strategy HR professionals are often not being as effective as they could be. Our research found a disconnect between how organizations view their approach to technology (innovative and ahead of the curve) and the reality (they lack the data or expertise needed to measure whether their benefits spend is helping achieve organizational goals).

Take retirement as just one example. We all know that pensions are one of the biggest spends in terms of benefits, with organizations parting with billions of dollars each year to fund the retirement of their employees. Yet, surprisingly, more than half of organizations are not using employee data to help forecast potential retirement scenarios and liabilities. This, in turn, can have a significant impact on workforce planning (knowing when employees are likely to retire is vital), learning and development (longer working lives mean more reskilling and upskilling), healthcare costs (older workforces are more expensive to cover) as well as pension provision.

Analytics is the answer: everything will change over the next three years

However, over the next three years, nearly every organization will be collecting vast amounts of data on their employees ranging from engagement to wellbeing. It is this data that will trans-

SPONSORED CONTENT

form the HR and benefits function and those who work in it.

The next step will be to analyze the data effectively to extract maximum value. To meet this need there has already been a massive increase in the number of organizations that have implemented people analytics teams in the last year and a half—with many of those working in this field being upskilled, seeing their roles enhanced (rather than replaced) by technology.

So what’s next?

It’s a huge step forward for the industry that so many HR professionals now see themselves as innovators. But in order to be truly transformative, organizations need a fundamental rethink.

For a start, the employee experience needs to be top of HR’s agenda to ensure everything they do—including their tech strategy—is driving

towards improving it. However, only 1 in 3 HR leaders are making ‘redesigning the employee experience through technology’ a priority on their worklist for 2019. Organizations are planning significant investment in technology to extract better value from their HR and benefits spend, but there is still a long way to go to make sure they make the most of the opportunity technology presents. Not only do HR departments need to make sure they are prepared by upskilling their teams to make them more data-literate, but technology providers need to respond quickly in order to meet the demands of the market and deliver tools that are fit for purpose.

To find out more about the HR tech disconnect download Thomsons’ “Innovation generation: the big HR tech disconnect 2019/20 report” now.

Chris Bruce is co-founder and managing director of Thomsons. Chris has been in the benefits industry for over 20 years. Driven by an entrepreneurial spirit and passion for all things Darwin, his main focus is on the development of new markets and engagement with global clients.

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OPENING THE WORKPLACE

Medicine Cabinet From booze and cigarettes to pot and microdosing LSD, employers are trying to find a prescription for managing drug use at work.

BY ANDIE BURJEK

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he phrase “drugs in the workplace” understandably elicits an alarmed reaction from employers. But the truth is the amount of substances that are considered drugs are many and varied, and many are commonplace for an employee’s daily routine.

Substance use abounds in the workplace — and that’s just legal substances. Employees

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roll into work and can’t get anything done without their daily dose of caffeine.

Colleagues meet in the break room with cases of beer to partake in the regular happy hour. Someone anxious about an upcoming deadline picks up a CBD-infused coffee at breakfast or a CBD-infused burger for lunch.

And don’t forget about that roll of antacids or bottle of ibuprofen in the desk drawer or an energy drink in the fridge for a mid-afternoon pick-me-up.

In short, regulating substance use among employees is not simple and straightforward.

Drugs like caffeine and alcohol are legal, but employers may get into trouble if an employee’s alcohol consumption leads them to cause problems during the employee get-together.

Cannabis is still illegal federally in the United States as more states legalize it for medical and recreational purposes, causing confusion for employers who can’t keep compliance straight among the constant changes. And, a recent surge of “smart drugs” — substances taken to improve creativity, attention, executive function and working memory — poses major ethical questions about whether it’s OK to take a mental steroid to be productive at work.

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Productivity Much has been made about college students taking medication to stay productive and awake, but that habit doesn’t end at graduation.

People use cognitive enhancing drugs — also referred to as “smart drugs” — to improve their creativity, attention, executive function and memory. Much like athletes may use performance-enhancing drugs to improve speed and endurance, employees may use smart drugs to be productive at work.

“Some people start using them in college and then they’re carrying that habit with them into the workforce.

And things don’t get easier when you go from college to the workforce,” said Nick Heudecker, vice president of research-data & analytics at Gartner.

MUCH HAS BEEN MADE ABOUT COLLEGE STUDENTS TAKING MEDICATION TO STAY PRODUCTIVE AND AWAKE, BUT THAT HABIT DOESN’T END AT GRADUATION. The use of smart drugs isn’t limited to an industry or economic status, Heudecker said. Even though Silicon Valley workers taking microdoses of lysergic acid diethylamide — more commonly known as the hallucinogenic

LSD — to stay focused has received media attention, knowledge workers aren’t the only ones taking part.

“Every workforce population is engaging in cognitive enhancement in some way,” Heudecker said.

ADHD drug Adderall is by far the most common smart drug, he said, followed by Ritalin, or methylphenidate. Modafinil, a narcolepsy drug, is another common cognitive enhancer. Energy drinks and caffeine — common parts of many people’s daily routines — are also considered smart drugs, according to Heudecker. And the over-the-counter dietary supplements called nootropics claim to improve people’s cognitive abilities, as well. Nootropics alone, according to Grand View Research, Inc., is a $2.17 billion market as of 2018 and expected to be a $4.94 billion market by 2025. Meanwhile, microdosing LSD means that the user takes about 1/10th of a dose as a way to “break down cognitive barriers and help them be more creative,” Heudecker said, adding there is no research on how microdosing LSD impacts users’ health.

The nickname “smart drug” is a misnomer. “These drugs don’t make you smarter.They allow you to better use the facilities you already have,” Heudecker said.

They do so by helping people stay more focused or awake. Users may have that “feeling of being in the zone” for longer.

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The use of these substances “is becoming more prevalent, not less,” he said, adding that too few employers are thinking practically about how they will address smart drug use in their workforce.

Why People Take Them: In 2018,The European Agency for Safety and Health at Work, or EU-OSHA, released the report “Managing Performance Enhancing Drugs in the Workplace: An Occupational Safety and Health Perspective” to explore the trend of smart drug use among workers.

Employees take them for “increased monitoring of employee health, stress levels, alertness and fitness,” especially when these measures are used to judge an employees’ ability to do their jobs. “It is possible to anticipate that employees under this level of scrutiny may turn to various pharmacological means to allow some control over biometric readings,” the report noted.

Workers in low-paid jobs that are not protected under standard labor laws may feel increased pressure to hit certain productivity levels, especially since they are increasingly being monitored by their employers. Not wanting to lose a job they rely on, they may turn to smart drugs.

“Electronic means of monitoring employees are likely to be accompanied by an increase in the stresses on workers,” the article noted.

Employers in general don’t seem aware that this trend is happening, Heudecker said. “It’s not like someone goes out for lunch, has a few martinis, and their speech is slurred. It looks like, ‘I’ve got a really productive worker.’ You’re not going to ask questions because it’s a positive outcome,” he said.

While employers may appreciate that their employees are being more productive, if employees must turn to drugs to reach those performance goals, then the employer should consider how the company culture or policy drove them there, Heudecker said.

“There’s a lot of demand to always be on, so you need to give your employees permission to be off,” he said. His 2017 Gartner report “Cognitive Enhancement Drugs Are Changing Your Business” also explored the main reasons that push employees to take these substances. Basically, employees either view smart drugs as an opportunity to push the boundaries of what they can accomplish in the workplace or feel coerced into taking them to maintain performance and keep up with their workload.

If employees feel forced, that has the potential to get employers in trouble. “This may expose organizations to legal risk if CED users obtain drugs illegally because they felt forced by colleagues or management,” the report noted.

Employer Response: Brian McPherson, labor and employment attorney at Florida-based law firm Gunster, has never had an employer raise the issue of smart drugs.

