SERVICE BEYOND THE CONTRACT
Volume 6, No. 2
Lane Quinn Benefits News Letter
June 2009
In this issue:
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The Link Between Family Care-giving and Workplace Health
Healthy, Wealthy and Wise
Fraud in Health and Dental Plans?
Effectiveness in Hiring
Elite Diagnostic Imaging Service
Employee Health- Major Reason for Retirement
Seeing Double
Improving One Smile at a Time
The HR Corner
FAMILY CARE-GIVING vs WORKPLACE HEALTH
The Problem Identified
For aging Canadians and the amazing “baby boomers”, the new facts of life are elder-care and the required
“superhero” responsibilities. Offspring who are now adult and are now themselves in high maintenance careers, or
spouses who have ill or disabled partners or relatives find themselves in the very difficult position of juggling the
three balls of work, life and unavoidable care responsibilities. They (and there are many) feel like the proverbial
“meat in the sandwich” as they try to balance their time between elder-care needs and those of their still dependent
children (who crave or need mom or dad’s attention), while also maintaining a high standard of productivity and
contribution in their own demanding careers.
The Invisible Backbone
Family caregivers are called on to provide care and assistance for spouses, children, parents and other members
of the extended family. Support may be necessary because of any or all of the required factors:
 Age
 Debilitating medical conditions
 Chronic injury
 Long term illness or disability
Caroline Tapp-McDougall is the author of THE COMPLETE CANADIAN ELDERCARE GUIDE. She describes
these caregivers as the “invisible backbone of the health and long–term care system in Canada” and states that
their contribution is at the level of more than $5 billion of unpaid care.
Governments and employers agree that productivity, absenteeism / presenteeism and retention are all key factors
for the aging workforces of our country. The statistics point directly to eldercare as one of the biggest and most
difficult hurdles to get over.
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Preparedness
Tapp-McDougall says that research shows that generally speaking, families are simply unprepared for the
eldercare responsibilities that they will be facing. The result is that they suddenly find themselves in the “care in
crisis” mode.The offshoot of this is plans made on the fly, with no depth of thought about long-term implications and
ultimately deep regret over not making plans and decisions about aging issues in advance of the problem becoming
real.
Recognition of the Challenges
It appears that employers are becoming aware of and concerned about the challenges of care-giving and the
potentially negative effects on productivity. The good news out of this is that some very thoughtful elder-care
programs are beginning to emerge. This has been helped along by the problem being very much in the forefront of
the news as well as in the daily lives of literally millions of Canadians.
To put a real face on it, one in every five employees (20%) is facing this frustrating and unavoidable challenge of
having to balance care-giving and work. This puts an onus on HR professionals to be leaders in seeking out new
opportunities and being courageous enough to “pioneer” assistance programs.
Ms. Tapp-McDougall identifies the following possible options for employees who need workplace flexibility:
 Caregiver leave – companies are treating this much the same as maternity leave. They allow 6-8 weeks
absence for family or extended care for elderly family members. The federal govt., bowing to public
opinion, has introduced a compassionate care-giver leave of absence program.
 Flex work arrangements – such as flex-time, a compressed work week, a shorter work day or job
sharing. Some companies may also be open to allowing the caregiver to work from home on certain days
of the week.
 Special compensation plans- in some companies, additional services may be available through a
benefits program. HR people should review the various “menu” items to find those that might not have
been previously noticed or applicable and advise employees that these options are at their disposal.
Strong encouragement should be given to employees to investigate workplace programs that:
 promote health
 reduce stress
 provide access to care-giving resources
 support groups and “lunch and learn” sessions are very useful ways for employees to learn of their options
and to meet other employees who are “in the same boat”.
Much More To Be Done
Companies that are truly serious about coming to grips with this real and growing reality need to do more than just
hold seminars and host awareness days, although both are part of a good start. However, the employer who really
gets it and has his eye on costs of higher absenteeism and lower productivity will want to seriously embrace
positive effect long term programs. Such employers will consider:
 bringing the resources, literature and experts in-house via libraries / resource centres in the workplace and
also online.
 inviting guest speakers from the Parkinson Society, the Alzheimer’s Society of Canada, or the Heart and
