As I write this, the Federal Unemployment Benefit of $600 per week as part of the COVID stimulus package expired on 7/31, and with the Democrats and GOP deadlocked related to a new stimulus package, President Trump stepped in with an executive order to serve as a bridge until congress could negotiate a deal in the same area.

This post isn't political. But any and all compensation issues in a pandemic are interesting to me, which is why I had one of my favorite compensation experts - Ann Bares - join me on my BEST BOSS EVER podcast to talk about managing compensation strategy in a pandemic world.

One of the the things that came up (I asked Ann!) was the fact that a lot of companies felt that the $600 per week federal unemployment benefit was preventing capable people from re-entering the workforce. As a leader in a recruiting company, I would tell you that our clients believe this to be true.  Ann had a great response, telling me that beyond the reality of whether people with access to federal unemployment were slow to return to work, she's more concerned and focused strategically on the 2nd and 3rd order consequences/impact of any comp program (including expanded unemployment as an example of that).

That was a "mind blown" moment for me, and I ended up wondering aloud whether difficulty finding needed labor may encourage companies to invest and go "all in" in areas like automation at this point.  Which ultimately harms employment for the sector of jobs in question.

That's the thing about unintended consequences - you never see them coming.

Check out my podcast with Ann Bares below!

---------------------------------

Welcome to Best Boss Ever, the podcast dedicated to helping you develop managers who build great teams. In this episode, Kris Dunn talks about the issues with Managing Compensation Strategy in a Pandemic World with Ann Bares, his favorite industry compensation expert at Altura Consulting Group and writer at Compensation Force.

Don't forget to subscribe to this podcast on Apple Podcasts, Spotify or Google Play. Rate and Review if you like what you hear!

On to the show (email subscribers, click here if you don't see the podcast player)...

Show Highlights:

2:00 - Ann talks about her transition from an undergraduate in social work to the world of compensation, where she found an affinity for quantitative methods.

5:30 - Ann and KD discuss what the transition looks like for companies on compensation strategy as we move from a 10-year expansion to the recession we’re already in.

8:00 - Ann talks about unevenness of the pandemic flavor of the recession - some companies are struggling, but some are expanding and thriving.

12:00 - Ann and KD discuss the most likely changes to come for companies that are in pain from a compensation perspective - think prioritized skill set investments for reinvention, etc. Ann and KD also talk about how adjustments are being made to common components like annual increases, etc.

16:00 - Ann and KD talk about when across the board salary cuts might be reinstated in the marketplace.

17:41  - Ann and KD discuss how WFH changes the landscape of competing for talent from a compensation perspective - what's your pay market when a large % of your workforce is remote? Fluidity is a new reality.  Kris also focuses on the fact that flexibility for personal wants and needs related to WFH preferences creates a new standard for HR pros.

24:10 - Ann talks about whether companies become less aggressive in benchmarking compensation vs the market in recessions. 

27:00 - Kris and Ann talk about whether there Is a brand of company out there that thinks of recessions as a great opportunity to pick up talent. How does their strategy differ from a defensive position on comp?

34:00 - Ann and KD talk about the federal unemployment benefit as part of the stimulus plan, and whether it discourages some people from returning to work. The conversation goes beyond that surface-level topic, as Ann and Kris discuss the 2nd and 3rd order consequences/impact of any comp program. KD notes that any difficulty finding needed labor may encourage companies that are slow to invest in areas like automation to go "all in" at this point.

---------------

Ann Bares on LinkedIn

Compensation Force

Altura Consulting Group

---------------

Boss Leadership Training Series

Kinetix

The HR Capitalist

Fistful of Talent

Kris Dunn on LinkedIn

KD's Book - The 9 Faces of HR

In Episode 10 of The HR Famous Podcast, long-time HR leaders (and friends) Jessica Lee, Tim Sackett and Kris Dunn get together to discuss how COVID-19 has changed their daily life, the Cuomo brothers and work-life balance. Tim wants to talk about PTO: accrual vs. unlimited. What’s better? There are different answers with many variables…

The gang continues to talk about how PTO will be molded by the COVID-19 crisis with Kris wondering if unlimited PTO might attract the “average” performers. The team closes by talking about the differences in how different types of employees want their PTO and Tim brings up the demise of the Unlimited PTO plan.