Medical cannabis is legal in Florida and that’s received all the attention, he said. “[Employers don’t have] the time winter

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or capacity to focus on the other issue that is brewing somewhat underneath.”

Studies support the increased use of Adderall, Ritalin and other drugs for performance, he said. Still, most employers try to stay away from getting involved in the prescription drugs employees are taking, and they assume they are complying with their physicians’ directions.

“We know it’s happening on a grand scale, at least more than it has in the past, but employers aren’t really talking about or dealing with it,” McPherson said.

Heudecker suggested policies companies can adopt to directly address smart drugs. A chief human resources officer can work with other leaders to draft a policy around cognitive enhancer use in the workforce. They also can support “non-pharmaceutical cognitive enhancement” — practices that naturally help people be more productive by “improving work-life balance, adjusting work schedules, promoting physical activity and educating employees on healthy nutrition and sleep practices,” Heudecker said.

An employer’s response also has to respect the fact that many smart drugs are prescription drugs that people need.

“You don’t want to alienate people who need something for their ADHD,” Heudecker said.

The Legal Landscape The substance that employers mostly ask about is cannabis, said McPherson. Since medical cannabis is legal in the Florida, McPherson has fielded many questions about its use.

All indications point to cannabis laws continuing to progress in more states, he said. Once states approve it for medicinal purposes, the “floodgate starts to open” and there is a “general march toward recreational use.”

Currently, 33 states, the District of Columbia and Puerto Rico have passed laws broadly legalizing marijuana in some form. As of Jan. 1, 2020, 11 states — Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon,Vermont and Washington — and the District of Columbia have adopted laws legalizing marijuana for recreational use.

“As long as marijuana remains illegal under federal law, employers are getting a comfort level that they can still enforce the drug-free workplace tests for marijuana,” he said. “If it ever becomes legal under federal law, that will really change the landscape, and it will become a much more complex situation.”

Drug use among many U.S. sectors is growing, according to the Quest Diagnostics 2019 “Drug Testing Index.” The data involved in this analysis come from 28

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pre-employment testing for safety-sensitive positions or drug-free workplaces, said Barry Sample, senior director of science and technology at Quest Diagnostics, which has been annually analyzing workplace drug testing data since 1988.

Cannabis is the most commonly detected drug in the workplace, according to the “Drug Testing Index.” Positive tests have increased in most sectors. Meanwhile, positive test rates have declined for cocaine, heroin and opiates.

Interestingly, the inclusion of cannabis in testing panels may vary by state, the index showed. In almost all states, 95 percent of organizations still test for it when they have the option. Colorado and Washington, the states where recreational use has been legal for the longest time, saw a 4 percent decrease in organizations testing for cannabis between 2015 and 2018.

There may be differences by industry, Sample added.

“Where there are generally less skilled workers, employers are having difficulties finding employees that will pass all the background screening, including drug testing,” he said.

“They may be making a risk-based judgment on their part that ‘We’re going to take the chance and ignore the use of marijuana, because we really need people on board.’ ” Meanwhile, two organizations have announced more nuanced drug tests for cannabis that may hit the market in 2020, according to Business Insurance. A research team at the Swanson School of Engineering at the University of Pittsburgh has developed a breathalyzer prototype, and Oakland, California-based Hounds Labs Inc. plans on bringing a breathalyzer to market in 2020.

Such tools could help detect marijuana use, which can stay in a person’s system up to 30 days after consumption, McPherson said. “The employers I’ve talked to about these tests are excited and hopeful about them,” he said.

Dan Harrah, senior associate at Mercer and a consultant specializing in behavioral health and health care operations, is skeptical about these tests. “The science of impairment is not settled yet.There’s a lot of subjectivity,” he said.

There will need to be a way to review these tests and see how effective they actually are, he added.

Psychedelic Legislation: While laws regarding cannabis use is moving rapidly, legislation on psychedelics is slower, said McPherson.

Two cities — Oakland and Denver — have decriminalized psychedelics such as magic mushrooms, and the Chicago City Council in October 2019 approved a resolution that experts say could pave the way to decriminalizing them. The resolution uses the term “entheogenic substances,” defined as any range of natural plants or fungi “that can inspire DRUGS continued on page 48 winter

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PHOTO COURTESY OF LEIDOS

Following the death of John Hindman’s son from a heroin overdose, his employer Leidos launched an initiative to combat the opioid epidemic.

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OFFICE DETOX A workplace cleansing is helping employers fight against the opioid epidemic through coalitions and some clever, creative management ideas.

BY RITA PYRILLIS

I

n the months after John Hindman lost his son to a heroin overdose in 2016, he discovered that he was not alone in his grief. As word of the tragedy spread among his colleagues at Leidos, a defense, aviation and health tech firm, many came forward to share their stories of loved ones struggling with addiction. He was so overwhelmed by the breadth of the problem that he wrote to his CEO challenging him to do something about it.

In a lengthy email titled “A Father’s Request” Hindman told Leidos CEO Roger Krone about his son Sean, who died at age 30, and his struggles with opioid addiction and later, heroin. He wrote of his grief and explained that many other employees face similar challenges, either dealing with their own addictions or those of loved ones. A few weeks later Krone replied. Hindman said his exact words were, “You broke me down. We’re all in.”

“I’ve worked here since 1985 and I never knew how many people were impacted by this epidemic,” Hindman said. “I felt that Leidos’ leadership had no idea of what was happening within the company. I realized that I needed to communicate this within Leidos, not with criticism but with honesty.”

The email launched not only a companywide initiative to combat the opioid epidemic, but also a national movement among business leaders to raise awareness and provide resources to their workforces and communities. The Reston,

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Virginia-based company distributed a CEO pledge to end opioid addiction that 60 corporate leaders around the country have signed so far.

Leidos, which employs 33,000 people worldwide, also held town hall meetings to gauge the extent of the problem and launched an internal public awareness initiative. It also reexamined its benefits and began looking at ways to better control the prescribing of opioids.

Opioid addiction has ravaged communities across the country.The misuse of these drugs is also a contributing factor in heroin addiction. In 2017, more than 70,000 people in the U.S. died from a drug overdose, a record, according to the Centers for Disease Control and Prevention.

Opioids, which are a risk factor for heroin use, were involved in the majority of those deaths. This has a direct effect on the workplace, impacting health care costs, productivity, absenteeism and recruiting.

Employers in states such as West Virginia, Pennsylvania, Ohio and Kentucky have been particularly hard hit, as have those in the construction, trucking and manufacturing industries.

Given that two-thirds of those who are addicted to opioids are in the workforce and that many get their prescriptions through their employers, corporate leaders have found themselves on the front lines of a public health crisis. According to a report by the Society of Actuaries, the

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prescription opioid epidemic cost the economy $179.4 billion in 2018. This includes $60.4 billion in health care costs and $26.5 billion in lost productivity.

Many employers are finding innovative ways to fight the problem, from public awareness campaigns to offering treatment programs to managing prescription opioids to seeking alternatives to pain pills.

“This is something we’re all coming to grips with,” said Lorraine M. Martin, president and CEO of the National Safety Council. “Issues in our community will end up in the workplace. This is the first year that opioid deaths eclipsed deaths by car crashes. That’s a big alarm bell. It’s tricky because most people become addicted to drugs that have been prescribed to them and many get those prescriptions through their employer.”

While 75 percent of U.S. employers have been directly affected by opioids, only 17 percent feel extremely well prepared to deal with the issue, according to a survey by

WHILE 75 PERCENT OF U.S. EMPLOYERS HAVE BEEN DIRECTLY AFFECTED BY OPIOIDS, ONLY 17 PERCENT FEEL EXTREMELY WELL PREPARED TO DEAL WITH THE ISSUE. the National Safety Council. More than a third have experienced absenteeism or impaired worker performance and have had an overdose, arrest or injury because of opioid use, they survey found.

