Epidemic of thieving bankers

Photo-by-Ian-Davidson

Introduction
Why have so many well paid, highly educated men (and it is almost entirely men) working in financial services caught the disease of fraud and theft? There is manipulation of LIBOR and FX rates, alleged dubious dealings in derivatives, insider trading; even down to evasion of train fares. Is the infection caused by greed, hubris, poor leadership or a corrupting culture? What is to be done?
Environment
Financial services is one of the most heavily regulated, monitored and controlled environments. Yet, even allowing for the gross incompetence of the regulators, the level of wrongdoing is breath-taking. It is essential, for the survival of the already low levels of trust in financial services, that the infection of thievery and self-enrichment is tacked with the vigor of attacking an epidemic.
Are societal norms to blame? Over the last few years we have seen enormous growth in tax evasion, expense fiddling and influence peddling (and that is only the politicians). It is arguable that the environment among the well off and those who should be setting an example in society is that obedience to the rules, both the spirit and the letter is for the little people. Even when caught the response is often that nothing wrong has been done; it is the rules that are at fault or that the regulations are to be gamed to the highest extent to the advantage of the individual. In that context I guess that a little rate manipulation is seen as quite acceptable. Informal sub cultures have developed, despite all the regulatory training and people development: where criminal or near criminal behavior is not just acceptable but encouraged. The disease spreads tenaciously, secretively, hidden from the cleansing light of day until it is too late. Certainly Human Resources appear to have lacked any form of X-Ray vision to detect the wrongdoing not just at an early stage but at any stage at all.
The Epidemiological approach
It is time that an epidemiological approach to the problem is taken. Examination of the causes, spread, transmission and monitoring of the disease in the hope of finding a cure or eliminating the causes of this epidemic is necessary and timely. We have big data tools, masses of data, specific examples and outbreak centers’ – perhaps even a patient zero or two. Trying to kill the diseases by punishing the host (in this case by large fines on the banks paid for, ultimately by the shareholders) is akin to killing the dog in order to get rid of the fleas.
Consequences
If we do not take the epidemiological approach now we risk simply driving the behavior underground making it harder to find and with even more painful consequences for the bank customers and the little people who always seem to carry the cost burden be it via higher taxes, austerity or erosion of personal wealth. This is the winter of our discontent, it is time to let lose the weapons of disease control before it turns in to a cancer that destroys the entire body of financial services.

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Giving it away

IAN_5089

Question
You are sitting in your office when the CEO walks in. She says “I want to give half my salary away to increase the minimum pay in the organisation to $25,000.” Do you:
A) Burst out laughing?
B) Sit her down with a coffee and ask how long she has spent in the sun?
C) Start working out the new pay and the impact on the benefit costs?

Introduction
We have seen a couple of recent cases of exactly this happening. CEO’s taking a salary cut or turning down pay increases to fund either general increases or to raise the minimum pay in their organisation. What are the reasons behind this startling phenomenon? Guilt, publicity or an increasing discomfort with levels of pay inequality? Is the startling level of inequality beginning to cause discomfort to the high paid?

The facts
In the United States the top 1% of earners are paid 20% of total earnings. ( http://en.m.wikipedia.org/wiki/Income_inequality_in_the_United_States). The reverse of this coin is that 25% of jobs in the United States are low paid.

The issues
Pay inequality is largely perceived in relative terms: what we are paid compared to the colleague sat next to us. I remember giving a talk to HR in an investment bank. I told them average earnings in the UK were $35,000 and 62% of the UK population earned less than this – the team did not believe me. On checking, the average earnings in the room was $70 000 and the highest paid was $220,000.

Increasing inequality has, so far, had limited impact. We have seen the “Mac attack” on low pay in the catering sector, the occupy movement make occasional protests yet most carry on as normal. Sociologists argue that inequality leads to a breakdown of social cohesion and trust – but have we seen this?

The counter argument is simple. The labour market works and we are paid what we are worth. But, we know the market is tilted. If favours certain backgrounds, certain coloured skin and one sex over another. White male middle class high earners have largely done well in the last decade over, for example, black working class women. So, pay inequality is also an issue of social fairness.