Listen below and be sure to subscribe, rate and review (iTunes) and follow (Spotify)!

Show Highlights:

1:56 – Tim brings up the question “How your life was pre-coronavirus vs. now – what’s the percentage?” He says he has had a 50-60% change where Jlee has had nearly a 90% change, drinking more and bonding with family.

4:05 – KD talks about how he isn’t doing anything. He’s going on a run sometimes and avoiding people as much as possible. He’s also being a little more introspective. Tim calls KD out on his new deck-lifestyle with the cat.

7:00 – KD hits the cancel culture with a “BACK OFF” and brings up the Cuomo Brothers (recently featured in a POLITICO article , since Chris Cuomo has the coronavirus but is still doing shows from the basement. Where’s our work-life balance? Is he a bad example? JLee says haters are going to hate, and maybe he should use that sick leave – but he’s doing a service to the people by showing them what COVID-19 looks like. POLITICO is just hating.

12:10 – There’s rarely a moment where someone reaches the top without outworking someone. KD calls out the bullsh*t – for everyone, you have to put in the work and people who don’t work as hard, can’t expect the same results. You have to grind it out. Shout out to Chris Cuomo.

14:47 – Tim brings up unlimited PTO vs Accruals – you’re not going to be using 4 months of PTO, but what would win if you had to choose? Would more people choose the unlimited plan?

18:26 – KD says the answer is different pre and post COVID-19. Tim brings up that HR pros have different opinions than the majority of workers.

22:15 – KD likes a system where you use it or lose it for your vacation time – but sick leave can be rolled over for extended sick leave, extended maternity leave, etc. It’s important for major medical! Jlee kind of agrees but when she was younger, she banked those days for an unused PTO pay out.

25:03 – Tim says PTO will be shaped by COVID, because people may stop coming to work sick. Hybrid PTO packages might be in our future…

28:00 – KD challenges Jlee – what plans would workers select, if they could? Jlee says, there’s no way it’s a one size fits all.

31:20 – KD asks Tim, “What plan will the top performer select?” Tim says unlimited, but Jlee and KD say no – KD says the real answer doesn’t matter because the best managers treat their high performers different.

34:48 – Jlee and KD talk about accruals being preferred over unlimited because sometimes, you don’t want anyone to call you and you want the official day off.

38:50 – The team closes it out with their final comments and how unlimited PTO just might go away post-coronavirus.

Resources:

Jessica Lee on LinkedIn

Tim Sackett on Linkedin

Kris Dunn on LinkedIn

HRU Tech

The Tim Sackett Project

The HR Capitalist

Fistful of Talent

Kinetix

Boss Leadership Training Series

If there's ever been a hype machine that reached peak myth status in the world of HR, it's unlimited vacation, trailed closely by:

--no performance reviews

--dog-friendly company

--peer feedback

--HSA accounts

But I digress. Much has been written about the cool, trusting and performance-first view of any company that would dare to offer unlimited vacation. I have to admit, it's intoxicating, until you figure out that most employees are dramatically underprepared to think about the responsibility and accountability that goes with the perk. I'd argue that there are 3 types of employees related to how their perceive and get their heads around unlimited vacation:

--The clueless. They think they can really take as much vacation as they want and really don't look inward at their performance related to their level of PTO. (10% of your employee population)

--The strong. High performers who operate at a higher level. They already understand that they're generally always on and appreciate unlimited vacation giving them the change to work and play something other than the office. They always answer the phone, so no one really challenges their face time.  They've already proven in. The also understand that their vacation is only vacation until it isn't, at which they hop online or on the horn and knock the required #### out. (10%)

--The huddled masses. Please - these people need rules and routines. They've been around the block enough to know that nothing is free, so they end up taking the same amount of vacation as they had under the old policy and are secretly pissed because they feel like the new rules create just enough gray area where no one really respects the fact that they are "off" when they are "off". (80%)

That scenario begs the following question - would employees rather have unlimited vacation or a healthy remote work schedule?