“I think we’re all at different places on this journey,” Martin said. “In areas that are hard hit employers have put in place programs that address recovery. Others still don’t understand that this is happening in their workforce or the role that they can play in fighting it. It’s important that employers understand how it affects their bottom line.The numbers are startling.Various industries and employers saw it quicker and some have taken very creative actions.”

One employer that saw firsthand how a regional opioid crisis also affected its workforce was Belden, a manufacturer in Richmond, Indiana. In 2016 the company was facing a labor shortage and having a hard time finding qualified applicants. About 1 in 10 applicants failed their drug test, so the company developed a novel approach to the problem.

In 2018, Belden began offering drug treatment to those who failed their drug screening with a promise of a job if they successfully complete the program. The program, called Pathways to Employment, was so successful that the company launched it at its New York and Pennsylvania locations a year later.

“The program has grown to 30 in Richmond,” said Ellen Drazen, corporate communications manager at Belden.

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“Our locations in Syracuse and Washington (Pennsylvania) were chosen because they were seeing a similar impact on hiring due to the opioid epidemic.”

Belden has also signed the CEO pledge launched by Krone at Leidos.

In other parts of the country, business coalitions are taking collective action to address the problem.

In Kentucky, which has the fourth highest drug overdose rate in the country, a group of employers launched the Opioid Response Program for Businesses, which helps companies develop policies that support recovery, such as addressing the stigma around addiction.The program is run by the Kentucky Chamber Workforce Center.

“Stigma is one the most profound obstacles in dealing with this problem,” said Natalie Middaugh, a project coordinator at the Kentuckiana Health Collaborative, a nonprofit organization focused on improving health care delivery in Louisville and southern Indiana. “We need to help employers understand that addiction is a chronic disease and not a moral failing or a criminal issue.”

The collaborative joined the effort in 2017 after a significant spike in overdose deaths. In February of that year, Louisville emergency services handled 43 overdoses in one day.

“That was a huge turning point,” Middaugh said. “It’s a community health issue and a business issue, but there is also genuine concern about employees and their families.”

In the past five years, large employers have made a number of changes in their benefits plans in response to the opioid crisis, according to the Kaiser Family Foundation 2019 “Employer Health Benefits” survey. Forty percent launched or revised an employee assistance program in response to the opioid crisis, nearly a quarter modified their health plans to incorporate step therapy for opioid use, 38 percent provided additional health information to employees, 8 percent required employees with high opioid use to obtain prescriptions from only one provider, 21 percent asked their insurer or PBM to increase monitoring of opioid use, and 2 percent increased the number of substance abuse providers in their networks.

The National Business Group on Health and a number of regional employer coalitions recommend working with health plans and pharmacy benefit managers to develop benefit plans that feature safeguards such as limiting coverage for certain prescriptions to small quantities.

Managing opioid prescriptions was a top priority for Leidos, which in 2018 began restricting prescriptions on long acting opioids, such as morphine, oxycodone and fentanyl, and limiting short-acting opioids to seven days.

The most common drugs involved in prescription opioid deaths are methadone, oxycodone and hydrocodone. Leidos worked with its pharmacy benefit manager ExpressScripts to implement the changes, according to Karen Kanjian, director of corporate benefits.

“Our part in this as benefits people is to look at what we’re doing in our programs, and we know that the frontline winter

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4 Areas to Prevent Workplace Opioid Abuse The National Safety Council recommends that employers focus on the following areas: 1. Employee education. Provide descriptions of opioids and their brand and generic names, common risk factors and questions to ask prescribers.

2. Workplace policies. Have a clear drug-free work policy, provide manager training and flexible medical leave policies.

3. Workplace culture. Foster values and principles that support recovery, including alcohol-free events.

4. Benefits and health care plans. Make sure they provide preventative services and treatment for substance abuse disorders, cover alternative pain management treatments and therapies and include a program for managing the prescribing of opioids.

— Rita Pyrillis

of defense is our PBM,” she said.“They see claims coming in real time and they have access to data, such as which doctors are prescribing and how much are they prescribing.”

Leidos also plans to work with dentists, who often prescribe opioids for procedures such as pulling wisdom teeth.

“My husband had a tooth pulled and got six weeks worth of pain pills that he never finished,” said Heather Misicko, a benefits consultant at Leidos.

A 2018 study in the Journal of the American Medical Association found a link between use of opioids after tooth extraction and long-term use. With 3.5 million wisdom tooth extractions performed each year, that’s a lot of pain medication sitting in people’s medicine cabinets, according to Meg Moynihan, director of strategic marketing at Stericycle. Safe disposal of medications is an important part of addressing opioid addiction, she said.

“Because these drugs are prescribed by doctors for legitimate medical conditions people don’t think of them as a risk,” Moynihan said. “I lock the liquor cabinet but I never thought of locking the medicine cabinet. Having medications lying around makes them more accessible to friends of children, housekeepers and visitors, particularly during open houses when selling a home. It takes less than 30 days to develop an addiction.”

In fact, 20 percent of Americans hold on to their prescription medications because they don’t know what to do with them, and 1 in 10 have offered or given their unused 34

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prescription drugs to friends or family members for either medical or recreational use, according to a 2019 study conducted by Stericycle.The company offers envelopes that can be mailed to the company anonymously for safe disposal.

In September, Stericycle and the National Safety Council released a free online toolkit to help employers develop and implement policies and programs that support opioid addiction recovery. It includes sample policies, employee presentations, white papers, videos and other materials designed to support a drug-free and recovery friendly workplace, according to Martin.

The toolkit recommends using the NSC substance abuse cost calculator, which takes into account location, industry and number of employees, to determine the economic impact of drug abuse. After that it lays out a 12-month plan for developing and implementing an opioid policy, from education to communication to vetting the policy with legal counsel.

The NSC also recommends working with health care plans to ensure that mental and behavioral health services are covered, encouraging annual screenings for substance abuse, making sure that alternative pain management treatments, such as non-opioid medications, acupuncture, and chiropractic and physical and occupational therapy are covered, and providing or enhancing EAP services.

“If you don’t know where to start, go to the toolkit,” Martin said. “We advise employers to look at their own health care benefits and to look into alternative medicines.

Opioids are not always the best drug for managing pain.

Also, make sure to have naloxone in all your facilities. It should be in every workplace and office.”

Naloxone is a medication, either in the form of an injection or a nasal spray, that can stop the effects of an opioid overdose. Before implementing a workplace naloxone program Martin suggests consulting with an attorney to make sure it complies with federal, state and local regulations and training employees on how to spot and respond to an overdose.

While there are many tools and approaches to tackling opioid addiction in the workplace, Hindman said that the most important factor is having company leaders who are committed to the effort.While not every company has the resources of a Leidos, employers are in a unique position to make a difference, he said.

“A third of all addicts are functioning in society, which means that they are in the workplace,” Hindman said. “It’s very hard for the working world to come to grips with this problem. It boils down to a company’s core values.

You need to commit it to paper and use it as a platform to attract talent and not treat it as rhetoric.The problem exists broadly and deeply in society and since you’re reaching into society for the employees you need, it makes sense to invest in solving it.”

Rita Pyrillis is a writer based in the Chicago area. To comment, email editor@workforce.com.

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People

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Being the chief people officer in the budding cannabis industry comes with unique challenges for Angie Demchenko.

BY FRANCESCA MATHEWES

A

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PHOTOS BY JEFF MILLIES

ngie Demchenko has an eye for business and a mind for people, and this mindset is immediately reflected in the environment of her new employer, Cresco Labs. The office, a chic, bright space in Chicago’s trendy River North neighborhood, is abuzz with conversation and collaboration.

It feels focused and fresh, teeming with ideas. And given that Cresco is a major player nationwide in the cannabis industry, it’s something of a novelty to work for a budding business.

