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, so 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. Thousands of factories had been shuttered. Whole companies just disappeared. None of it was coming back. It was gone for good.

Manufacturing was not, of course, the only industry hit hard prior to the start of the larger recession, but perhaps no industry was affected more since the turn of the millennium. 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, 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, but all of the indicators do point up, however modest, rather than down.

“One of the things that will help the market is the easing of credit,” says Issy Kotton, partner, BDO USA LLP. “Credit is extremely tough and looking at companies that are undercapitalized, there’s no next step for them, so there may be further cutbacks required. But those companies that are reasonably capitalized, there are lots of opportunities for them. They can work on the supply chain system; they can continue to collaborate with the supplier and the customer to improve the process.”

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.

Among those changes are the new gaps in the supply chains of some larger original equipment manufacturers, the result of smaller companies closing, 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, what with banks starting to somewhat relax their requirements. 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, the ripple effect across industries.

For example, if you have not already reassessed your vision and your plan for your company, that should move to the top of your priority list.

“Create value from the customer’s perspective and eliminate unnecessary costs,” Kotton says. “If you look at a company that confuses what is necessary, if they could put an ideal product in place and make it right the first time, that could eliminate some unnecessary costs. There are areas of waste that can add up and be substantial.”

Keep the long term in perspective

Two years ago, few manufacturers were prepared for the recession. But you can prepare for the ascension, however slow and modest it might be and whenever it does become more noticeable, 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 departments of federal, state and local government. And you will likely want to consider your risks, especially over the long term.

“If demand picks up, they’ll be in a good position, and those who are struggling along should be looking for other products and services they could add to help pick up the slack at the moment,” Kotton says. “Also, you don’t want to get into areas where you’re not an expert, so sticking to the basics is also good.”

Technology and education, as would be expected, can also play a role in increasing your business. Several experts discussed how the advantage of U.S. companies is U.S. technology. Domestic manufacturers continue to be at the forefront when it comes to utilizing technology in their processes. To ensure that the technology is operated correctly and efficiently, workers should be more educated than they were even 10 years ago.

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.

Ask questions

As you prepare for 2011, it will be important to keep any number of questions in mind. What those questions are 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?

“The economy is more global today, and what happens in Southern California is affected by what happens in the rest of the world,” Kotton says. “There is uncertainty in Europe at the moment, so there are lots of questions out there and I’m not sure if there are lots of answers.

“One of the things companies can do is to look to expand their markets, introduce new products, be innovative — and this is usually the time when people do become more innovative. Although it may be difficult for 2010, those companies that see 2010 through will have good prospects.”

With all of that in mind, you will also need to think about innovation as much as ever. 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,” DeRocco says. “But remember the volatility of this market.”

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.

“But what we’re seeing is that manufacturing is coming back, but it’s not back yet to where it was in 2008,” says Daniel E. Berry, president and chief executive officer, MAGNET (Manufacturing Advocacy & Growth Network). “From what we hear, people are back up to 50, maybe 60, percent of their 2008 production levels and they’re feeling pretty confident but are very cautious. Manufacturers still are not calling employees back in big numbers for the most part. We are seeing some hiring again in the auto sector, so all of this is good and will have a ripple effect, but for the most part, everyone is still cautious.

“Manufacturing is recovering. It’s still a little bit wounded, but folks are feeling a little bit better — just not enough to jump in and hire back everyone they laid off.”

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 innovation and new opportunities — that should move to the top of your priority list.

“We believe helping companies become more innovative in what they’re doing is an important strategy for avoiding, to some degree, the problems of the past — helping them develop new products that create new markets and growth opportunities is an important strategy,” Berry says. “The market diversification and new product development are areas where we want to be more helpful with companies, with helping them look to the future and avoid the past.”

It 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 researching 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. You might also consider your risks, especially over the long term. And you will likely want to diversify your product lines into other markets, so you aren’t as dependent on single-source customers, and, more generally, diversifying your portfolio.

“Company executives really need to come to fundamental recognition that things are really not going to be the way they were,” Berry says. “Facing that reality means they’re going to have to embrace a strategy to changing how they do business. That’s an important first step — recognizing that the ground has shifted and we need to find different ways of doing things. What we’ve been saying is that companies need to be looking seriously at how they take their instinct product lines and adapt them and diversify them to other markets so they’re not so dependent on single-source customers.

