Will the Affordability Care Act be a Catalyst for HCM Analytics?

PPACA_2HR leaders on the fence about investing in an analytics platform may now have the  justification needed for moving forward, courtesy of the US Federal Government and its impending Patient Protection and Affordable Care Act (PPACA), which goes into effect on January 1, 2014.  With complex requirements and potentially significant financial consequences, the PPACA will require many employers to move beyond standard tracking and reporting platforms to more advanced, real-time decision support tools to proactively manage the many aspects of this complex legislation.

Fundamentally, the PPACA is about reducing the number of uninsured Americans  (numbered at more than 50 million in 2010) while attempting to address the affordability and quality of that healthcare coverage overall.  State-level health insurance exchanges (HIX) are being formed to make available the minimum requirements across benefit coverage and cost-sharing standards, while employers grapple with tradeoffs in health benefit plan designs and premium costs vs. the federal tax credits and subsidies available to low- and middle-income workers.

For employers, the requirements of the PPACA quickly get complicated with look-back and ongoing calculations of hours worked and future hours, benefits eligibility vs. enrollment, premiums to wages ratios, and evidentiary reporting to government agencies.  Non-compliance with this still-being-clarified legislation can lead  to significant penalties for employers, not to mention the many downstream impacts on employee relations and employer brand.

For some organizations, calculating and paying the penalty will be the quickest route to compliance while others will want to weigh various workforce modeling scenarios to determine their best approach (provide coverage as intended, reduce worker hours for a percentage of employees, etc.).  Leading payroll and workforce management platforms such as ADP, Ceridian and Kronos are actively enhancing their software to deliver the calculations and reporting required by the ACA, often including the ability to anticipate when benefits eligibility will be triggered based on future labor schedules.

Across the many mandates of the PPACA, (employer mandates, healthcare tax credits and individual mandates), behaviors at work will change that will affect the costs – both direct and hidden – of compliance choices.  Shifting workers to part-time will result in increased unemployment claims; additional part-time staff may be hired to fill the gaps of the reduced workforce; turnover may be adversely affected; workforce tax credit eligibility can be affected and additional training and ramp-up time needs to be factored in.  As they evaluate the direct costs of their compliance alternatives such as benefits premiums, labor expenses and penalties, employers must also take into account these and other indirect or hidden costs associated with their choices.

Getting to a clear understanding of the direct and indirect costs requires complex analysis and modeling, a prime use case for an analytics platform.

One of the players in this market is Equifax,  which recently augmented its Equifax Workforce Solutions division with the acquisition of analytics technology provider eThority in 2011.  Leveraging the eThority platform, Equifax is introducing a new solution called the “Affordable Care Act Impact Analysis and Management” tool to help employers model and monitor the impacts of PPACA on their business. The tool enables employers to see costs (including labor, benefit premiums and potential fines) at group or detail levels based on different modeling scenarios. It also highlights the associated costs resulting from anticipated new hires and increased unemployment claims that can offset savings from those initial scenarios, a level of analysis that many traditional payroll and workforce software providers are not offering.  Equifax can also leverage the data reported to them by thousands of employers across the country, representing tens of millions of workers, to report on labor and payroll trends across regions, industry and other segments, further augmenting the modeling scenario evaluations.  As desired, Equifax also provides additional consulting services including evaluation of new assumptions as well as overall program management and audit support.

The modeling platform is interactive, adapting to changes in law and assumptions. Delivered via subscription or available on premises, employers can access data beyond their own workforce data to make better, more informed choices with regard to how they will achieve compliance with PPACA mandates.

Investing in an analytics platform can bring more than just workforce insight and modeling capabilities: it can be a powerful tool in managing risk and compliance across the entire enterprise.  In the case of the Affordable Care Act, it may be the only tool that will effectively support employers in their daily need to monitor and manage the complexities of this legislation.  The requirements of PPACA actually begin before January 2014, with employers needing to make decisions and communicate benefit options, costs and coverage to employees during the Fall Open Enrollment schedule. Employers should be evaluating their options now, and the availability of new tools like the Equifax ACA Impact Analysis and Management solution are timely additions to the market.

The Answer is Talent Mobility. Now, What’s Your Question?

If there were a secret sauce to organizational success, then you would find “Effective Talent Mobility Program” as one of its first ingredients.

From addressing the top concerns of CEOs to the daily challenges of line of business leaders and the concerns of individual employees – an effective talent mobility strategy can have significant positive results at all levels, and on the business as a whole.

What is Talent Mobility?

Fundamentally, talent mobility is about the movement of talent across the organization (across projects, roles, teams, divisions, locations, etc.).  Based on the driving party, these workforce initiatives are typically called succession planning (employer-initiated) or career planning (employee initiated), but at the end of the day it all comes down to the readiness for and actual movement of talent in the enterprise.

