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0 Comments | Aug 19, 2010

Top 3 Executive Delusions

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We talk to hundreds of human resources managers and C-level executives across a very wide swath of industry sectors.  A few interesting and widespread executive delusions have become apparent recently, generally surrounding the topics of best practices for employee retention, current healthcare cost and wellness trends, and today’s employee engagement climate in the “post-meltdown” economy.

Some of you will recognize these statements, because you say them.  You might even believe them.  My hope is that if you continue to believe them after reading further, at least you’ll know the magnitude of suspended disbelief you’re indulging.  It’s Hollywood-esque.

We’ll start with a good one.

Delusion Number One:  “Yeah, healthcare costs are a problem.  But we don’t have an employee wellness program and aren’t considering one.  Money is just too tight right now.  We’re really trying to cut back on our expenses.”

Huh?  We’re so busy cutting expenses that we can’t afford to…cut expenses?  The average company spends over $13,000 per employee, per year on healthcare.  That number has risen by 12% per year for each of the last five years.  It’s kind of a big deal for most companies.

A benefits manager happily reported that she had expended herculean effort to successfully hold her company’s total healthcare expenditure increase to just under 11% for the year.  Another reported an increase rate in the low 20’s – their plan was more than one fifth more expensive this year than last.  A third benefits coordinator lamented the additional administrative overburden required to unbundle their company’s health plan in order to find piecemeal savings in individual program elements – again to hold their rate increases near 12%.

Newsflash:  the supply side of healthcare holds all the cards.  There’s a reason many medical companies are (very quietly) posting record profits.  They’re riding a wave of regulation and demographic influences that might, as some suggest, propel the industry to destruction – but its death will be by gluttony.  Yours will be the opposite fate.  Employee heart surgery and depression costs aren’t going to get cheaper any time soon.

Obviously, not everyone is taking the ostrich approach to the healthcare dilemma.   I spoke recently with a benefits coordinator who stood on her CFO’s desk to implement a holistic and comprehensive wellness initiative.  The factual arsenal that won the day?  Just the small item that her personal cost to the company dropped from over $21,000 two years ago to under $700 last year.  How did she reduce her personal healthcare burden to her employer?  Diet, exercise, and relaxation.  Compelling.  Simple.  Profitable.

But it’s more than a little surprising – and altogether too common – that it took a William Wallace-like effort to convince the chief bean counter that saving money on healthcare is a good thing.  One of those amazing human paradoxes, I suppose.

We’ll move on.

Delusion Number Two:  “Our company is a family.  We’ve been through downsizing and have had to cut our benefits and pay, but our remaining 500 employees are loyal and really sticking together and working extra hard to see the company through.  They know we’ll reward them when things turn around.”

Not so much.

The reality is much different away from the corner office.  Anonymous surveys done by Salary.com reveal that two thirds of employees are job hunting right now.

If you’ve had to downsize, whatever sentiment of loyalty that might have existed toward your company before the layoffs was likely quashed by images of equally-tenured, equally-talented cohorts cleaning out their desks or lockers.  In their heads, employees might say “it’s just business, no hard feelings.”  In their hearts, however, there are definitely hard feelings – anger, survivor guilt, and a little bit of betrayal.  It’s human nature to feel those things.  It’s delusional to pretend they don’t exist in your company.

Want evidence?  In a recent MSNBC.com poll following the now-famous flight attendant’s famously flamboyant resignation, ten percent of more than 91,000 respondents called him an “idiot.”  Five times as many employees called him a “hero.”  Over 45,000 people admired his “take this job and shove it” departure.

That’s a statistically significant figure.

If you believe that everyone in your battered, beaten-down, underpaid and overworked workforce is “happy to be here and glad to help the team win,” you’ve attended a few too many shareholder meetings.  You need to hire someone to hang out by the water cooler and report on the real situation.  Taking care of your folks suddenly won’t feel much like a luxury any more.

Delusion Number Three: “Our employees have a real sense of duty right now.  They know we need them to work harder than ever and do more with less until we get through this rough patch.”

Ask any soldier how the “more with less” program works.  But be sure you have a half hour to hear the angry reply.

It’s no different for your workforce.  Making up for a lack of physical resources by overtaxing your human resources is a viable short-term option.  The problem is, if you’re like 98% of businesses out there, the “short-term crunch” is several years old by now.  Your folks are burned out, stressed out, and worn out.  There’s no doubt they put on a brave face for you, but it’s more than time to return to a sustainable employment arrangement.

Or else what?  Simple.  They’ll leave.  Talent Management, the Wall Street Journal, HR Magazine, and several other sources have recently featured articles on the looming retention crisis.  To sum up, the “jobless recovery” isn’t actually jobless, and neighboring pastures look greener by the day.

What are smart businesses doing about all this?

Three things:

  1. Smart human resources departments implement employee health and wellness programs. Do it intelligently – be sure to target the two most costly ailments, stress and depression.  Learn more here.
  2. Smart CFOs spend a little bit to save a ton.  Take care of your people.  Many benefit programs are exceptionally affordable (many are free, like Vacation Wellness‘ voluntary option), and the research demonstrates that you can get a lot of mileage out of a little care and concern.  Learn more about turnover prevention and cost reduction here.
  3. Smart executives guard their employees’ life balance.  Just because your CFO is worried about the books doesn’t mean your employees’ families don’t need them to be present, rested, stable, and relaxed.  And the balance sheet actually does need your employees to be sharp, insightful, and on the ball.  Stop cracking the whip, help them enjoy their time off, and you’ll be amazed at how much better they perform on the job.  Recovering from the economic meltdown will be a marathon, not a sprint.  Better slow down a bit – now would be a rough time to learn about the turnover crisis firsthand.

Any war stories of delusional execs?  Any victories in the War on Healthcare Costs?  Any wellness lessons learned?  Better yet, tell us about your summer Vacation Wellness experience!  Please comment below – we’d love to hear from you!

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