Demchenko started her career in the cannabis industry as Cresco Labs’ first chief people officer in July 2019. She got her start in human resources right out of college in Toronto at consultancy giant Accenture before moving to Jones Lang LaSalle, a commercial real estate firm in Chicago, and most recently working with shopping center management company Starwood Retail Partners.

Attending the University of Western Ontario in London, Ontario, Canada, initially piqued Demchenko’s interest in people management where she attained a business degree with a focus in human resources and a double major in sociology.

“I don’t think I really understood how much I enjoyed the people side of it until my sophomore year of college,” she said.“I was really interested in how to connect the dots between macro and micro social themes. That decision carried me through my first several years of work, and I’m really glad I have that people-minded background as well as the true core business sense.”

The challenge of working with a smaller company in an industry that is still in its growing stages appealed to Demchenko, who is among a handful of executives in the cannabis industry with the title of chief people officer.

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“I went smaller and smaller in terms of the organizational structure I was a part of. I wanted to learn the connectivity of everything that goes into HR and how it works with the business,” she said.

Demchenko said that her experience at larger organizations enabled her to learn about the intersections of people and business in every aspect of an organization.

“At larger organizations, you have centers of excellence that you specialize in,” she said. “I wanted to make sure that I was really kind of deep in each of the areas and able to understand how to add real value to a company in the sort of head position.”

AS MORE STATES LEGALIZE RECREATIONAL OR MEDICINAL CANNABIS, SOME PARTIES ARE EXPRESSING WORKPLACE SAFETY AND HEALTH CONCERNS. Her position at Cresco Labs has presented its own new set of challenges. Cresco Labs is one of the largest vertically integrated multistate cannabis companies in the United States. Cresco is what some in the industry call “seed to store,” meaning that Cresco controls every aspect of the production from cultivation and manufacturing to product packaging to retail, distribution and sales.

According to a Cresco spokesperson, more than 1,000 people are currently employed at the company across the country. Cresco operates 23 production facilities and 22 dispensaries in 11 states. And the nuances of the cannabis industry, which is still considered illegal on the federal level, is something that Demchenko is continuing to navigate.

“Everything is state-regulated, so the complexity of the business is something that has been frustrating at times,” she said. “But [it’s] also exciting in terms of, ‘How do we problem solve?’ ‘What do we need to do to make sure we’re overcoming some of this?’ ” Seeking solutions and problem solving are a part of Cresco’s core values, Demchenko said. “I understand why now, because the industry is really sort of riddled with opportunity and challenges and you have to sometimes think a little more creatively.”

Addressing Drug Use at Work As Cresco’s HR leader, Demchenko is responsible for policies including drug use in the workplace. Like most organizations, these are policies that must be adhered to.

“Our goal is to provide a safe and drug-free work environment for our clients and employees, and our policies mirror the drug use policies you would see at major companies in any other industry,” Demchenko said. “Because of their personal connection to the industry, we have many 38

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certified medical cannabis patients that are employees and their cannabis use is treated the same as any prescription medication would be in the workplace.”

As more states legalize recreational or medicinal cannabis — 11 states have legalized recreational marijuana use while 33 states have legalized medical marijuana — some parties are expressing workplace safety or health concerns from cannabis use. As an HR leader in the cannabis industry, Demchenko is helping to identify use versus abuse.

“As a leading cannabis company, appropriate cannabis use is a topic that extends far beyond the workplace,” she said.

“We advocate for everyone, whether a long-time consumer or someone experiencing cannabis use for the first time, to educate themselves on the products available, proper consumption and appropriate dosage for their personal use.”

Finding lending institutions willing to fund the industry and other service providers that can accommodate a company like Cresco can present obstacles, but Demchenko views these as opportunities to educate people about the cannabis industry.

“Some of the larger providers have been hesitant in the past in working with cannabis companies,” Demchenko said. “One of the things that’s still a challenge but really exciting for me is getting to educate these companies on what the cannabis business is really all about — from a medical and recreational standpoint — [and to] see them change their minds about who they’ll do business with.”

Educational Leaders Being at the forefront of the industry and having the opportunity to serve as an educator in this way has also been a benefit to Cresco’s growth.

“We have had a number of situations where — even a few years ago where we were still a single-state company — where conferences wouldn’t take the call or let us on a panel,” Demchenko said. “We were almost an afterthought whereas now we’re such an industry leader that they’re calling us. They want Cresco on the panel and want to understand what we’re saying from a business standpoint.”

Going forward, Demchenko plans on prioritizing recruitment, retention and building an increasingly inclusive and diverse workplace. Cresco is also launching its first national retail brand, Sunnyside, in November, which will be shops “designed to help broaden the spectrum of wellness to include cannabis. Bright, welcoming and convenient, each Sunnyside will serve as a hub for health and wellness for both new and existing cannabis consumers,” as described on Cresco’s website.

The expansion creates a welcome challenge to Demchenko and her burgeoning human resources team.

“We’re growing at such a rapid rate, so I really want to make sure that we’re bringing in the best talent,” she said.

“And as you can imagine, there isn’t a lot of true industry experience, so we have an interesting opportunity to bring in the best minds from things that are well aligned with what we’re doing.” winter

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The recruiting team, which is comprised of eight recruiters and two management and vice president roles, hires for its dispensaries, manufacturing and processing, cultivation, and corporate offices, and looks to industries that typically have translatable skills ranging from retail and consumer packaged goods to technology and health care.

Recruiting and Diversity Some of the many job listings on Cresco’s website include more industry-specific positions with quirky titles such as “cultivation agent” and “edibles packaging specialist” as well as more traditional general business positions as “staff accountant” and “brand manager.” Building a network of employees with a dynamic background of experience is one of Demchenko’s visions for Cresco’s future.

Demchenko has also been working on what she described as a sort of “diversity and inclusion committee” that will include individuals from different backgrounds in each department to oversee and facilitate representation at Cresco.

The committee will be responsible for expanding the level of diversity and inclusion as it pertains to many aspects of a person’s identity beyond race or gender, such as veteran status or disabilities, Demchenko said.

“Ultimately it’s about increasing representation,” she said.

“Making sure we’ve got the representation that matches our consumers and our patients and doing what we can to retain the right talent.”

Another facet of the kind of work Demchenko will be overseeing at Cresco is their social equity and education initiative, or SEED, which works with regulators in different states on pushing forward expungement platforms for those affected by the war on drugs.

“We work very closely with regulators in every state to make sure that we’re setting the bar really high in terms of what we’re going to be doing in diversity and inclusion, how we hire, how we get involved in communities, all of that,” Demchenko said. “Learning about all of that has been really eye opening.”

The SEED program, according to a Cresco press release from May 2019, “is the cannabis industry’s first national social equity initiative promoting inclusion, expungement, equality, access and community engagement.”

Seeking Social Justice Realizing the potential for social good at Cresco and expanding on it is one of Demchenko’s focus points as chief people officer.

“The industry is so much bigger than just the patients or recreational users,” she said. “There’s so much to it in terms of social justice, the war on drugs, all of that. It’s not just a consumer packaged goods company. It’s really about doing greater good for the communities that we serve.”

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Cresco Labs Chief People Officer Angie Demchenko is bringing her past HR experiences to the burgeoning cannabis industry.

“With our CEO and president and a number of our leaders, we’re helping them make that transition from a small employee operation to [an organization] of over 2,000 people,” she said. “We talk a lot about scalability and finding ways of empowering our leaders and holding them accountable, which has been a big focus for me.”

Her past experiences inform her hands-on, dynamic approach to human resources and leadership that continues to grow alongside Cresco.

“Angie has an impressive track record of managing the human resources functions of dynamic, high-growth companies,” said Charlie Bachtell, Cresco’s CEO and co-founder. “Her experience in building best-in-class HR strategies and operations will be valuable in helping Cresco maintain our strong workplace culture and our focus on our core values and mission as we continue to scale.”

