Reach Remote Employees for a Successful Benefits Enrollment

Employees have never been known to clamor for information about their health and welfare benefits. In fact, studies show that most workers would prefer to do just about anything else besides learning about their benefits program. But it’s 2020 – a year when a pandemic seems to have turned the world upside down – so be prepared for remote employees to immerse themselves in your company’s benefits enrollment communications.

The double-whammy of the COVID-19 pandemic and an economic crisis has many American workers concerned about their benefits and the financial security that comes with company-provided health and welfare benefits. As employees face decisions during open enrollment, more attention may be paid to the coverage they need for 2021 – from medical plan options to disability benefits and supplemental life insurance.

Reach Employees for Successful Remote Benefits Enrollment

Employees who previously wouldn’t glance at voluntary benefits such as critical illness insurance and long-term care coverage may now review the offerings and consider enrolling in the plans. Are there benefits that employees should be taking advantage of? For the upcoming enrollment, employers can enhance their benefits package by adding one or two voluntary benefit options.

Enrollment is also an opportunity to remind employees of the COVID-19 benefits that are available through the company’s medical plan. Those benefits typically include the waiver of COVID-19 testing.

With a better understanding of their benefits, employees gain a greater appreciation of the value of the employer-provided health and welfare programs.

New Normal, New Ways to Reach Workers

Getting employees to that point of understanding and appreciation means educating them about their various benefit options. And, with the pandemic continuing to force social distancing, employers won’t be scheduling in-person enrollment meetings or health fairs. This year’s enrollment calls for a new approach to reaching a remote workforce.

As tempting as a passive enrollment may be in this chaotic year, employers should lean toward active enrollments so that employees go through the decision-making process about the important health and welfare plans that provide them some security.

Through this pandemic, video conferences, teleconferences, and webinars have become second nature to most employees who are working remotely and these tools can be very effective methods of communicating your benefits program this fall. Video conferencing and webinars allow employers to present updates for the 2021 benefits package and also respond immediately to questions from employees.

Without in-person enrollment meetings or one-on-one sessions with benefit advisors, employers should try to include online decision-making tools such as medical plan comparisons and benefit cost calculators in the enrollment process.

For employers who rely on a paper enrollment process, it’s time to consider moving to an online enrollment process. Protecting employee data as they make elections and enter information into the enrollment system remotely is essential.

Change Up the Communications

Employees now may be more interested in their benefits and employers can take advantage of this curiosity by mixing up their enrollment communications. Keeping in mind that many remote employees may not have printers, it will be helpful to provide communications that do not have to be printed. It’s also effective to keep messages brief and instructive – providing action items and spotlights on important content. While much of your communications can be online, postcards mailed to the home are often useful reminders for key messages and enrollment dates.

Changes to the benefit program – especially if it’s bad news – should be announced early and in a straightforward manner. Giving employees a “heads up” about higher costs or reduced benefits enables them to prepare for the impact of the change. It’s also important to have the buy-in of managers and supervisors so that the messaging they provide to employees is clear and consistent.

Highlighting certain benefits topics (i.e., an overview of enrollment and changes for 2021, or a video that explains the differences between consumer-directed health plans and a preferred provider organization option) into short 2D graphic videos allows employees to quickly and easily absorb complex information. Many remote employees are juggling work assignments, home-schooling their children, and maintaining a household, so access to short videos to learn about enrollment and their benefits can help in their decision-making process.

With the likelihood of more employees paying attention to their benefits today, Human Resources and Benefits staff may experience an increase in questions and requests for more information. As you prepare for enrollment, it may be beneficial to include “Frequently Asked Questions” that can be posted on the enrollment page of the company’s intranet or shared through an email to employees.

Conclusion

Certainly, this year’s enrollment brings challenges to reaching a remote workforce, but it also offers a chance to connect with them and improve their understanding and appreciation of their benefits package.

If you would like to learn more about how to help your employees navigate benefits remotely, please contact Dave Barchet in the form below.

Published August 19, 2020

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Managing your Sales Incentive Plans through a Global Crisis

The COVID-19 pandemic continues to severely impact the global economy as the world stays locked down. Countries are continuing to mandate quarantines and social distancing practices to contain the pandemic. The impact and magnitude of this crisis on the economy has created great uncertainty. A question many companies are struggling with today is how to handle their sales force, especially since the majority of these employees earn their living through incentives and commissions.

