HR & Benefits Decision Makers Believe US Health Care Landscape is Experiencing Profound Change

Survey Respondents Admit to a Significant Lack of Clarity and Understanding Around their New Responsibilities under the Affordable Care Act

Press Release: Automatic Data Processing, Inc. – Fri, Jun 15, 2012 3:00 PM EDT

ROSELAND, N.J., June 15, 2012 /PRNewswire/ -- A newly released ADP Research Institute(SM) survey reveals that a majority of Human Resource and benefits decision makers at U.S. companies of all sizes believe the U.S. health care landscape is going through profound change.  In addition, a significant number of these decision makers expressed a lack of confidence that their organizations clearly understand their new responsibilities under the requirements of the Affordable Care Act (ACA).  The study also found that preparedness for key upcoming ACA regulations varies greatly across different sized companies.

ADP recently surveyed more than 800 Human Resource and benefits decision makers in U.S. organizations of all sizes in order to gauge employers' attitudes and behaviors regarding the future of health care benefits in general and impending ACA regulations in particular.  While decision makers at small businesses (1-49 employees) were the most vocal in confirming their belief that the U.S. health care landscape is undergoing profound change (64 percent), 52 percent of their counterparts at midsized (50-999 employees) and large (1000+ employees) organizations hold the same view.

"The ADP Research Institute's recent survey clearly shows that confusion and lack of preparedness surrounding ACA provisions is a widespread issue for U.S. companies of every size, although small and midsized companies seem particularly challenged," said Jan Siegmund, Chief Strategy Officer of ADP.  "For example, our study shows that half or more of small and midsized companies are unprepared to meet the newly-required summary of benefits and coverage required by the ACA."
According to the ADP Research Institute survey, just 40 percent of respondents from large organizations are very confident about their understanding of employer requirements under the ACA, while even fewer respondents in small companies (20 percent) and midsized companies (17 percent) expressed that same level of confidence.  Moreover, a majority of Human Resource and benefits decision makers at small and midsized companies (67 percent and 62 percent respectively) indicated they are unaware of the upcoming employee notification requirement about public exchanges.  Thirty-two percent of survey respondents from large organizations indicated a similar lack of awareness.

In terms of being ready to provide the newly required summary of benefits and coverage, 66 percent of large companies, 50 percent of midsized companies and just 31 percent of small businesses say they are prepared.
To view these and other key findings from the study, please visit: http://www.adp.com/pdf/KeyFindingsShiftingUSHealthcareLandscape.pdf

About the Survey

The ADP Research Institute conducted an online survey of 827 Human Resource and benefits decision makers at small, midsized and large U.S. enterprises in May 2012.  Respondents were key decision makers for critical employee benefits policy changes and/or major benefits system/service purchases within their enterprises.  The resulting data for small, midsized and large companies achieved statistical reliability at the 95 percent confidence level.

About the ADP Research Institute(SM)

The ADP Research Institute is a specialized group within ADP that provides insights to leaders in both the private and public sectors around issues of human capital management, employment trends and workforce strategy. Combining ADP's worldwide expertise in human capital management with a unique approach to identifying and analyzing trends that shape the working world, the ADP Research Institute transforms insights into information, tools and guidance that organizations can use to run their businesses more efficiently, including helping to navigate regulatory changes.

About ADP

Automatic Data Processing, Inc. (ADP), with about $10 billion in revenues and approximately 570,000 clients, is one of the world's largest providers of business outsourcing solutions.  Leveraging over 60 years of experience, ADP offers a wide range of human resource, payroll, tax and benefits administration solutions from a single source.  ADP's easy-to-use solutions for employers provide superior value to companies of all types and sizes.  ADP is also a leading provider of integrated computing solutions to auto, truck, motorcycle, marine, recreational vehicle, and heavy equipment dealers throughout the world.   For more information about ADP or to contact a local ADP sales office, reach us at 1.800.225.5237 or visit the company's Web site at http://www.adp.com/.

