Matthew LaWell

Monday, 26 July 2010 20:00

Build and deliver

By the time financial markets around the globe started to tumble in October 2008, much of the manufacturing industry was already deep in a recession that had stretched across the better part of a decade. Millions of workers had been sent home, their labor and their experience no longer needed because of more efficient machines and the rise of globalization. Thousands of factories had been shuttered. Whole companies just disappeared. None of it was coming back. It was all gone for good.

Manufacturing was not, of course, the only industry hit hard prior to the start of the larger recession. Publishing and newspapers had been on the decline for years, and the domestic automotive industry, technically under the umbrella of general manufacturing, had been in a slide for a generation. But perhaps no industry was affected more since the turn of the millennium than manufacturing. About a quarter of a million manufacturing jobs were lost over the course of a decade, the large majority of them prior to 2008. As the recession spread from one industry to another, millions of workers were laid off from the collective work force, but manufacturers often still let go of the most employees.

The cycle was vicious, and it continued, month after month.

How is it possible, then, that less than two years after the economy turned, manufacturing is on the rise again? Manufacturing activity increased again in May, according to the Supply Management’s index, the 10th straight month of growth. And even though that growth has started to slow a bit, growth is still growth. Were the 2008 levels just so low that any growth is significant? Or is the sustained increase in manufacturing a sign for the rest of the economy? Nothing is certain, not yet, but all of the indicators do point up, however modest, rather than down.

“Two years ago, we hit the wall, and as a result, sales volume dropped off,” says Stephen R. Ferrara, partner, regional business line leader, BDO Seidman LLP. “Most of our manufacturing clients have taken a look at their business and said, ‘OK, what do we need to do to improve processes, streamline our head counts and really make our operations as efficient as possible to maximize our potential in a down cycle?’ So I think most of the streamlining and cost cutting has been done, and now these businesses are poised as we come out of this recession to really improve the profitability of their businesses dramatically as we move into 2011.”

Prepare for more change

What was normal two years ago will almost certainly not be normal during the second half of 2010 or even during the first months of 2011. What was normal then, in fact, might never be normal again. Even though it might be a cliché, change really is the new normal in manufacturing — and plenty of other industries, too.

Among those changes are the new gaps in the supply chains of some larger original equipment manufacturers, the result of smaller companies closing during the last couple of years, which might cause delays and problems in receiving supplies in a timely manner. A number of industry experts say the availability of credit will also likely change, with banks starting to somewhat relax their requirements for the first time in two years. But the biggest change might be the addition of manufacturing jobs.

“Manufacturing is now the only business sector that has been adding jobs for five months,” says Emily Stover DeRocco, president, The Manufacturing Institute. “Manufacturers have added 126,000 new jobs.

“But the focus is going to continue to be more on what we call mass customization, as opposed to mass commoditization. This reflects, again, the industry’s response to globalization, which is that U.S. manufacturers, in order to maintain their global leadership, have had to move to a higher quality and a higher value product.”

And that higher quality product will almost certainly lead to more changes in the way manufacturers and so many other companies plan and do business. It is the ripple effect across industries.

For example, if you have not already reassessed your vision and your plan for your company — especially in terms of securing your position in the marketplace — that should move to the top of your priority list.

“You need to have a competitive advantage,” Ferrara says. “If you’re just a commodity, it’s going to be tough to compete. You need to have a differentiating factor in the product you’re taking to market. It’s like anything else. If it’s a manufacturer, if it’s a distributor, if it’s a service company, you need to create that differentiating factor. If you’re manufacturing a product that someone can take offshore and do it much more cost effectively, it’s going to be tough for you to compete at that level.

“You have to have a product that is unique enough that it can’t be produced elsewhere. What’s unique about what you’re doing that separates you from the pack?”

Doing so can also help you better position yourself and your company for the continuing changes and the eventual uptick in the economy and the industry.

Keep the long term in perspective

Two years ago, few manufacturers — few companies at all, really — were prepared for the recession. But you can prepare for the ascension, however slow and modest it might be, by being smart during these coming months and years.

You might think about diversifying your product lines into other markets, so you aren’t as dependent on single-source customers, and, more generally, diversifying your portfolio. You might also research how to best tap in to loans, grants or tax credits that are available from various levels and departments of federal, state and local government to help increase business during challenging times. And you will likely want to consider your risks, especially over the long term.

“I don’t think you can ever stop learning,” Ferrara says. “Now there are a lot of companies that, either on their own or after being driven to do it by lenders or private equity owners or someone else, are bringing in consultants to help them with turnaround and restructuring.

“But to be successful, you need to continually be looking to any successful business needs in order to continually be focused on improvement and what you can be doing differently to be successful, grow and evolve. If you become complacent, that’s how you die.”

Technology and education, as would be expected, can also play a role in increasing your business. Several experts discussed how the advantage of companies that are owned and operated in the United States is the technology that is developed in the United States. Domestic manufacturers continue to be at the forefront when it comes to utilizing technology in their processes, a trend that will only continue. To ensure that the technology is operated correctly and efficiently, workers should be more educated than they were 40, 20, even 10 years ago, and with so many quality workers still unemployed, there is a deep talent pool from which to hire.

How you handle all of that now might be the difference between a quicker return to profitability and increased production, and the far less appealing option of a long struggle back to respectability and some small sense of comfort in the market.

Most important, though, is to do everything with the long term — and that refers to years and decades, not just months and quarters — in mind.

“I think you’re going to see people continue to be cautious about investing as we move through 2010,” Ferrara says. “They’re going to wait to see some sustainable growth take place moving into 2011, and I really think that, as a result of this recession, you’re going to see businesses continue to be cautious as we move into 2011 and 2012 and going from there.”

Ask questions

As you prepare for the last months of 2010 and the first months of 2011, it will be important to keep any number of questions in mind. Write them down. Type them and print them out. Keep a copy on your desk. Distribute copies to your executive team, perhaps even all of your employees. Just keep them in mind. No matter how well you know your business and your industry, that list of questions will be as important now as it has ever been.