It is important to recognize that although we are weathering the same storm, not everyone is in the same boat. Sales team members who rely on face-to-face interaction and extensive travel had their world flipped upside down as it came to a startling halt. The ability to foster relationships, generate new leads, and demo products is limited to phone, emails, and video chats.  Other sales team members are falling into windfall situations selling products in high demand industries, such as sanitizers, cleaning equipment, and personal protection equipment. Both circumstances can cause the sales incentive plans to deliver pay at levels that were not planned and require a review of plan designs.

Manage your Sales Incentive Plans through a Global Crisis

Assets and Business Strategy

Before diving into revamping a sales incentive plan, it’s important to first think about the overall business strategy. How has the crisis impacted your company and is it time to re-pivot the strategy? In addition, it is important to check-in on the most important assets of any company, its people. Below are questions to consider:

  • How has demand for our products changed?
  • Do you have a pulse on your talent?
  • Is the company providing the right tools and technology to maximize employee potential?
  • Are we structured properly support the “new” environment?
  • How has the crisis impacted employees mentally?
  • Are channels of communication open and transparent?

Sales Incentive Plans

Once you review the business strategy and determined the “new normal”, it would then be an appropriate time to redesign or tweak the sales plan to ensure that it continues to align with the overall strategy. It is clear that in more cases than not, sales forces are taking financial hits. According to recently published surveys, it is expected that over 70% of companies expect COVID-19 to negatively impact on sellers’ pay by at least 5%. Companies need to determine how they want to intervene and adjust their employee’s potential earnings.

Some key avenues to explore are:

  • Paying draws to make sales employees “whole” or “partially whole” so they do not suffer from a financial hardship;
  • Using historical performance measures and results rather than current year sales;
  • Reducing quotas based on a revised business outlook;
  • Enhancing rewards through team goals rather than an individual focus;
  • Adding sales performance incentive funds (“SPIFs”) where possible;
  • Addressing windfall or bluebird situations, where the terms and provisions of incentive plans do not adequately reflect the possibility of unusual situations, such as the COVID19 pandemic, that may result in excessive and unwarranted payments due to sales team members;
  • Ensuring high performers have the opportunity to earn previous pay levels and provide retention elements into their pay mix as they may be poached by competitors; and
  • Pausing a sales plan completely and allow for discretionary payments based on business development activities.

We are living in a world where there is more uncertainty than ever, but we must hope that there is a turn around the corner. When the economy starts to come back, companies who are proactive at retaining their sales talent will come out of this stronger and on top.

Questions or need help evaluating your organization’s sales incentive plan options? Please contact Jen Givens or Tom Hurley by filling out the contact form below.

Published May 15, 2020

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Adapting Compensation Strategy in an Economic Crisis

And just like that, the Goldilocks Economy ended. GDP growth was a healthy 2.9% in 2019. The Dow Jones hit 29,000 in January, 2020, and a record high in February. The 3.5% unemployment rate was the lowest we had seen since 1969. In a few short weeks, that’s all changed.

Absent a magic bullet, the only solution is to adapt in an economic crisis. As we weather the impact to the global economy, significant disruption to business and weakening of many sectors, one thing is sure: businesses still need to retain key talent – not just the top performers, but workers who perform critical jobs. 

We recently posted an article outlining the importance of Recalibrating Human Capital Strategy and we identified four core areas to assess:

  • Strategic planning
  • Leading during a time of crisis
  • Employer branding and communications
  • Compensation and total rewards

Our focus in this article is compensation and total rewards.

adapting compensation strategy in the coronavirus economic crisis

Coronavirus Economy Impacts Variable Pay

The economic downturn – and possible recession – won’t impact all sectors to the same degree. In fact, growth is expected in retail grocery/non-durable essential goods, ecommerce, shipping-related subsectors in the transportation industry, and medical supply manufacturing. But many other organizations will have little option other than to reduce staff and the remaining staff will experience lower wage growth – if any at all. 

Let’s face it – base pay increases are already stagnant, having hovered between 2.9% and 3.1% annually since 2013. Regardless, there will always be a need to keep and attract strong talent. This is especially true for organizations poised to thrive in the Coronavirus Economy. There are strategies you can begin to employ to increase your opportunity to do so – as long as you remain focused on total rewards: the value of base pay, variable pay, and benefits and ancillary programs. 