Contact:

Jim Larkin
ADP
(973) 407-9714
jim.larkin@adp.com

'People Problems' Sink Most Startups

Bloomberg BusinessWeek: By Karen E. Klein on April 02, 2012

http://www.businessweek.com/articles/2012-04-02/people-problems-sink-most-startups#p2

It’s not undercapitalization, lack of planning, or failure to test the market that most often cause startup business failures, says Noam Wasserman, a 42-year-old associate professor at Harvard Business School. Instead, nearly two-thirds of early stage failures stem from people problems—who does what and how they’re compensated, says Wasserman, who has written a new book, The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup (Princeton University Press, 2012). I spoke to Wasserman recently about his conclusions on startup failure and how he recommends would-be entrepreneurs increase their odds of success. Edited excerpts of our conversation follow.

How did the book come about?
It grew out of a course I developed when I got into academia, based on my own experience in entrepreneurship and venture capital and out of private company data I collected over 12 years. With the help of three professional-services firms, I got surveys from 10,000 founders of 4,000 startups, plus I’ve done deep dives into research for case studies.

My mission was to map out key decisions that founders must make and bring rigorous data to bear on an arena where anecdotes and rules of thumb and gut instincts rule the day. For instance, we have a preponderance of prominent role models that we assume are the rule in entrepreneurship, but they may really be the exception.

You found research showing that bad personnel decisions—about co-founders, equity splits, hires, and investors—drive most early failures. Let’s talk about partners and co-founders and what goes on there.

The most common source of finding co-founders is people you have social but not professional relationships with—friends and relatives. It’s understandable, but my quantitative analysis shows that these are the least stable of all the startup teams. There are two Achilles’ heels: You already trust each other in the social realm and you assume that will map to trust in the professional realm, which it does not necessarily do. And you’re not going to have the in-depth conversations about competence and skills that you would have with a business acquaintance or a stranger. That’s because you assume you don’t need to talk and you are hesitant to raise doubts because you fear they could blow up the social relationship that is so valuable to you.
Those factors lead to elephants in the room that teams are not going to be tackling. And if things go sour in the venture—if you’ve co-founded with an acquaintance—you’re not imperiling the most treasured relationship. But if you’re co-founding with a brother or a roommate or a spouse, the potential damage is extremely high. This is what I term the “playing with fire” gap.

So should entrepreneurs avoid friends and family when they look for partners?
I’m not pounding the table and saying: “Don’t you dare co-found with your best friend or your brother.” What I say is to do it with the gap in mind and reduce it by forcing the hard discussions and building firewalls that protect your social relationships from your professional ones.

Another pitfall you discovered is the decisions about how and when to split equity within a founding team.

Yes. In my data set, 73 percent of founding teams split equity within the first month of a venture, and the majority set it in stone without allowing for any dynamism within that agreement.

The problem is that early on, entrepreneurs don’t know what their business model or strategy will be. They don’t know what individual roles will be, how much commitment each co-founder will have, and they all share a rosy scenario because they’ve never gone to the bottom of the entrepreneurial roller-coaster.

What do you recommend when it comes to equity splits?

I like to see founders match uncertainties by putting dynamism within their agreements. It’s critical, early on, to take your best cut at a serious discussion about where the company is going, who will be the key players, what are the different ways they’ll be contributing. In contrast to just focusing on the usual rosy scenarios, they should also tackle the expected case and the worst case.

If you hit each of those scenarios and how equity should be changed under them, you can have a dynamic agreement that might include vesting of equity, for instance. A typical agreement might have equity vest over four years, or they might use a milestone vesting plan or a scenario-based one. The idea is that equity is earned over time for those who are still around in the venture.

One common problem you saw is that founders’ early strengths often undermine their effectiveness later on. How does that happen?

Their passion and confidence leads them to overly rosy projections and they underestimate how much funding they’ll need or overestimate the speed with which they’ll accomplish things. I think if there’s a realistic road map in place for the company and the founder does some introspection, they have a much better chance of succeeding.

What kind of introspection are you talking about?

Understanding the true motivation for why you’re getting into this to begin with. I call it the rich-vs.-king dilemma because the two most common motivations are financial gain and control. The king is a visionary who wants to bring something to fruition and have an impact on the world without having to sacrifice the idea or have others twist and turn it. This person is more control-oriented and should think about being a solo founder, bootstrapping the venture, and finding inexpensive employees who are going to be more rising stars than rock stars.

The founder who primarily wants to get rich will do what it takes to grow the venture, including hiring the best employees, finding the best co-founders, [and] giving up control to the investors with the best financial resources, guidance, and networks. They don’t mind imperiling control in hopes that the pie will grow a lot bigger—and their slice, while smaller, will be much more valuable.