Stroke Foundation, to educate concerned employees on conditions and possible interventions.
The Bottom Line
Many employees (yes, including in your company) are “on the hook” for:
 providing home care
 arranging placement in a long-term care facility
 offering support for parents who need assistance with medical appointments or shopping
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For such employees, sympathetic open discussions, accommodations and easy to access assistance with
eldercare issues can avoid a family crisis that may mean time off work. Serious attention to all these positives will
create a proactive contribution to reduce stress, create job satisfaction, and ensure ongoing employment for
valuable employees who are the key to company success.
Employers should not dwell on how expensive it might be to do something positive. But they should understand the
consequences of doing nothing…excessive absenteeism and reduced productivity. Hoping the problem will just go
away is pointless. It won’t.
HEALTHY, WEALTHY and WISE
The Issue
Canadian employers are seriously concerned about a major loss of baby boomer employees. In fact, the retirement
of the “boomers” is believed to be the one issue that will have the greatest workforce impact over the next ten
years.
Concerns of the Boomers
1) Retirement planning- traditional focus is on financial readiness. However, proper retirement planning
goes beyond just income. It focuses on preparation for health care spending as we grow older.
Aging often includes a need for extra funds for home care, assistive devices, medications and even home
modifications. People often ignore this whole area when thinking of retirement, believing it is reserved for the
elderly. However, Sun Life Financial data shows that more than one out of every ten people who
has been a recipient of long-term care insurance benefits was younger than age 50 at the time of their claim.
2) Women re retirement planning- face a double jeopardy. (a) They provide the majority of care for loved ones.
(b) They also receive the most care because they tend to live longer than men. They also worry more than men
do about future long-term care needs. Statistics reveal that more than 6 out of ten women (62%) have anxiety
about the likelihood that they or their partners will need a nursing home, assisted living or home care in the
future. These same women worry about their ability to pay for this care. Strangely, In spite of those numbers,
only slightly better than one in five (21%) actually considered long term care costs in their retirement plans.
What Should Employees Do?
It is not unusual for employees to be misinformed about long term care costs. They often assume that the
government will take care of them in their golden years. If they did plan for future healthcare costs, it would do
much to remove this burden from family and/or friends.
So, what to do? First, they need to understand the healthcare system (e.g. public versus private). They should also
know what resources are available to them. It could also be very important at some point for them to know their
family health history and thereby be aware of any chronic conditions they may face in the future.
Once they are in possession of all this information, they should establish clear financial and legal directions
regarding future healthcare. This means ensuring that wills, powers of attorney and advance directives are
complete and current. Of course, they should also take steps to store these documents in a safe place and ensure
the location is communicated to family members and updated annually.
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Strategies for Employers
Employers want their people to be more proactive about long-term care planning. But how can they be effective in this?
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Option: include communications and education initiatives in their benefits program
Option: Send out targeted communications with employee pay notices.
Options: are inexpensive and can be repeated frequently thus ensuring employees get the message.
Advantage: if an unexpected adverse health event happens to an employee or to an aging parent, those who are
prepared will more easily cope with both the costs and stress associated with the event. This translates to
less time off, as well as greater productivity during the difficult period.
Advantage: this will help employers to develop a more attractive workplace, especially positively affecting retention of
older and more experienced employees.
The Final Word
No one wants to think the unthinkable. But employers can be supportive to their senior (age) employees by
educating them about the need for long-term care planning and help them make it happen.
Note: Above story includes excerpts from the article by Ms. Karen Henderson, CEO of the Long Term Care
Planning Network
FRAUD IN HEALTH and DENTAL PLANS
NOTE: Every year, private plans lose large sums of money to benefits fraud, which has the effect of driving
up plan costs. There are protective steps employers can take for the benefit of themselves and their plan
