Slow Times, Quick Thinking
How very different employers are staying ahead in a fluctuating economy

Franklin D. Roosevelt once said: "There are many ways of going forward, but only one way of standing still." Although Roosevelt faced very different struggles in his time, his statement couldn't be more appropriate for employers looking for ways to move ahead despite soaring healthcare costs and cutthroat competition for skilled employees.

Look to the Future recently spoke with two benefits professionals in different industries to see how their benefits strategies help them stay ahead in a fluctuating economy. Although their styles are different, they seem to have a common "vision" — satisfied employees.

Benefits Style: Creative Conservatism.
It's no secret that the telecommunications industry has fallen on hard times in recent years. Those employees lucky enough to have jobs are not likely to get raises or bonuses this year. Employees are also likely to feel the pinch when it comes to healthcare benefits. According to a recent study by the Kaiser Family Foundation, costs paid by workers out of their own pockets for prescription drugs and doctor visits jumped by at least 50 percent in just the last three years.

At NEC America, Inc. (NEC), one of the leading telecommunications providers in North America, employee benefits programs had been spared — until recently.

"NEC has been offering a rich benefits program that hadn't changed significantly in the past few years. We've pretty much paid 100 percent of costs for all of our employees. But now we're looking at additional cost sharing with employees — it's just a fact of life," said Cindy McCoy, NEC's Benefits Coordinator.

McCoy works in NEC's Benefits Department located in Irving, Texas, which is responsible for providing benefits to approximately 2,500 employees at multiple NEC operations and affiliates. Prior to NEC, McCoy worked as a broker for 15 years. Working on both sides of the benefits industry has given McCoy a unique perspective. "Our company's approach to benefits is conservative. We're not on the cutting edge of making changes. You see things come and go. We like to implement tried and proven plans, like VSP."

According to McCoy, keeping costs down and employees happy are NEC's top two benefits objectives. That's why, despite increases in employee contributions for medical benefits, they're looking to enhance their vision plan at no additional employee cost. NEC has found that their vision plan is such a high satisfaction benefit, that the low cost of enhancing it even further could offset employee concerns about increases in medical contributions.

"All of our competitors offer VSP, so a few minor tweaks to our plan can make us more competitive. Because of the work our employees do, we're looking into adding progressive lens options and/or Computer VisionCare.

"NEC has done a lot of research to determine what benefits employees really appreciate most," she explained. "Vision care makes employees happy without breaking the bank. Vision care is 100 percent paid for by NEC. The cost is low, it's a flexible plan and nothing runs smoother than our VSP plan. Our employee satisfaction level with VSP is about 98 percent."

NEC also seeks to educate its employees about the state of the economy and provides them with constant reminders of the benefits they do have. "We're trying to get the ball rolling in our employee communications by pointing out that benefit changes are not just happening at NEC, but happening nationwide. In addition, every year we host a benefits fair — Fitness for Life. We talk about how things like eyecare are more than just a benefit, but important for life."

Along the same lines, NEC is looking at the possibility of adding voluntary work-life benefits, including an employee assistance plan that will help employees find day care or college loans. "Employees need services that take some of the pressure off and, in turn, enhance productivity. If employees aren't productive, we're losing money."

Benefits Style: The Sky's the Limit.
In the highly specialized world of healthcare, the most valuable recruiting tool is an organization's reputation as a workplace. With nurses and medical staff generally on short supply, healthcare facilities must recruit and retain a skilled workforce with more than just high salaries, all while keeping costs down.

This holds true for Medicorp Health System, a not-for-profit regional system of 28 healthcare facilities and wellness services located in Fredericksburg, Va. "We're looking to provide a complete benefits package that is cost-effective for the organization and cost-effective for the associates. But, we need to offer a benefits selection that enables us to compete with the hospitals to the north that can beat our salaries," says Pam Burton, Medicorp's Senior Human Resources Representative.

Providing those benefits is not cheap. Last year, Medicorp, which employs approximately 3,600 employees, spent $14 million just on its medical plan alone. "Our associates are typically more savvy than the average consumer when it comes to healthcare. They're not only asking 'what can you pay me?' but 'are you offering me the highest quality benefits available?'" says Burton.

Medicorp added vision care as a voluntary benefit in the '90s as a way to recruit potential employees that expected more from their benefits package. Fortunately, it accomplished both of the organization's objectives — keeping costs down and offering a high satisfaction benefit.

"Vision came in because it didn't cost us a penny, it's a pass-through. Premiums have not gone up in three years for us or our associates. And, it's absolutely the most popular benefit because it's something they really need, it's affordable and it's so easy to use. Our associates love it."

More recently, Medicorp has tried to evolve its benefits package so it's not only valuable, but portable. Just a few of the voluntary benefits Medicorp offers employees are auto, home and renters insurance, pet insurance, legal services, universal life and long-term care. Burton, who has been in benefits administration for 25 years, tries to stay ahead of employee demands. "I'd say we're pretty progressive for an organization our size. You'd be hard pressed to find better benefits."

To help manage expectations, Medicorp's Benefits Department solicits associate opinions in annual surveys, hosts a "great ideas" hotline and keeps decision-makers informed of the competition. Burton says, "VSP is probably the benefit we have to do the least with," noting that VSP's benefit literature and Web site make it easy to keep her employees informed about the value it offers.

That's a bonus for Medicorp's small Benefits Department which, up until a few months ago, was a staff of two. "No paperwork. No cards. It's incredible. The monthly bills are easy to read with all of my enrollment right there. We are spending almost no time on this plan."

Look for more ways to keep employee satisfaction up, even while the economy is down, in our Eye2Eye column.