What is to be done?
We have a number of options
A) Do nothing – the labour market more or less works and the alternatives are worse
B) Encourage an open and honest debate – but will it achieve anything?
C) Legislate – but state initiatives on pay seldom work and always lead to unfortunate consequences
D) As pay professionals start to ask questions about inequality of our CEO’s – but will they listen?

What do you think?

The Cobblers last, digital marketing and reward.

Introduction

  I was in a branch of Timpson recently where I noticed a cobblers last.  This is a rare sight.  I am old enough to remember when most shoe shops had them in the shop window; a bit like the three balls above a pawn brokers shop.  In reward we have a number of tools that go in and out of fashion like the cobblers last.

Recently I undertook a post graduate certificate in digital marketing with Google Squared in order to make sure that I was using the most up to date tools of the trade, particularly for reward communications.  I learnt a great deal about curation, the customer journey, the importance of content and the enormous power of digital communication in this world that has moved far beyond the technology of the cobblers last.    It also helped refresh my thinking of the roles of imagery, imagination, innovation and illustration in communication.

 

Reward’s digital cobblers last

There are a large number of tools available to reward professionals to help get the message across – particularly in a world very largely dominated by digital communication.  I have used You Tube videos to demonstrate total reward concepts, Podcasts to discuss the latest pay regulations (and the CIPD produced some very informative broadcasts).  And Twitter to publicise interesting reward web content.    Blogs, both written and video, are a very good way to publicise changes and new initiatives in reward.  The raw power of modern personal computers linked with cheap yet sophisticated software packages for producing excellent videos and technically proficient podcasts puts the creative process in the hands of most of us. 

 

A few months ago I contributed a chapter on risk and reward to a new HR eBook, edited by David D’Souza, an OD professional, called “Humane Resourced”.  This excellent collection of HR blogs stormed to the top of the HR best seller list at Amazon and was even a top ten selling business book on the same platform.  Such is the power of the new media that makes publishers, film makers and broadcasters of us all. 

 

Networking has been around since the days that humans learnt to communicate further than they could shout.  There are some excellent digital tools for networking such as Google Plus and LinkedIn.  These tools will not just allow you to communicate, but find like-minded people and relevant professional groups for you to meet and join.   There are communities of interests available on any subject; and if you cannot find one to fit your interests, set one up….  I have an interest (but little talent) in photography, largely in the niche field of police and military vehicles; yet my Flickr photography mini site has had over 130,000 views; such is the power of the digital.

 

Proper and appropriate use of social media and digital technology means that you can generate a consistent message, a new meme, or brand image to a diverse and large audience at little cost except the not inconsiderable time resource and mental commitment to the cause.

 

Corporate realities – the Empire strikes back

We all live in a corporate reality where blogs, videos, podcasts and the like are controlled by the marketing and PR departments who have a strong fear of brand contamination or social media embarrassment.    I have two responses to this; having a firm grasp of digital media tools will enable reward practitioners to go to the corporate gate keepers with ideas and imagination to kick start some new reward communications.  Second, and perhaps more open to debate, large organisations are, with a few noticeable exceptions, slow moving and not nimble in a fast moving social media world.  Perhaps, just perhaps, reward could help move the paradigm.

 

Alternatively you make think the entire subject is just a load of old cobblers lasts.  

Reward fights back – peashooters against tanks, some closing thoughts

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Introduction

Unless you have been living in a monastery then you will aware that HR in the UK has been under attack on a number of different fronts by the media and by politicians. 

 

     The mauling given to the former BBC Head of HR

     The criticism over the high pay of senior managers in the charity sector

     Attacks on zero hours contracts

     Complaints on police PPO’s overtime payments

 

Much of the criticism has been aimed at the area of reward.  The quantum  of the BBC termination payments,  sizeable remuneration in the third sector even the discussion on low pay and zero hours contracts are clearly in the orbit of reward.  What has puzzled and dismayed me as a seasoned reward manager is the lack of a robust response on these issues.  Fleet Street knives have been sharpened and deployed against HR practices with very little parry from the profession or its leaders.