And just what questions should make the list? Well, a lot will depend on your industry, your goals and your financial standing at the moment, but there are some questions that all businesses need to be asking right now. And those are: What is happening in your industry? Is it expanding or contracting? Is your company expanding or contracting? Where do you see your company in 2015? In 2020? Is your company in the right market? Is it in the right position in the market? What are the strengths and expertise that your company has that could be adapted to another market or product line? Where can you turn to think through your situation? Will your company be able to receive a large enough line of credit during the next year? Will you be able to fund your growth? How sustainable are the current demands? And, the great unknown, how will global events affect your company?

“I think the cost of goods has been driven down,” Ferrara says. “For example, steel prices a few years ago were much higher, and as the economy softened and the demand has gone down, the cost of raw materials has improved. So I think you’re going to see better attention to detail with respect to efficiencies in the manufacturing process as people are working on thinner margins and trying to continue to make money.”

With all of that in mind, you will also need to consider whether your supply chain will be able to respond to the innovative approaches required for future growth and success, which means supply chain capabilities and locations become more important. The demographics of your work force are also important, especially with a generation of baby boomers still on the brink of retirement. And innovation is important, too. How will you move ideas from the collective mind of your company to the drawing board to the marketplace? Live in the present but remain focused on the future.

“Eyes on the future, but remember the volatility of this market,” DeRocco says. “There’s a constant threat to every business sector and there are some very large factors in play right now that will determine manufacturers’ cost structure for continued operations, so they’re keeping an eye on all of those — public policy, the global impacts around the world, certainly the European financial crisis.

“Every one of those issues has an impact and creates new challenges for manufacturers operating in that environment.”

Tuesday, 06 July 2010 10:37

3 Questions

Robb Gomez has been with Paradigm Learning Inc., which uses a

discovery learning approach to corporate training, since its inception in 1994.

Prior to his current position as president, Gomez was executive vice president

of sales. He worked with large clients such as McKesson, Tenneco Automotive and

HCA on strategic communications initiatives.

Q. What should companies train employees in as the economy

improves?

Anything from a training perspective that further engages the

employee in the understanding of how your organization makes money is probably

going to be valuable training. Even as the economy starts to come out of a

rather dismal year and a half, it’s still going to be important to focus in on

making the business better. We’re always going to have another downturn, and

when we have that downturn, we need to really ratchet down on how we look at

our business, how we spend the money to improve our business and all of those

other things that improve margins.

Q. How can companies determine what training to provide

employees?

It’s really just doing a survey of the organization to see

where there are gaps. That’s as easy as going out with a 10-question survey and

asking your employee base where they feel their development gap is in relation

to what the organization asks of them.

Q. How can companies monitor training?

One of the things that we profess in any of our programs is

making sure the participants in a program are truly walking away with some sort

of action plan that gets them committed to doing something different based upon

what they’ve learned. Walking away with one, two or three key behavioral things

that I’m going to do differently now that I’ve been exposed to this content —

that’s the first thing. The second thing is making sure as an organization you

then are doing constant follow-up. You want them making commitments that have

some sort of quantifiable results. At that point it becomes very, very easy to

track some sort of ROI on the training effort that you’ve put in place.

Unfortunately, many organizations don’t do a good job of it.

The training was a failure. All of that time, all of that

effort, all of that money, just gone, just out the window and gone. What other

explanation was there, after all, for drop after drop in the hard numbers from

a talented sales team in the wake of a training and development session?

It could have happened at any business, but for the purposes

of this story, it happened at a large technology company with headquarters in

the Midwest. The top executives, frantic for answers, called a corporate

training firm. “Our sales are down,” the executives said. “We need training.”

That technology company was part of a large percentage of

businesses that continued to invest in corporate training, education and

development during the last couple of years. Thousands and thousands of others

turned away from training, unable or unwilling to spend more money during the

recession.

But a panel of more than 30 industry experts and academic

professionals agreed that it would have been far better for businesses to

continue to spend on training during those tough times — to invest in their

employees and to show the extent of that investment, to improve the business

and keep it up to date, to be in a better position when the economy ultimately

turns around — than to tighten the budget. The same rule applies now, too.

“Training is always important but even more so in times like

this,” says Pat Galagan, executive editor, ASTD. “This is when you really have

to come out of the gate running. It’s a big mistake to cut your training budget

when times are tough because it leaves you unprepared for better times.”

Make a plan

Members of the corporate training firm arrived the next day

and talked with as many employees as possible at the technology company, from

executives to engineers to those slumping sales representatives and everyone

else in between. They prodded and probed and asked questions. They were curious

about what, exactly, had happened.

They wanted to know, before they embarked on another

training session, whether another training session was actually necessary.

This is what you should do when you’re in the process of

determining whether to invest in training and development for your employees.

You should prod and probe and plan, because just as you shouldn’t approach a

new business venture without a model and a solid idea of what you want to

accomplish, neither should you approach training without thoughts of what you

need to tackle.

“Typically, businesses start by looking at their goals and

their objectives for a period of time, usually the coming year,” Galagan says.

“Some companies will do what’s called a skills audit to see if they have the skills

to support the direction. Then if they don’t, they will try to train to fill

any gaps that they find.

“It’s a very comprehensive process of looking at the skills

that employees have in key areas and matching that against the skills you feel

you need.”

And even though those needs will vary from business to

business, from industry to industry, there are a number of common training

areas on which almost all businesses should focus. Leadership development,

project management and team building are all increasingly important because of

the changing demographics and economy and because general communication and

technology skills are as important now as always.

“The first thing I always emphasize is that you need to

determine your training needs,” says Lisa Ncube, assistant professor,

Department of Organizational Leadership, College of Technology, Purdue

University. “Where are you lacking in your skills? In your knowledge? Where do

you see a need? Many times, I see routine training conducted because that’s how

it has always been done. But is that what you really need? Find areas that ease

a training need. Where is the gap in performance?”

Open your wallet

Those members of the corporate training firm remained in the

offices for a couple of days. They wanted to follow every lead and turn over

every stone. They wanted to find out what had happened to the sales team after

that apparently disastrous training and development session. And the technology

company executives had no problem paying to keep them around. They wanted to

find out what happened, too.

Do you want to keep your top employees after the job market

opens again? Do you want all of your employees to be happy and to enjoy their

work right now? Investing in training and education is an important part of helping

you do just that. The average business spends about $1,060 on training and

education per employee per year, according to research by ASTD.

Businesses that have the most success tend to spend between 2

and 3 percent of their total payroll cost on training, education and

development. The average is in the middle, of course, right around 2.3 percent.