Bachtell also said that Demchenko’s skills in working with people paired with her experiences in a dynamic business world made her an ideal candidate for the position.

“We believe that Angie is exceptionally well suited to help us achieve our goal of attracting the best talent in the cannabis industry and empowering them with the tools and knowledge to deliver exceptional performance,” he said.

As Cresco’s first chief people officer, Demchenko is intent on bringing a level of enthusiasm, drive and fresh perspective to the cannabis industry.

“The sky is kind of the limit for us, I would say, being part of a new industry,” she said. “This role of chief people officer is kind of new — I’m taking the lessons of what I have learned in other industries and bringing it to this.

Having a voice and putting my stamp on what HR can look like in this profession is what is important.”

Francesca Mathewes is a former editorial associate for Workforce.

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39

An Underused

Prescription

for Employers Pharmacy benefit managers have largely flown under the radar in the prescriptiondrug crisis. They can be a key ally to help employers manage employees’ drug abuse.

M

BY MICHAEL A. PERRY

ore than 10 million people in the United States misused a prescription opioid in 2018, and the opioid epidemic cost the country $179 billion including mortality, health care expenses, lost productivity, criminal justice expenses and assistance. The National Safety Council notes that the annual direct health care costs of individuals who misuse opioids are 8.7 times higher than those who do not.

The opioid epidemic offers an example of a preventable, complex public health and safety

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issue that has arisen due to a perfect storm of causative factors. Consequently, it requires multiple stakeholders to develop and deliver an effective solution to help lower costs and improve patient health outcomes. These stakeholders include health care providers, pharmacies, drug manufacturers and even employers.

However, the pharmacy benefit manager is one player in the opioid crisis that fills a critical role by employing clinical programs to ensure safe and appropriate utilization of medications.The PBM is a third-party administrator of prescription drug programs and primarily responsible for contracting with pharmacies for network services, negotiating discounts and rebates with drug manufacturers, developing and maintaining the plan’s list of covered drugs (a formulary), and processing and paying prescription drug claims.

PBMs have become an increasingly important part of health benefits since they first entered the market in the 1970s.Today, three pharmacy benefit managers control more than 80 percent of the American market. All are part of massive health care conglomerates that have interests in other aspects of the benefits food chain — from retail pharmacies to medical insurance.

This can create conflicts of interest, as these mega-corporations stand to profit from every stop on a patient’s journey. These conflicts of

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41

interest can in turn leave employers and patients vulnerable to increasing health care costs and crises such as the opioid epidemic.

The American public, from the employee to the executive suite and human resources professionals, as well as those who make decisions about employee-sponsored health care, seeks change in today’s profit-driven benefits industry.

Here are just a few of the reasons why: • In 2017, the average annual cost for prescription drugs used to treat chronic conditions reached $20,000, and drug prices increased at twice the rate of inflation.

• American families spent 67 percent more on health care in 2018 compared to 2008.

• Employer contributions toward health care costs rose 51 percent in the same period.

• More than 66 percent of bankruptcies are due to medical expenses or time out of work as a result of illness.

Mergers and acquisitions may answer the health care industry’s need to create new sources of revenue, but they can leave patients and plan sponsors behind. In a sector dominated by an outsized few, consumers all begin to look the same.

MERGERS AND ACQUISITIONS MAY ANSWER THE INDUSTRY’S NEED TO CREATE NEW SOURCES OF REVENUE, BUT THEY CAN LEAVE PATIENTS AND PLAN SPONSORS BEHIND. To compound the issue, PBM operations are veiled enterprises. Complex contracts and opaque business practices conceal the flow of dollars, making it difficult for plan sponsors, HR professionals and members to see what they’re paying for. It may seem impossible to demand meaningful change from such a sizable arm of the health care industry, but it doesn’t have to be.

Human resource professionals occupy a unique position in the U.S. workforce. As part of the decision-making process when it comes to employee benefits, HR leaders can demand change from the industry by learning how to spot PBMs that put member and plan sponsor interests first and move away from PBMs that don’t.

This requires understanding today’s health care landscape and how PBMs should be transforming to work for employers, not just for themselves. Here are four key indicators that demonstrate a PBM has broken from the status quo to operate in the best interests of its clients and their members: • Pay-for-performance business model.

• Comprehensive clinical programs.

• Complete care coordination.

• Transparent contracting 42

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Pay for Performance Most PBMs today operate on a fee-for-service model in which they are paid each time they perform a given function, such as a prior authorization review.While this type of business model is common, it fails to tie the PBM’s financial success to how well the company performs for consumers.

No matter how well or poorly the PBM helps the plan sponsor manage prescription spend, the PBM is paid the same. In some cases, it may even be paid more if the plan’s prescription spending grows based on profit incentives tied to per-claim fees and hidden revenue streams.

That’s why a pay-for-performance business model has so much potential in the PBM industry. Pay for performance is a relatively new model, so far only explored by a few PBMs despite its power to help tie the companies’ interests more closely to those of members and plan sponsors.

The pay-for-performance model helps to support transparent PBM operations by holding PBMs responsible for the quality of the work they do and putting dollars at risk if a plan sponsor’s prescription spending rises above a guaranteed maximum. This puts skin in the game and places people, not profits, first.

Under this type of pay-for-performance structure, the PBM is held accountable. Its success is tied directly to quality of service and whether it reduces overall drug spending through proactive clinical programs that help reduce inappropriate utilization.The plan sponsor is rewarded by performance guarantees tied directly to the PBM’s clinical programs and how well they improve health outcomes and lower costs over time.

This new approach helps encourage a straightforward pricing structure that does not benefit from unnecessary prescribing practices. It eliminates conflicts of interest and places plan sponsors and their members first.

Comprehensive Clinical Programs Clinical programs can be easily overlooked when it comes to their importance not only in safeguarding patient health, but also in the amount patients and plan sponsors pay for health care each year. While many see programs such as step therapy and clinical reviews for prior authorization as sources of member disruption — and they can be if handled poorly — it’s important to recognize that these programs can positively impact plan sponsors and members alike.

An estimated 40 percent of opioid overdose deaths in 2016 involved a prescription opioid, highlighting the dangers that clinical programs have the chance to prevent.

From 2011 to 2016, prescriptions were written for dozens of opioid tablets following surgeries, even when procedures would cause relatively little pain.

This prescribing pattern has tremendous impact, as the probability of long-term opioid use and abuse increases sharply in the early days of therapy, particularly after five days.To prevent addiction and abuse, it is vitally important to ensure patients take prescription opioids no longer than is medically necessary. winter

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PBMs can help to reduce unnecessary opioid prescribing by improving coordination of care among physicians, pharmacists and patients to identify when the potential benefits of these medications outweigh the risks. Comprehensive clinical programs offer a strategic way to ensure medical necessity while protecting patients.

Data from the Centers for Disease Control and Prevention show that the rate of opioid addiction is relatively low if only one day of opioid therapy is prescribed initially, with just 6 percent of patients on opioids one year later. The likelihood of addiction increases sharply with eight or more days of prescription opioid therapy (13.5 percent of patients on opioids one year later). This data demonstrate just one way that clinical programs, such as starter dose and quantity limits, can help protect patients.

Starter dose programs limit the initial supply of a drug to help determine its appropriateness for the patient. In the case of opioids, my company, BeneCard PBF, found that a program limiting the initial supply to three days helped curb the number of prescription opioid claims by 67 percent as part of a comprehensive, clinically driven approach preventing opioid addiction. The starter dose program helps avoid members having excess opioids on hand when therapy is needed for just a few days. This approach also reduces the risk of opioid fraud, waste and abuse.

Quantity limits, which control how much of a medication can be dispensed at a time based on medical best practices, can provide similar protection.This helps to prevent unused medication from building up in the home, where it presents a danger not only to the patient, but to others who may be accidentally exposed to the drug (such as children and pets) or who may be at risk of using the medication without a prescription and a physician’s oversight.