 

The issues

Let’s breakdown what is behind the political and media rhetoric.  All big organisations have enhanced termination payments in place.   Why?  First, if it is a true redundancy where there is no replacement of role, the payback on a redundancy payment is very rapid.  If you pay two years pay you are probably only paying 15 months costs of employment (let us not forget that employment costs also include all the infrastructure costs of offices, IT, administration support and the like) so you are very quickly in “profit”.  I have only once seen this argument put forward in the attacks on BBC HR.  Second, making a settlement agreement with an employee avoids costly legal disputes and reputational damage for both the organisation and the individual.  Not to mention the management time costs.  I have had some involvement with legal cases involving very senior managers having to sit around for hours at a time at court being totally unproductive, not to mention many expensive hours of briefings and the like with highly charging  QC’s.  Paying enhanced redundancy is very often in the interests of the organisation the stakeholders and the former employees.  So, why does nobody stand up and explain this?  I guess the facts do not make such good headlines.

 

We have seen the offensive (in both meanings of the word) being taken by politicians and the media over senior management pay in the charity sector.  Why has nobody shown the politicians the salary surveys and the head-hunter advice on the costs of employing senior management?  And, as a fan of big data I have to ask if anyone has produced the figures to show the large difference to an organisation that good leaders make in terms of both profit and success.    

 

I also notice some attacks in the media recently against the overtime being paid to the Metropolitan Police Personal Protection Officers who look after the Royal Family, the Prime Minister and the like.  These are very highly trained people – experts in their field with many years’ experience and very great skills.  The do a very difficult job very well in the vast majority of cases.  They may be required to put their life on the line for the people they protect – yet there are complaints about their overtime.  There has been no discussion that I have seen of the enormous value of their work or the circumstances that led to the requirement for long hours.  Why not?

 

There has been a lot of talk of both zero hours and low pay of late.  No one would deny that low pay is an issue.  But, it is a function of the labour market.  Increasing low pay is a social good but comes at an economic cost.  Politicians should not on one hand bemoan the erosion of working families incomes in the UK while at the same time urging employers to increase pay.  Such increases can only be paid for by raising prices.

 

Conclusion

You will, by now, have perceived the common theme.  Much of what is done in reward may not meet the highest moral standards, (and since when have either politicians or the media ever met that requirement); but our work is essential, commercial and pragmatic.  The labour market is imperfect, ambiguous and messy.  No amount of editorials or political band-standing is going to change those facts. 

 

One Head of Reward did point out to me when I was researching for this article that the targets of these attacks, the BBC, the police and the big charities, are all out of favour with the government and thus may be seen as legitimate targets.  She may say so, I could not possibly comment.

 

What is needed is a data rich, fact based discussion on these important reward questions by those who know and understand the issues.  We need a very big pea shooter to take on the storm troopers of the Westminster village and the chattering classes.  But it is time for reward professionals to do what they do best, provide the data and the analytics to take the battle in to the enemy camp.  Let us have a proper intellectual debate on these issues rather than the glass house occupants driving their tanks over the green lawns of the HR and Reward profession. 

IN CLOSING

I would urge you to buy/read the best-selling (#1 Amazon HR books) HR book  “Humane, Resourced” a crowd sourced ebook by some 50 HR professionals providing a cutting edge view of HR today by those who fight in the trenches.  I have honoured to have been a contributor to this volume.  All the revenue from sales of the book go to charity.  A very worthwhile read.   

 

This is my last reward blog post for a while.  I hope you have enjoyed the variety of topics covered over the last couple of years

Pay reviews; the Compa ratio magic. Strong Analytics V

Compa1

Introduction

We are, in most organisations, in pay and bonus round season. I have been involved in running pay and bonus rounds for over fifteen years.  One of the most helpful ratios and presentation tools is the compa ratio.  It is an incredibly powerful analytical tool.  At its most simple the compa ratio is the role is the position salary divided by the market salary.  This gives a ratio.  The magic is the amount of information contained in that number.  A compa ratio of 1 indicates that the position is paid at the market rate.  A ratio of less than one show the position is paid at less than the market rate and by what percentage and a ratio of more than one shows the position is over paid against the market and by what percentage.

By building graphs and visualisations of the compa ratios you have a powerful tool to assist management in making decisions on where to spend the limited salary increase resource.  Compa ratios can also be derived from total cash or even total compensation figures; although please see the methodological warning below.