If a founder is one type—making decisions that are the opposite of the outcome he wants—that’s the worst-case scenario because you’re being led to a promised land that is not at all what you’ve aspired to.

You studied both small startups that are bootstrapped and higher-potential startups that often attract outside capital. What are the big differences in decision-making?

The smaller businesses are often not as aware of some of the nuances in decision-making and they are playing with fire more often.
For instance, half of tech startups co-found with social-relationship partners—that’s even more common in smaller startups. About one-third of tech companies split the equity equally up front; that goes to 70 percent for smaller bootstrapped startups.
Instead of heading down the most common roads that are most fraught with peril, the smaller companies should be having all the same discussions the bigger guys need to have, and it’s even more imperative that they understand the “head” side of a business, not just the “heart” side.

Chipotle under criminal scrutiny for hiring practices

Denver Business Journal

Date: Tuesday, May 22, 2012, 5:01pm MDT

Chipotle Mexican Grill Inc.    Chipotle Mexican Grill Inc. Latest from The Business Journals Chipotle under investigation for hiring practicesBenchmark buys in Maryland, wraps Tonawanda workChipotle's immigration probe isn't over yet Follow this company disclosed Tuesday that it is being investigated by federal prosecutors looking into possible criminal violations of securities laws in its process of verifying the legal status of workers.

The Denver-based burrito chain (NYSE: CMG), in a Securities and Exchange Commission filing, said that the U.S. Attorney’s Office in Washington, D.C., notified it Monday that it is “conducting an investigation into possible criminal securities law violations relating to our employee work authorization verification compliance and related disclosures and statements.”

In recent years, federal authorities have been looking into whether Chipotle hired illegal immigrants to work in its restaurants and how it checks workers’ legal status.
In January 2011, following an audit by U.S. Immigration and Customs Enforcement (ICE), Chipotle dismissed some 450 of its Minnesota employees who lacked valid employment eligibility documents. That ICE probe later expanded to 60 of the company’s restaurants in Virginia and Washington, where additional Chipotle workers were dismissed.

Last May, ICE agents checked more than 20 Chipotle Mexican Grill restaurants in several markets, including Los Angeles, Washington and Atlanta.

The company has repeatedly denied wrongdoing in its hiring practices and said it has upgraded its procedures for verifying employees’ legal status.

“We intend to continue to fully cooperate in the government’s investigations,” Chipotle said in Tuesday’s securities filing.

Compiled by the DBJ's Mark Harden

High-Energy Workplaces Can Save America

by Jim Clifton
Excerpted from The Coming Jobs War (Gallup Press, October 2011)

The explosion of entrepreneurship that economic growth requires won't happen until the country doubles the number of its engaged employees

There are currently more than 6 million companies operating in the United States. Within these workplaces is the will to create the next 20 million businesses. Many startups are incubating within these existing organizations. They will manifest themselves either when "intrapreneurs" [who work inside companies and are the brains and energy behind creating customers] create new business models in their own companies or when entrepreneurs venture out and start new firms of their own. America needs both. Every city in the world needs both.

Let me summarize the biggest body of behavioral economic data in the world on workplaces. It comes from a Gallup study on workplace productivity, and it consists of 12 critical elements of work life. Gallup has asked millions of workers worldwide to respond to these items for more than a decade and always finds the same thing: Miserable employees create miserable customers.

That may seem obvious, but try to find solid metrics in any organization that clearly link employee misery to customer outcomes by individual work unit. Every company has solid-gold data for sales and profit or product defects, but few know their misery quotient by workgroup.

And if you can't find the misery quotient, I guarantee your accounting department will. It will take a year or two though. I've observed that employee misery precedes all the easy-to-find data by one day to two years, depending on the type of business. Somebody in the company needs to treat a customer like hell for between one day and two years before the customer will defect. Customer defections are immediately followed by job loss.

But as I said before, few companies know their misery quotient. And not nearly enough organizations in the world have the metrics on the intricate behavioral economic wiring between customer and employee by work unit. This information is rare because leaders are drawn to all the wrong metrics, so they pay attention to all the wrong things -- they ask employees questions about compensation, benefits, vacations, parking, and the cafeteria. Virtually all employee surveys lack statistical correlations to sales increase and subsequent job creation because they ask the wrong questions -- directing leaders to work on the wrong things.