There are also effective ways to spend a little less, if your

revenue is still down or if you opt to not invest as much in training. Turning

toward local colleges and universities to design a custom program for your

employees is often less expensive than sending them to open enrollment courses,

as are distance learning and online courses. Some businesses opt to look within

for employees who are experts in a specific area and can train the rest of the

staff.

“Many companies do have training departments and experts

in-house,” Ncube says. “Using a lot of those experts in-house would be a way to

cut costs, rather than bringing in experts and consultants.”

Keep an eye on results

At last, an answer for our corporate training firm and our

technology company in the Midwest. That previous training session, as it turned

out, was not to blame for lower sales numbers. No, the culprit was instead the

fact that the technology company executives had recently installed a drastic

restructure of the compensation program. That program encouraged the sales team to try and sell only one of their

many products, and that is what

changed everything.

The training had not been the problem at all.

In fact, without that recent training session, the

technology business might have planted itself in more trouble because of the

new structure of the compensation program. The best money spent might well have

been the money spent on the training — and the worst might have been the money

that was about to have been spent unnecessarily correcting that training.

“You need to know what the measures were before you start the

training,” Ncube says. “If you don’t know that, how will you know whether it has

improved and be able to monitor the changes? You cannot monitor after training.

That’s the whole point of training — to improve performance.”

The only way to know where you are is to know where you were.

In order to receive a more relevant return on your investment, watch the

progress from the planning stages through the training itself, then during the

months, even years, beyond.

“It’s still

the same basic principles that are being used over and over again,” Ncube says.

“But people still don’t get it right. That’s where a lot of companies fall into

the trap and assume that in bad times, that’s the time to get rid of training.

“It’s during difficult times that you need to

keep training going.”

The training was a failure. All of that time, all of that effort, all of that money, just gone, just out the window and gone. What other explanation was there, after all, for drop after drop in the hard numbers from a talented sales team in the wake of a training and development session?

It could have happened at any business, but for the purposes of this story, it happened at a large technology company with headquarters in the Midwest. The top executives, frantic for answers, called a corporate training firm. “Our sales are down,” the executives said. “We need training.”

That technology company was part of a large percentage of businesses that continued to invest in corporate training, education and development during the last couple of years. Thousands and thousands of others turned away from training, unable or unwilling to spend more money during the recession.

But a panel of more than 30 industry experts and academic professionals agreed that it would have been far better for businesses to continue to spend on training during those tough times — to invest in their employees and to show the extent of that investment, to improve the business and keep it up to date, to be in a better position when the economy ultimately turns around — than to tighten the budget. The same rule applies now, too.

“I would like to think training could help the company achieve its business objectives,” says Mark Spool, owner and president, Management Development Solutions. “The way you think of that is through the skill set of the employees and the leadership of the company.”

Make a plan

Members of the corporate training firm arrived the next day and talked with as many employees as possible at the technology company, from executives to engineers to those slumping sales representatives and everyone else in between. They prodded and probed and asked questions. They were curious about what, exactly, had happened.

They wanted to know, before they embarked on another training session, whether another training session was actually necessary.

This is what you should do when you’re in the process of determining whether to invest in training and development for your employees. You should prod and probe and plan, because just as you shouldn’t approach a new business venture without a model and a solid idea of what you want to accomplish, neither should you approach training without thoughts of what you need to tackle.

“What we typically suggest is start by performing a needs assessment,” says Waverly Coleman, assistant dean, Division of Business and Technology, and executive director, Corporate Solutions, Community College of Philadelphia. “One easy way to do this is trying to sit back and looking at where the problems are [that] the organization is facing.

“Then, sort of peel away layers of the onion, so to speak, in terms of trying to identify the root causes of these problems. Once we can identify the actual problem, what we look at are the skill levels of the individuals involved.”

And even though those needs will vary from business to business, from industry to industry, there are a number of common training areas on which almost all businesses should focus. Leadership development, project management and team building are all increasingly important because of the changing demographics and economy and because general communication and technology skills are as important now as always.

“Do questionnaires or do focus groups or interviews, review the employees’ performance appraisals,” Spool says. “It’s certainly understanding the business and therefore business strategies and objectives and looking into the future. What are the implications of the business in the future in regards to the skill set that is needed?”

Open your wallet

Those members of the corporate training firm remained in the offices for a couple of days. They wanted to follow every lead and turn over every stone. They wanted to find out what had happened to the sales team after that apparently disastrous training and development session. And the technology company executives had no problem paying to keep them around. They wanted to find out what happened, too.

Do you want to keep your top employees after the job market opens again? Do you want all of your employees to be happy and to enjoy their work right now? Investing in training and education is an important part of helping you do just that. The average business spends about $1,060 on training and education per employee per year, according to research by ASTD.

“That’s an average, not a recommendation,” says Pat Galagan, executive editor, ASTD. “In that pool of companies, some are large, some are small, some are government, some are private.”

Businesses that have the most success tend to spend between 2 and 3 percent of their total payroll cost on training, education and development.

There are also effective ways to spend a little less, if your revenue is still down or if you opt to not invest as much in training. Turning toward local colleges and universities to design a custom program for your employees is often less expensive than sending them to open enrollment courses, as are distance learning and online courses. Some businesses opt to look within for employees who are experts in a specific area and can train the rest of the staff.

“Companies ought to be focusing more on how their employees can learn from experience,” Spool says. “It’s been proven to be the most effective and it’s got to be the most cost-efficient.

“As long as a company continues to offer stretch assignments and grow employees and links their job with their own personal growth, you’re much more likely to retain them, let alone improve their capabilities.”

Keep an eye on results

At last, an answer for our corporate training firm and our technology company in the Midwest. That previous training session, as it turned out, was not to blame for lower sales numbers. No, the culprit was instead the fact that the technology company executives had recently installed a drastic restructure of the compensation program. That program encouraged the sales team to try and sell only one of their many products, and that is what changed everything.

The training had not been the problem at all.

In fact, without that recent training session, the technology business might have planted itself in more trouble because of the new structure of the compensation program. The best money spent might well have been the money spent on the training — and the worst might have been the money that was about to have been spent unnecessarily correcting that training.

