Marcia Passos Duffy
Online sales are growing at a rate of about 25 percent per year. This figure, while impressive, still only accounts for about 3 percent of total retail sales. While many consumers increasingly browse the Internet for information on products and services, linking that information to an actual online sale can be tough.
“Internet users still hesitate to take their credit cards out and actually buy a product,” says Brian Ratchford, Ph.D., who teaches marketing at the UT Dallas School of Management. “But there are ways to increase that trust and sales.”
Smart Business spoke with Ratchford about the challenges to marketing a product or service online and how to overcome the obstacles of selling in cyberspace.
What is the biggest challenge in marketing and selling online versus offline?
There are two major obstacles: The biggest obstacle is that the customer can’t inspect or try a product or service firsthand online. Certain products cars and initial purchases of cosmetics and fragrances, for instance are very difficult to sell online for this reason.
Some companies have made strides in trying to overcome this stumbling block. For example, many car companies now offer virtual test drives. But no matter how advanced the technology, this still cannot replace a live test drive.
The second major challenge is the fear factor. Despite the healthy increase in online sales, the fact remains that many people are still afraid to conduct transactions online. They may be uncertain about the security of the site and the reliability of the vendor, and they may be concerned about identity theft.
How can businesses overcome these obstacles to create a successful e-commerce site?
Trust is the foundation to creating a successful e-commerce site. There are several steps you can take to accomplish this.
First, your business must have an easy-to-navigate site. Just because a site may be beautiful to look at doesn’t mean that it is easy to get around. It must not contain any dead ends or be frustrating in any way for the user. It is too easy for the user to give up and click somewhere else. If the learning curve to navigate a site is too steep, visitors won’t bother to get beyond the home page. Having a site that is easy to navigate is the first step to creating trust. Don’t scrimp on this step.
Next, build a strong reputation online. EBay which, by the way, constitutes one-third of all online sales strengthens its own reputation with seller ratings. Those sellers with poor ratings are quickly weeded out, since no one will buy from them. Another way to reassure visitors that you sell a quality product or service is to add testimonials from your customers and clients on your site with full attribution. By the way, businesses with good reputations in brick-and-mortar have an easier time selling online since their good name follows them online.
Are there any other strategies businesses can use to reassure visitors and convert these visitors to customers?
An e-mail newsletter is a good way to establish trust and establish a relationship with potential customers. The best prospects in e-commerce like in traditional commerce are repeat customers. These are the people who already trust you.
Marketing trends happen quickly online how does a business keep up?
Companies need to test what works and doesn’t work and this kind of marketing experimentation can be done more inexpensively online that it can be offline. There are also many tools that can be used to track visitors to a site, which is invaluable in helping you understand where your visitors or subscribers live and who they are. One company, for example, used its database of e-mail subscribers to research where to open up a new retail location.
Businesses also need to remember that the Internet serves two functions: information and transaction. While e-commerce is still quite a small percentage of the overall buying patterns of consumers, information is the driving force behind the Internet.
BRIAN RATCHFORD, Ph.D., is a Charles and Nancy Davidson Distinguished Professor of Marketing at the UT Dallas School of Management (www.UTDallas.edu). Reach him at (972) 883-5975 or firstname.lastname@example.org.
Have you identified the emerging leaders in your organization? If you assume that the next in line for a top position is the logical employee for your succession plans, you may be selecting the wrong person, according to Anne Hach, the executive director of training and development at Cleveland-based Corporate College.
“Business owners hurt themselves twice when they simply move technically competent employees up to leadership roles without preparing them,” Hach says. “Once by removing good employees from jobs they performed well, and again when the employees step into the new role, which they can’t do adequately because they have not been properly trained.”
Smart Business spoke with Hach about the importance of identifying and training emerging leaders in order to create a seamless transition when succession occurs.
How can business owners successfully identify emerging leaders?