members.
Plan sponsors realize that the costs to provide employee benefits, especially health and dental insurance, are rising
quickly. What they may not appreciate is the extent to which fraudulent conduct by patients and healthcare
providers is a significant contributor to the escalating premium levels.
Although no official figures are available, it is estimated that 2 to 10% of all healthcare dollars in North America are
spent fraudulently.
Based on healthcare spending in Canada in excess of $160 billion, the amount lost to healthcare fraud is from $3.2
to $16 billion every year. Add in healthcare inflation of more than 10% annually, the losses to fraud are growing at
an explosive rate. Even if we figure conservatively and use the lower end of the range, it is a staggering amount.
Whatever the right number is, it is ultimately passed on to both employers and plan members in the form of higher
premiums. Additionally, instances of fraud are not isolated. The most recent survey of the prevalence of this
problem revealed that 94.9% of plan sponsors have had at least one fraudulent claim.
How Do the Deceptions Happen?
Fraud has many forms. It is limited only by the clever deception skills of those who are determined to be dishonest
in this way. The most common types of fraud carried out by plan members fall into four categories, as follows:
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Malingering – exaggerating illness or injury to collect additional benefits.
Doctor shopping – obtaining multiple drug prescriptions from various doctors.
Misrepresenting dependents- maintaining eligibility for individuals not qualified for benefits such as
formerly dependent children
Failing to coordinate benefits with an insured spouse- submitting false claims
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Fraud committed by medical service providers generally takes the form of:
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Billing for services that are not medically necessary
Billing for services not rendered
Billing for services more expensive than those actually performed (up-coding)
Billing for non-covered services disguised as medically necessary, for the purposes of obtaining
reimbursement
These fraudulent activities can occur with or without the assistance of the patient. In some cases the
patient cooperates and receives a kick-back or other benefits.
Methods of Discovery
Attempts to reduce fraudulent benefits claims fall into four categories:
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Prevention
Detection
Investigation
Prosecution
The success of any initiative to reduce fraud depends on the relationship between the plan sponsor and its benefits
administrator, regardless of whether the plan is an insured or administrative services only arrangement. There are
steps that sponsors can take in isolation. But the reality is that the success of any fraud reduction actions relies on
the relationship between the sponsor and the benefits administrator.
Reliance on 3rd party administrators for detecting fraud has increased significantly. Recent federal or provincial
privacy legislation has seriously diminished sponsor access to employee claims information. The result is greater
dependence on administrators.
The insurance industry is of course very concerned about this and is now devoting more resources to the problem.
The result is more sophisticated methods for detecting fraud and for increasing recoveries.
Five Steps to Discourage Fraud Activity
1. Implement a whistle–blower policy – Employees who want to report facts or their suspicions of benefits
fraud or other improprieties must be protected from reprisals.
2. Develop a written code of conduct and conflict of interest policy – Policies should be communicated to
employees in a formal seminar manner. Consider requiring each employee to sign an agreement
confirming that they have read and understood the policies.
3. Work closely with your insurer - Ensure that your benefits provider is using up-to-date techniques to
prevent fraud and detect it when it does occur.
4. Educate employees about the cost of fraud- Emphasize that fraudulent claims increase the cost of
premiums, which can lead to a reduction in coverage and/or take–home pay.
5. Consider design features that will help inhibit fraud – Co-pays, deductibles and annual or lifetime limits
–particularly on items vulnerable to abuse – can help reduce the incidence of fraud in your benefits plan.
Dealing With the Defrauders
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When fraud activity is uncovered, sponsors should take care to not hastily publicize the discovery.
A fraud investigation may be compromised if the perpetrator learns that he/she is under suspicion.
The plan sponsor should immediately contact the insurer who is the direct victim of the fraud. The insurer is
in the best position to lead an investigation.
They may also choose to involve local law enforcement. This is especially appropriate if there is suggestion
that the employee is not working alone or is even engaged in a wide-scale fraud. (Benefits fraud is