“Companies don’t want to send people to training and also pay for the training if they don’t have some level of assurance that training is having a return on investment at that organization,” Coleman says.

The only way to know where you are is to know where you were. In order to receive a more relevant return on your investment, watch the progress from the planning stages through the training itself, then during the months, even years, beyond.

“An organization’s employees are really their most valuable resource,” Coleman says. “The investment they make in human capital is really going to pay great dividends down the road for that organization in terms of helping them become even more competitive in a global marketplace.”

The training was a failure. All of that time, all of that effort, all of that money, just gone, just out the window and gone. What other explanation was there, after all, for drop after drop in the hard numbers from a talented sales team in the wake of a training and development session?

It could have happened at any business, but for the purposes of this story, it happened at a large technology company with headquarters in the Midwest. The top executives, frantic for answers, called a corporate training firm. “Our sales are down,” the executives said. “We need training.”

That technology company was part of a large percentage of businesses that continued to invest in corporate training, education and development during the last couple of years. Thousands and thousands of others turned away from training, unable or unwilling to spend more money during the recession.

But a panel of more than 30 industry experts and academic professionals agreed that it would have been far better for businesses to continue to spend on training during those tough times — to invest in their employees and to show the extent of that investment, to improve the business and keep it up to date, to be in a better position when the economy ultimately turns around — than to tighten the budget. The same rule applies now, too.

“Training is always important but even more so in times like this,” says Pat Galagan, executive editor, ASTD. “This is when you really have to come out of the gate running. It’s a big mistake to cut your training budget when times are tough because it leaves you unprepared for better times.”

Make a plan

Members of the corporate training firm arrived the next day and talked with as many employees as possible at the technology company, from executives to engineers to those slumping sales representatives and everyone else in between. They prodded and probed and asked questions. They were curious about what, exactly, had happened.

They wanted to know, before they embarked on another training session, whether another training session was actually necessary.

This is what you should do when you’re in the process of determining whether to invest in training and development for your employees. You should prod and probe and plan, because just as you shouldn’t approach a new business venture without a model and a solid idea of what you want to accomplish, neither should you approach training without thoughts of what you need to tackle.

“What should companies focus on for their employees?” says Newt Margulies, professor emeritus and associate dean, executive education, University of California Irvine. “Companies are taking a harder look at their strategy, and whatever flows out of that strategy becomes the areas they would like to focus on for education and training.”

And even though those needs will vary from business to business, from industry to industry, there are a number of common training areas on which almost all businesses should focus.

“Every place I go, I hear about five things, and the first is leadership,” Margulies says. “Leadership means different things in different companies, but 90 percent of what we do in those programs is helping people do an assessment of how they lead. I also hear a lot about operations excellence. How do we improve the way we deal with customers and how we respond to customers?

“The third is management strategy. What is it, and how do we formulate a management strategy? The fourth is project management. How do you really manage an effective project team? What are the elements that contribute to project success? The fifth is really teams, in every sector. How do we become more effective? And how do you make judgments about the effectiveness of teams?”

Open your wallet

Those members of the corporate training firm remained in the offices for a couple of days. They wanted to follow every lead and turn over every stone. They wanted to find out what had happened to the sales team after that apparently disastrous training and development session. And the technology company executives had no problem paying to keep them around. They wanted to find out what happened, too.

Do you want to keep your top employees after the job market opens again? Do you want all of your employees to be happy and to enjoy their work right now? Investing in training and education is an important part of helping you do just that. The average business spends about $1,060 on training and education per employee per year, according to research by ASTD.

“That’s an average, not a recommendation,” Galagan says. “In that pool of companies, some are large, some are small, some are government, some are private.”

Businesses that have the most success tend to spend between 2 and 3 percent of their total payroll cost on training, education and development. The average is in the middle, of course, right around 2.3 percent.

There are also effective ways to spend a little less, if your revenue is still down or if you opt to not invest as much in training. Turning toward local colleges and universities to design a custom program for your employees is often less expensive than sending them to open enrollment courses, as are distance learning and online courses. Some businesses opt to look within for employees who are experts in a specific area and can train the rest of the staff.

Keep an eye on results

At last, an answer for our corporate training firm and our technology company in the Midwest. That previous training session, as it turned out, was not to blame for lower sales numbers. No, the culprit was instead the fact that the technology company executives had recently installed a drastic restructure of the compensation program. That program encouraged the sales team to try and sell only one of their many products, and that is what changed everything.

The training had not been the problem at all.

In fact, without that recent training session, the technology business might have planted itself in more trouble because of the new structure of the compensation program. The best money spent might well have been the money spent on the training — and the worst might have been the money that was about to have been spent unnecessarily correcting that training.

The only way to know where you are is to know where you were. In order to receive a more relevant return on your investment, watch the progress from the planning stages through the training itself, then during the months, even years, beyond.

“This is a good time to begin thinking seriously about it,” Margulies says. “Now is the time to ready yourself for the upswing, because the upswing is coming. I can’t tell you that it’s coming in 2011 or 2012, but you know it’s coming. Here’s the opportunity for you to help develop your internal talent so that you’re ready. Whatever you want to do, how do you ready your folks for that?”

The training was a failure. All of that time, all of that effort, all of that money, just gone, just out the window and gone. What other explanation was there, after all, for drop after drop in the hard numbers from a talented sales team in the wake of a training and development session?

It could have happened at any business, but for the purposes of this story, it happened at a large technology company with headquarters in the Midwest. The top executives, frantic for answers, called a corporate training firm. “Our sales are down,” the executives said. “We need training.”

That technology company was part of a large percentage of businesses that continued to invest in corporate training, education and development during the last couple of years. Thousands and thousands of others turned away from training, unable or unwilling to spend more money during the recession.

But a panel of more than 30 industry experts and academic professionals agreed that it would have been far better for businesses to continue to spend on training during those tough times — to invest in their employees and to show the extent of that investment, to improve the business and keep it up to date, to be in a better position when the economy ultimately turns around — than to tighten the budget. The same rule applies now, too.

“Training is always important but even more so in times like this,” says Pat Galagan, executive editor, ASTD. “This is when you really have to come out of the gate running. It’s a big mistake to cut your training budget when times are tough because it leaves you unprepared for better times.”