Those companies that successfully identify leaders understand what qualities they need in a leader. Some leadership competencies are universal, such as communication skills, good self-control, delegation skills and decision-making abilities. However, depending on the organization — and the industry — other competencies will be needed. It all depends on the culture and mission of a business. For example, in the information-technology-centered organization, a leader not only needs basic competencies but also strong creative thinking and innovation skills.
If leaders are not readily apparent, what can a business owner do to cultivate leaders in the company?
You need to design your business culture so that there are opportunities for emerging leaders to shine. For example, there are companies that keep decision-making high up on the corporate ladder, leaving little opportunity for those further down the ladder to hone their leadership abilities.
Leaders can also be found among managers who are excelling in their roles or among employees who have been recognized for technical competence and show pronounced leadership abilities — as witnessed in meetings, projects or other areas.
Once emerging leaders are identified, what are the next steps?
You need to train these emerging leaders on an ongoing basis. This kind of training can be done through formal or informal programs. Employees can participate in training sessions or work with in-house mentors or coaches. The training needs to strengthen the core leadership skills, plus any other leadership skills you have identified that are important to the business.
What can happen if a business does not identify and adequately train emerging leaders?
This kind of succession planning — at all levels of management — is critical for sustained growth of a company. Without it, what usually happens when a current leader retires or leaves the company is that the warm body most readily at hand — usually the next in line for the job — is promoted without much thought or preparation.
This is a strain for the company since it leaves a gaping hole in the employee’s former position until a new employee gets up to speed. Plus, the promotion of the individual is often from a technical position to a leadership position — without proper training, an employee can flounder in this new role, potentially damaging the morale and performance of other employees. This very common business scenario can be avoided with proper planning and preparation.
Could you summarize the steps necessary to groom emerging leaders?
- Hire for talent, not position.
- Provide opportunities for informal
leadership at all levels of the company.
- Create and implement a succession
plan for each position.
- Define competencies of successful
leaders and provide training.
- Provide mentoring and coaching for
ANNE HACH is the executive director of training and development at Corporate College (www.corporatecollege.com) based in Cleveland, which offers employers custom-designed training programs to enhance future work force development, job growth and job retention in Northeast Ohio. Reach her at (440) 522-5072 or email@example.com.
As the business world becomes increasingly global and integrated, more countries have seen the benefit of moving toward International Financial Reporting Standards (IFRS), a set of international accounting standards established under the aegis of the London-based International Accounting Standards Board. The IFRS determines how financial events and transactions are reported. Publicly traded companies in the European Union have been using these standards since 2005 and nearly 100 other countries, including Australia, Russia, Singapore, China, India and Pakistan, intend to adopt or already have adopted IFRS methods.
“Converging our financial system with the IFRS would allow greater globalization and greater transparency on a uniform basis,” says Adolf J.H. Enthoven, director for the Center for International Accounting Development at the University of Texas at Dallas.
Smart Business spoke with Enthoven about the drive for the U.S. to adopt these international accounting standards and the benefits of transitioning the U.S. rule-based accounting system to the principle-based standards of the IFRS.
What is the drive for the U.S. officials to move toward International Financial Reporting Standards?
The U.S. Financial Accounting Standards (FAS) General Accepted Accounting Principles (GAAP) and many other countries’ accounting standards for that matter are essentially rule-based and can be quite elaborate and complex. While the U.S. accounting standards are extremely well-researched, they tend to neglect the underlying accounting principals or concepts. The FAS also provides certain opportunities for manipulating accounting arrangements. While the reforms created by the Sarbanes-Oxley Act of 2002 have strengthened FAS, they have put a greater burden on accounting firms and have not created the kind of transparency and conceptual consistency that IFRS provides.
Could you highlight some of the key differences between FAS/U.S. GAAP and IFRS and give some specific examples?
Research and development costs are capitalized under IFRS but expensed under U.S.
FAS. Goodwill is capitalized but subject to an impairment test under FAS, while under IFRS it is capitalized and amortized over its useful life presumed to be 20 years or less. The concept of inventory value and disclosure of assets is different in the two systems. Consolidation under IFRS is based on control; under FAS, on major voting rights. One particular difference that could have prevented the Enron accounting issues and subsequent scandal is the special purpose entities (SPE) category, which cannot be excluded from the balance sheet under IFRS.