frequently prosecuted under the Criminal Code of Canada).
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Sponsors should contact legal counsel if they have been defrauded directly (self-insured plan), as well to
ensure that they are not otherwise implicated in the fraud. e.g. The Insurance company may allege that the
employer, through its conduct, enabled the fraud to take place.
Finally, plan sponsors should establish and mark a litigation file for use in any subsequent litigation. This
will maintain & ensure privilege over any documents produced in the course of an investigation or in
dealings with the insurance company.
Thanks to Sean Maxwell of Bennett Jones LLP in Toronto for his research and reporting on this topic.
EFFECTIVENESS IN HIRING
The business of attracting and retaining employees is no longer “business as usual”
Times Past
Remember the simpler times when the employer was the talent judge, and you had the luxury of considering any
number of employees who really wanted to work for your company? The candidates had to be very clever and
assertive just to get an interview and maybe, only maybe, actually get a call back!
Well, no more. Things have changed and are still changing in Canada….including the demographics of the country.
The proportion of the working-age has begun to decline and Stats-Can suggests that this will decline even further
over the next twenty years. There is a huge wave of baby-boomer retirements already well underway and it is
going to be very difficult finding enough capable candidates to replace them.
Although the current recession has temporarily reduced the problem, western provinces have already been
exposed to labour pressures. When this downturn starts to reverse as it inevitably will, gradually the drive to replace
those baby-boomers will again be an issue.
As this process unfolds, employers will face the issues of how to keep their very valuable “good guys” and find
ways to attract new talent. This will mean examining compensation, pension and benefits plans to determine
whether they need minor tweaking or major overhaul.
The Near Future
On the matter of benefits, as has been outlined in other articles in this newsletter, employers will need to look
closely at non-traditional benefits such as eldercare and wellness programs. Being a leader in these areas could do
much to make employers be high on the candidates “must see“list.
On the Pension side of things, the long awaited report from the Alberta / B.C. Joint Expert Panel on Pension
Standards is now out. There are some interesting, exciting and long overdue alterations being proposed, ideas that
should be attractive to both employers and employees in the near future. Employers will be well advised to stay
close to this issue as it will help determine what you will need or not need to do to offer more flexible, employee –
friendly pension plans.
Bottom Line
One thing is crystal clear. Recession or not, the balance of power is definitely shifting. Thanks in large part to the
massive baby-boomers retirement wave, there will be a lot of holes to fill in company organization charts. This
means that employees will assume the role of being the judge and you, Mr. Employer, will be the one who is
required to audition for acceptance. Those who are not sharp and ready to impress the candidates you want, will
find it particularly difficult to attract, hire and retain the people needed for company success. Put your thinking caps
on right now and be ready when the time is ripe.
Thanks to Alyssa Hodder, Managing Editor of Benefits Canada magazine, for her reporting and writing on this
issue.
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ELITE DIAGNOSTIC IMAGING SERVICE
Recent Situation
Canadians currently face unreasonably long wait times to get access to even the most basic of medical services.
The well known and respected Fraser Institute reported in Oct. 2007 that wait times in Canada increased by 97%
between 1993 and 2007. The reported wait times are consistently and significantly longer than physicians feel are
clinically reasonable. For example, in 2007 median wait times in Alberta were 4.0 weeks for a CT scan and 10.0
weeks for an MRI.
Improved Situation
Best Doctors Canada –a Toronto–based medical organization, has developed the Best Doctors Elite Diagnostic
Imaging Service to ensure that correct diagnosis and treatment plan options are identified in days or weeks
instead of months, by providing immediate access to diagnostic testing.
Statistics prove that the intervention of Best Doctors has resulted in:
 A revised diagnosis 22% of the time
 A revised treatment plan 61% of the time
 Reduced invasive surgery 67% of the time
This impressive Elite Diagnostic Imaging Service does not replace the provincial health care plan. It simply provides
access to diagnostics when the health care system cannot.
How Will Employees Benefit From This Coverage?
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Access to 50,000 renowned specialists worldwide
Empowered with knowledge, guidance and support when faced with serious illness or injury.
The average wait time of 80 days for diagnostic testing is reduced to 72 hours