“Diversifying their portfolio is an important strategy for avoiding the kind of massive negative impacts we’ve seen over the last year.”

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.

“One of the big unknown changes that everyone is tracking is what the (oil spill in the Gulf of Mexico) means,” Berry says. “It means that we’re more likely to see some more impetus from the federal government on green initiatives and sustainability and probably some more of a push for alternative energy sources and maybe the price of petroleum will go up and have an effect on the economy, too. There is a little bit of uncertainty around the effects of the Gulf and more manufacturing particularly.”

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?

“It depends on what happens in global markets, the value of the euro, whether our companies are disadvantaged,” Berry says. “I think we’re going to see a slow, gradual recovery that’s threatened by what’s happening in Europe. Folks are kind of cautiously optimistic.”

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 10:40

3 Questions

As director of the Center for Professional Development at

Webster University, Larry Mabrey has helped develop and implement the

university’s Leadership Continuum Certification, which takes a new approach to

leadership training and development. Mabrey previously worked as the external

communications administrator for Webster’s School of Business and Technology.

Q. What should companies train employees in as the economy

improves?

In an improving economy, customer service is an area that can

impact a business probably the most dramatically. As your business picks up,

you have the opportunity to capture new customers by providing top-notch

service. Hand in hand with that is communication, both internal and external.

Establishing strong internal and external guidelines for communication can help

effectively manage whatever growth you have because everybody is aware of

what’s going on.

Q. How can companies determine what training employees need?

They have to do an analysis of their own organization, doing

something as simple as a SWOT (strengths, weaknesses, opportunities, threats)

analysis on your company. If you step back objectively, you can get a snapshot

of where the opportunities are. Then you look at your people and say, ‘Do we

have the people who can take advantage of those opportunities or do we need to

give them some specific training to get them ready for that?’ Also, what are

your threats? If you see technological challenges coming ahead, then get people

trained in the technology areas that can specifically address those.

Q. What are some cost-effective ways to train employees?

Through the center, we have round tables that we do. Those of

course are free. Most regions have a local business paper, a local university

or college that provides these kinds of events, seminars that may be free or at

low cost.

The idea of bringing a training company into your organization

and training an entire team may be of greater value to you than shipping your

whole team off to a weeklong conference or two- or three-day seminar. Having

someone come into your work can save you money and can be customized for you.

There are a variety of online training programs out there.

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.

“The question is not, ‘Where should I be training?’ but,

‘Where should I be spending my dollars on people in the organization?’” says

Alec R. Levenson, research scientist, Center for Effective Organizations,

Marshall School of Business, University of Southern California. “In terms of

the choices you have, you can choose to pay people more, you can choose to

train them, you can choose to increase benefits.

“What is the return to you of increasing the ability or

abilities of the people you have?”

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.

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.

“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?”

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.

“The larger macroeconomic trends are both in

favor of and against training, paradoxically,” Levenson says. “The argument

against is that, when you have such high unemployment, it should be easier to

reach outside the organization and buy the capabilities you need in the

external markets. The argument in favor is that it almost doesn’t matter what

happens in the external market, that by investing in training, you’re showing

them you are investing in them, that this is a shared destiny for the

organization and the individual.”

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.

“Human assets are what create the competitive advantage for

an organization in this economy,” says Amy Lane, executive director, corporate

and community services, Kent State University. “It’s critical to have the

training to become innovative and compete effectively. Training is what will

make the organization most competitive and allow the employees to help meet

strategic objectives.”

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.

“The areas where companies should train employees really

depend on the company’s needs, which can be determined by conducting a needs

analysis or assessment,” says Manny Avramidis, senior vice president, global

human resources, American Management Association. “It really depends on your

situation, your industry, the business, the personnel, whether you have new

products or venues.”

And 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. General communication and technology skills

are as important now as always. Leadership

development, team building and project management are also increasingly

important because of the changing demographics and economy.

“Project management seems to be taking off quite a bit,”

Avramidis says. “There are fewer and fewer traditional managers in place.

People have been asked to manage projects with numerous employees or

cross-functional teams, and they’re asked to manage without direct authority.

We’ve seen quite a bit of activity there.”

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, the world’s

largest professional associated dedicated to the training and development field.

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.