When I refer to talent mobility as part of the “secret sauce”, I’m not talking about  yesterday’s strategies – where succession plans are based on senior job titles;  where “internal recruiting” means a job is posted internally for five days and then routed to the external job sites; or an employee seeking career growth is handed a listing of the next three job titles up the ladder and the associated required training and tenure for each role.

Instead, I’m talking about talent mobility for the future of work  – what works in an environment where five generations are converging on the enterprise but bringing divergent perspectives on work, rewards and motivation; where hierarchies give way to networks, and influence is the new social currency; where virtual teams and mobile devices drive expectations for an always-on, always-connected, always-informed experience.

What’s The Risk?

You can hardly view a blog, tweet or magazine article without hearing the extent to which employees are disengaged, mistrustful of leadership, and open to being poached by competitors. Consider the following stats:

  • At any given time, more than 2/3rds of a company’s workforce is disengaged1 – workers are essentially sleepwalking on the job.
  • 65% of employees are looking – either actively or passively – to leave their organization.2
  • Only 18% of Millennials expect to remain in their current job for the long term;3 37% say they do not trust “big business” (read this one as “we’re recruiting challenges for big firms!”)

Improving employee engagement is paramount, as study after study correlates improved engagement with improved retention, productivity and business outcomes such as customer satisfaction, profitability and brand.  According to the Corporate Leadership Board4,

Employees most committed to their organizations put forth 57 percent more effort and are 87 percent less likely to leave their company than employees who consider themselves disengaged.

By incorporating a few key design tenets into their talent mobility strategies, organizations can propel engagement and bottom line results across the organization.

Five Tenets for Effective Talent Mobility

  1. Focus on people, not titles.  Succession plans focused on replacements for certain titles and roles fail to account for the valuable hidden talent of the organization.  Such an  approach also fails to plan for the departure of critical employees who, despite being in individual contributor roles or holding nominal titles, nonetheless serve pivotal roles in greasing the wheels of success in the organization.  Uncovering your hidden talent is possible when social tools are part of the enabling technology of your mobility programs:  expanded profiles allow for greater talent insight, while social network analysis can uncover critical connections and impacts previously undetected.
  2. Eschew the corporate ladder; embrace the corporate lattice.  The latest generation of worker is less motivated by factors such as pay and job titles, and more by recognition, engagement at senior levels, and the ability to work on projects of high interest. However, lateral or even downward moves in the organization may be required to access these opportunities.  If your company culture only values upward mobility, then your development, retention and mobility strategies can have limited results at best.  Embracing and celebrating moves anywhere along the corporate lattice will foster corporate agility while engendering improved trust and motivation from individuals. (Note: embracing the lattice also means embracing the actual movement of talent…an increased volume in transfers and cross-team assignments, or some level of ambiguity around corporate hierarchies, will be standard in such a culture.)
  3. Broaden the focus beyond “jobs” to include “opportunities”.  Expanding one’s skills and experiences should not always require an official job change.  Temporary project assignments, virtual teams assembled for a defined period of time, dynamic org structures that constantly reform around strategic initiatives: these are the emerging realities of workplace structures in the future of work.  Beyond support for managing job openings, tools are emerging that enable users to share these more project-based initiatives across the enterprise social network.  Instead of staffing ad-hoc or short-term projects with the same resources again and again, extend visibility of the opportunities across the enterprise, creating new options for employees and improving communication, transparency, trust and engagement.
  4. Incorporate mentorship and coaching. Process-wise this is a no-brainer, but many organizations still do not officially support mentor/coaching programs as part of talent mobility programs.   Today’s technologies support mentor and coaching relationships that range from highly informal and unstructured conversations to richly choreographed relationships with milestones, tracking, reviews and more.  The use of social technologies makes finding and connecting to mentors or coaches easier than ever before, and matching algorithms in the technology can further automate the mentor/mentee connection process, refining its calculations over time.
  5. Give employees the tools they need to drive their own success. With today’s technologies, talent mobility does not have to remain a top-down process managed in complex systems.  Today’s social-infused tools foster employee engagement throughout the mobility program; recommendations of potential job or opportunity matches (for “passive” internal candidates) are delivered to employees’ devices of choice; individuals can scan or search across opportunities, engaging in conversations with opportunity owners and others; employees are able to promote their ‘brand’ by communicating successes, soliciting feedback and engaging visibility across the enterprise.  Intelligence in the form of recommendation engines, analytics and visualizations are part of the experience to drive employee self-sufficiency.

Internal mobility programs that continuously engage the workforce will also have beneficial effects on external recruiting initiatives, as members of your engaged workforce become positive brand ambassadors for your organization.

Want to hear firsthand how one Silicon Valley leader is doing it?

Join us for an exclusive luncheon in Palo Alto on Wednesday Sept 12. 