See the chart for some examples.
Are current Financial Accounting Standards not beneficial anymore?
FAS is beneficial for U.S. purposes and it certainly works for companies that are not publicly traded and/or have no overseas operations. IFRS would not be imposed on small privately held companies that do not have operations internationally. But FAS is not the best system for multinational companies. And it becomes less so as more countries are adopting or adapting IFRS or converging to it. Our multinational companies are at a distinct disadvantage since they must keep two or sometimes three sets of books to comply with FAS, IFRS and perhaps another local accounting standard. The burden on the accounting departments of these companies is very great.
ADOLF J.H. ENTHOVEN is the director of the Center for International Accounting Development at the University of Texas at Dallas (www.utdallas.edu). Contact Enthoven at (972) 883-2320 or firstname.lastname@example.org. Information about the Center for International Accounting Development is at http://som.utdallas.edu/oilandgas/index.htm.
Business owners or high-level executives often are so busy keeping their business in the black that keeping track of their personal financial business can often be pushed to the wayside. To keep personal day-to-day finances on track, it is often necessary to get the help of private banking services.
“Private banking services also called private client services is personalized attention for those who have acquired substantial financial resources and need assistance in managing these resources as it relates to their full financial picture,” said Camille Ussery, vice president of Private Client Services at Plano-based ViewPoint Bank.
Smart Business spoke with Ussery about the benefits of having a private banker.
What is the difference between private banking and traditional banking?
A private or personal banker is someone who is looking out for a family’s day-to-day finances as well as your investments. As the level of a family’s wealth increases, managing that wealth can become very complex, and inattention to the day-to-day details is quite common. Having a private banker gives the family one person to contact if, for example, a checkbook is lost or stolen. It also is a kind of banking ‘concierge’ service that gives the client a heads up if an account is dangerously close to being overdrawn.
All kinds of banking services can be conducted through a private banker. This is advantageous over cold calling a branch to try and get a banking issue resolved. The reason for having a private banker is to take away the worry of day-to-day finances.
What are the typical problems that a private banker can solve?
When you say ‘private client services,’ most people think of investments or insurance products. But that is only one component. Outside of investment strategy or ensuring funds are performing at optimal level, there are a multitude of banking issues that can be resolved using a private banker, such as a lost checkbook or check card, ordering checks, and resolving any notices that have been received in the mail. This is really like having a personal assistant to resolve these issues. The client simply picks up the phone and transfers the responsibility to the private banker to resolve the issue. It is a huge time-saver.
The private banker is usually available by phone during business hours, and a hotline number is typically assigned, as well. The client often has the cell phone and e-mail of the private client banker who can help resolve issues in the off-hours or on the weekend.
There are often other advantages to belonging to a bank’s roster of private clients, including good rates on deposits and credit. Banks often host several events annually for private clients which can be ideal for business networking.
How can an executive go about finding the best private client banker?
There are three critical questions to ask first:
1. Does your bank have this service? Check to see if the financial institution offers this full service. Perhaps the bank has already reached out to these clients, but the client has been too busy to respond. Pay attention to these offerings for private client services because of the advantages it could offer you and your family.
2. Is the personal banker accessible? Are there hotlines to reach a specialist if you can’t immediately get a hold of your personal banker? Are they attainable by e-mail? Cell phone? A good personal banker needs multiple touch points.
3. What type of services do they offer? What additional benefits can you receive by consolidating your assets at the bank? Can you get increased earnings on deposits, better loan rates? Can you get online banking services, discounts on traveler’s checks and money orders? What about expedited loan transactions?
What are the downsides to not having a personal banker?
Well, when a crisis does happen, it helps to have developed a relationship with your personal banker to lessen the impact. For example, if you are traveling overseas and suddenly your debit card stops working, how can you access your funds? Without a personal banker, you might have to call a branch back home and be put on hold while someone figures out the problem. If you had a personal banker, you could call the hotline or e-mail the banker or call his or her cell phone and have the banker resolve the problem and get back in touch with you.
