Selling employees on health savings accounts. Plus, how to motivate junior staffers who are short on humility.
Q What's the best way to manage and motivate young workers who have an inflated sense of entitlement?
Co-Founder and President
Before you write off Gen-Y in toto, remember that youth has always appeared lazy, undisciplined, and impatient to its up-by-our-bootstraps elders. This new generation does have its quirks, but young people can prove eager and industrious if you know how to work with them.
Bruce Tulgan, founder of RainmakerThinking, a research firm that focuses on generational issues in the workplace, describes Gen-Y as a sort of perpetual customer. For more than a decade marketers have aggressively targeted young people and given them everything their way--from cell phones to sneakers. "They've been treated like customers all of their lives, and they think like customers," says Tulgan. That's not necessarily a bad thing. Many successful companies practice servant leadership and describe employees as "internal customers"--business-speak for "we strive to make workers happy." Your twentysomethings are down with that, and that kind of culture does tend to improve morale and reduce turnover.
Gen-Yers work hard when they know what they're getting in return. Vague talk of a vague future ("Keep your nose to the grindstone, sonny, and you can soar as high as your dreams!") means less to this group than specific short-term goals, according to Tulgan. Spell out in concrete terms what it takes to earn a bonus, an extra day off, or a promotion. Make them stretch by creating goals that exceed your expectations: an extra 20 sales calls a week or delivery of a project a month before the client needs it. And the more you can pair young workers with veterans, the better. Even bright young people don't know everything, and under the right circumstances they might even admit it. Having a newbie learn from a more experienced co-worker--or maybe be bailed out of a tough situation by one--is an all-natural way to bring down a swelling sense of entitlement. Consider creating an advocate system, says Cam Marston, who has studied generational issues in the workplace for 12 years and is CEO of Marston Communications, a consultancy in Charlotte, North Carolina. More like counselors than mentors, advocates help young employees understand how to reach their career goals. The most effective advocates are managers--but not employees' bosses or human resources representatives, says Marston.
Finally, assume your young charges will cause you headaches. Also assume they are worth it. "This new generation might be the highest maintenance in the history of the world," says Tulgan, not holding back the hyperbole. "But it's also going to be the highest performing."
Q Our health insurance premiums have become a significant expense. Besides making employees pick up more of the cost or offering fewer benefits, what can we do?
COO And CFO
All three branches of government, academics, and think tanks are busy on that one. When they come up with something definitive, we'll let you know. If you can't wait that long (and with health insurance premiums for families of four up 87 percent since 2000, who can blame you?) here are some ideas.
One option is to switch to a high-deductible insurance plan that's compatible with health savings accounts (HSAs for short). Such plans can save between $1,000 and $3,000 per worker on premiums (it varies significantly depending on state insurance regulations), says Ronald Dobervich, a partner at Sage Benefit Group, which is based in Minneapolis. Employers then deploy some of that freed-up cash to tax-free accounts with which employees pay for medical expenses. Funds in HSAs draw interest, and the money rolls over from year to year. Employees can also contribute pretax earnings to their HSAs and take the accounts with them if for some unfathomable reason they leave you for another employer.
The downside: Employees may smell a benefit cut. The numbers vary depending on your state and plan, but a common setup requires a single employee to pay about $2,500 out of pocket per year before a PPO or HMO kicks in. (A traditional PPO plan has a deductible of about $600.) Even if you put up, say, the first $1,000 by funding their HSAs so that their savings on premiums outweigh the extra expense for the deductible, some employees will have a hard time grasping how this system saves them money.
Another option is to outsource your HR department to a professional employer organization. A PEO is considered a co-employer; for about $150 a month per employee it handles everything from payroll to benefits. Because it co-employs workers from many companies, the PEO has a larger risk pool and can oftentimes get better rates from insurers. For example, MindLeaf Technologies, a Bedford, Massachusetts, firm that handles IT and administrative services for hospitals, saved 17 percent on health care costs for its 76 employees, without reducing benefits, through a PEO, says CEO P. K. Shah.
Yes, there's a fee, but the PEO earns it by doing more than cutting checks: managing 401(k)s and recruiting employees, for example. Delegating health care management may be the healthiest thing your company does all year.