“A lot of organizations certainly should consider the local

universities and colleges, maybe rather than the big national training

organizations,” Lane says. “We’re cost-effective, local and can customize

programs. I think there are often opportunities to provide blended approaches

to training and development — some of it may be a stand-up delivery and another

part of it may be online. And there are options for training internally.”

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 can do everything from a more formalized needs assessment,

where you conduct focus groups, talk with managers and employees, and develop a

full survey that provides a comprehensive view of the needs that would go out

to all employees, to conducting internal meetings with managers and listening

to what skills gaps they have noticed,” Lane 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.

“Every organization can buy the same equipment, put in the same

systems and set up the same processes,” Lane says. “But it’s the people who

make those processes go faster and create the innovation. People compete on the

level you need.”

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.

“Executive and corporate education is a real growth market,” says Jerry Hoag, associate dean, executive education, University of Texas at Dallas. “Companies increasingly are seeing the value of using programs to help their people adapt to an ever-changing environment and technology. The traditional secondary higher education system is not educating enough people or providing a sufficient education for them to come into the work force without further education and training.

“Companies are recognizing that this is critical to their long-term viability and sustainability.”

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.

“The most important thing for a company to do is to first do a careful analysis of the competency and development needs of your people,” Hoag says. “Too many training programs are managed mindlessly, without a real understanding of what is wanted from the training program in terms of specific objectives and deliverables.”

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.

“All employees, in order to be successful in the new workplace, will have to have the ability to adapt and to learn,” says Paula Yoder, director of the Tandy Center for Executive Leadership at the Neeley School of Business at TCU, referencing a recent paper by Sandy Dutkowsky, “Trends in Training and Development — The New Economy, Training in U.S. Companies, Who Does the Training in Corporations?”

“This is part of a developmental organization. Those who have ‘learned to learn’ will become most valuable in the new economy. The role of education and training is becoming more important in the workplace. Employees are recognizing the need to improve and broaden their skills to remain employable.”

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.

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.

“We cannot forget about our internal subject matter experts,” Yoder says. “Companies that leverage the expertise of those internal leaders, even if those leaders need polishing or extended training, are truly honoring their resources.”

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 expectation is that outside training programs will transform their management and their leadership behavior and capabilities,” Hoag says. “The studies are not very pretty. That’s because changing behavior is tough. You cannot underestimate that. There needs to be follow-up, six, 12, 18 months later.”

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 is imperative that leaders ask their employees about the benefits and outcomes of training,” Yoder says. “There is no excuse for a company to not know the return on investment for training. Even at the most basic level of understanding without using any assessment tools, you can at least ask, ‘What did you get out of it? How did it impact what you do on a daily basis? How does this impact your effectiveness in your job?’”

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.

“Identify what your top outcomes need to be,” says Garry McDaniel, associate dean, Center for Professional Training & Development, Franklin University. “Looking at your mission strategy and goals, you need to say that, in this quarter or this next year, what is it we need to do if we’re really going to succeed in our business plan? Once that’s identified, you can back up and ask, in order to attain those goals, what skills and knowledge do we have to have? Once you’ve done that, you need to figure out who needs to be trained and in what.”

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.

“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.”

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.

“[You might even] collaborate with other companies,” McDaniel says. “If you belong to associations, you can pool your resources.”

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.

“Companies that invest in people, people see that, people recognize when they feel valued — and one way for them to feel valued is to provide them with the training that they need,” McDaniel says. “That leads to higher morale, better productivity, higher quality, fewer errors, better use of resources, and all those impact the bottom line. Among the best companies, training is often one of their investments that they promote, which adds prestige to the company. Those are the companies people want to go work for.”

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.

“A wellness program is important to address the rising trend in health care costs,” says Dr. Jill Sumfest, market medical officer for Central and Southern Florida, Humana. “There are always the instances where someone has a catastrophic illness, and you have to deal with that when it happens, but if we can just keep healthy people healthy and improve the health of those who have chronic illnesses, we can help to reduce costs.”

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. 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.

“That information is so valuable because it identifies people who may be at risk even before they start to accrue claims,” Sumfest says.

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.

“We take the responses and use them to develop a model to identify people who would benefit from the program,” Sumfest says. “And the nice thing about taking it online is, at the completion of the HRA, they will actually receive a profile that will give them their overall health score and offer programs that might benefit them depending on their responses.”