Visit viewpointbank.com/business to learn more about ViewPoint Bank’s Private Client Services.
CAMILLE USSERY is the vice president of private client services at Plano-based ViewPoint Bank. Reach her at (972) 509-2020 ext. 7305 or email@example.com.
Sooner or later, partners or senior attorneys will depart from a law office or department either because its time to retire or because of another job opportunity. Yet, most firms never plan for this inevitability. In a recent survey, 53 percent of attorneys polled said their law firm or legal department does not have a formal succession plan in place for key positions. The survey, developed by Robert Half Legal, a leading staffing service specializing in attorneys, paralegals and other highly skilled legal professionals, polled 300 attorneys among the 1,000 largest law firms and corporations in the United States and Canada; all respondents had at least three years of experience in the legal field.
“Most law firms or departments are too busy taking care of clients and urgent legal matters to find time to put together a succession plan,” says Tiffany Lambert, division director for Robert Half Legal in Columbus, Ohio. “The problem with this is that many wait until a leader leaves to begin the process of finding a successor.”
Smart Business spoke with Lambert about how law firms or companies can groom high-potential employees for leadership roles and the importance of creating a succession plan.
If losing a top leader in a law firm or department is so disruptive, why don’t more firms establish a succession plan?
Succession planning is a back-burner issue for most companies. People know it is important, but somehow, there isn’t enough time to sit down and create a succession plan. It takes years to identify and groom successors. But without a plan, chaos can erupt if a top leader decides to leave or retire and there is no qualified employee to take his or her place.
Who should be responsible for creating a succession plan in a firm or company?
Top executives and the human resources department should get together to create a strategy. Top executives often have succession plan ideas human resources can be very helpful to executives as they organize their thoughts and put a plan down on paper.
What are the key steps in creating a good succession plan?
Evaluate personnel. Look at the existing management team, practice heads and managing partners in the firm. Identify strengths and weaknesses of leaders. What do they contribute in regard to their people skills and practice areas? What are they missing? A good attorney does not necessarily translate into a good manager.
Evaluate needs. Who will be leaving in the next several years due to retirement? Is there a chance that a top leader will find another job at another firm? Once you know the slots that might need to be filled, zero in on the people who are best suited or can be groomed to fill those positions in the upcoming years. Make sure you have more people in mind than slots.
Start the mentoring process. Be very open about your succession plan for both those who are slated to leave due to retirement, as well as those you plan to groom. There does not need to be a formal announcement but bring those potential successors in for a conversation about their future opportunities. Let them know that, while this is not a done deal, they have been singled out for grooming for a leadership role. Assign a mentor for these future successors and create opportunities for them to take on leadership tasks and assignments.
What if those who you’ve selected don’t work out?
You need to be flexible in the process. You potentially can identify 12 people, mentor them, but realize that 10 out of 12 won’t cut it. It takes years to develop a succession plan and groom individuals for leadership roles, but this is much better than a last-minute strategy hastily put into place when a leader leaves.
Could you explain what usually happens when there is no succession plan in place in a law firm or law department within a company?
When a top executive leaves, the natural assumption is that the next in seniority is right for the job. But that is not always the case. Losing a leader also means losing an understanding of a firm’s culture, which can affect morale and disrupt the flow of business. It is difficult to scramble to try and find a replacement for top talent when you are trying to run a business.
TIFFANY LAMBERT is the division director for Robert Half Legal in Columbus, Ohio, a legal staffing division of Robert Half International. The company provides law firms and corporate legal departments with highly skilled professionals including attorneys, paralegals and legal support personnel, on a project and full-time basis. Reach Lambert at (614) 221-9300 or firstname.lastname@example.org.
“Executives are increasingly relying on their administrative staff for more varied duties, including project management, research and budgeting tasks as well as traditional responsibilities,” says Brandi Alexander, branch manager of OfficeTeam, based in The Woodlands.