What is it?

Most of us have salary data information from salary surveys.  We use this data to see how various positions sit in our labour market.   If I work in an insurance company I may have the excellent Mercer survey on insurance pay; if I work in banking I may very well use the methodologically sound McLagan survey.  Provided the jobs or roles have been correctly matched we will have a mass of market data on most of the roles in our organisation.  We will also have the average salaries for the same roles in our own organisation.

Here are some examples of comp ratio calculation:

Position salary Market salary Comp ratio
100,000 100,000 1 (Salary at the market position)
100,000  90,000 1.1 (Salary 10% above the market)
100,000 110,000 0.9 (Salary 10% below the market)

By using the simple compa ratio we will be able to see how our roles fit to the market.  Here is an example from a data set:

Role Average of Current Base Salary Average of Salary Compa
Actuary

$370,000

1.03

Management   Team

$370,000

1.03

Analytics analyst

$36,000

1.03

Analytics

$36,000

1.03

Analytics Manager

$100,000

1.01

Analytics

$100,000

1.01

Asst Trader

$47,648

0.94

Commodities

$41,603

0.95

EM

$29,347

0.96

OTC

$57,696

0.93

Special   Sits

$44,335

1.02

Treasury

$31,333

0.63

Here we have roles categorised by department with the compa ratio.  We can immediate see that there is an issue with the Assistant Trader role in Treasury.  At 0.63 we are clearly paying well below the market.  At best this warrants further investigation; at worse we have an immediate problem that should be prioritised in the pay increase distribution.   The concept becomes more powerful when we convert the data in to a graph

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In this example I have produced a graph showing both compa ratio and the attrition rate.  There is a strong negative correlation between compa ratio and attrition rate.

Getting clever

Using compa ratios it is possible to compare departments against one another as well as roles within a department.

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This shows the compa ratio by department; again illustrating where our pay round fire power should be concentrated.

The analysis can be extended to looking at sex discrimination, for example.  In this graph we look at the differences between males and females by compa ratio.

Compa3

This chart again gives an indication of areas that will require to be considered when carrying out the pay review.

Making connections

Another very useful application of compa ratios is to compare department compa ratios against a range of business analytics.  So, in the table below I have compared compa ratio with return on risk capital.  The concept is to focus our pay increases on to those areas that give the best return for the business.

Department Average of Salary Compa Average of RORC
Political Risk

0.93

32.00%

M&A Advise

1.00

28.00%

Treasury

0.89

18.00%

EM Debt

0.99

14.00%

Special Sits

1.00

14.00%

Derivatives

0.97

12.20%

Swaps

0.95

8.20%

OTC

0.95

7.40%

FX

0.95

7.23%

EM

0.96

5.50%

Vanilla

0.94

3.50%

Grand Total

0.95

11.60%

This approach shows a low correlation between market position and return on capital of 32%.  Depending on our reward strategy we may wish to focus our pay budget on, for example, Political Risk which has the top return on capital but has a compa ratio below one, showing we are paying, on average, below the rate for the market.

Thinking bigger

A similar approach can be taken when using a compa ratio for “total cash” – that is salary plus annual cash bonus.

A word of warning

I will talk of some of the methodological issues later in the article; but of particular note is that great care must be taken when looking at total cash market survey results.  Survey organisations use different methodologies so be sure you are comparing like with like in terms of cash bonus definition and the timing of the payment of the bonus.

Combining data

One of the most powerful ways to use total cash compa is to compare base salary compa, total cash compa and, for example performance ranking or even better, a business KPI to ensure alignment of bonus payments with outcomes.

A common reward strategy is to place salary at the median of the market place but to pay bonuses at the upper quartile, or better, for upper quartile performance.

He is an example of a table of salary compa ratio, total cash ratio and return of risk capital.

Compa4

This is a very powerful analytic graphic.  It shows that there is a major mismatch between the areas achieving the best return on risk capital and the market position for both salary and total cash.  It further shows that two areas with very similar RoRC have different compa ratios for both salary and total cash.

We can carry on with this type of analysis with almost any business metric and any mixture of KPI’s and compa ratios.  It is a really powerful way to think about pay and bonus analysis.