Defective employees

For all you Six Sigma enthusiasts, a miserable employee, particularly a miserable manager, is a defect -- a defect for the company, the customer, and ultimately the country. Gallup counted the number of extremely miserable employees -- which we refer to as "actively disengaged" because they also encourage others to be disengaged -- right at 20 million nationwide. Out of approximately 100 million full-time workers, there are 20 million actively disengaged employees in the United States.

Re-winning the world's best jobs is part of winning the innovation and entrepreneurial wars. And as America wins those, initially it will be manufacturing its own inventions, at which the country will temporarily be the best in the world. But shortly thereafter, far cheaper labor in other countries is likely to take that over.

That is OK, as long as the United States incorporates the invention, creates the almighty business model, and owns and operates it around the world. This simple U.S. world trade and economic strategy works in many productive ways now (think iPod). This whole premise depends on Americans' ability to be innovators, to be entrepreneurs, and especially to create world-class business models to ignite authentic GDP growth and job creation.

Low-energy workplaces, or as Gallup calls them, disengaged workplaces, will derail that.

Where is the United States on the behavioral economic standard of miserable vs. engaged employees? Right now, as I mentioned earlier, the country has just over 100 million employed people in real full-time jobs. Gallup has determined that 28% of the American workforce is "engaged," another 53% is "not engaged," and a staggering 19% is "actively disengaged."

The 53% of not engaged workers are not hostile or disruptive, and they are not troublemakers. They are just there, killing time with little or no concern about customers, productivity, profitability, waste, safety, mission and purpose of the teams, or developing customers. They're thinking about lunch or their next break. They are essentially "checked out." Most importantly, these people are not just part of your support staff or sales team. They are also sitting on your executive committee.

And then there are the 19% of actively disengaged employees who are there to dismantle and destroy your company. They exhaust managers, they have more on-the-job accidents and cause more quality defects, they contribute to "shrinkage" -- as theft is politely called, they are sicker, they miss more days, and they quit at a higher rate than engaged employees do. Whatever the engaged do, the actively disengaged seek to undo, and that includes problem solving, innovation, and creating new customers. When you're in a meeting with nine other people, odds are that two of them are taking notes to make damn sure whatever you're planning doesn't see the light of day.

The 28% of engaged employees are the best colleagues. They cooperate to build an organization, institution, or agency. They are the creative force behind everything good that happens in an organization. They are the only people in your organization who create new customers.

The explosion of entrepreneurship that GDP growth requires won't happen until the country doubles the number of its engaged employees -- just doubles it, especially in the sweet spot of job-creating small and medium-sized businesses, but really in every company. If companies double their number of engaged employees, they'll double the number of ideas and commercial energy running through the national grid of interconnected workplaces. If that happens, America will grow the best jobs in the world.

12 frames of mind
For more than 75 years, Gallup has counted, sorted, and analyzed every state of mind imaginable in the workplace. And we found 12 behavioral economic-based standards -- 12 frames of minds -- to which virtually all performance outcomes can be attributed. We didn't find 45 or 80, but 12, all separate and distinct from one another.

Gallup also found that other apparent key variables (such as "I'm fairly compensated") outside the 12 didn't distinguish between engaged and disengaged employees. These 12 items hold up statistically throughout all job variations and throughout business and industry, retail, hospitality, manufacturing, government, nongovernmental organizations (NGOs), the military, education -- virtually all jobs everywhere in the world.

Employees' responses to the 12 survey items neatly factor all workers into the three categories of engaged, not engaged, and actively disengaged. These items are:
Q01. I know what is expected of me at work.
Q02. I have the materials and equipment I need to do my work right.
Q03. At work, I have the opportunity to do what I do best every day.
Q04. In the last seven days, I have received recognition or praise for doing good work.
Q05. My supervisor, or someone at work, seems to care about me as a person.
Q06. There is someone at work who encourages my development.
Q07. At work, my opinions seem to count.
Q08. The mission or purpose of my organization makes me feel my job is important.
Q09. My associates or fellow employees are committed to doing quality work.
Q10. I have a best friend at work.
Q11. In the last six months, someone at work has talked to me about my progress.
Q12. This last year, I have had opportunities at work to learn and grow.