Smart Business spoke with Alexander about how executives can best support their administrative personnel and how administrative professionals can establish a better working relationship with the executives they serve.
It seems that administrative professionals are doing much more than ‘traditional’ duties. How has the profession evolved?
You don’t hear the term ‘secretary’ anymore. These workers are referred to as administrative professionals because what they do now goes beyond the scope of taking dictation or typing up reports. Some have a staff reporting to them; they are managing facilities and reception desks, and sometimes other administrative personnel. They handle Internet research, track budgets and juggle schedules. They are often called on for support by other executives in a business. Because of technology and the increased work demands of executives, this has become a multifaceted career.
How can executives ensure that they have a positive working relationship with their administrative personnel?
The hallmark of a good working relationship is open communication and trust. An executive often works closer with his or her administrative professional than anyone else in the company. The executive needs to trust that the administrative professional can take on the workload, plus handle scheduling and other administrative tasks. The executive also needs to set expectations, communicating clearly what needs to be done and when.
Working as an administrative professional is a complex job that can often go unsung in a company. It is important that the executive maintain a positive relationship by recognizing an administrative professional’s work. It can be as simple as a verbal ‘thank you’ or a note written on a sticky note. These efforts seem small, but they go a long way in establishing a good working relationship.
What are some other ways an executive can recognize the administrative staff?
For work that exceeds expectations, the executive can also give thoughtful gifts to show appreciation, such as movie tickets for the administrative worker’s family.
Another idea is having lunch brought in to celebrate the end of a big project, or during the project when department personnel need to eat lunch at their desks.
Recognition does not have to be elaborate or expensive, but should be viewed as a token of respect and appreciation for what the administrative professional does on a day-to-day basis. The most important thing is just saying, ‘Thanks for your help. I couldn’t have done it without you.’
In our company, we celebrated Administrative Professionals Week (April 22-28), by treating our admins to a big breakfast and then sending them out for manicures and pedicures. This kind of thing is important, because, let’s face it, a business can’t survive without them.
How can an administrative professional ensure that the working relationship with his or her supervisor stays positive?
The key to being a successful administrative professional is being proactive. It is not a passive job where you wait for the next assignment to appear in your inbox. A good administrative professional meets with his or her supervisor and asks what is coming up next and helps to prioritize duties. The executive often has 10 or 15 projects and presentations going on at once and often may not think about what the administrative professional can do to help. It is the job of the administrative professional to ask about priorities and projects coming down the road.
Can executives support their administrative staff’s careers?
There are many ways to go about this, ranging from online training and classes to seminars and professional memberships. Providing professional development opportunities shows tremendous appreciation and respect for the profession. And it also helps the professional advance his or her learning skills which is a win-win for both the business and the administrative professional.
BRANDI ALEXANDER is branch manager of The Woodlands-based OfficeTeam (www.officeteam.com), a division of Robert Half International, which has more than 300 locations worldwide. Reach Alexander at (281) 681-2940 or Brandi.email@example.com.
“Employers know all too well that the cost to replace an exiting employee is very high, particularly in this very tight job market,” says Kristen Denning, an account executive with Fort Lauderdale-based recruiting firm, Spherion Corp. “So it behooves the employer to find out why the employee is leaving and bring a counteroffer to the table that is appropriate to what the employee would like.”
Smart Business spoke with Denning about ways business owners and managers can head off potential problems in the workplace that could cause employees to leave; and how to make a counteroffer that an employee will consider.
What is happening in the job market that makes the subject of counteroffers so timely?
The job market is extremely tight across the board but it is particularly acute in the accounting, finance and information technology fields. Counteroffers are becoming more commonplace because of the tight job market and because it costs less to keep a current worker even if there is the added expense of a counteroffer. Because of this current scenario, employers have to not only approach the employee with a counteroffer, but they have to be more creative in attracting and keeping their good employees.
How are businesses becoming more creative in retaining their employees?
We are seeing companies finding more creative ways to increase morale among their employees, such as office raffles, giveaways, half-days off, department outings and work-from-home days.