Make a plan

Members of the corporate training firm arrived the next day and talked with as many employees as possible at the technology company, from executives to engineers to those slumping sales representatives and everyone else in between. They prodded and probed and asked questions. They were curious about what, exactly, had happened.

They wanted to know, before they embarked on another training session, whether another training session was actually necessary.

This is what you should do when you’re in the process of determining whether to invest in training and development for your employees. You should prod and probe and plan, because just as you shouldn’t approach a new business venture without a model and a solid idea of what you want to accomplish, neither should you approach training without thoughts of what you need to tackle.

“Typically, businesses start by looking at their goals and their objectives for a period of time, usually the coming year,” Galagan says. “Some companies will do what’s called a skills audit to see if they have the skills to support the direction. Then if they don’t, they will try to train to fill any gaps that they find.

“It’s a very comprehensive process of looking at the skills that employees have in key areas and matching that against the skills you feel you need.”

And even though those needs will vary from business to business, from industry to industry, there are a number of common training areas on which almost all businesses should focus. Leadership development, project management and team building are all increasingly important because of the changing demographics and economy and because general communication and technology skills are as important now as always.

“Do an online survey and try to find out from your employees, if they had an opportunity, what they would really like to focus on and where they feel they have a need for improvement,” says Leslie Ciborowski, president and founder, TrainSmart Inc.

“And set expectations for them, as well.”

Open your wallet

Those members of the corporate training firm remained in the offices for a couple of days. They wanted to follow every lead and turn over every stone. They wanted to find out what had happened to the sales team after that apparently disastrous training and development session. And the technology company executives had no problem paying to keep them around. They wanted to find out what happened, too.

Do you want to keep your top employees after the job market opens again? Do you want all of your employees to be happy and to enjoy their work right now? Investing in training and education is an important part of helping you do just that. The average business spends about $1,060 on training and education per employee per year, according to research by ASTD.

“That’s an average, not a recommendation,” Galagan says. “In that pool of companies, some are large, some are small, some are government, some are private.”

Businesses that have the most success tend to spend between 2 and 3 percent of their total payroll cost on training, education and development. The average is in the middle, of course, right around 2.3 percent.

There are also effective ways to spend a little less, if your revenue is still down or if you opt to not invest as much in training. Turning toward local colleges and universities to design a custom program for your employees is often less expensive than sending them to open enrollment courses, as are distance learning and online courses. Some businesses opt to look within for employees who are experts in a specific area and can train the rest of the staff.

“Train other employees within your organization and provide them that opportunity to work with others and train others,” Ciborowski says. “It’s not always about compensation, but make sure they get that recognition for what they do.”

Keep an eye on results

At last, an answer for our corporate training firm and our technology company in the Midwest. That previous training session, as it turned out, was not to blame for lower sales numbers. No, the culprit was instead the fact that the technology company executives had recently installed a drastic restructure of the compensation program. That program encouraged the sales team to try and sell only one of their many products, and that is what changed everything.

The training had not been the problem at all.

In fact, without that recent training session, the technology business might have planted itself in more trouble because of the new structure of the compensation program. The best money spent might well have been the money spent on the training — and the worst might have been the money that was about to have been spent unnecessarily correcting that training.

“Some organizations, they just keep throwing dollars at training, time after time after time,” Ciborowski says. “In order to monitor training results, you have to know where you started. We make them think about it. We look at ways that we can help them measure that success and effectiveness.”

The only way to know where you are is to know where you were. In order to receive a more relevant return on your investment, watch the progress from the planning stages through the training itself, then during the months, even years, beyond.

“One vehicle of having corporate training is to impart to your employees what your mission, vision and strategies are for the organization,” Ciborowski says. “People want to be happy and they want to please, but if they don’t have direction or if they don’t understand, one way they can is through training.”

Wednesday, 26 May 2010 20:00

Creating a wellness program

Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands, clicking off each step up and down the stairs and through the halls and around the cubicles. Imagine an office where employees snack on fruits and nuts rather than candy bars, where employees drink water instead of another can of soda, and where employees have managed to kick that pack-a-day habit.

Imagine an office where health and wellness are a priority.

Is this anything like your office? It should be. Perhaps it will be during the months and years to come.

There is little doubt that health and wellness are, if nothing else, a hot topic across the nation. Just turn on the television and watch a reality show about weight loss or any of what seems like a dozen syndicated talk shows where a photogenic doctor fields questions and concerns. Or pick up a magazine and read the features on wellness recently published in Time and The New York Times Sunday Magazine. Or just turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.

Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise or even move nearly enough. We are in the dregs of a pandemic. All of our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.

“A wellness strategy is really a subset of a human capital strategy,” says Paul Martino, vice president, health and wellness solutions, WellPoint Inc. “I think if an employer has a long-term horizon and views human capital in a particular way — that it is valuable, that you want to retain your highly valuable and efficient people — you want to allow people to be at their job and functioning well.”

If you do not have a program up and running, pun intended, at your business, why should you bother to install one now? Or if you do have a program, why should you aim to improve it as we continue to move through 2010? Well, because plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. Oh, and there is an impressive return on the investment, especially after a year or two.

But you have to plan and install the program first.

Take the first step

Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are all important and relevant questions, and if the answer to any is yes, you will want to consider a wellness program.

But why do you want to install a wellness program?

There are no wrong answers, of course, but if there is no why, if there is no vision, the program will flounder.

“Often, our first presentation is with the president or CEO or owner of a company to make the business case for wellness,” says Jennifer Grana, director of health promotion, Highmark Inc. “And absolutely, that interest, that motivation has to be there for it to get off the ground, and sometimes, that message is more efficient coming from a physician.

“That is a key to success. If you don’t have the support of the owner of a smaller business, or of midmanagement in a medium-size company, it is very hard for a wellness committee to achieve their goals and to drive interest in the program.”

And if you and your executives do not support the program from its first breath, neither will your employees, so take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.

HRAs and biometric screenings highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.

HRAs are often free, though if performed in person rather than on the Internet, they can cost between $5 and $25 per employee, depending on the quality and depth of the analysis. Biometric screenings typically cost anywhere between $50 and $150 per employee. You might also need to offer your employees an incentive, like a gift card or cash, for them to give their time to take the tests — because anything less than 70 to 80 percent participation leaves the results skewed and of less use for your business.