No question - they want remote work.

If you look at the scenarios above related to how groups react to unlimited vacation, only one group is self actualizing - the strong. But unlimited vacation becomes a form of remote work for them.  The clueless? They think they're living the dream, until you swoop in and deal with the issue by removing them from the company. The huddled masses can't stand your unlimited vacation free-for-all because they're scared to death of the consequences for not being around or having face time.

Remote work wins over unlimited vacation ALL DAY LONG.

Did I mention we might go to a dog-friendly workplace (said in my best carnival barker voice)?  Did I mention we're thinking about replacing the PPO with HSAs, which are cool, progressive and allow to manage the cost of your healthcare?

Unlimited vacation is a dream - it's the opiate of the masses.  Remote work is an OD strategy that actually can improve lives, productivity and retention.

Remote work beats unlimited vacation 10 times out of 10.  It's a four game sweep in a seven game series.

I'm not an expert on pension plan funding. But if you're relying on a pension in retirement, you might want to take a look at what % of obligations are funded currently in your pension plan.

Why would I say that? Because while I'm no expert, I can tell you when your pension plan is in trouble. Here's how you know:

You know your pension plan is in trouble when your company announces they're freezing pension benefits, IN THE MIDDLE OF THE BIGGEST ECONOMIC EXPANSION IN HISTORY.

More specifics from the Wall Street Journal:

"General Electric Co. GE +0.06% said it was freezing its pension plan for about 20,000 U.S. workers and offering pension buyouts to 100,000 former employees, as the conglomerate joins the ranks of U.S. companies phasing out a guaranteed retirement.

GE’s traditional pension and post-employment benefits programs, which were underfunded by $27 billion as of the end of 2018, are one of the company’s biggest liabilities. The company said the latest changes could reduce its pension deficit by as much as $8 billion.

GE is still responsible for lifetime payments to more than 600,000 retirees, workers and beneficiaries. The latest changes won’t affect retirees or others already receiving pension payments.

The company’s pension plan is the second largest by projected obligations, only behind International Business Machines Corp.’s,according to consulting firm Milliman Inc., which compiles data on the 100 U.S. public companies with the largest pension plans.

GE had funded 76% of its projected pension obligations at the end of 2018, according to Milliman, compared with 91% funded at IBM. The median funding level was 89% for the group.

Man. While freezing pension plans has become a common technique to reduce risks and shrink corporate balance sheets, when you're doing it in the middle of the biggest expansion in history, you kind of know you're screwed. 

Let's do story time and look at another classic buy high, sell low type of investment fund for the common good.

My state has a Prepaid Affordable College Tuition program, created by the Legislature in 1989 and managed by the state treasurer. It almost collapsed during the last recession. Imagine the Dow at 14,000 in early 2007. Well, that investment group was struggling to meet the member requirements in 2007, and the Dow went to 7,000 during the recession, at which time they exited securities and went to a cash position. Buy high, sell low.  Great work, team! That decision combined with sharp tuition increases (healthcare costs as a comparison in a pension, anyone?) caused the fund to go insolvent and require a state bailout.

The point? If you're freezing pensions at the Apex of the market and the biggest expansion is history, sh#t's going to get real in even a moderate recession of any length.

It's not early October without the Kaiser Family Foundation releasing their 2019 Employer Health Benefits Survey.  It's the best report of healthcare costs and trends available, and a must for any HR leader who wants to be knowledgeable about cost trends.