All these techniques can work well to keep employees happy. However, employers need to also pay more attention to their work force to see if there is dissatisfaction brewing and catch it early. Before you have the situation where an employee leaves because of dissatisfaction, you need to put in place strategies to make sure that dissatisfaction among workers is addressed … because if you have one unhappy worker, chances are you have others.
How can a counteroffer keep an employee who has already decided to leave?
Bidding wars happen because employees are looking for higher compensation. Monetary counteroffers don’t usually happen if an employee is looking for a better schedule, a change in locale, a better work environment or more responsibility. Many employees understand the demand for workers is high and will test waters to see what they are worth. What they really want, in that case, is fair pay.
If employees are happy at their job, chances are they aren’t looking for a new job, just better pay and a counteroffer from their current employer is probably what they are seeking. However, if intangibles are not satisfactory such as work-life balance, opportunity for growth and advancement in the company, more responsibilities, or less responsibility (if they are feeling overworked), then chances are a monetary counteroffer will not keep the employee.
Can an employer then counteroffer with perks other than money?
Yes, but it is important to have an honest discussion with the employee to find out what they are looking for. Is it a better schedule? Flexible work hours? Less workload? More responsibility? More money? More vacation time? It is difficult to make an appropriate counteroffer unless you know what is motivating the worker to leave.
Is there reluctance among companies to make counteroffers?
Yes, there is. One of the reasons is that if word of a counteroffer gets out, other employees might get the same idea. A business owner or manager needs to understand that he or she would be setting a precedent for other workers. Ask yourself: Should the perk be given to all employees or be based on seniority or work performance? Get to the root of the issue by finding out if the problem (such as being overworked) is true for other employees as well. By doing this, you will head off not only one employee leaving but perhaps many more.
Employers must communicate with workers because if employers can address problems in the early stages, employees won’t start looking for another job.
Is a counteroffer ever inappropriate?
When an employee wants to move to another part of the country to be closer to family members, there is really nothing an employer can do to change this situation and keep the employee.
Companies also should be able to back up the counteroffer particularly if they are promising intangibles, such as a better work-life balance, or a change in reporting structure or growth opportunities. If employers promise it, they need to deliver it, or they will end up with the same problem down the road.
KRISTEN DENNING is an account executive for Spherion Corp. based in Fort Lauderdale. Reach her at (813) 864-1111 or firstname.lastname@example.org.
Communication skills have grown in importance for accounting and finance professionals, but workers may be on their own when it comes to developing this expertise, a new survey shows. While 75 percent of CFOs say that verbal, written and interpersonal skills are more valuable now for accounting and finance professionals than five years ago, only 37 percent of CFOs say their firms provide formal training in this area. The survey was developed by Accountemps, the world’s first and largest specialized staffing service for temporary accounting, finance and bookkeeping professionals, included responses from more than 1,400 CFOs from a random sample of U.S. companies with more than 20 employees.
“Communication skills are a critical factor in shaping your professional reputation,” notes Tom May, branch manager of Accountemps in Cleveland. “It is important to hone these skills because the way in which you communicate speaks volumes not only about your knowledge level and attention to detail, but also your work ethic and ability to be diplomatic, persuasive and tactful.”
Smart Business spoke with May about how employees can obtain these coveted skills, and how companies can help their employees become better communicators.
While communication skills are valued, very little training is provided by companies. Why?
Soft-skills training varies significantly from company to company. While some companies may provide many types of courses from leadership seminars to writing tutorials others do not.
For some companies, providing communication training is something that gets relegated to the back burner. They would like to offer it, but it often gets swept under the rug due to the time and resources it entails to provide the proper training. Companies find it to be very worthwhile, however, when they do have communication training in place.
What should companies do to decrease this gap?
Of course, providing internal communication and soft-skills training opportunities is one solution. But if it’s not feasible for a company to develop its own program, there are many other options.
Encourage staff to attend local workshops. Provide opportunities for staff to develop their communication skills through presentations and situations that involve working with a team.