“The reason why higher participation is important is because the more people you have participating in a wellness program, the better chance for that behavior change,” Grana says. “And that change in behavior over time is where you’re going to see the impact in the health care cost trend.”

That cost might seem steep, but the information that is revealed can change your business. Do you want to know the overall health risk for your employees? Their weight and body mass index? Their exercise, nutrition and smoking habits? Even their levels of stress at work and at home? All those figures are available and can help lay the groundwork for what you need to know to start a wellness program.

Consider an outside company — and your employees

When you have the results of the HRAs and screenings, you’ll want to work with your insurance company to perform an annual claims review. At that point, you’ll be able to plan for the installation of a wellness program.

But you might not want to keep that plan under your own roof.

Because of compliance regulations and the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your burgeoning program remains legal. After all, you already work with a law firm to handle your legal matters, an accounting firm to handle your numbers and a bank to keep everything in order, so why not work with professionals when it comes to the literal health of your business?

“Typically, for smaller groups and middle-market groups, we do work with human resources or management in the human resources or benefits department,” Grana says.

No matter your choice on that matter, your employees do need to feel a sense of inclusion in —and perhaps even some sliver of ownership of — the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible. And when the program is prepared to launch, make sure you pass along that information well in advance.

The key to increased participation is to offer an incentive, especially now as we continue to recover from recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts. Some businesses opt for duffel bags and water bottles for their employees to take to the gym or larger incentive prizes like a raffle.

“Incentives are a huge driver for participation, and it doesn’t have to be a big incentive,” Grana says. “We just tell our groups it just has to be a meaningful incentive. What we’ve seen from programs with higher participation percentages is that they tied incentives to their benefit design. But we’ve seen great participation with meaningful incentives that are meaningful to a certain population. We’ve had some manufac turing companies where they were raffling off a truck — something like that that gets the morale and motivation up.”

Monitor results and look forward

The fruits of an effective wellness program will take some time to develop and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as new habits spread from employee to employee.

Those new habits, of course, are part of the return on your investment. There are other intangible returns, too, including employee reports that they feel better and look better and now have a success story to tell their friends and family. But without hard numbers, all of those intangibles are nothing more than what one expert referred to as “warm fuzzies.”

Good thing a wellness program is far more than warm fuzzies. After a couple of months or a year or two, you can measure the collective pounds lost, the drop in body mass index, and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.

“You want to look for those success stories and those testimonials, because those often help to engage the employees more than the savings,” Grana says. “You want to make it personal for them, you want to make them feel valued, and that leads to more productivity.”

And there are the dollar figures for the return on your investment. Those are as important as any number on any scale.

Similar to those first trips to the gym and those first months of the program, you should not expect to see any sort of large return during the first year or so. The program might pay for itself during that first year — thanks to employees being able to work more hours and to a possible decrease in health care costs — but you will likely have to wait until the second year, perhaps even early during the third year to see any real positive return.

When that change starts to filter in, you might be surprised at what you see. Over time, the average wellness program will be worth about $3 toward your bottom line for every $1 you invest. Some experts say you can expect more than that, $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.

“If you believe in the value of your human capital and you want to keep the people who are healthy now healthy in the future, then keep them engaged,” Martino says. “Keep them happy at work.”

Wednesday, 26 May 2010 20:00

Creating a wellness program

Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands, clicking off each step up and down the stairs and through the halls and around the cubicles. Imagine an office where employees snack on fruits and nuts rather than candy bars, where employees drink water instead of another can of soda, and where employees have managed to kick that pack-a-day habit.

Imagine an office where health and wellness are a priority.

Is this anything like your office? It should be. Perhaps it will be during the months and years to come.

There is little doubt that health and wellness are, if nothing else, a hot topic across the nation. Just turn on the television and watch a reality show about weight loss or any of what seems like a dozen syndicated talk shows where a photogenic doctor fields questions and concerns. Or pick up a magazine and read the features on wellness recently published in Time and The New York Times Sunday Magazine. Or just turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.

Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise or even move nearly enough. We are in the dregs of a pandemic. All of our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.

“A wellness strategy is really a subset of a human capital strategy,” says Paul Martino, vice president, health and wellness solutions, WellPoint Inc. “I think if an employer has a long-term horizon and views human capital in a particular way — that it is valuable, that you want to retain your highly valuable and efficient people — you want to allow people to be at their job and functioning well.”

If you do not have a program up and running, pun intended, at your business, why should you bother to install one now? Or if you do have a program, why should you aim to improve it as we continue to move through 2010? Well, because plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. Oh, and there is an impressive return on the investment, especially after a year or two.

But you have to plan and install the program first.

Take the first step

Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are all important and relevant questions, and if the answer to any is yes, you will want to consider a wellness program.

But why do you want to install a wellness program?

There are no wrong answers, of course, but if there is no why, if there is no vision, the program will flounder.

“Often, our first presentation is with the president or CEO or owner of a company to make the business case for wellness,” says Jennifer Grana, director of health promotion, Highmark Inc. “And absolutely, that interest, that motivation has to be there for it to get off the ground, and sometimes, that message is more efficient coming from a physician.

“That is a key to success. If you don’t have the support of the owner of a smaller business or of midmanagement in a medium-size company, it is very hard for a wellness committee to achieve their goals and to drive interest in the program.”

And if you and your executives do not support the program from its first breath, neither will your employees, so take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.

HRAs and biometric screenings highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.

HRAs are often free, though if performed in person rather than on the Internet, they can cost between $5 and $25 per employee, depending on the quality and depth of the analysis. Biometric screenings typically cost anywhere between $50 and $150 per employee. You might also need to offer your employees an incentive, like a gift card or cash, for them to give their time to take the tests — because anything less than 70 to 80 percent participation leaves the results skewed and of less use for your business.

“The reason why higher participation is important is because the more people you have participating in a wellness program, the better chance for that behavior change,” Grana says. “And that change in behavior over time is where you’re going to see the impact in the health care cost trend.”

That cost might seem steep, but the information that is revealed can change your business. Do you want to know the overall health risk for your employees? Their weight and body mass index? Their exercise, nutrition and smoking habits? Even their levels of stress at work and at home? All those figures are available and can help lay the groundwork for what you need to know to start a wellness program.

