Fact or Fiction?

Fiction

“Pet-ernity” has been introduced to Australia. This allows folks to take a special leave allowance to take care of newborn puppies and kittens. The policy has been enacted by Virgin Mobile, ONLY if you’ve been with the company for more than 2 years. The policy doesn’t allow pet-ernity for other animals, such as snakes, turtles or fish. What are you waiting for? Go adopt a newborn kitten and enjoy the week off!

You can read the full article here.

The Astron Road Show

Astron’s next event is the Capital Regional Human Resource Association’s 2009 Conference and Marketplace on March 19th in Albany, NY. Look for Astron’s exhibit booth in the main lobby. National Director Michael Maciekowich will be there meeting and greeting with attendees. For information on this event, please click here.

As promised in last issue, Astron Solutions has teamed up with Bond, Shoeneck & King, PLLC to give presentations regarding the latest changes in labor legislation. National Director Mike Maciekowich will present these seminars along with the BSK team lead by Partner Lou DiLorenzo. From March 24th through the 27th, and March 31st, Astron and BS&K will be in upstate New York giving presentations. Then on April 2nd and 3rd, we’ll be in New York City and Long Island. For more information on upstate New York dates, locations, and how to register, please click here. For more information on New York City and Long Island dates, locations, and how to register, please click here.

Well, that’s what we have for the coming month. More events will be announced as we get more details.

We hope to see you there!

Understanding the pervasiveness of the problem

The list of adverse effects on employees faced with foreclosure, or “having to sell the home in order to keep it,” go beyond the employee and affect the workplace. “The workplace” must be understood as reaching well beyond the office or shop floor. Some of these effects are the following:

• The individual employee,
• Other employees who exhibit sympathy for the distressed worker,
• Supervisors spending more time looking over the distressed employees’ work,
• EAP cost increases, through direct billing or in future years based on actual utilization, and
• Classic turnover costs: recruitment, training, lowered organization output, and lower new employee productivity during orientation and acclimation.

Addressing the issue proactively and positively--a concept

One key to managing this problem and mitigating its effects is found in the thesis of the book The Dream Manager, by Matthew Kelly. Mr. Kelly’s book is a parable of how a senior manager in an organization can take action with all employees to clarify their personal desires and dreams, and then proactively find ways that the company can facilitate accomplishment of those dreams. It’s easy to see that a company with such an “Affirmation Ombudsman” performs better in its market through better HR outcomes.

Take this thesis and apply it directly to the impending loss-of-home-ownership and shattering-of-the-American-Dream situation. Your organization can become a hero in the eyes, minds, and hearts of your employees, and enjoy improvements in HR and financial measures across the board.

The risk of a loss of focus for the organization

Of course, doing this is easier said than done. Organizations are not in the business of rescuing or bailing-out their employees. Still, some actions are well within the organization’s purview that can make a concrete difference to the employees in this situation. However, some creativity is necessary for your organization to stand out from the competition for talent.

Nearly every organization has a retirement savings program, with some sort of arrangement with an investment adviser from the provider to periodically be available to your workforce. The limitation of this setup is that in most situations, the investment adviser is only that--an investment adviser, often not licensed in the full spectrum of financial offerings your employees need, and is often focused on retirement savings, just one part of the puzzle.

Full-spectrum problem, full spectrum approach

To get beyond this, think out of the ERISA box. The need your employees have is full-spectrum financial understanding and personalized money advice; much more information than just how their 401(k) is doing and advice to just “put more away for retirement.” We are talking about getting finances under control so your employee can keep his house, remember?

If your workforce has a full-spectrum need, get a full-spectrum adviser. Doing what you have traditionally done, bringing in your 401(k) provider, you’ll likely get someone focused on retirement investments and not what’s worrying your employees--losing their home is. Such an advisor misses the target. Remember, as in every hiring situation, you have to pay for talent and experience.

You must ask the right questions of a potential adviser: (1) What are your state and national licenses? What to they permit you to do? (2) What professional certifications do you hold? (3) What is your experience in giving financial advice? (4) What kinds of tools and help do you have at your disposal? (5) How do you get paid? What is a fair fee arrangement?

A look at one viable option

Let’s set up an example and then scale it from there. You estimate that you have about 20 employees who need this relatively low level of financial advice. By addressing their problems you expect to keep four of them who would have left otherwise. You arrange for the advisor to be on-site, twice a month for two hours, meeting with employees by appointment for about 15 minutes each, for a tightly focused discussion. That level of service provides one “touch” by the adviser for 16 of your 20 distressed employees every month. Some of those original 20 may not need a monthly “touch,” so you’re in the ball park.

If you contract with the adviser for a flat fee of $250 per month (about $62 per contact hour with employees), your annualized cost is only $3,000. Compared with a low-end estimate of $5,000 turnover cost per employee – you can work the numbers backward from estimated turnover costs to find your own approximation of value to the organization – and it’s paid for itself with just keeping one of those 20. Yet you expect to keep four. A real bargain. The organization wins.

Getting $62 for each contact hour, which is less than one-fortieth of the 176 available hours in a month (22 working days), would provide an annualized salary of $132,000. The adviser wins. The four employees whose houses you saved, who now stay with the organization, get an incalculable benefit--the American dream of home ownership. The employees win.

Triple Play!

Rich Virgilio is an occasional contributor to Astronology. He has experience in the financial industry, and is a former HR consultant, university researcher, and career nuclear submarine officer. He lives outside Augusta, Georgia, and can be contacted at rlvirgilioga@yahoo.com.

Looking for a top-notch presenter for your human resource organization's meeting? Both Jennifer Loftus and Michael Maciekowich present highly-rated sessions on a variety of compensation and employee retention issues. For more information, send an e-mail to info@astronsolutions.com.

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Copyright 2008, Astron Solutions, LLC

ISSN Number 1549-0467