Methodological warning

A major consideration when thinking about this type of analysis is that salary survey data relates to positions, not individuals.  Further, accurate job matching is essential to ensure a good “fit” to the data.  Salary surveys are best viewed as not absolute numbers but as indicating relativities in the marketplace.  It is more important to look at the relative position of a role than the absolute salary level.  This is because roles are different between organisations as are the people who fill them.

To use the compa ratio approach well requires a good understanding of the statistical methodology underlying the raw numbers, it advantages and its limitations.  We need to understand both the size of the data population and its stability.  Even quite large populations used for data can cause issues if that population changes year on year.  This applies both to the organisations taking part in the survey as well as the roles and the individuals within the roles.    Survey data is averages of samples; good statistical approaches can ensure that the samples closely resemble the total population; but in many cases there are no more or less than a sub-set.

This applies still further when looking at total cash survey data.  The definition of total cash and the age of the data are essential consideration when manipulating the analytical outputs.

Conclusion

When we are analysing data in preparation for the pay round the compa ratio is a very powerful analytical tool.  Used effectively it can give a great deal of data in a simplified format that is amenable to graphs, diagrams and info graphics.

Used in conjunction with business data it can create meaningful business insights that will shape and direct the nature of the pay and bonus round in your organisation.

If you would like to understand more about data analytics and the pay round please contact me at idavidson@rewardresources.net

The pessimistic person’s pension problems Pandora’s package

Introduction

I had a letter recently from the Trustees of one of my defined contribution occupational schemes.  They told me they were going to change all of my carefully balanced investments in to funds of their choosing.  They said they were doing it in the best interests of all members; a reason that gives little room for argument.  It did set me thinking of the many pension risks we face; often not of our making.

Here is a list from the Pandora’s package of a pessimistic person’s pension problems.

Security risk

There is an assumption that our pensions are safe but what about:

  • The strength of the sponsor; as pensioners in Detroit have found – nothing is guaranteed
  • Investment manager – more on this later; but what happens if our investment manager fails?
  • Spouse risk; we assume that our spouse has made appropriate pension arrangements in the event of their death, but have they?  What about divorce?
  • State risk: some people rely on the state to provide a pension.  Research has shown that there are a lot of European countries who will not (and in some cases currently cannot) be able to afford the state pension burden.  If, it is going to be paid followed by when is it going to be paid followed by how much is going to be paid?

Political Risks

  • What tax regime are we going to face on our future savings and on pensions in payment?  In the US have we made use of the Roth rollover?  In Europe, what are marginal rates of tax going to look like in the future given the deficits are likely to last for another twenty years?
  • What limitations and regulations are going to be put in place now and in the future?  In the UK the limits on pension savings change every few months.  Are we going to face a savings limit; or like Australia a reduction in our state pension because we were prudent enough to save for our old age?  We know this is on the agenda of the UK and other European governments.
  • Are our pension’s savings going to be confiscated by the state at some stage, as we saw proposals to take savings from bank accounts in Greece recently? Do not think because it has not happened it will not happen in the future.
  • For those countries that allow income drawdown; will those rights be curtained or removed thus driving the proverbial coach and horses through our pension planning.
  • Regulatory risk; in order to protect pensions will regulators have to put such high hurdles in place that pension provision becomes impossibility expensive.

Economic risks

  • What happens to our savings when QE ends and the bond bubble bursts?
  • What happens if inflation takes off, as I consider very likely?  Are our savings and our pension payments protected against massive price rises?
  • Our country goes bankrupt!  Not at all impossible in these volatile times.
  • Annuity risks: are annuity risks going to crash even further (yes, probably).  Meaning we have to save vastly more for the same level of pension.

Sufficiency risk

  • Research by Fidelity and others have shown that very few people are saving enough to meet a basic standard of living let alone meet their retirement aspirations
  • Economic shocks for individuals such as unemployment, depression in the real level of wages, rising costs taking larger proportions of income are becoming the norm rather than the exception
  • Annuity rates are falling and there is little sign on the horizon of increases.  Forecasts based on old or historic annuity averages will underperform against the market reality
  • Life expectancy; this is the good news bad news story.  It is great that people are living longer.  But, that also pushes annuity rates down even further.  Someone (that is you) has to pay for all those extra years of pension

Investment risk

Where does one start?

