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Working Remotely – It Comes at a Cost

I sometimes joke that my “international headquarters” is located in Clive, Iowa, with satellite offices peppered “throughout the globe.” Technically, there is a great deal of truth to this seemingly impressive boast. However, fact and fiction become more clear after revealing my true workplace arrangement.

My office is indeed based in Clive, but I don’t participate in daily or weekly employee meetings. I do not gossip at the water-cooler – heck, I have NO water cooler! My office consists of one person – ME. When I am not physically in the office, I can be anywhere and everywhere still transacting business – with the assistance of my laptop, iPhone and iPad (Wi-Fi is a critical ‘friend’ to me). Even though I have a physical office, I often feel that I work ‘remotely’. Much of what I do is by myself or orchestrated with a few trusted third-parties. I have come to like this ‘remote’ arrangement a great deal. But it does come at a cost.

According to a 2017 Gallup survey, 43 percent of 15,000 employed Americans said they spent at least some time working remotely – usually from their own home. This represents a four percent increase from 2012. In our 2016 Iowa Employer Benefits Study©, we found that over 34 percent of employers with more than 101 employees offer flextime, while just over 14 percent of employers with fewer than 101 employees did. Flextime allows for employees to customize their schedules within a certain range of hours and days. Unfortunately, these results do not specifically reveal how many Iowa employers allow employees to work remotely.

Flexible scheduling and working remotely are increasingly important factors for employees to take (or leave) a job. Employees argue, and many employers acknowledge, that these practices are beneficial for both – workers are more productive for their organizations (an obvious win for employers) while being able to more successfully navigate through their own personal work-life issues (a win for employees). Working remotely and having flexible hours also provide financial upsides to employees –  savings in lunches and transportation costs, along with having greater childcare flexibility.

A 2015 Employee Job Satisfaction and Engagement report by SHRM indicated that 55 percent of employees cited that flexibility to balance work and life issues was a very important aspect of their job satisfaction. This same report found that leading reasons employees would not leave their jobs within the next year was primarily due to compensation/pay (45 percent) and having the flexibility to balance work and life issues (42 percent).

But, as I have personally found, working ‘remotely’ does have some drawbacks. Here are two of the largest challenges that employers (and employees) should be cognizant of when working remotely.

Social Connectivity Can Suffer

Social connectivity drives the engine of our mental well-being. Connectedness within the workplace plays a vital role for employees to feel they are seen, heard and valued through organizational relationships. Working remotely can easily isolate one from social inter-activities that is crucial for employees who yearn to have the ‘sense of belonging.’

According to the 2018 State of Remote Work, surveyed employees who work remotely reported the two biggest advantages were having a flexible schedule (43 percent) and spending time with family (15 percent). But, if not careful, these advantages can be offset by loneliness (21 percent), reduced collaborating/communicating (21 percent), having distractions at home (16 percent), and staying motivated (14 percent).

To go one step further on social isolation and loneliness, as more people in the U.S. are living alone, some researchers are warning this could become a “greater public threat than the widely discussed problem of obesity.” That should grab our attention!

To combat the negative side-effects of loneliness, employers might encourage (or establish policies) requiring remote workers to come to the office once a week to learn and grow. Studies suggest this approach is more likely to generate happier employees compared to fully-remote employees who don’t physically reconnect with the office.

Some employees may be quite geographically remote, and perhaps it would be more realistic to have them come to the office monthly or quarterly. Speaking from experience, the most rewarding days at my office usually result from having face-to-face meetings with various individuals that I would otherwise correspond with via phone or email. Embracing the opportunities to physically meet with others should always be a priority – it is for me.

Stress or Burnout

This may sound somewhat counterintuitive to some of us, but working remotely can nudge employees to work longer hours to please their supervisors, just because they are grateful for having the opportunity to work remotely. For me, if I don’t stay on top of my self-imposed projects, they will not be completed. This responsibility causes added pressure to ALWAYS be engaged with my work, sometimes more than I really should be.

Unintentionally, employees may burnout from performing this additional work without the employer having the benefit of monitoring the employee’s well-being throughout a course of time. That is why it is so critical for organizational leaders to engage with remote employees about what is going on – not only in their work – but with their personal lives. Feeling isolated has large, emotional costs.

As workplaces continue to morph into new environments that require employees to work remotely, it is imperative for leaders to find ways to have regular ‘face-time’ to ensure the worker does not lose the social connectedness that will keep them both happy and productive. This same principle applies to entrepreneurs who are working on their own.

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A BIG ‘Thank You!’

