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Why Employees Quit—And How to Keep Them

Why Employees Quit

Employee turnover creates tremendous risk—resources are lost in recruitment and training, productivity lags with insufficient staffing, intellectual property can be exposed, and no company wants to get a reputation as a place where no one can stay very long. Further, the implications for workers comp, lawsuits and insurance extended to employees can cause headaches long after a desk has been cleared out.

A few recent studies highlight some of the biggest factors contributing to employee turnover resultant human resources risk, and what managers can do to keep staff and avoid risk.

Why Employees Leave

A new “exit survey” conducted by LinkedIn among members from five countries found that top reason workers left their jobs was because they wanted greater opportunities for advancement. In a related study from the social network, the number one reason employees who were not actively seeking a new job would be willing to leave was for better compensation or benefits. Regular performance reviews and assessments that open up opportunity for advancement in both responsibilities and salary can help keep employees engaged—and prevent feeling they have to stray to stay on top.

Room to Improve

Another recent study from LinkedIn found that 69% of human resources managers thought that employees were well aware of internal advancement programs. Yet only 25% of departing employees said they knew about these opportunities. In fact, of those who stayed within the company and found a new position internally, two thirds found out about the opportunity through informal interaction with coworkers. Strengthening formal retention and advancement programs and improving awareness of these initiatives may go a long way toward getting employees to use them.

Why New Hires Quit

One in six employees quits a new job within six months — and 15% either make plans to do so or quit outright within that time frame, according to Time. HR software company BambooHR found that the primary factor was “onboarding problems”—in other words, HR or managers are failing to properly orient new hires and integrate them into the workplace. This may seem silly, but they could have reason to feel this is a fatal flaw: research from John Kammeyer-Mueller, associate professor at the University of Minnesota’s Carlson School of Management, found that there is only a 90-day window for settling in. If your new employee is not caught up to speed by then, you may see them walk out the door.

Getting Employees to Stay

CareerBuilder surveyed thousands of workers recently to gain insight into why they decide to stay or go. Of those who plan to stay at their jobs, the top reasons they did not want to leave included: liking the people they work with (54%), having a good work/life balance (50%), being satisfied with the benefits package (49%), and feeling happy with their salary (43%). Of those who are unhappy, however, 58% said they plan to leave in the next year. Making sure these bases are covered is a strong step to keeping your top talent at their desks.

Check out the infographic below for more of LinkedIn’s insights into why employees leave, and what you lose when they go:

Health Care Reform and Workers Compensation

Since its passage in 2010, the Affordable Care Act (ACA), commonly referred to as health care reform, has been the subject of intense political debate and a source of anxiety for many employers. Although most employers have focused on the law’s health benefit requirements, the ACA is also expected to impact how they manage their workers compensation costs in the following ways:

Workers’ Health

Proponents of the ACA say that it will lead to a healthier society. Advocates say that because more people will have access to health care, there will be a reduction in comorbidities. There is, however, no significant evidence to support this contention. For example, data from the Centers for Disease Control and Prevention indicate that heart disease remains the leading cause of death in the United States and that the percentage of Americans with a high body mass index has steadily climbed over the last 50 years—two trends that are not confined to the uninsured population.

Cost Shifting

Employers have long been concerned that injuries from non-work-related causes will be shifted to workers compensation. Doing so is tempting because of workers compensation’s combination of higher reimbursement rates for medical providers and lack of deductibles and co-payments for employees.  Some have speculated that the greater access to health insurance promised by the ACA will reduce this shift to workers comp.

It has become clear, however, that the law will not result in all Americans having health insurance coverage. With the ACA requiring that employers offer coverage to all employees working 30 or more hours per week starting in 2015, one-in-10 large companies are planning to cut back on hours for at least a portion of their workforce, according to “Mercer’s National Survey of Employer-Sponsored Health Plans” 2013.

Access to Care

Probably the most predictable outcome of the ACA is that it will increase the number of individuals in the U.S. with health insurance coverage. Despite the potential benefits, this could put additional stress on a health care system that is already short on doctors.

This is particularly troubling as it relates to specialists and the potential for delays in obtaining diagnostic tests and scheduling elective surgeries and other procedures. Longer periods of disability and complications as a result of such delays would ultimately drive workers’ compensation costs up.

With this added pressure on a limited number of medical providers, it becomes more important than ever for employers to develop medical networks that focus on quality of care and outcomes—even if it means paying more on a fee-for-service basis.

Standards of Care

Traditionally, the health care industry’s focus has been on volume; more patient admissions, tests, and procedures translated to higher revenues. Post-reform, however, the industry has shifted its focus to improving standards of care and achieving better patient outcomes.

If this transition results in less emphasis on costly procedures, which often produce questionable results, workers’ compensation costs could be reduced.

Although it remains to be seen whether the standards of care developed under the ACA for group health care would be enforced under workers compensation, this is a promising development for employers.

Protect Outdoor Workers from Extreme Cold

During this winter’s extreme cold spells, caused by a polar vortex creating frigid temperatures, workers are at added risk of cold stress. Increased wind speeds can cause air temperature to feel even colder. This increases the risk of cold stress for those working outdoors—including snow cleanup crews, construction workers, postal workers, police officers, recreational workers, firefighters, miners, baggage handlers, landscapers and support workers for the oil and gas industry.

The U.S. Department of Labor notes that what constitutes extreme cold and its effects can vary across the country. In regions that are not used to winter weather, for example, near freezing temperatures are considered “extreme cold.” Because a cold environment forces the body to work harder to maintain its temperature, as temperatures drop below normal and wind speeds increase, heat can leave the body more rapidly.