Carefully designed and managed clinical programs have the power to save lives and to protect members and their employers from fraud, waste and abuse of prescription medications.There is an urgent need to do so that extends beyond controlled substance abuse. The United States spends about $21 billion on medication errors and $935 billion in overall health care waste each year. However, many PBMs rely primarily on retrospective reviews of prescription drug utilization to identify problems. This approach may represent a conflict of interest, as many PBMs charge a per-claim fee, meaning they get paid every time a prescription is filled.

Instead, look for a PBM that offers comprehensive clinical programs designed to be proactive, not reactive.These programs should include a retrospective review, but they should also work to identify potential concerns before a medication is dispensed and prevent potentially dangerous or wasteful prescription utilization instead of addressing it after the fact.

sponsor interests and helping to control prescription spending.

Unfortunately, many PBMs rely primarily on rebates and negotiated discounts to control prescription spending.

While these negotiations are necessary in today’s marketplace, they focus on only one part of the equation.

As in any other industry, obtaining strong discounts is simply not enough. PBMs must also be smart about where and how money is spent. That’s why a clinical focus is key. Rebates and discounts do little good if the number of prescription claims continues to rise because patient welfare has become secondary to numbers on a spreadsheet.

But how do you put people first in this challenging environment? Select a PBM that empowers its pharmacists to coordinate care between the various members of a patient’s health care team. This team can include primary care physicians, specialists, retail pharmacists and others.

Often, these individuals are spread across multiple practices, and communication between them can be difficult.

However, the PBM’s pharmacists have a unique perspective, with insight into the prescriptions written and filled by multiple providers. This puts them in an ideal position to facilitate more effective communications between all parties involved in a patient’s care.

PBMs should understand a patient’s condition, symptoms, medical history and any other medications they use to help ensure each prescription dispensed is medically appropriate. They must know each drug’s manufacturer recommendations and FDA guidelines to understand if it offers the most effective course of treatment for that particular individual. PBMs also must take into account industry best practices, which constantly evolve as new medications and new clinical data become available.

All of this helps to support better health outcomes by reducing the risk of side effects and adverse drug reactions, improving treatment efficacy and supporting a better quality of life.This, in turn, can reduce the need for repeat visits to the doctor and lower the risk of hospitalization.

It can also lower the risk of patients taking a medication that offers little or no benefit. All of this helps to lower overall health care costs, improve member satisfaction and support a stronger workforce.

Health care must be a coordinated team effort to achieve positive results for both the patients and the PBM.

Transparent Contracting

Complete Care Coordination

The ongoing conversation regarding PBMs and their role in controlling costs often focuses on transparency, and it must continue to do so. In many cases, PBMs practice selective transparency, allowing consumers to see only what’s favorable to the PBM and its revenue streams.

Complicated contracts help to conceal revenue streams in an industry where conflicts of interest have become increasingly common.This creates an environment in which human resource professionals and their companies are not

Since today’s health care system is so complex, a clinically driven PBM model is important in protecting patient and plan

PBMs continued on page 48

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43

SECTOR REPORT

Recruiting Software Providers

The Future of Recruiting Technology Peeling back the layers of candidate applications gives a peek at hiring pipeline success.

By Sarah Fister Gale

T

here are more open jobs than talent to fill them and companies are willing to try anything to win this war. That’s great news for recruiting technology firms that promise companies innovative solutions to find, engage and hire quality candidates.

Venture capitalists continue to court the recruiting tech sector, delivering yet another record-breaking year of investment. By the end of the third quarter of 2019,VCs had invested more than $4 billion in recruiting technology firms, and the industry was expected to cross $5 billion by the year’s end. Many of those investments went to recruiting platforms, including Jobvite, which received $200 million in February to acquire three new recruiting platforms for its portfolio; SmartRecruiter, which raised $50 million in May; and Fountain, a platform to hire gig and hourly workers that landed $23 million in October.

“The war for talent is not going away,” said Denise Moulton, vice president of HR and talent research at Bersin, Deloitte Consulting in Boston. However, companies are getting smarter about how they select and validate the impact of their recruiting technology.

“There are new solutions coming to market all the time,” she said. That is putting pressure on vendors to demonstrate value if they want clients to stick around.

Some companies need tools that will help them more effectively uncover passive candidates, figure out how to mine the former applicant pool and identify internal talent who might be perfect for a current opening.

Others are more focused on automation tools to help them engage with candidates, conduct video recording or improve and track the candidate journey.

The industry has been talking about AI in recruiting for years, but the current generation of tools are actually making an impact, Moulton said. “AI is boosting productivity, helping to analyze candidate pools, and making it easier to keep track of people who you want to keep in your funnel,” she said.

The use of AI and automation is freeing recruiters to become advisers, focusing on building relationships and capturing data to track outcomes, said Jared Goralnick, group product manager for LinkedIn in San Francisco.“Analytics are helping them set realistic expectations about the size of the talent pool, and the ability to reach new talent.”

AI driven analytics are also reducing the time to fill key roles, and helping companies address diversity and inclusion goals. “These tools can be game changers,” Moulton said.Though as always they only work if you have the expertise to ask the right questions and enough data to generate meaningful unbiased analysis.

“The more data you can feed (a system) the smarter it gets over time,” she said.

92

%

OF TALENT PROFESSIONALS SAY CANDIDATES WITH STRONG SOFT SKILLS ARE INCREASINGLY IMPORTANT.

43

%

OF RECRUITERS SAY LEVERAGING TECHNOLOGY IS THEIR TOP PRIORITY.

AI IS FINALLY PAYING OFF Many of these tools now feature artificial intelligence to add to the value proposition. And that’s finally a good thing.

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SKILLS VERSUS EXPERIENCE

The other big trend in recruiting tech is the rising use of assessments, as companies look for ways to vet candidates’ skills and attitude, along with their qualifications and experience. “Assessments are critical if you want to build a funnel of candidates that will be relevant today and for the long term,” Moulton said.

Several vendors have acquired assessments companies, including SHL’s November purchase of Aspiring Minds, an AI-driven talent assessment and interviewing platform; Hired’s February acquisition of Py, an app that assesses candidates coding skills; and Mercer’s 2018 acquisition of Mettl, an Indiabased talent assessment firm.

And other firms are building their own assessments.

Most notably, late last year LinkedIn launched its Skills Assessment feature, which lets users complete dozens of free skills assessments that they can add to their profiles. winter

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The early assessments focus primarily on technical skills, but the company plans to introduce soft skills and personality assessments over time.

“It will make it easier for candidates to highlight their skills, and for recruiters to filter their searches,” said Goralnick. It will also make the search process more relevant for candidates and companies. He noted that LinkedIn research shows 69 percent of professionals think their skills are more important than their college education, and 76 percent would like to be able to verify their skills as a way to stand out in a candidate

pool. The assessments will help them do that, he said.

Moulton urged companies to be thoughtful about the technology they choose and to be sure it will add measurable value to the talent acquisition process.

“You can’t pick up every shiny new penny,” she said. “You have to figure out what your team will really use and how it will integrate into the workflow.”

Sarah Fister Gale is a writer in Chicago. To comment email editor@workforce.com.