Significant improvement in the overall care, recovery time and outcome.
What Value is Gained By the Employer ?
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Immediate access to diagnostic testing / treatment protocols; this helps employers by being able to offer
employees more than just financial support.
Fees are stable and thus provide an investment that can be budgeted and it is predictable.
Hidden costs incurred may be reduced. These costs include lost work time, lowered productivity that is
associated with physical impairment and anxiety, increased drug costs and physical and psychological pain
and suffering.
The number of long term disability claims may be reduced as is the financial obligation on short term
disability plans.
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Product Features
The best way to save lives and improve the quality of life is to avoid the misguided care that happens too often,
because of an overburdened medical system fraught with fragmentation and very long wait times.
At Best Doctors Canada, their role is as collaborators with the treating doctor and/or specialists to provide the
confidence that the diagnosis is correct and the right treatment options are followed.
Here are the features:
Membership:
 Individual – one adult
 Extended Family –spouses and unmarried children under 21 or under age 25 if they are
full time students.
 Children under 21 are not covered if they are working more than 30
hours per week unless they are full time students).
 Children who are incapable of self support because of physical or mental disorder are covered
without age limit IF the disorder begins before they turn 21, or while they are students under 25 and
the disorder has been continuous since that time.
Enrolment:
 Mandatory for all eligible members in a group
 Minimum Group is 10 members
Issue Ages for Adults:
 18- 65th birthday
Pre-Existing Condition Clause:
 None
Portability:
 Fully portable for member’s lifetime as long as they are a resident of Alberta and continues
payments
Medical Requirements:
 No medical underwriting or evidence of insurability is required
Waiting Period:
 Groups over 50 employees – no waiting period
 Groups less than 50 employees – 90 days waiting period
Membership Fee:
 $12.00 /month (plus applicable taxes)
NOTE: Employers - if you are interested in learning more about this special service coverage, please
contact Jay Quinn at Lane Quinn Benefit Consultants.
Jay Quinn, B.A.
President
(403) 261-6084 x 214
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EMPLOYEE HEALTH – MAJOR REASON FOR RETIREMENT
In the recent annual RBC RRSP poll, one in four (25%) retired Canadians cited health issues as the main reason
for their decision to retire. Interestingly, only 9% of pre-retired Canadian employees believe that health issues will
push them into retirement.
Besides health issues, the leading factors in causing the retirement decision were:
 Qualifying for a pension – 24%
 Company downsizing - 13%
The RBC study also found that health is top of mind for already retired employees. In fact, to emphasize this, when
retirees were asked to state the best gift they could receive in retirement, good health (53%) ranked even higher
than no financial worries (30%). The reverse is true for those not retired with 38% ranking no financial worries over
health (34%).
SEEING DOUBLE
An increase in health and dental claims is usual at the beginning of every year. However, what has not been usual
is what is happening to claims for paramedical services. Some insurers have reported seeing an abnormal spike in
claims in this area. The question is WHY? The answer may be that job losses and fears of cutbacks and future
layoffs is driving this phenomena.
The one area that stands out is extended healthcare claims such as eyeglasses, chiropractic care, etc. The
explanation is that maximums come off at the beginning of the calendar year .Officials ponder whether it’s part of
the economic times and people trying to maximize their benefits.
Related to this, Hakim Optical reported an increase in sales recently, notably in Oshawa and Windsor, centre of the
Canadian auto industry, where widespread layoffs have occurred.
This is NOT a surprising turn of events. A benefits consultant explained that due to employment standards, benefits
…as provided to active employees, are extended to active employees and are also extended to severed
employees. This creates a spike in claims under the plans. Severed employees are thinking that they might not find
employment for awhile, so it may make good sense to go to the dentist, get prescriptions filled, go for an eye exam,
etc.
There is nothing technically wrong with this and nor can employers prevent employees from increasing their use of
these benefit services. However, employers should be actively communicating the state of the business as well as
the strategies to be used to pass through the turbulence of the economy. This should especially be so if job security
Is the main topic of conversation among employees..
The essence of the matter
If employees are concerned about their company, they are more concerned about their jobs than their benefit