If you’re going to be in the Silicon Valley on Wednesday, September 12, please join me as I talk with Michael McNeal, Intuit’s VP Talent Strategy & Acquisition, and senior executives from UpMo, innovators in social talent management, on this topic of talent retention and mobility.  You’ll hear about Intuit’s path to creating a talent mobility culture and engage in an interactive session with peers from across the Valley on the cultural, technological and business implications of these initiatives.  This is a complimentary event, being held at the Four Seasons Silicon Valley in Palo Alto.  Register here

Exclusive Luncheon sponsored by UpMo.

Data sources:

1 US Employment Engagement Survey, Gallup Management Journal 2012
2 Deloitte “Talent Edge 2020, Building the Recovery Together” 2011
3 PWC “Millennials at Work: Reshaping the Workplace” 2012
4 Corporate Leadership Council “The Role of Employee Engagement in the Return to Growth” 2010

Tuesday’s Tidbits: Challenges in Talent Mobility

Tuesday’s Tidbits” is a recurring post serving up “choice morsels” of information. Brief? You bet. Distracting? Absolutely. Useful? Hope so! Read on and enjoy.

I’ve been writing and speaking a lot about the Future of Work and how it requires an evolution in the way we engage and inspire the next generation workforce. New thinking and approaches to Talent Mobility (the practice of engaging, developing, retaining and deploying organizational talent) are required if organizations are to thrive in the future of work.

This new mindset extends from pre-employment considerations (how can we improve the skills in the labor market to improve employability) to post-hire practices which include relinquishing the “command and control” mentality so that employees are given the tools necessary with which to drive their own mobility forward.  (My POV:  Social collaboration tools become critical for organizational success in this area, as they enable mentoring, transparency in projects and foster the conversations that will drive employee engagement, knowledge sharing and, ultimately, mobility within the enterprise).

Mercer published their study on this topic earlier this year, Talent Mobility Good Practices.  The study uncovered four key issues facing organizations globally, as summarized in the Infographic below.

Tackling talent mobility issues
Infographic by Mercer Insights

Your POV

Are you contemplating a shift in your talent mobility strategies?  Add your comments to this blog or send us a comment at Y@ConstellationRG.com.

Please let us know if you need help with your talent mobility strategy efforts.  Here’s how we can assist:

  • Reviewing your talent mobility and other people process strategies
  • Connecting you with other pioneers
  • Sharing best practices
  • Designing a next gen apps strategy
  • Vendor selection

Webinar: Social Talent is the Next Wave of Awesomeness!

Register today for this Thought Leadership Webinar

Sponsored by UpMo and #TChat

Let’s Face it. Employees want to move, change & grow. So why fight it? HR’s main goal is to support the business, but how do organizations do that with challenges ranging from not having enough great talent to fending off the many poachers of the talent you already have in-house? Hear how some companies are combating this issue by embracing new forms of collaboration and transparency and enabling their employees to map their own career growth. The latest trends in Social Talent all tie back to the larger issue, which is supporting the goals and priorities of the company at large.

In this webinar, you will hear from Yvette Cameron, VP and Principal Analyst from Constellation Research, Inc., speak to the trends happening in internal recruitment, retention and mobility processes and how they affect your ability to retain great talent.

Webinar: Social Talent is the Next Wave of Awesomeness!
Date: Tuesday, March 6, 2012
Time: 10:00 AM PST (1:00 p.m. EST)
Register Now: https://www2.gotomeeting.com/register/235391138

In this webinar you will learn:

  • The latest research findings and trends on attracting, engaging and retaining the Millennial Generation
  • How emerging Social Talent approaches transform a Command-and-Control culture to Open-and-Engaged – and why you should care
  • How the market is evolving to value the corporate lattice over the corporate ladder for internal employee growth and mobility
  • How social technologies help employees power up their brand – and the organization’s – for better and faster results

Register Now!

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About Yvette Cameron: Executive-level leader with over 20 years experience developing, marketing, evangelizing and implementing market leading HCM technology solutions. Deep process and technology expertise spanning social and collaborative talent management, talent acquisition, workforce management, learning management, enterprise social networking and web conferencing. Dedicated to helping HR and business leaders deliver business value through both efficiency and effectiveness of people processes.
About UpMo: UpMo intelligently matches employee competencies and aspirations for career growth with internal job, project and connection opportunities. UpMo’s Social Talent Engine tightens the link between what employees want and what companies need. The result is positive internal mobility that spurs motivation and productivity and keeps more of your essential talent in-house.
About #TChat: Join us for #TChat on Twitter every Wednesday from 7-8 p.m. ET & 6-7 p.m. CT & 5-6p.m. MT & 4-5 p.m. PT. Search for hashtag #TChat on Twitter or your favorite Twitter client and join the conversation. Remember we welcome global input! Join in from  wherever you might be.
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