Consider an outside company — and your employees

When you have the results of the HRAs and screenings, you’ll want to work with your insurance company to perform an annual claims review. At that point, you’ll be able to plan for the installation of a wellness program.

But you might not want to keep that plan under your own roof.

Because of compliance regulations and the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your burgeoning program remains legal. After all, you already work with a law firm to handle your legal matters, an accounting firm to handle your numbers and a bank to keep everything in order, so why not work with professionals when it comes to the literal health of your business?

“Typically, for smaller groups and middle-market groups, we do work with human resources or management in the human resources or benefits department,” Grana says.

No matter your choice on that matter, your employees do need to feel a sense of inclusion in, perhaps even some sliver of ownership of, the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible. And when the program is prepared to launch, make sure you pass along that information well in advance.

The key to increased participation is to offer an incentive, especially now as we continue to recover from recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts. Some businesses opt for duffel bags and water bottles for their employees to take to the gym or larger incentive prizes like a raffle.

“Incentives are a huge driver for participation, and it doesn’t have to be a big incentive,” Grana says “We just tell our groups it just has to be a meaningful incentive. What we’ve seen from programs with higher participation percentages is that they tied incentives to their benefit design. But we’ve seen great participation with meaningful incentives that are meaningful to a certain population. We’ve had some manufacturing companies where they were raffling off a truck, something like that that gets the morale and motivation up.”

Monitor results and look forward

The fruits of an effective wellness program will take some time to develop and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as new habits spread from employee to employee.

Those new habits, of course, are part of the return on your investment. There are other intangible returns, too, including employee reports that they feel better and look better and now have a success story to tell their friends and family. But without hard numbers, all of those intangibles are nothing more than what one expert referred to as “warm fuzzies.”

Good thing a wellness program is far more than warm fuzzies. After a couple of months or a year or two, you can measure the collective pounds lost, the drop in body mass index, and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.

“You want to look for those success stories and those testimonials, because those often help to engage the employees more than the savings,” Grana says. “You want to make it personal for them, you want to make them feel valued, and that leads to more productivity.”

And there are the dollar figures for the return on your investment. Those are as important as any number on any scale.

Similar to those first trips to the gym and those first months of the program, you should not expect to see any sort of large return during the first year or so. The program might pay for itself during that first year — thanks to employees being able to work more hours and to a possible decrease in health care costs — but you will likely have to wait until the second year, perhaps even early during the third year to see any real positive return.

When that change starts to filter in, you might be surprised at what you see. Over time, the average wellness program will be worth about $3 toward your bottom line for every $1 you invest. Some experts say you can expect more than that, $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.

“If you believe in the value of your human capital and you want to keep the people who are healthy now healthy in the future, then keep them engaged,” Martino says. “Keep them happy at work.”

Wednesday, 26 May 2010 20:00

Creating a wellness program

Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands, clicking off each step up and down the stairs and through the halls and around the cubicles. Imagine an office where employees snack on fruits and nuts rather than candy bars, where employees drink water instead of another can of soda, and where employees have managed to kick that pack-a-day habit.

Imagine an office where health and wellness are a priority.

Is this anything like your office? It should be. Perhaps it will be during the months and years to come.

There is little doubt that health and wellness are, if nothing else, a hot topic across the nation. Just turn on the television and watch a reality show about weight loss or any of what seems like a dozen syndicated talk shows where a photogenic doctor fields questions and concerns. Or pick up a magazine and read the features on wellness recently published in Time and The New York Times Sunday Magazine. Or just turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.

Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise or even move nearly enough. We are in the dregs of a pandemic. All of our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.

“I always tell everybody that wellness is brain surgery,” says Chris Dobbins, executive director, health promotion services, Community Health Network. “Actually, it’s more difficult than brain surgery because there’s no clear definition of what wellness even means. Every person you talk to will give you a different answer about what wellness means to them and, of course, all those answers are correct.”

If you do not have a program up and running, pun intended, at your business, why should you bother to install one now? Or if you do have a program, why should you aim to improve it as we continue to move through 2010? Well, because plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. Oh, and there is an impressive return on the investment, especially after a year or two.

But you have to plan and install the program first.

Take the first step

Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are all important and relevant questions, and if the answer to any is yes, you will want to consider a wellness program.

But why do you want to install a wellness program?

There are no wrong answers, of course, but if there is no why, if there is no vision, the program will flounder.

“Do you want to build benefits (because) it is the right thing to do? Or, as the management team, is your goal to affect claim costs? Is it a combination of the two?” says Sally L. Stephens, founder and president, Spectrum Health Systems. “Senior management, or whoever initiates it, needs to ask what they want to accomplish by putting a wellness program in. Too many people think it’s a solution but don’t think through clearly what their goals are.”

And if you and your executives do not support the program from its first breath, neither will your employees, so take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.

HRAs and biometric screenings highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.

“Some employees hesitate to give all their personal information to the insurance company,” Stephens says. “They don’t want the insurance companies to know they smoke or any of these other things. Working with a third-party provider ensures 100 percent confidentiality. They manage all the data, they manage the security, and the employer doesn’t have to worry about the data management.”

HRAs are often free, though if performed in person rather than on the Internet, they can cost between $5 and $25 per employee, depending on the quality and depth of the analysis. Biometric screenings typically cost anywhere between $50 and $150 per employee. You might also need to offer your employees an incentive, like a gift card or cash, for them to give their time to take the tests — because anything less than 70 to 80 percent participation leaves the results skewed and of less use for your business.

That cost might seem steep, but the information that is revealed can change your business. Do you want to know the overall health risk for your employees? Their weight and body mass index? Their exercise, nutrition and smoking habits? Even their levels of stress at work and at home? All those figures are available and can help lay the groundwork for what you need to know to start a wellness program.

Consider an outside company — and your employees

When you have the results of the HRAs and screenings, you’ll want to work with your insurance company to perform an annual claims review. At that point, you’ll be able to plan for the installation of a wellness program.

But you might not want to keep that plan under your own roof.

Because of compliance regulations and the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your burgeoning program remains legal. After all, you already work with a law firm to handle your legal matters, an accounting firm to handle your numbers and a bank to keep everything in order, so why not work with professionals when it comes to the literal health of your business?