Historically, non-fixed pay (variable pay) has provided an opportunity for an upside and has been an important tool for closing the gap between relatively flat growth in base wages and the need to achieve market-competitive total cash.

The majority of for-profit organizations – as many as 84%, according to WorldatWork – offer at least one kind of variable pay program and variable pay for salaried exempt employees has averaged 12%-13% of payroll over the past 10 years. Executives and senior leadership have the highest percentage of variable pay opportunities, followed by middle management and then professional exempt employees. Many organizations also provide variable pay to non-exempt employees.

Allocate Increase Dollars Where Needed Most

Because variable pay is, well, variable, most plans not only have targets, but also thresholds and maximums. Even in a year when overall performance doesn’t hit the target, many employees receive some payout. And in a great year, the payout will exceed the target percentage.

The beauty of variable pay is that it isn’t fixed. Unlike base pay adjustments, variable pay doesn’t increase the cost of base payroll year over year. Plan funding is directly tied to performance, so in a well-constructed plan, the payout occurs only if the performance goals are achieved. In short, the plan pays out if the organization can afford it.

For many companies, that won’t happen this year. 

If your organization has been providing the same percentage increase to all employees regardless of performance – independent of whether or not you have an incentive plan –you’re missing a critical opportunity to focus the increase dollars where they’re needed most. 

If you’ve managed a merit-based increase process, you understand the challenge of having a 3% budget and trying to adequately award increases that differentiate between a good performer and a great performer. The math isn’t difficult: You’ve got a good employee who meets expectations and you award them 3%. You give the top performing employee one and half times the 3% target. Assuming each of those employees earns $75,000 annually, that additional 1.5% merit increase means your top performing employee gets an extra $0.54 per hour.

What message does that send, especially when the opportunity for incentive pay disappears?

Compensation Hurdles to Overcome in Coronavirus Economy

Given the current economic crisis, there are a couple of key stumbling blocks on the compensation front:

  • Many businesses won’t hit the targets for incentive payouts this year – even if they’re able to recalibrate performance measures and goals. Without the incentives that previously boosted the market competitiveness of total cash, the focus will shift exclusively to base pay and benefits programs. If your base pay isn’t market competitive, you’ve lost use of an important tool for competing on the total cash front, and you’ve also lost one of the other advantages of variable pay: its ability to drive retention. Most variable pay plans require an employee to be actively employed to receive the year-end award.
  • Base pay increases plateaued and many employees became accustomed to receiving some level of variable pay. While we know employees shouldn’t expect receiving variable pay, they do and have factored that into their anticipated compensation. Even if those employees aren’t top performers, most are likely meeting job expectations and many may be performing jobs that are key to the operation of your business. If the base pay is competitive, it’s a little easier to manage employee expectations, engagement and morale. 

It’s time to do things differently – because the real danger would be doing things the same way.

Coronavirus Economy Calls for New Base Pay Strategies

It would be naïve to suggest that in the absence of a meaningful incentive opportunity the solution is to simply increase the funding of the base pay or merit increase pool. It won’t be that easy. And you won’t be able to make all of the fixes at once. But there are some actionable strategies organizations should take.

Six Strategies for Managing Compensation in a Business Downturn

  1. Evaluate the competitiveness of your current base pay structure
  2. Determine which jobs are more critical and warrant additional pay — even temporarily
  3. Identify key employees and assess the potential impact of not being able to retain them
  4. Analyze employee pay to determine risk (employees paid too low given their experience and performance; pay equity issues)
  5. Consider using your increase or merit pool differently in order to maximize the budget 
  6. Leverage other types of award, retention or recognition programs

There is no singular, easy fix to what’s ahead. It will take a multifaceted approach and healthy dose of tenacity and resilience. But as the old expression goes, adapting is a game of singles, not home runs.

Learn more about applying Strategic Compensation and Human Capital tactics that will help optimize and bring some flexibility in unpredictable economic times with the Findley Compensation Strategy Guide:

Guide to Adapting Compensation Strategy in an Economic Crisis

For more information about adapting compensation strategies, contact Dan Simovic at dan.simovic@findley.com or 216.875.1917 or Sandy Turba at Sandy.Turba@findley.com or 216.875.1937

Published April 30, 2020

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