Jill Webb, Director of Human Resources, Dental Prosthetic Services

Jill Webb, Director of Human Resources, Dental Prosthetic Services

Since 1999, we have completed 18 annual employer benefits studies, surveying well over 13,000 employers. During that time, Data Point Research, Inc. has served as the backroom ‘engine’ for undertaking this survey process. I am grateful for the work they do and the professionalism they consistently demonstrate on behalf of my organization

Alex Glenn, Director of Human Resources, Generation Next

Alex Glenn, Director of Human Resources, Generation Next

As in the past three years, we offered a special incentive to employers who took part in this year’s survey. This year, participants were automatically entered into a random drawing for one of two Amazon Echos. This year’s winners are Jill Webb of Dental Prosthetics Services (Cedar Rapids) and Alex Glenn from Generation Next (Ankeny). Both recently received their Echos and were gracious to allow me to use their names and photos within this blog. Thank you, Jill and Alex. Again, congratulations, and we hope you enjoy your Echos!

A BIG thanks to the other 1,023 organizations who participated in this year’s survey! If your organization was one of this year’s participants, an email was sent to you on October 5th, with a unique link to download your FREE copy ($300 value). If you missed this email, please check your Spam or Junk email folders. Otherwise, please contact us.

To learn more, we invite you to subscribe to our blog.

Ten-Year Projection of Employer Health Insurance Costs in Iowa

Projecting into the FutureI just can’t help it.

Give me some historical data and I want to run projections into the future. If it is good enough for Congress to rely on the Congressional Budget Office (CBO) to make budget projections based on assumptions that impact legislative proposals, why not do the same for Iowa employers on the health insurance they pay?

Many assumptions we make usually begin with a very short, yet powerful, word – ‘if.’ This word provides a fallback position for anyone who is willing to venture guesses on what the future may hold on any given subject matter. The Merriam-Webster dictionary explains how the word ‘if’ is used:

  • to talk about the result or effect of something that may happen or be true
  • to discuss the imaginary result or effect of something that did not happen or that is or was not true
  • to say that something must happen before another thing can happen

So, I want to make a few projections (not necessarily predictions) of what family health premiums ($15,743 in 2016) will be for Iowa employer-sponsored plans over the next 10 years (2017-2026). To do so, I will first need to make a few assumptions using the word, “if.” So here we go…

IF we assume over each of the next 10 years:

  1. Employers continue to offer health insurance coverage; and
  2. Employer-sponsored medical premiums increase by 7.7 percent (using the average annual growth in premiums between 2012 and 2016 received by Iowa employers PRIOR to making benefit plan changes); and
  3. Iowa employers make NO changes to their plans and accept this average increase; and
  4. Medical inflation is similar to 2016 rates and continues unchanged; and
  5. No deep recession (depression) has occurred; and
  6. ‘Pay-for-value’ reimbursement systems remain ‘experimental,’ meaning that there is no clear consensus on controlling costs and appreciably enhancing value of care delivered; and
  7. The average employer share of paying for family premiums remains at 68 percent of the total premium (employees pay the other 32 percent); and
  8. The median household income in Iowa during 2014, $53,816, increases annually by 1.5% to 2026; and
  9. Lack of political decisiveness continues without passing any new major health reform measures beyond what we currently have in 2016; and FINALLY
  10. Life continues as we currently know it today.

THEN we may see:

By the year 2026, total family medical premiums will have exceeded $33,000, which would be 51 percent of the projected 2026 median household income in Iowa ($64,344).

Ten-Year Projection of Family Premium at 7.7 Percent

IF we make the same assumptions above, but tweak #2 and#3 to make the likely assumption that employers WILL make changes to their medical plans to keep them more competitively priced, and that the average annual growth of premiums will increase by only 3.5 percent annually, the average family premium by 2026 will grow to $22,207, or 35 percent of the projected 2026 median Iowa household income. The power of compound rates can make a huge difference. In this case, the 2026 family premium would be $10,849 less using 3.5 percent compared to 7.7 percent.

Ten-Year Projection of Family Premium at 3.5 Percent

Before we become somewhat giddy about ‘saving’ this type of premium by using a lower percentage, it is important to understand what is NOT shown on this particular graph – how health plans will change by 2026 AFTER the employers make annual alterations to keep their plans affordable. Deductibles and out-of-pocket maximums would continue to increase, offsetting any potential ‘savings’ made by not having higher premiums. However, employees would assuredly bear the undeniable burden of paying more out-of-pocket expenses when seeking more expensive medical care.

In 2014, according to the Health Care Cost Institute, total annual spending was $660 less per person with those employees who had high deductible health plans, or about 13 percent less than spending in conventional health plans. But what is not known is if this ‘savings’ came from avoiding needless tests and procedures or employees skimping important (and necessary) treatment, which can be detrimental to long-term health.

Something tells me that the use of the word “giddy” will not be part of the 2026 health insurance vocabulary.

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