Wind chill is the temperature felt by the body when air temperature and wind speed are combined. For example, when the air temperature is 40°F, and the wind speed is 35 mph, the effect on exposed skin like an air temperature of 28°F.

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Cold stress can occur when the skin temperature goes down and the internal body temperature (core temperature) drops. This can lead to serious health problems and also cause tissue damage and possibly death. Exposed workers are vulnerable to hypothermia, frostbite and trench foot, the DOL said.

Some risk factors that contribute to cold stress are:

  • Wetness and dampness, dressing improperly and exhaustion
  • Predisposing health conditions such as hypertension, hypothyroidism and diabetes
  • Poor physical conditioning

The DOL recommends that employees working in frigid temperatures avoid alcohol, smoking and some medications to help minimize risks.

The best way to avoid cold stress is by wearing proper clothing. The type of fabric makes a difference as well. For example, cotton loses its insulation value when it becomes wet, while wool, silk and most synthetics retain their insulation even when wet.

Here are some clothing tips for workers in cold environments:

• For better insulation wear at least three layers of clothing: An inner layer of wool, silk or synthetic to wick moisture away from the body; a middle layer of wool or synthetic to provide insulation even when wet; and an outer wind and rain protection layer that allows some ventilation to prevent overheating.  Avoid tight fitting clothing.

• Wear a hat or hood to help keep the entire body warm.

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Hats reduce the amount of body heat that escapes from the head.

• Wear insulated boots or other appropriate footwear.

• Keep extra clothing (including underwear) handy in case clothing gets wet.

• Do not underestimate the wetting effects of perspiration. Venting of the body’s sweat and heat can be more important than protection from rain or snow, according to the DOL.

The Occupational Safety and Health Administration (OSHA) also issues guidelines. For example, because it is easy to become dehydrated in cold weather, employers can provide warm sweetened liquids to workers. Additionally:

• If possible, schedule heavy work for the warmer part of the day. Assign workers to tasks in pairs so that they can monitor each other for signs of cold stress.

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• Allow workers to interrupt their work if they are extremely uncomfortable.

• Give workers frequent breaks in warm areas.

• Acclimatize new workers and those returning after time away from work by gradually increasing their workload. Also allow more frequent breaks in warm areas to help them build tolerance for working in the cold environment.

These and other safety measures should be incorporated into the organization’s health and safety plan.

Workers Compensation Issues to Watch in 2014

With 2013 behind us, here are my thoughts on some workers compensation issues to watch for in 2014:

Rates Continue to Climb

In most of the U.S., rates for workers compensation insurance continue to rise. Rates are being driven by rising medical costs, the low interest rate environment, and the general unprofitability of the line of business.

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Potential Expiration of TRIPRA

Unless Congress takes action, the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) will expire on Dec. 31, 2014. Companies with high employee concentrations in certain cities are already seeing fewer options, with some carriers scaling back their writings to reduce their exposure to a potential terrorism event.

Impact of the Affordable Health Care Act (AHCA)

There has been much speculation about the potential impact the AHCA will have on workers compensation. With a finite number of medical providers available to handle the increased utilization, it is imperative that workers compensation payers identify the providers who deliver the best clinical outcomes for injured workers.

Integrated Disability Management

More employers are realizing that the impact of federal employment laws, like the Americans with Disabilities Act and the Family and Medical Leave Act, must be considered on workers compensation claims. Companies are also recognizing the value of managing non-occupational disability so that valued employees can get back to the workplace and be productive. Integrated disability management programs are the next generation of claims-handling and will expand in the future.

State Legislative Issues

Several states that passed significant reform legislation in the last two years are working to implement those reforms. Passing a law is only the first step, as the rules, regulations, and implementation of those laws determine if they will achieve their intended purpose. The most significant states to watch are in California, New York, and Oklahoma.

When California passed SB 863 in 2012, the expectation from the state’s legislature was that it would increase benefits to injured workers, while lowering costs for employers in the state. Litigation and unanticipated consequences of the bill have resulted in increased complexity and continually rising insurance rates. There is currently talk of potential clean-up legislation to go along with continued efforts at implementation. We will know by the end of the year whether SB 863 will be able to produce the promised cost savings.

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New York streamlined its assessment process, resulting in a significant reduction of the assessment rate for most employers. Since these rates are adjusted annually, it remains to be seen if these assessment savings will continue into the future.

The big news in Oklahoma is the bill that allowed employers to opt-out of workers compensation starting in February 2014. There have been delays in developing the rules and regulations supporting the opt-out plans, and this has in turn delayed carriers’ development of policies to cover new benefit plans. It appears unlikely that everything will be in place in time for employers to opt out beginning in February.

Vendor consolidation

In the last few years, there has been significant vendor consolidation in the workers compensation industry. First on the third-party administrator side and most recently in medical management. All this consolidation is making buyers of these services uneasy.

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They question how this will impact the quality of the services they receive and wonder how their goals of reducing costs align with the vendors’ goals of increasing revenues.

Analytics

Despite the huge amount of premium, exposure and claims data produced by the workers compensation industry, many complain about the lack of actionable information. As an industry, we will see a continued focus on the use of more meaningful analytics that can assist in identifying savings opportunities, formulating action plans, and measuring the impact of change.

Assessing ROI for Medical Cost Management Efforts

Programs including bill review, utilization review, and nurse case-management are all necessary components of any successful workers compensation program. It is important, however, that these programs are constantly monitored to ensure they are being used appropriately.

Please join me Jan. 15, for a webinar discussing these issues and other potential legislative developments to watch in 2014.  Click here to register