This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, offer rates, wellness programs, and employer practices. The 2019 survey included 2,012 interviews with nonfederal public and private firms.

So what did we learn in the 2019 report?  

Annual premiums for employer sponsored family health coverage reached $20,576 this year, up 5% from last year, with workers on average paying $6,015 toward the cost of their coverage. The average deductible among covered workers in a plan with a general annual deductible is $1,655 for single coverage. Fifty-six percent of small firms and 99% of large firms offer health benefits to at least some of their workers, for an overall offer rate of 57%.

Some of you are wondering how that breaks down across HMO, PPO, POS and HDHPs.  I get it, you're nerdy.  I like that you're nerdy - here's the chart you need (email subscribers click through if you don't see the image below):

A few of you look at that and say, "Hey what about EE+Spouse or EE+1?".  That's cute - you know most of us have carved out EE+Spouse long ago.

If you read one thing about healthcare cost all year, this report is the bible.  Go get the full report here!

I travel a lot for work. Over the last nine years, that's meant a bit of travel fatigue and recent attempts to reduce my total number of nights in hotel rooms.

Reducing nights in hotel rooms generally means getting up as early as needed and hitting the road for mid morning meetings - rather than going in the night before.  Being up early means a need for coffee and food somewhere along the way - especially on trips where I drive into the meeting in question.

Enter Chick-fil-A. 

Most people know Chick-fil-A for specific reasons:

--Kick Ass chicken sandwiches (you're weak, @Popeyes. Don't @ me).

--Great service at the counter.

--You say thanks, they say, "My pleasure".  You can say thanks 5 times, they're always going to come back and say that phrase.  You could say, "I appreciate how you're going with the company line to such extremes, you robo-cop of chicken sandwich love" - you know what they're going to say?  "My pleasure".

But I'm here today not to applaud Chick-fil-A for the normal things you associate them with.  Instead, let's talk about subtle signs of how they treat people.

I generally walk into Chick-fil-A's in the morning because the restrooms are always clean, etc. I'm around about 4 or 5 Chick-fil-A locations during my normal power commutes of 3 hour trips in the car, and you know what I always see?

I ALWAYS SEE GROUPS OF ANYWHERE FROM 3-6 CHICK-FIL-A EMPLOYEES IN THE SIDE SECTION OF THE SEATING OF THE  RESTAURANT, EATING TOGETHER AND GENERALLY TALKING TO ONE ANOTHER.

I don't want to go off on too much of a rant here, but when's the last time you consistently saw that at a fast food location? 

Try never.  And I see it all the time at the Chick-fil-A locations I'm around.

I've never seen it at another fast food franchise.  It's haunted me a bit, because like any HR geek, I want to know the people practices behind what I'm seeing. I thought about asking the employees but paused due to the jeepers/creepers factor, and have thought about asking to speak with a managers and then I saw this in a social post (email subscribers, click through if you don't see the photo below):

Makes sense - free food every shift.  Taking care of people, and a meaningful perk for many they employ.

I'm sure other chains offer that as well but DAMN - I always see these Chick-fil-A employees eating with each other and they're actually engaged with each other. It's staggering and meaningful from a cultural perspective.

It all comes down to how they hire. If you know anything about the company, you know franchise are owned by individual operators who are highly vetted. A living wage doesn't hurt. They're offering family discounts as well as free food and you don't have to work Sundays.  All of those things add up to provide a place as an employer of choice, one you see in the service you experience vs other chains (airport locations excluded).

You love the chicken sandwich. I say "screw the chicken sandwich, did you see what's happening on the side?"  They have people engaging each other on THEIR OWN TIME.

Staggering. Well played, Chick-fil-A.  I see you.

Remember when "Unlimited PTO" was a fresh thought and really made you think about the relationship employees had with the organizations they worked for?

Yeah, me neither.

