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A Proactive Approach to Healthcare Reform

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Whether or not Healthcare Reform survives the current political firestorm, Cumberland Gulf decided to take a proactive approach to the provision of affordable healthcare for their employees. Ari Haseotes, the company’s Chief Operating Officer, reviewed the options with his top HR, Finance, and Retail leaders and decided that the right thing to do was to offer benefits (including healthcare) to employees who were considered Part Time but working more than 30 hours per week. In this interview, Scott Thomson, Vice President of Total Rewards & HR Technology at Cumberland Health, shares the insights gained with this experience and tips for other HR leaders that are considering this proactive approach.

Cumberland Gulf took a unique approach to the Healthcare Reform by being proactive, why did you feel this would be more beneficial for your organization? 

Scott Thomson2

Has it proven to be beneficial so far?

First, because Ari Haseotes (President of Cumberland Farms and COO of Cumberland Gulf Group) felt that it was the right thing to do for our employees working between 30 and 40 hours per week. Second, because we know that when we make an employee full time and give them benefits that our attrition rate for this group falls to less than 20% which is very low in retail. If we leave them part-time and don’t give them benefits then the attrition rate holds at 60 to 70%.

As far as being beneficial, we got a very positive response from both our employees and our customers for doing this. We extended benefits to 1220 employees in this category and 340 signed up for medical benefits while the balance will take advantage of the rest of our benefits package (vacation, life and AD&D insurance, holidays, PTO, and vision). 

How where you able to weigh the bottom line—bringing on more full time employees vs cutting hours and keeping costs down?

We had partnered with Finance to run the numbers to evaluate our options but in the final analysis Ari felt strongly about creating a great place to work combined with providing a superb customer experience, both of which come from having tenured trained employees. So he wanted to send the right message to our employees that they are critically important to us. Cutting hours to control costs sends a powerfully negative message to employees.

What results have you seen from an employee engagement and work output, if any, since announcing your decision?

We just went through the Great Place to Work survey for the first time and got reasonable results. However, we have plenty of work to do and are building a plan right now on what we need to do to improve our culture and our work environment. Our Retail Field Operations team tracks metrics closely and I’m sure that they will have some data shortly on the impact of having more full time employees than part time employees – a flip in our field workforce composition.

If you could give top three tips to companies who are deciding which way to go that helped you with this decision, what would they be?

First, run the numbers to understand what the financial impact will be to provide medical for those employees but don’t let that increase in medical costs be your sole driver for the decision.

Second, take a look at your turnover data to under- stand how “sticky” your employees are by employ- ment category. Spend some time understanding why they stay and why they leave. That should help you to determine which direction you should go.

Third, consider how this decision will affect your company culture and the message that you will be sending to your employees with the decision that you make.

Scott Thomson is a frequent best practices contributor to the Connex Employee Benefits Sector. For more insights from executives such as Thomson, apply to join our member network. 

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