A great manager has employees who score all 12 of these items as highly as possible; the items are measured on a 1-5 scale of agreement, with 5 being highest (or "strongly agree"). All innovation, entrepreneurship, authentic sales growth, new customers, job growth -- all the things that every company needs most -- are sparked and inspired by the relationships between managers and employees that these 12 items measure.

As I said before, if twice as many American workers scored high on these 12 frames of mind every day, that would create sudden significant change; it would generate more rapid job growth than anything else. Going from 30 million engaged workers to 60 million engaged workers would change the face of America more than any leadership institution, trillions of stimulus dollars, or any law or policy imaginable.
Raising the percentage of America's engaged employees from 28% to 60% would double innovation and double entrepreneurship. It would create the conditions necessary to suddenly overwhelm competing nations because engagement creates new customers.

US Labor Dept, CO Dept of Labor & Employment Partner to Reduce Misclassification of Employees As Independent Contractors

PRESS RELEASEColorado Department of Labor and Employment • 633 17th Street, Suite 1200 • Denver, CO 80202 • (303) 318-8004 • Fax: (303) 318-8070
For Immediate ReleaseDate: December 5, 2011
Contact: Colorado Department of Labor and Employment
Office of Government, Policy and Public Relations
Phone: Bill Thoennes (303) 318-8004 or Cher Haavind (303) 378-4709
Contact: U.S. Department of Labor
Office of Public Affairs
Sonia Melendez (202) 693-4672 or Laura McGinnis (202) 693-4653
Web: http://www.colorado.gov/

WASHINGTON – Today, Deputy Administrator Nancy J. Leppink, head of the U.S.
Department of Labor’s Wage and Hour Division, and Ellen Golombek, executive director of the
Colorado Department of Labor and Employment, signed a memorandum of understanding on the improper classification of employees as independent contractors. This is the eleventh such state partnership announced by the U.S. Department of Labor. Following the signing, Leppink and Golombek hosted a press teleconference where they discussed how the U.S. Department of Labor and the Colorado Department of Labor and Employment will embark on new efforts, guided by this memorandum, to protect the rights of employees and level the playing field for responsible employers by reducing the practice conducted by some businesses of misclassifying employees.
“This memorandum of understanding helps us send a message: We’re standing united to end the practice of misclassifying employees,” said Deputy Administrator Leppink. “This is an important step toward making sure that the American dream is still available for employees and responsible employers alike.”
“Misclassification costs everyone,” says Executive Director Ellen Golombek. “It destabilizes the business climate by causing responsible businesses to suffer unfair competition. The efforts we will be launching with the U.S. Department of Labor will promote accountability that Colorado employers and employees will welcome.”

Employee misclassification is a growing problem in our economy. In 2010, the Wage and Hour Division collected nearly $4 million in back wages for minimum wage and overtime violations that were a result of the employees being misclassified as independent contractors or otherwise not treated as employees. This is an increase of almost 400 percent from FY 2008, when the division found just over $1.3 million owed for the same reason.
Business models that attempt to change, obscure or eliminate the employment
relationship arenot inherently illegal, unless they are used to evade compliance with federal labor laws. The misclassification of employees as something other employees, such as independent contractors,
presents a serious problem for affected employees, who are often denied access to critical benefits and protections – such as family and medical leave, overtime, minimum wage and unemployment insurance – to which they are entitled. In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are saving money by skirting the law.Employee misclassification also generates
substantial losses for state unemployment insurance and workers compensation funds. These memorandums of understanding arose as part of the U.S. Department of Labor’s Misclassification Initiative, which was launched under the auspices of Vice President Biden’s Middle Class Task Force with the goal of preventing, detecting and remedying employee misclassification. Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington have signed similar agreements with the U.S. Department of
Labor. More information is available on the Department’s misclassification web page at http://www.dol.gov/misclassification/. The mission of the U.S. Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve workingconditions; advance opportunities for profitable employment; and assure work-related benefits and rights. To learn more about the FLSA's requirements, call the Wage and Hour Division's toll-free hotline at 866- 4US-WAGE (487-9243).
Information also can be found on the Internet at http://www.dol.gov/whd/.