programs. This being so, the focus of employers should be more engagement and communication with their staff.
Communication is always a good idea.
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IMPROVING ONE SMILE AT A TIME
Many people are unaware that independent dental hygienists can offer a number of services that don’t require a
dentist’s approval or oversight.
There is a growing number of dental hygienists who are ready to jump in to the exciting area of conducting their
business operating independently of supervising dentists. As the number of these independents increases across
the nation, it will enhance access to preventative oral health care for both employees and retirees. This is an
important advance as it is now established that there is a link between gum and bone disease to conditions such as
heart disease and stroke; pneumonia and other respiratory diseases; diabetes and even premature and low birthweight deliveries.
This group of health care specialists are NOT trying to operate like mini-dentists’ offices. They want to reach out to
people in places like nursing homes and long-term-care facilities. This will allow them to provide an important
service to elders & others who cannot physically walk into a dentist’s office.
Where Are We Now?
B.C. is way ahead of the curve on this issue, having allowed independent practice since 1994, with Alberta (2005)
and Ontario (2007) enacting similar changes. Saskatchewan requires hygienists to have an employment
relationship with a dentist or an institution that hires a dentist. In Ontario, hygienists must either have a lot of
experience working with a “standing order “ from a dentist or take an additional course. New grads have to take
both the course and be mentored by an independent hygienist for six months. In total in Canada, there are more
than 14,000 dental hygienists. Up to now, 30 in B.C., 30 in Alberta and 75 in Ontario have set up shop on their
own. Those in Ontario now have the option to provide mobile services or open their own office.
One of the main barriers to progress for hygienists has been that until Alberta and Ontario came on board,
insurance companies did not recognize hygienists as service providers. Recently, major national insurers such as
Manulife, Sun Life, Great-West Life, Desjardins and Equitable Life have relented. Example: Manulife has agreed to
change their admin practices for claims originating in B.C. Alberta, Saskatchewan, Manitoba and Ontario.
Green Shield Canada has taken a different approach. They have agreed to cover services by independent
hygienists providing the employer specifically requests this coverage to be included in their policy. For reasons
known only to them, Pacific Blue Cross has not yet come online. Finally, some self-administered unions plans still
haven’t got the message on this issue.
Cost Savings?
What about cost savings? In Ontario, the fees for dental hygienists services are roughly 30% lower than the fees for
the same services provided by dentists. In B.C., hygienists and dentists charges are generally the same, because
B.C. fees are the lowest in the country. The employer would save on the exam fee, but not the hygiene fee.
Summing It Up
An independent hygienist in B.C. summed it up nicely this way:
“If I was an employer I’d want to get the costs to insure my employees down to the best level for the best
treatment. Some people just want to have their teeth cleaned without committing to dentistry. But if I tell
them they have a problem, then they are happy to go to the dentist.”
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THE HR CORNER – with Jerry Jellison
Hello Employers!
Well, that really was a winter to remember and I hope, never to be repeated!! Yeah, right!!
Well, enough negativity. It’s beautiful day today, and that’s what matters for today.
Be An Empathetic, Sensitive and Productivity-Oriented Leader In A Downturn Economy
I know that most of you are struggling to maintain a straight and level course in the midst of a difficult and uncooperative economy. Many of you employers have been downright heroic in your efforts to arrange things to
minimize the effects on your employees. This is a wise thing to do as you know that you will need your skilled and
experienced people to help you to be a strong competitor once a positive economy is on the way back.
Speaking of rebounding, I heard a news flash today on CNN that quoted a well respected group of economists as
predicting that this recession will likely come to an end by the third quarter of this year. Hope they are right! Wonder
what Mr. Harper and Mr. Flaherty and their economic advisors have to say on this matter for Canada? It was never
supposed to be as bad in Canada as it is in the USA so it should be good news for us. I’ll be watching the national
news tonight to see if a recessionary cure is on the way (but won’t be holding my breath).
Let’s move on. I hope that last quarter’s article on Workplace Issues in a Downturn Economy was helpful to you.
Whether you had to recently face major layoffs or something less difficult, it has been a challenge for you to do
