Well, the end of the Mayan calendar came and went late last year, and many of us were relieved to find that much is the same as it was before. The earth still orbits the sun, coffee and pizza remain as delicious as ever, and we are heartened to observe unemployment rates inching slowly downward.
But if there’s anything we’ve learned from apocalyptic prophesy, recent global weather patterns, and the specter of the “fiscal cliff,” it’s that 2013 is likely to be a challenging year for many Americans. In particular, ongoing tax reform and roll-out of Obamacare may have weighty implications for the average worker.
Facing these likelihoods, Human Resources executives planning for the year ahead must be ready to assess and communicate potential changes to employee benefits and take-home pay, so that unpleasant surprises do not occur and employee engagement levels can remain high.
The Fiscal Cliff and its Aftermath
President Obama and top economists have acknowledged the need for further reform of taxation and government spending in order to address the soaring national debt. According to Workforce magazine, experts predict that tax reform in 2013 could reduce the maximum pretax amount employees are permitted to contribute to 401(k) retirement accounts, thereby increasing the taxes paid by workers. While this would not decrease the monies employees have available to address the day-to-day costs of living, any such measure could affect their ability to save for retirement. Understandably, employees will be concerned and are likely to have questions.
Sea Change in Healthcare
Meanwhile, business leaders across the nation are poised to respond to the roll-out of Obamacare, with many organizations already investigating alternatives to their current employee benefit offerings. According to the Wall Street Journal, some organizations may opt out of providing employee healthcare insurance, because the penalty for not doing so would be less in many cases than the cost of covering employees. Other employers are considering cutting back on the number of full-time workers they employ, or raising employees’ premium contributions. Whatever tactic is chosen, your approach to communicating benefits changes will determine whether employees are able to understand and accept them.
When communicating significant change, utilizing a blend of methods is advisable. Whenever possible, incorporate live, interactive communications, such as town hall–style meetings, into your strategy. Live meetings allow employees to see the human side of the change—your tone and body language can convey compassion and encourage togetherness, which are harder to get across in written communications. Provide employees with an opportunity to ask questions, and encourage managers to hold smaller group “huddles” after the meeting, so employees can raise concerns they may not feel comfortable sharing in a larger group setting.
When change involves pay or benefits, providing written notification may be required by law, but in any case it is highly recommended. Written notification gives employees a resource they can digest at their own pace, and which they can return to as need arises. Ideally, written communications should be concise, address all pertinent/actionable points, and reflect a neutral, unbiased tone. Written communications may also encourage employees to approach their manager or Human Resources with any questions they may have. Finally, use your annual employee survey or pulse survey to assess the efficacy of your communication strategy and adjust accordingly.
Whether change is the result of internal decision-making or the influence of external pressures on the organization, employees are likely to view developments concerning their paychecks or benefits as impacting the employee-employer value proposition. To support employee engagement, it may be wise for employers to try to rebalance the proposition through low-cost initiatives and resources available to them. If, for instance, your organization must switch to a high-premium insurance option from a lower-premium plan, consider holding free annual wellness clinics for employees. Or if tax legislation significantly decreases take home pay, look into low-cost financial seminars that can help employees do more with less. While certainly no magic bullet, these efforts, when effectively communicated, can help employees to see that their employer cares about them and takes seriously the responsibility to provide fair value to employees.
The coming year need not be one of gloom and doom, but it surely holds challenge in store for everyone—from the line-level worker up through the C-Suite. But isn’t that what work and growth are all about? With the right combination of careful planning, robust communication, and a little elbow grease, Human Resources executives can steer their organizations through difficult change so that their organizations aren’t better in spite of those changes, but because of them. That’s what I call a positive, productive, and very happy New Year.