I just did a google search titled, "The Long Con of Unlimited PTO".  It didn't give me what I wanted, which was a simple take on a once hot idea.  I'm probably going to write that post in the future, just for the SEO benefit.

Most people have discounted Unlimited PTO at this point, citing the following downsides:

--Many jobs don't fit unlimited PTO (work that has to be scheduled).

--The worst employees always take advantage of the system.

--Without official rights to a certain amount of days, politics and perception intervene and employees will actually take fewer days.

--The whole premise of "just perform at a high level, then take all the time you want" is clouded by the fact we're HORRIBLE at measuring performance in most organizations. What's good? What's great?  Hmmm - I know it when I see it, which isn't actual guidance you can use.

Taking vacation was always about having work-life balance.  For those of you that routinely rep the need for balance and the need to disconnect, I feel you.  You do you and let me do me.  Here's my big thought:

For most people with families and complex lives, work-life balance isn't the issue. Flexibility is, which means we should probably be talking about something called work-life integration rather than work-life balance. 

There's a lot of confusion between the two terms. As work-life balance has shifted toward work-life integration, organizations have worked to understand the gap between the concepts. UC Berkeley offers a smart description of the difference between the two. They suggest using work-life integration in place of work-life balance because "the latter evokes a binary opposition between work and life."

Futurist Jacob Morgan suggested in a piece for Inc. that this is simply a progression of the way we do business. Morgan wrote that since it's nearly impossible to avoid work and life merging, today's employees should align their goals and experiences to create the life they want.

Amen. Work and life have been merging for awhile, and the higher up the food chain you go, the less you can uncouple the two sides of your life from one another.

That's why Unlimited PTO should be dead and work-life integration should be what we're working on.  A quick summary of what most professional grade employees need could be summarized like this:

"I have enough vacation (suck it, unlimited PTO!). What I really need is to leave work when I want/need to with you (my manager) not backbiting me when I leave at 4pm to get to an activity for one of my kids/<insert what people with no kids want the flexibility to do here>, because you understand I'm going to be on email later tonight or (gasp) while I'm actually doing the personal thing I left at 4pm to do."

That last part is critical. Work-life integration is a two-way street. As an employee, you've got to be willing to do things when you're not at work (which most of you are, anyway). If we could all grow up a bit and say that's how we're living our lives, maybe our organizations would step up and be more supportive of you booking out from work whenever you want/need to.

If you don't want that as an employee - I get it.

I've got something else for you.  It's called Unlimited PTO, and it's FANTASTIC.

Here's your latest CHRO briefing that matters:

CVS and WalMart have agreed to laid down their weapons, reaching agreement and ending a dispute would have prevented some CVS Caremark customers from picking up their prescriptions at Walmart pharmacies.

Walmart and CVS didn't reveal the terms of their new agreement in a joint statement. CVS had said that Walmart, the biggest retailer in the world, wanted to raise the cost of filling prescriptions by too much.

The dispute could have affected about $4 billion worth of prescriptions, according to an estimate from Eric Coldwell, an analyst at Baird. It also would have prevented CVS customers from picking up scripts from 4,700 WalMart locations.

Of course, the real briefing is this --If you don't think that's Amazon's coming to severely hamper CVS and similar Rx companies by getting into the Rx game themselves, you're not paying attention.

In case you missed it, leading online retailer Amazon.com Inc. (AMZN) acquired PillPack in June 2018, an online pharmacy service that allows customers to purchase medications in pre-made doses.  Walmart was also a contender to buy PillPack but lost out to Amazon's better offer. Closely following the PillPack purchase, Amazon announced a program that will include prescription deliveries through its Prime membership program. 

You know there's always a new play annually when it comes to help you get cost out of your benefits program.  You've seen that with the trends you now know well - managed acute care, tele-doc, mail order Rx, etc.