“If you have enough resources to hire a professional wellness vendor, that would probably provide the most bang for the buck, so to speak,” Dobbins says. “If you don’t have those kinds of resources, I would say a wellness committee could actually be in charge of the wellness program. They’re not going to be as successful because they don’t have the background.”

No matter your choice on that matter, your employees do need to feel a sense of inclusion in —and perhaps even some sliver of ownership of — the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible. And when the program is prepared to launch, make sure you pass along that information well in advance.

The key to increased participation is to offer an incentive, especially now as we continue to recover from recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts.

“I have worked with employer cultures before that didn’t need cash or even incentives,” Dobbins says. “But typically, you almost always need to offer incentives to drive participation and to introduce those services to employees.”

Monitor results and look forward

The fruits of an effective wellness program will take some time to devel op and spread throughout your business. Just remember, when you start to work out or return to the gym, you don’t see a noticeable difference after one day or even after one week or one month. A wellness program is a lot like that trip to gym. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as new habits spread from employee to employee.

Those new habits, of course, are part of the return on your investment. There are other intangible returns, too, including employee reports that they feel better and look better and now have a success story to tell their friends and family. But without hard numbers, all of those intangibles are nothing more than what one expert referred to as “warm fuzzies.”

Good thing a wellness program is far more than warm fuzzies. After a couple of months or a year or two, you can measure the collective pounds lost, the drop in body mass index, and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.

“If we prevent eight pre-diabetics from becoming type 2 diabetics and we catch that in the first year, that could mean anywhere from $2,000 to $15,000 in claims for one person, depending on the level of their illness and whether they have kidney dysfunction,” Dobbins says. “But how do you measure that? It’s critical if you can get the medical and the Rx and the HRA and the biometric data in one centralized database, you’re going to get the best bang for your buck in terms of true ROI.”

And there are the dollar figures for the return on your investment. Those are as important as any number on any scale.

Similar to those first trips to the gym and those first months of the program, you should not expect to see any sort of large return during the first year or so. The program might pay for itself during that first year — thanks to employees being able to work more hours and to a possible decrease in health care costs — but you will likely have to wait until the second year, perhaps even early during the third year to see any real positive return.

“Improvements in health can take a little longer,” Stephens says. “But what we say an employer should expect is stabilization of their health care claims within three to five years — meaning their claims will trend below industry average, assuming they don’t have a lot of outliers like cancer or automobile accidents, things that a wellness program isn’t really going to impact.”

When that change starts to filter in, you might be surprised at what you see. Over time, the average wellness program will be worth about $3 toward your bottom line for every $1 you invest. Some experts say you can expect more than that, $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.

“A good wellness program takes time, it takes money and it takes a commitment,” Stephens says. “The health of a population takes years to get in its current state. It takes time to reverse that trend; it doesn’t happen just overnight. Be patient.”

Wednesday, 26 May 2010 20:00

Creating a wellness program

Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands. Imagine an office where employees snack on fruits and nuts rather than candy bars, drink water instead of another can of soda, and have managed to kick that pack-a-day habit.

Imagine an office where health and wellness are a priority.

Is this anything like your office? Perhaps it will be during the months and years to come.

There is little doubt that health and wellness are hot topics. Just turn on the television and watch reality shows about weight loss, or pick up a magazine and read the articles on wellness published recently in Time and The New York Times Sunday Magazine. Or turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.

Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise, and our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.

“You really need to think about your overall strategy and culture,” says Michael Nadeau, president and chief executive officer, Viverae Inc. “If somebody is going to improve their personal health, they need to change their lifestyle. If a business is going to change their health, they need to change and improve their culture and incorporate health and wellness management.”

If you don’t have a program at your business, why should you bother to install one now? If you do have a program, why should you aim to improve it as we continue to move through 2010? Well, plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. And there is an impressive return on the investment, especially after a year or two.

But you have to plan and install the program first.

Take the first step

Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are important and relevant questions. If the answer to any is yes, you’ll want to consider a wellness program.

The question you have to ask yourself, though, is why do you want to install a program?

There are no wrong answers, but if there is no why, the program will flounder.

“You need to determine what your budget is per person and whether you want to do executive wellness, as well,” says Dr. Steven Schnur, CEO, EliteHealth.MD LLC. “Then interview several companies and see what fits in that budget.”

And if you and your executives don’t support the program from its first breath, neither will your employees. So take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.

“Screening usually involves biometric testing, which is blood pressure and body fat analysis, screening blood work,” Schnur says. “This is what I call an M.D. review, which is where someone actually reviews the screened blood work and the biometric testing.”

HRAs, which are often free online or cost between $5 and $25 per employee if performed in person, and biometric screenings, which cost between $50 and $150 per employee, highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.

Consider your employees

Because of the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your wellness program remains in compliance.

“Running these programs is difficult,” Nadeau says. “There’s a lot of work that goes into coordinating it and making it all happen. And it’s just as easy to coordinate a program for 1,000 employees as it is for 50 employees. That’s why the spend tends to be a little higher per employee for smaller companies.”

No matter your choice on that matter, your employees do need to feel a sense of inclusion in —and perhaps even some sliver of ownership of — the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible and allow them to participate.

The key to increased participation is to offer incentives, especially now as we continue to recover from the recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts.

“You need to show someone you’re thinking about their health,” Nadeau says. “This is where you need to provide the right information at the right time and at the right frequency, because you need to have specific programs designed for a specific population.”

Monitor your results

The fruits of an effective wellness program will take time to develop and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as the culture changes.

Over time, you can measure the collective pounds lost and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.

The program might also pay for itself during that first year — thanks to employees being able to work more hours and to a possible decrease in health care costs — but you’ll likely have to wait until at least the second year to see any real positive return.

“Usually, you have a 60 percent return on investment in the first two years,” Schnur says. “You probably reach around 100 percent in years three or four.”

When that change starts to filter in, you’ll likely see the average wellness program will be worth about $3 for every $1 you invest. Some experts say you can expect more than that — $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.

“At the end of the day, our health care costs are trending up 7, 8, 15, perhaps even 20 percent per year for smaller companies,” Nadeau says. “The question I always pose is, ‘What are you doing about it?’ If your rent went up 10 percent per year, you’d move. And around 70 percent of all that money is lifestyle related; it’s preventable.

“When you put it back in those financial terms, doing nothing is not working. Health care rates will continue to go up if we do nothing.”