HOT LIST Recruiting Software Providers Listed alphabetically; compiled by Yasmeen Qahwash; editor@workforce.com COMPANY NAME & Web Address

ICIMS icims.com

TALENTREEF talentreef.com

ULTIMATE SOFTWARE ultimatesoftware.com

NAMES OF RECRUITING SOFTWARE

Recruitment Marketing Suite; Advanced Communications Suite; Hiring Suite

TalentReef Recruit 2.0

UltiPro Recruiting

NUMBER OF CLIENTS

KEY CLIENTS USING SYSTEM

4,000

Enterprise Holdings; Valvoline; Canon; 7-Eleven; Memorial Sloan Kettering Cancer Center; Hard Rock International; Dollar General; Sony Music

4,000

Tip Top Poultry; EZCorp; Alamo Drafthouse; Focus Brands; Landmark Industries; LBA Hospitality; Lucky’s Market; Four Foods Group

6,400

Bloomin’ Brands; Culligan International; Feeding America; First Horizon National Corp.; Red Roof; Subway; Texas Roadhouse; Yamaha Corp. of America

Source: Companies.

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45

SECTOR REPORT

Recruiting Process Outsourcing Providers

RPOs Are Winning the Talent War The ongoing battles involve demonstrating the value behind key performance indicators.

By Sarah Fister Gale

T

he ongoing talent shortage has been a boon for recruitment process outsourcing firms. Business leaders are increasingly frustrated by their inability to find and keep talent, and they are turning to RPOs for help, said Zach Chertok, an analyst for Aberdeen.They see these vendors as a possible solution to help them figure out what they are doing wrong. “It’s giving RPOs a competitive advantage.”

It’s also helping them expand their perceived value proposition. Where RPOs were once a niche solution, or even a last resort, Chertok’s research shows more companies are turning to RPOs sooner as they think more strategically about talent acquisition.

Jeanne MacDonald, president for global RPO solutions at Korn Ferry, agreed. “It used to be, ‘Here’s the job description, find the right person,’ ” she said.

But now clients are turning to RPOs for advice on how to build the talent brand, market the company and link recruiting strategies to broader workforce development goals, she said.

“It’s becoming much more strategic.”

LONG-TERM KPIs RPOs still struggle with getting access to the right stakeholders to demonstrate this strategic value proposition.

Chertok noted that RPOs often work with recruiting or talent acquisition teams who still track talent acquisition through near-term key performance indicators, or KPIs, like days to fill an open position and cost per hire.

“To demonstrate their business value, RPOs have to connect what they do to the HR strategy and what the business is trying to achieve,” he said.

To do that, they need to link their work to long-term KPIs, including retention, performance and the business value their candidates bring to the company. These measures take more time to collect, but they connect RPOs to business strategy, he said.

They also have to provide a more strategic toolkit, said Stacey Cadigan partner for Information Services Group, a market intelligence firm. Clients today expect RPOs to provide user experience consulting, recruitment marketing, business intelligence, data visualization and advice on the tech stack, she said. “These are no longer value-add services.

They’ve become the expectation.”

That’s driving RPO vendors to invest more in automation and data analytics tools ranging from candidate-facing chatbots and automated scheduling to workforce forecasting and

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dashboards that showcase ongoing talent acquisition and performance metrics.With these tools RPOs can move beyond individual hires to help companies create a more sustainable workforce, Cadigan said. “It’s less tactical and more strategic.”

A TOTAL TALENT SOLUTION The investments they are making in technology are also helping RPOs expand their offerings to accommodate a broader range of candidates, said MacDonald. In the last year she has seen an uptick in clients using RPOs to fill entrylevel positions, including clerks, clerical workers, retail and light manufacturing.

“Historically that’s been a tough area for RPOs because humans did all the recruiting,” she said. But advances in smart searching tools, chatbots, day-in-the-life simulations and other automated systems have lessened the human burden, freeing RPO recruiters to focus on relationship building. For example, Korn Ferry recently rolled out “Juno,” a recruiting chatbot that communicates with candidates and helps set interviews and answer questions. MacDonald said the interface is so realistic many candidates expect to meet Juno when they come to interviews. “They think she’s a person.”

BY 2027 THE GLOBAL RPO MARKET WILL EXCEED

$40 BILLION.

The technology is making RPOs more competitive with traditional recruiting firms. Though as with all technology, RPOs have to prove these tools add strategic value to the business and are not just fun new tools to play with.The key is working with clients as an adviser and problem-solver.

“You can’t just report that you didn’t meet a KPI, you have to dig into what happened and how to address it,” MacDonald said.

That’s how RPOs demonstrate value and prove that they can be strategic partners to the business.

Sarah Fister Gale is a writer in Chicago. To comment email editor@workforce.com.

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HOT LIST Recruitment Process Outsourcing Providers Listed alphabetically; compiled by Yasmeen Qahwash; editor@workforce.com NUMBER OF CLIENTS OUTSOURCING RECRUITMENT OF ALL JOB CLASSES TO COMPANY

ABLE TO BLEND RECRUITING OF TEMP/ PERMANENT STAFF ON SINGLE PLATFORM

NUMBER OF RECRUITMENT PROFESSIONALS ON STAFF

COMPANY NAME & Web Address

POSITIONS FILLED ANNUALLY

NUMBER OF CLIENTS OUTSOURCING END-TO-END RECRUITMENT PROCESS TO COMPANY

ALLEGIS GLOBAL SOLUTIONS

305,064

147

75%

Yes

2,751

HUDSON RPO hudsonrpo.com

13,000

44

12

Yes

353

IBM TALENT ACQUISITION OPTIMIZATION ibmtalentao.com

160,000

85

Would not disclose

Yes

Would not disclose

452,699

96

581

Yes

6,840

200,000

339

Would not disclose

Yes

2,156

allegisglobalsolutions.com

MANPOWERGROUP SOLUTIONS manpowergroupsolutions.com

RANDSTAD SOURCERIGHT randstadsourceright.com

Note: Korn Ferry and Sevenstep declined to participate. People Science did not respond to requests for information.

Source: Companies.

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47

PBMs continued from page 43 fully informed regarding how their money is being spent and where PBMs may be profiting at consumers’ expense.

Convoluted business practices and hidden revenue streams make accurate PBM comparisons virtually impossible.This means that there is a greater chance companies and their employees could be spending more to get less from their PBM. The traditional PBM business model masks several revenue streams, including rebates and spread pricing, which pharmacy benefit managers enjoy at the expense of plan sponsors and members.To avoid these and other conflicts, it is vital to select a PBM that offers clear contract terms.

Clinically driven pharmacy benefit management works, and because it works so well, there’s no need for complicated contracts that conceal exactly what the plan sponsor and their members are paying for. Another method of avoiding hidden revenue streams and conflicts of interest is to work with an independent or privately owned PBM not beholden to shareholders and not driven by the needs of larger health care ventures. This allows the PBM to focus closely on providing superior service with less emphasis on profit margins. Typically, working with these PBMs means carving out the pharmacy benefit from the medical benefit, which offers further advantages and transparency.

There are several small to midsize privately held PBMs that are advancing clinical care, transparency and innovation — outperforming the industry giants for customer satisfaction in numerous categories. The PBMI “PBM Customer Satisfaction Report” is an annual survey of pharmacy benefit managers’ customers to show client satisfaction in multiple categories such as delivery of promised savings; meets financial guarantees; effective tools to manage prescription costs; no conflicts of interest issues; and other important factors.

DRUGS continued from page 28 personal and spiritual well-being,” as well as other psychological and physical benefits.

“The most alert employers are watching what’s going on with the psychedelics and they are concerned,” McPherson said.

Regardless of the substance, he advises employers to stay informed.

Let the Past Inform Our Future

Employer Communication: Many employers have benefits programs in place to address addiction but not an environment that allows for open conversations about substance use, Harrah said.

“When it comes to behavioral health, everybody is able to talk about [how they] didn’t sleep well last night, and there’s no stigma around that. But nobody says, ‘I’m really thinking about cutting down on my drinking.’ There’s more stigma around that statement.” he said.

More employers have been taking on behavioral stigma, but there’s still work to be done. And the lack of communication around substance use benefits can lead employees down the wrong road, Harrah said. For example, if someone with an addiction realizes they need help, oftentimes the first thing they do is Google treatments. While the employer plan may include in-network carriers with good programs for addiction, a simple internet search can lead to low quality, out-ofnetwork care, he said.

