Friday, March 20, 2015

Rolling Stops

One of my pet peeves occurs when other drivers do not come to a complete stop at the red, octagonal signs or those wonderful, hanging tri-color light banks when they're shining red. I understand there's a conflict between two opposing ideals: 1) obedience to a law that's designed to keep everyone safe; 2) reduction in fuel costs by maintaining some momentum...I'm ignoring the other motivations like opportunity ('because I can when no one else is around'), laziness and urgency.

Similarly, in business, we should be frustrated by conflicting ideals when it comes to overtime or health insurance.

Overtime has the conflicting ideals of:

  • being more productive (revenue/employee), reducing hiring and orientation costs for new employees and ease of scheduling on the plus side
  • overtaxing physical, emotional and mental limits on employees making them less efficient and effective in the extra hours, reducing their recovery time before the next scheduled time of work and extra stress from family, friends and others because their availability is reduced.
That's why I've always advocated for voluntary overtime even when we're sorely behind. Some employees remain efficient and effective throughout a whole 12 hours, while others collapse at 7. Some don't have demands on their non-work time, while others are overly committed. The businesses I've coached in this regard have always "won" with regard to on-time deliveries, efficiencies, etc.

In order to reduce costs (costs have continually increased for the last 20 years or more), many companies have opted for reducing the insurance premiums through higher deductibles. Many have dropped coverage; only 50% of private sector firms offer health insurance (down from 68% in 2000--though another source says the current level is 61%, it's still a decrease). But ideally, you don't want employees to put off preventive care or nip small ailments in the bud (like an upper respiratory tick to become full-blown pneumonia) and put them out of work for days or weeks--a temptation they might have if they don't feel they have adequate coverage. Absenteeism and tardiness will increase as employees and employees' family health is at risk. These phenomena will increase costs. According to one estimate, the cost is $4,000/yr per employee (39% of which is because they're sick but they show up to work anyway--being less efficient and effective and perhaps infecting others). This is roughly the cost of single employee health insurance coverage (average $6,000 for single coverage; $17,000 for family coverage). 

Depending on the company's share of the premium, it might be good to figure out a balance between the absenteeism/presenteeism costs and the insurance costs so that your employees and their kin don't scrimp on staying healthy.


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