In hiring and promoting staff, look carefully at communication skills. When considering if someone is right for a position, the manager should ask: How does this person represent himself verbally and in writing? What impression do others have of this person based on his/her communication style? Can others learn from this person in terms of how he/she communicates in difficult situations?
What should employees be doing to make themselves more marketable in regard to communication skills?
- Observe others. In addition to traditional learning methods (like classes and online tutorials), a good way to enhance communication skills is by observing others. Take a close look at people in your organization who present their thoughts well at meetings and can write detailed, yet brief, e-mail messages.
- Invite constructive criticism. Those with whom you work closely will be able to provide a more objective view of your communication skills. Inform trusted coworkers of your desire to improve and ask for suggestions to act upon.
- Seek opportunities to improve. There are a number of courses individuals can take to heighten listening, negotiation and public speaking abilities. Also, the capacity to perform under pressure, make good decisions in a time crunch and project a professional image can be enhanced with practice.
- Give attention to the details. Make it a habit to double-check your e-mails for accuracy and clarity a clean, error-free e-mail speaks volumes about your attention to detail.
- Be an active listener. The savviest communicators do more listening than speaking.
Are CFOs largely lacking in these skills because they focus more on numbers?
It may not be that they’re lacking, but now more than ever soft skills are important across all industries and skill levels. The workplace is increasingly team oriented. If you can't work well and communicate with others, your options can be limited.
Executives rely on soft skills every day in their interactions with staff, senior management and clients, so proficiency in all types of communication is essential to success. Since senior-level responsibilities include motivating and retaining employees, strong people skills are as vital as financial expertise.
TOM MAY is the branch manager of Accountemps in Cleveland, a company with more than 330 offices throughout North America, Europe, Australia and New Zealand, which offers online job search services at www.accountemps.com. Reach May at (440) 777-8367 or Tom.email@example.com.
Health care providers are beginning to feel the effects of the aging baby boomer population. Aging inevitably brings a higher incidence of chronic diseases, such as diabetes, hypertension, heart disease, asthma, and osteoporosis diseases that are often long-lived and very expensive to control. The Center for Disease Control (CDC) estimates that the medical costs for the 25 million people in this country with chronic diseases account for more than 70 percent of the nation’s total medical costs. Those numbers are expected to swell as more baby boomers enter their senior years.
Employers are feeling the pinch of this aging population in increased premium costs, not to mention the price paid for increased sick days and decreased productivity.
One way to control these costs is through disease management says Marc Rivo, M.D., corporate medical director for Health Services Research and Innovation at AvMed Health Plans.
“Disease management can reduce the probability of expensive and avoidable emergency room visits or hospitalizations by helping patients adhere to their prescribed care.”
Smart Business spoke with Rivo about how disease management programs can improve health, avoid costly hospitalizations and, ultimately, save employers money in premiums.
What is the first step in controlling the cost of diseases?
The first step starts with employees becoming more informed consumers both about their conditions and health care choices and costs. As employees are increasingly shouldering the costs for their premiums, it is to their benefit to become knowledgeable about options. This may become easier with recent federal legislation requiring increased transparency for price and quality of health procedures. (Readers can get more information about this legislation on the Web at: hhs.gov/transparency.)
At the moment, the major problem for people with chronic diseases is that people receive only half of the recommended services, such as laboratory tests and medications, for their condition and I’m talking about people who have medical insurance and access to physicians. This problem is with our fragmented health care system.
Shouldn’t doctors be guiding patients on how to manage their diseases?
Yes, but oftentimes physicians do not know who else may be caring for their patient. For example, a person goes to the hospital for a complaint and is newly diagnosed with diabetes. Laboratory tests are run and the patient is placed on new medications. However, none of this is communicated with the person’s doctor in the community, and the medical records are not transferred. This causes a whole host of problems for the patient, who may not receive the proper follow-up care. Unless the patient tells his or her doctor, the physician may not be aware that a patient is on a certain medications, or even has a disease.
What is being done to solve this problem?