To effectively manage a benefits program and protect its members as well as its financial viability, it is essential to understand the issues inherent in the pharmacy benefit management system, as well as the steps necessary to create meaningful and lasting change.This entails exploring smarter, more strategic PBM clinical programs designed to promote clinical efficacy and reduce wasteful and inappropriate prescription utilization. It also involves resisting the traditional per-claim fee structure, which can be prone to fraud, waste, and abuse.

Addressing the underlying issues in the PBM industry requires persistence and tenacity. Armed with proper knowledge, employers can begin asking their PBM the tough questions and start demanding more for their plan and for their members.

Michael A. Perry is president of BeneCard PBF, a pharmacy benefit management company headquartered in Mechanicsburg, Pennsylvania.

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Addiction A person with an addiction is hyper-focused on obtaining their drug of choice and getting that high, which can affect their hygiene, sleep, basic social behaviors and work performance, said Andrea Elkon, clinical psychologist and director of behavioral health for Alliance Spine and Pain Centers. This hyper-focus applies to substances such as nicotine, alcohol or opioids as well as behaviors like gambling or shopping.

An employee struggling with a serious substance addiction is fairly obvious to spot, Elkon said. They may consistently come in late, leave early or not show up to work at all, take extended lunch breaks or exhibit erratic behavior such as falling asleep at their desk or acting more emotional than usual.

In such cases, managers need to be assertive, Elkon said. It may be an uncomfortable subject, but not enough people know how to handle it, she said.

Managers should learn how to take action — sooner rather than later — while still showing concern toward the addicted employee.

When an employee does not yet have a serious addiction but is on the path toward one, managers can still notice behavior patterns like absenteeism that may point to a substance problem. “That is a way to address the early signs, to focus specifically on the behaviors that are disruptive to the workplace,” Elkon said.

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“One of the things that I caution my clients on is you can have these supportive conversations, but you better understand what programs are in place. Because once you start having those conversations, your employees start to come to you, whether for themselves or a family member,” Harrah said.

Substance abuse and mental health benefits also belong in open enrollment conversations, said Morgan Young, vice president of client services, employee benefits at insurance brokerage Holmes Murphy.Young didn’t mention mental health and substance abuse benefits in a recent open enrollment meeting, and an employee later asked if the company covered mental health benefits.

Young was reminded of how important it is to share that message to employees.

Substance abuse benefits should go beyond the employee assistance program, she added. Employers consistently see low utilization of EAPs and try to convince employees to use them more, but they’re not going to be the only solution, she said.

“We need to understand that while an EAP may be a good tool for some, it’s not

going to dissolve all the needs we have.

We need to come up with different tools, resources and policies and make them available to employees,” she said.

Elkon suggested resources that could help employees or dependents with addictions. One of the first steps is sending them for a substance abuse risk evaluation, she said. These evaluations can tell employers about the employee’s risk of substance abuse problems and treatment options.

If an employee does have a problem, employers can respond by showing concern and having treatment resources available, Elkon said.The employee could use a leave of absence to get the necessary treatment, with the assurance that they won’t lose their job while they’re getting treatment.

“If someone is showing any signs of addiction, it’s important to show concern but be firm with that person sooner rather than later because it could spiral and affect other co-workers.” she said.

ADVERTISING SALES Clifford Capone Vice President, Group Publisher 312-967-3538 ccapone@Workforce.com Daniella Weinberg Eastern Sales Director 917-627-1125 dweinberg@Workforce.com Ana Dirksen Western Sales Director 312-847-5729 adirksen@Workforce.com Kevin M. Fields VP, Business Development for Events 312-967-3565 kfields@Workforce.com Melanie Lee Business Administration Manager mlee@Workforce.com

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w o r k f o r c e . c o m | Workƒorce

49

LAST WORD

Rick Bell

A NOTORIOUS WORKPLACE WARNING

I

’ve been hitting up a neighborhood eatery for several About six months ago, though, I noticed a change at years now. the restaurant. Some of the funky artwork disappeared.

It’s adorned with funky artwork, airs an eclectic The music went from eclectic to predictable. The weekly soundtrack and offers a menu featuring everything from Notorious D.O.G. rotation went static. And most notably a burger slathered in peanut butter to a tasty rotation of familiar faces were gone. hand-made sausages. One week it might be venison, the I discovered that my favorite little eatery had changed next chorizo. No matter the encased meat of the week, the ownership.

Notorious D.O.G. is my go-to item.

I get it. Change happens. For those of us who take comI always feel comfortable stopping in. Not in a “Cheers” fort in the familiar, we need to adapt.That, or find another way where Norm and Cliff anchor one end of the bar and restaurant that serves tasty, encased meat.

Frasier Crane holds down the other end and everybody Over the next couple of visits it was clear that other knows my name, but instead for its casual neighborhood vibe. changes were underway. New staff members were inexperienced, which is understandable, but they also seemed indifferent to the legacy of customer service that built up over the years.

Since the staff was still pooling tips, it presented the risk of a breakdown in trust between engaged longtime servers and indifferent new people manifesting itself in an atmosphere of apathy.The delicate dance of having each others’ backs, which had served employees so well, threatened to descend into a clumsy series of missteps that frustrated all staff members and irritated patrons accustomed to a high level of service.

Building a cohesive staff is a challenge all managers face.

As good as the food, drink and atmosphere are, what Engaging and retaining them truly tests that person’s ability I’ve particularly appreciated is the staff camaraderie. It’s a to manage people but also speaks volumes for employees’ talented young team that with few exceptions has worked willingness to set aside their own interests for the good together since my initial visit. I’ve often mused that it must of the organization. Even in the best of economic times be hard to crack this employee roster since the faces have a mere one-third of employees say they are engaged in been familiar for so long. their work.

I even wondered whether there was profit sharing or an That means you have a whole lot of your workforce who employee stock ownership plan to retain the team. In an at best are indifferent about their work and a big portion of industry where turnover is regularly 60 percent-plus, they them who couldn’t give a rat’s tail about you, the company’s were an employee-retention oddity. goals or mission statement.

Ultimately I concluded that this team just enjoys workWhat can you do? You can gamble on an exodus and ing together. So I wasn’t all that surprised to find out that hope to rebuild what likely has become a demoralized staff they’re cool with sharing the wealth by pooling their tips. or worse, an ugly, toxic mess. Or, realize and appreciate What a novel concept that in our “Eff you, I got mine” the current camaraderie and learn the nuances of what working world, a group of 15 or 20 people pulling for sustains it. one another’s success allowed them to share the work and Sure you are going to make changes. It’s your shop now. reap the rewards.

But too many bosses make change just for change’s sake.

It was not unusual to see one of them serving one night, Can I toss out a cliché? Why fix what isn’t broken? hosting the next and behind the bar on another visit. As a Sadly, I still don’t feel that old level of comfort. I’m probcollective they have each others’ backs. ably not the lone patron who noticed a swing in servers’ If one server has a table that requires a lot of attention, engagement. another server or busser covers for their colleague by doing Swapping out wall hangings, reprogramming music and the little things — refilling water glasses or taking an appe- curbing the fare might be one thing. But a slippage in service tizer order even though it is not their table. The team atti- is noticeable, and it’s also notoriously bad for business. tude provides amazing customer service, solves problems on the fly and perhaps most importantly keeps the locals Rick Bell is Workforce’s editorial director. To comment, email eager to return. editor@workforce.com.

CHANGE HAPPENS. FOR THOSE OF US WHO TAKE COMFORT IN THE FAMILIAR, WE NEED TO ADAPT. THAT, OR FIND ANOTHER RESTAURANT THAT SERVES TASTY, ENCASED MEAT.

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Workƒorce | w o r k f o r c e . c o m

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2020

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