  • Do we invest conservatively to reduce volatility; but with a greatly reduced investment return or do we invest more aggressively and risk losing it all?
  • Market timings – when do we buy and when do we sell; is our “lifestyle planning” going to mean our fund manager exists equities at exactly the wrong time?
  • Hidden costs eroding our pension savings.  De we actually know how much we are paying for all these advisors, fund managers, intermediaries, actuaries, professional trustees, pension lawyers, pension administrators and other assorted hangers on who seem to make a very good living out of our pension savings?
  • Investment advice; should we be in bonds or equities, infrastructure or emerging markets debt?  Even if we avoid the perils of active management do we know where we should be invested?
  • Diversification risk, everything seems to be correlated with everything else when we look at investments.  Are we over diversified or under diversified; should we be diversified?  Are our fund managers over or under diversified
  • Active vs. passive fund management?  Should we hope that “our” fund manager can do better than the market over the long term (statistically very unlikely) or should we invest in the market indexes and perhaps lose out on juicy “one-off” investment opportunities?
  • Vanilla or exotic investments.  Should we invest just in main index stocks, or should we use derivatives to help hedge our exposure?  Are Credit Default Swaps a good or a bad place to be; or both?

Operational risk

  • Have we got good fund administrators?
  • Are our pension records with our advisors correct and up to date?  Does someone still hold the record for the pension I took out in 1984?
  • Are our pension administrators undertaking the correct highly complex calculations correctly to ensure the correct final pension payment?  Some years are indexed against one figure (In the UK, for example, against RPI) and in other years against another index (again, for example in the UK, CPI).  Has inflation indexing, if we are that lucky, being calculated correctly.
  • Would we ever know if any of the above does contain errors?
  • Are the auditors of our pension scheme doing a good job for us?
  • Are the pension lawyers looking after our best interests
  • Have the pension trustees made the right investment and administrative decisions?
  • Have the regulators got sufficient resources and expertise to ensure that pension scheme members are being treated fairly?
  • Are the pension scheme communications easy enough to understand so we know the risks we are taking?

I could have gone on and on looking in my Pandora’s package but I have depressed myself enough already writing this.  I am going to have a little lay down and a cup of tea.

Wellness as a reward strategy

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Introduction

The UK Health and Safety Executive claim that 27 million days were lost to sickness or injury in 2011/12 at a cost of 13.4 billion in in previous year.  A lot of the illness is due to lifestyle choices such as diet, lack of exercise and stress.  There is a strong argument that including “Wellness” as part of a reward strategy is a powerful and cost effective way of increasing engagement, reducing sickness absence and increasing productivity.

Advantages of wellness initiatives

  • It is a cost effective way to improve engagement
  • Employees appreciate the interest shown by their employer
  •  Increase in productivity
  • Contributes to the “common good” – therefore good CSR management
  • Wellness initiatives can integrate with health and safety programs and occupational health activity giving a virtuous circle of employee wellbeing aligned with good business practice.

Development of a “wellness” culture

One of the most difficult things to do; but the most rewarding, is to develop a culture in your organisation of wellness.  By which I mean developing and encouraging behaviours that support wellness.  So it becomes the norm in an organisation for people to eat property, take exercise and take responsibility for their own and their family’s health.

This can be achieved by the same tools that we achieve any culture change.  Leadership is important. In one company I worked for there was an open competition between the CEO and the CFO on a number of sporting achievements.  Lots of staff took part with these leaders or at least supported their healthy activities.

The “nudge” approach so favoured by the UK government can also work.  By only serving healthy food in the canteen employees have little choice.  By having employees opt out instead of opting in to annual health checks will considerably increase the take-up.  Reducing the number of car parking spaces and replacing them with bike racks and showers nudge people in to considering using a bike rather than a car.   There are a number of small, inexpensive changes that can nudge people in to a healthier lifestyle.