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.

“You may want to look at contracting out to a company after you assess your needs,” says JoAnn Shea, director of employee health, Tampa General Hospital. “You may even consider hiring a part-time wellness staff member or occupational health nurse to run the program.”

No matter your choice, 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.

“Make it accessible,” Shea says. “Get 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.

“The key to participation is that you have to make it fun and you have to have incentives and prizes,” Shea says. “They don’t have to cost a lot of money. You just have to remember when you’re developing programs that everyone likes to win a prize.”

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, 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.

“We do know that wellness programs increase productivity, presenteeism and employee satisfaction,” Shea says.

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.

“Most companies, if they just started, the minimum is two to three years before they start to see a change in their health care claims,” Shea says.

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.

“A CEO needs to realize that it will affect their bottom line in a positive manner,” Shea says. “It will decrease their claims and employee injury, and it will increase employee satisfaction. Employees become more loyal to the company because they feel that the company cares about them.”

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 program is important to address the rising trend in health care costs,” says Dr. Jill Sumfest, market medical officer for Central and Southern Florida, Humana. “There are always the instances where someone has a catastrophic illness, and you have to deal with that when it happens, but if we can just keep healthy people healthy and improve the health of those who have chronic illnesses, we can help to reduce costs.”

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. 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.

“That information is so valuable because it identifies people who may be at risk even before they start to accrue claims,” Sumfest says.

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.

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.

“We take the responses and use them to develop a model to identify people who would benefit from the program,” Sumfest says. “And the nice thing about taking it online is, at the completion of the health risk assessment, those individuals will actually receive a profile that will give them their overall health score and offer programs that might benefit them depending on their responses.”

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?

“You should have someone from your human resources department, and I would advise you interviewing a bunch of wellness companies, which you really can access on the Web pretty well — who is out there, who does wellness — and seeing if they fulfill the needs that you’re looking for,” says Dr. Steven Schnur, CEO, EliteHealth.MD LLC. “You need to determine what your budget is per person and whether you want to do executive wellness, as well.”

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.

“We try and talk with the employer about giving incentives to the employee,” Schnur says. “If they do take part in the wellness exams, we will work on incentives, employer-driven incentive programs, such as gift certificates. For the one employee who performs the best or follows the program, a gym membership. Some pay 50 percent of their health care benefits, some pay a little more, so there are different ways of incentivizing.”

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.

“We monitor sick time off, we look at medical leaves, we try and do some through our surveys we do beforehand by repeating surveys after a year, seeing if they feel less stress at work, more camaraderie, more loyalty, less loyalty,” Schnur says. “We do a lot of survey follow-ups, as well.”

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, especially if your employees buy in.

“If you look at three behaviors — smoking, your diet and lack of exercise — those are responsible for about 40 percent of premature deaths in the United States; they contribute to about 70 percent of chronic diseases and they account for 75 percent of health care costs,” Sumfest says. “So if you can get people to stop smoking, if you can get them to eat better and if you can get them to increase their activity level, you can help reduce your health care costs.

“Those are the biggest things to attack.”

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.

“This has to be a business strategy,” says Tom Carter, vice president, sales and broker relations, Kaiser Permanente California. “And just like any other business strategy, investing in the health of your work force is a good business decision, but it requires discipline. You have to understand that this has to be part of the leadership endorsement; it has to be part of the culture. You have to have a shared vision with the rest of your employees, and you have to measure the results year after year.”

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 and 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.

No matter your choice, your employees do need to feel a sense of inclusion in, perhaps even some 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.

“You have to create the shared vision,” Carter says. “People have to feel inspired about it, and they have to feel like their values and ideas are also incorporated. You have to have a champion or a leader. Then you include people on the committee and in the discussion about how to deploy it to the work force. As people feel incorporated, they support it a little more easily.”

A 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.

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 of 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.

“The thinking that got us into high costs and health care reform and lost productivity is not the same thinking that will get us back to healthier communities and healthier populations and better business outcomes,” Carter says. “You have to rethink the way you’re packaging benefits, the way your culture is set up in the workplace.

“To do nothing is just not going to work. When you take a little more charge of the work force and work site health and safety, you can improve your outcomes and really change the culture, which is good for everybody.”