what’s right for the business and for your employees. Frequently, what is good for one is good for the other.
Until the end of this difficult period is in sight, the job of leading your employees in a difficult climate continues to be
sensitive and challenging, but unavoidable. Leaders, in times like these, have to walk a very fine line between
showing empathy and motivating employees for productivity.
Before we proceed further, let’s do a quick refresher on stress and its implications. Why? Because this is what you
see and face as you walk through your business everyday trying to maintain employee morale while also
maintaining or perhaps boosting productivity.
Stress and Its Implications
Stress is defined as a reaction to a given set of circumstances. A stressful reaction can be a positive thing if it
helps you get through something because that’s exactly what your body and mind want you to do. But what
happens when the stress situation continues over time and simply doesn’t go away. That’s when the “cheese can
get binding”. The human body is not equipped to handle endless stress. The immune system is weakened and
eventually will crash. That’s when a variety of disorder symptoms are possible, in fact quite likely.
Even in good economic times, there are usually a variety of stressful situations operating in the workplace. This
means that some of your people were already struggling with their own stress demons. So when the economy
turned down and the work situation became more intensified, in addition to some newly stressed employees, those
who were already in distress may have entered into a state of chronic insecurity. In fact, current literature on this
reports that the amount and depth of the problem is unlike anything previously seen by those who deal with such
phenomena.
So, that’s what leaders are dealing with. It takes a lot of thought, experience and skill to do this effectively. You
need to be a motivator to keep productivity at the required level and also be sensitive to those who are finding it
difficult to cope. If there has been layoffs necessary and some colleagues of active employees have lost their jobs,
that fear of “Am I next?” may be very much in the minds of many, all hoping they can hold on. That active fear can
be a barrier to good performance or it can be an incentive to work harder and faster than ever. People are very
individual in their reactions to stresses.
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All this is a lead up to the question as to what are the behaviours that company leaders need to know, understand
and master so they can be effective in their leadership role. You may recall that we discussed this in our Dec.2008
newsletter. Since the economy has worsened since then, a refresher may be useful. The underpinning of what’s to
come is this: Every work day, employees arrive at your plant or office wondering about things like:
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Is my company OK?
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Is my company in trouble that I don’t know about?
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What will that mean for me?
This is internal self-talk, doubt and worry that is roiling around inside of them. That doesn’t make for a healthy
employee (absenteeism?), or a productive employee. Obviously in most cases company leaders can’t provide an
iron clad guarantee of job security. Let’s talk about (a) what you can and should do and (b) what behaviours are
counter-productive.
Must Do Leadership Actions
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Do be committed to honesty, openness and directness about how the business is doing.
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Do keep your door open and be available.
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Do personally acknowledge positive contributions. There is still no better award or incentive to encourage
good works than a warm smile, a friendly handshake , an expression of appreciation for a job well done,
followed by an enthusiastic “Thank you” from the boss.
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Do explain, especially if asked, what actions employees can take in their own small section of the business
to protect the situation. It will help them to know that they are doing the right things and doing them well. It
will give them a sense of control over their own destiny in your business. Remember, stress develops
quickly when employees feel they have little or no control over their situation.
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Do display your willingness to listen and then put your willingness into practice.
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Do exercise patience when an employee signals that they want/ need to talk with you. It may prove to be a
very good investment of your time.
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Do be particularly aware of the need to not get so busy and pre-occupied in the daily blur of the business
that you miss the little signals that concerned /anxious/ stressed people tend to give off.