Health plans are at the forefront of innovative solutions to this problem through disease management. We do not assume that physicians have all the relevant health information on their patient’s condition. Our goal is to provide that information and help physicians in their efforts to provide their patients the recommended care.
How does this work?
A health plan uses the information we receive from our doctors and other providers to identify care opportunities. For example, that newly diagnosed diabetic patient should be periodically screened for kidney and eye complications, among other steps, to ensure that the disease is under control.
A member who has opted for a disease management program will be reminded that he should be receiving certain recommended services. The member’s physician is also informed. The goal of disease management is to ensure that we increase from 50 percent to 80 percent of recommended services provided by their physician.
What are the savings for the employer in having a disease management program in place with its health plan provider?
When people get the recommended physician visits, laboratory exams and medications, they may avoid medical complications resulting in emergency room and hospital visits.
Savings depend on the condition. For example, every $1 spent on disease management programs for patients who are predisposed to congestive heart failure saves $5 in avoidable hospitalizations and ER visits. For other conditions, savings are ‘soft’ and not easy to quantify. But employers and employees understand that when our medical conditions are controlled, we tend to feel better and are more productive at work.
“Half of the companies across the country that we surveyed said they are actively grooming their staff for future management. This fact is important when you consider the void that will be left within these companies when many of the baby boomers move out of leadership roles and into retirement,” says Tricia Opincar, division director for Robert Half Technology in Houston. The national poll was conducted by Robert Half, a leading provider of information technology professionals on a project and full-time basis. It includes responses from more than 1,400 CIOs from a random sample of U.S. companies with 100 or more employees.
Smart Business spoke with Opincar about what businesses are doing to groom IT staff for succession, plus what kinds of skills are important to this kind of career transition.
Is there anything about the current business environment that makes it critical for businesses to groom IT staff for leadership roles?
Unemployment figures nationwide are low, and they are particularly low in information technology. There are a number of reasons, but in the IT realm, the demand for talent outweighs the number of people trained to do this kind of work. Since there are so many jobs, and the jobs can be quite demanding, the turnover rates are very high in IT.
To compound the issue, many of those in IT upper management are baby boomers who are getting ready to make the transition into retirement. The time is ripe for businesses with IT staff to ensure there is a succession plan with qualified staff waiting in the wings to replace managers who retire.
What do these succession plans within businesses look like? That is, how are qualified employees being groomed as management material?
Every company designs its succession training a bit differently. Many of the training programs center on soft skills such as time management, active listening and budgeting, just to name a few. There are also mentoring and management training programs that familiarize future managers with all aspects of the business not just technology.
Because companies today require IT staff to take a more strategic and collaborative approach, soft skills are playing a larger role and are a critical component in the grooming process for future managers.
In the survey, of those 50 percent who said they are creating a plan for future succession within their organization, 43 percent said they had implemented mentoring programs, 42 percent had management training, 35 percent had soft skills training, and 19 percent had a formal succession planning program.
What is the consequence for companies if this kind of succession training does not happen?
Businesses need to realize that offering this kind of training is crucial to prepare for the next generation of managers. It provides continuity of leadership within the company, leverages institutional knowledge and encourages employee retention. Without succession training, companies may be faced with a void or leadership bubble when company leaders resign or retire.
Since turnover is an ongoing issue in IT departments, it makes sense that employers offer succession training to their staff members. There is a competitive advantage to offering succession training, as many IT professionals today are looking toward companies that have an interest in their future. A succession plan also increases employee morale, which in turn, increases employee efficiency. It is a win-win for both sides.
So why did 49 percent of those businesses interviewed not have a succession plan?
Succession planning is like preparing for a hurricane or tornado many companies know they need to do it, but it often gets put on the back burner. But the day is drawing near when companies will feel the impact of the retiring baby boomers, and it is those pro-active companies that will win at the end of the day.
TRICIA OPINCAR is division director for Robert Half Technology in Houston. Reach her at (281) 681-3046 or Tricia.firstname.lastname@example.org.