Pricing actions can also help with the establishment of a wellness culture. Subsiding health options and making more expensive less health options is a good way to nudge people in the right direction.  Increasing the reimbursement rates for using public transport and decreasing milage rates make people consider the costs of motoring against public transport.  Subsidising gym membership is another good approach to encourage take up.  With some work and analysis these types of pricing approaches can lower the total benefits spend while leading to a more healthy group of employees.

Wellness culture can also be encourage by carrying out regular health audits of staff.  These can be carried out by occupational health or an outside advisor looking at patterns of staff activity and how wellness initiatives are working and perhaps suggesting new lines of attack.

Examples of wellness approaches

Wellness approaches can be split in to:

  • Risk Benefits
  • Environmental changes
  • Catering
  • Professional support services

Risk Benefits

The two most obvious benefits here are private health insurance and Health screening.  Many organisations offer private health insurance with, in the UK for example, BUPA or PPP.  But what is sometimes overlooked is that most health insurance organisations offer and in some cases encourage health screening.  A mixture of these two benefits can pay big dividends to organisation by both reducing time off sick by obtaining immediate treatment and health screening can pick up health issues at an early stage and deal with them before they turn in to long-term sickness issues.

Although not strictly speaking a risk benefit (although with some ingenuity it can look like one) is the provision of an on-site or near site private GP service.   I worked for a financial services organisation that provided a near site private GP service; which, while expensive, paid for itself by the reduction in staff having to take time off to see their local GP; often requiring a half day for a simple 10 minute appointment at their home location.  It was also very useful for visiting overseas staff and inward expatriate staff who often found it difficult to  get treatment with a local doctor.  (This tends to apply to the UK rather more than other countries).  The same type of approach can be used for the provision of private dental treatment on a “near site” basis.

Environmental changes

Making the workplace healthier is easily undertaken.  Replacing high fat snacks and drinks with healthy alternatives is but one suggestion.  Provision of showers for staff that bike ride in to work or like to exercise at lunchtime is another key initiative.  Opening up staircases as the preferred access and egress routes rather than elevators or lifts, perhaps by designating half of these as for visitor use only.  There are a number of simple environmental changes that will encourage a healthier lifestyle.

Catering

The provision of healthier snacks, drinks, tea trollies and canteen meals can make considerable changes to the diet of our employees.  Healthy eating does not have to mean uninteresting eating.  When I visited the Head Office of Commerzbank in Germany they had interesting Asian and African foods in the canteen; as well as it being open to the public…

Professional support services

This is another area that can create considerable leverage in employee wellness.  As an example, mental health is now recognised as a major issue for employers.  Time off for stress and depression is rising rapidly.  The provision of confidential counselling is an excellent way to provide support to employees.  Likewise drink and drug awareness and support initiatives can often catch problems at an early stage.

This type of support can extend to the provision of “at desk” massages’ to help relieve stress and long hour exhaustion.  There are many other creative and innovative solutions available in the market place to drive home the wellness message and provide support to staff.

Finally in this section, let us not forget trauma support.  Unfortunately, unexpected but dramatic incidents are an on-going fact of life in all countries.    These can vary greatly from terrorist attacks to train or airline crashes or sadly mass shootings in our locality.  It is essential to have appropriate professional, qualified trauma counselling available immediacy after an incident. Services can support staff, managers and families in the event of tragedy; minimising the possibility of long term mental issues arising from the trauma.  Do not forget, in the event of an incident many organisations will be looking for this type of support so simply get in first and have contingency arrangements in place with approved suppliers.  This is all part of the wellness agenda; be it often over looked.

 Conclusion

Wellness is an important, but often overlooked part of reward strategy.  Yet it is a cost effective way to improve both productivity and engagement to our valued staff.  It turns the phase “our staff are our biggest asset” from meaningless marketing to a working reality appreciated by staff and other stakeholders as part of a cohesive CSR policy.

On the subject of cohesiveness a well manufactured wellness approach can be closely integrated with business continuity, health and safety and occupational health.  The impact on the employee brand and proposition will be enormous – without a large cost.

I do not know why this approach is not more widely used.  Do you? And, have you any suggestions for innovative approaches on wellness in the workplace that I can share as part of an on-going dialogue on “Wellness in the Workplace” which will focus on some of the individual initiatives and providers who can help build this simple but highly effective reward intervention.