Someday soon, Amazon's going to have a path to offer you a 20% reduction in your company's Rx spend.  It's only being slowed by realities like Aetna being owned by CVS, which muddies the competitive landscape for Amazon to navigate to make becoming your Rx provider of choice a reality.

But Amazon's coming. They might have to buy an retail Rx firm to get it done, but with the aging of the USA that seems like a prudent investment.

Martin Luther King Jr. Day (MLK) is a holiday with increasing importance in our world.  But most companies don't provide this as an official holiday.  Here's the stats I could find via Bloomberg:

"Most U.S. workers won’t get Monday off for Martin Luther King Jr. Day.  A study by Bloomberg BNA found 37 percent of employees will get a paid day off, similar to the 35 percent that will be off on Presidents Day in February.

The survey found that as a paid day off, Martin Luther King Jr. Day might have plateaued. Those receiving it as a paid holiday have hovered between 30 percent and 37 percent the past five years.Manufacturers are least likely to provide it as a day off, with 10 percent offering it.

Non-federal holidays such as the Friday after Thanksgiving are more common days off. About seven in 10 employees receive that as a holiday, and 46 percent are off Christmas Eve."

MLK presents an interesting quandary for employers.  If you don't have it, employees and candidates are increasing expecting it as a holiday, and MLK - rightly or wrongly - can be used as a proxy for commitment to diversity by vocal, mobilized special interest group and employees alike.  I'm not saying you're not committed to diversity if you don't provide MLK as an official day. I'm saying it could be used against you, and all of us are smart to think about the meaning and what we should do if we don't provide it.

Let's say you've determined you want to provide MLK Day as a holiday, but you want to stay net even related to the total number of days you provide.  Here's the checklist I go down...

1--It's not enough to say people can used general PTO or floating holidays to cover it.  If you want the optics and meaning  that providing MLK day off provides, it needs to be an official holiday.

2--If you have floating holidays or general PTO banked time, you could designate MLK as an official holiday and reduce that banked time by one day. 

3--Next, you could look at your existing holidays.  I rank order them like this:

Untouchable - Christmas (birth of Jesus), 4th of July (birth of our country), Memorial Day (remembering those who served and gave their lives)

Less meaningful but still untouchable - Christmas Eve (wow - try it - I wish you luck) New Year's Day (just try and take that one), Thanksgiving (our right to remember Omish-like founders and eat large amounts), Labor Day (celebrating workers - try that one)

One you could trade out, but there would be hell to pay - Day after Thanksgiving (expected if you've already given it - hello entitlement!!)

Trade this one or one like it out for MLK in 2019 - President's Day, Columbus Day, etc.  (Let's face it, the presidents are on money, and damn, Columbus didn't even really discover America, right?)

If you want to give MLK as a holiday but want to stay even related to paid time off, this is your playbook.  1) Trade out President's Day or Columbus Day if have it.  2) If you have floating holidays or generalized PTO, reduce by one day and designate MLK as official in exchange. 3) Go get Friday after Thanksgiving or (winces) Christmas Eve to trade for MLK.

Good luck if you're seeking to add MLK and stay neutral related to time off.  I hope your Change Management goes well.

This appeared in my gmail as a paid ad today (Email subscribers, click through to see the poison below):

I'm not a financial advisor.  There's probably money to be made in Bitcoin, although the SEC has issued investor warnings.

The vast, vast majority of your employees aren't qualified to evaluate Bitcoin as an investment option.  When ads like this pop up, I'm assuming they aren't offering Bitcoin as a speculative 5% of someone's portfolio - I'm assuming they want to cram all 100% of that rollover in Bitcoin for various reasons that have to do with money.

Many of your employees have 401ks parked with a previous employer.  25% know about Bitcoin and are interested in the hype.  1/5 of those would consider this ad.

It's worth you getting in front of this with a HR comms piece -  to let people know that ads are rolling encouraging 401k rollovers straight into Bitcoin and there's some danger via the SEC.  

Respect the game.