Page 48 - MetalForming July 2014

Human Capital
By Debbie McGrath
Benefits and the Butterfly Effect
Posted to HR.com by Chris Bruce, Thomsons Online Benefits
Last week I had an interesting dis-
cussion with a colleague about
The Butterfly Effect and what it could mean from the organizational and HR perspective. The Butterfly Effect, which originates from Chaos Theory, is based on the notion that everything is part of a larger system— small changes in one part of a system can result in larger changes to other parts of the system.
To understand how the Butterfly Effect can influence a workforce, con- sider the Hawthorne Effect, named for a study conducted to gauge the effects of physical conditions on productivity. The Hawthorne Works factory of West- ern Electric commissioned the study to see if changes in light levels would cause their workforce to become more or less productive. Researchers ulti- mately found that neither higher nor lower levels of light affected workers productivity. Instead, productivity improved simply as a result of the com- pany showing interest in employees’ wellbeing.
Organizations are very complex sys- tems, and each employee is an essential part of that system. That’s why it’s important for HR teams to understand
Content for Human Capi- tal comes courtesy of Debbie McGrath, founder and chief instigator of HR.com, Aurora, Ontario, Canada. McGrath has a degree in computer sci- ence and business administration from the University of Guelph. Founded in August 1999,
HR.com aims to help build great companies by connecting them with the knowledge and resources they need to effectively manage the people side of business.
www.HR.com
tel: 877/472-6648
that even small changes can make a big difference to workforce engagement.
Streamlined Benefits Administration
Imagine this scenario: Due to the manual processing of employee bene- fits management, an employee’s life insurance isn’t set up above the free coverage level. That employee passes away unexpectedly, and, in addition to that tragedy in itself, the company has to pay out the money to cover the +error.
Implementing a cloud-based bene- fits-management system can create automated links with benefit providers and HR and payroll systems, and enable more speedy data provision. It also can facilitate benefits manage- ment, either locally or via shared serv- ices centers. This frees up HR teams from employee queries and manual reporting, which frees up time for value-adding tasks like employee- engagement initiatives. It also ensures that there is less room for human error, which could go a long way in prevent- ing a scenario like the one above.
As demonstrated with the Hawthorne Effect, an engaged work- force can have a major positive impact on productivity. And, vice versa. According to research company Gallup, more than 70 percent of work- ers consider themselves either “not engaged” or “actively disengaged,” costing businesses more than $370 billion annually.
Now consider this example:
Imagine that you have an employee who is bright, ambitious and extreme- ly talented, but is not particularly happy at work, but neither is he unhappy. He feels no bond to his employer. This employee takes time off work to get married. Upon return- ing to work, he gets an e-mail from
LinkedIn telling him that a company is really interested in recruiting him, and that they have heard about his great talent. In reality, it is a standard e-mail sent to many people, but technology makes it feel personalized. As he has just been married, he decides to learn more about this opportunity, goes for an interview and ends up leaving your company. He ends up becoming CEO of that company, which happens to be a competitor.
Many of our clients have found that using benefits-management software can make a measurable difference in increasing employee engagement, by personalizing communications and putting them at the center of their reward experience. For example, Cisco sought to implement a program designed to reduce the number of staff on long-term sick leave, tackle under- lying causes of ill health such as poor sleep, and nip underlying health issues in the bud before they led to absence. Since implementing the software, 40- percent fewer employees have taken long-term sick leave, saving Cisco more than $800,000.
Controlling Costs
Whether managed directly with a provider, through a broker or provi- sioned inhouse, the continual chal- lenge of cost control impacts every business function. However, HR teams often lack the ability to challenge ben- efits vendors on how much they are charging, due to lack of efficient data management.
Efficiency is easily achieved using a global benefits-administration plat- form, giving employers the confidence that the right employees are covered at the right point in time. Beyond internal savings, for many providers there are savings in using an automated admin- istration solution, which means that
46 MetalForming/July 2014
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