Do keep in mind that if a little time and attention by you can defuse anxiety or any of its “cousins”, you will
have helped one of your people and also likely moved the business forward. Increased loyalty and
appreciation of you as a leader may be other very useful side benefits of your efforts.

Remember that for every mind you can clear and reassure, just by a simple, honest and warm
conversation, will likely mean that the employee is able to turn their full attention back to the job at hand.
Isn’t that exactly what you want?

Do exercise some caution. Don’t make things sound better or worse than they are .Just state the truth and
facts of the situation in a straightforward way.

Be calm and appear to be unhurried and unworried.

Do show by your words and / or body language that you are pleased the employee had the confidence to
trust you and do be very open about recognizing and accepting their concerns.

Do follow up on any commitments you make re answers or info that you said you would investigate.
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
Do ensure privacy is available for any employee conversations you have.

Do remember that staff reductions or company reorganizations have repercussions on those remaining.
Must NOT Do Leadership Actions

Do not be evasive, practice avoidance or appear to always be in a hurry (wrong signals big time).

Do not be a communicator only in times of crisis.

Do not keep your door closed.

Do not make things sound better or worse than they really are and give no false reassurances about the
future.

Do not be impatient with people.

Do not put off conversations with your people, especially when you encounter an employee who is clearly
in need of attention. Ignore these conversations at your peril.
Generally speaking, employee perceptions of how layoffs, restructurings and the uncertainties of a downturn
economy are handled by management will promote the recovery and return to productivity of your organization, or it
will work against it.
It is well known that among employees, losing a fellow worker can be very traumatic. In fact, the experts say it can
be much like post traumatic stress disorder (PTSD). An employee’s personal resilience capacity, their strength in
managing uncertainty and depending on their age and stage of life, all add up to the employee’s ability to deal with
the losses of friends from the company. But it is almost a guarantee that there will be some immediate dip in
productivity because of employee concern, distraction and disengagement.
In circumstances like this, employees want to see and feel some empathy from “the boss” and it is appropriate for
the boss to do this. So, compassion first, then you can start working to restore loyalty and company allegiance. In
this process, the danger to be avoided is giving any false re-assurances; just the truth and the facts. If more layoffs
are in the near-future plan, the leader cannot / must not say that it’s all over.
The Realities
In spite of all the best efforts, the leader may still encounter some employees who are incapable of handling this
difficult transition well. Their reaction may continue to be negative and extended. They may continue to behave in a
way that signifies they are increasingly in agonizing fear of losing their own jobs. Some of the behaviours that they
may manifest are:

Talking about those who have left

Coming in late

Not meeting deadlines

Displaying cynicism

Weeping or being highly emotional.
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Some employees actually feel guilty about surviving a round of layoffs. They just can’t grasp why certain
individuals were released and others were kept. However, there are some who maintain that survivor guilt in
this current recession is not what it used to be. Employees in this climate seem to be more worried about
their own job security.
How To Minimize Layoff Impact and Improve Morale in a Stressful Economy
Here are a few things that employers can do in these difficult periods:





Anticipate and plan
Communicate
Put a leash on grief
Manage the rumour mill
Acknowledge contributions
Anticipate and Plan
This means that given the “climate”, try to anticipate people’s reactions and plan for it. If your planned reduction is
significant, what you may overlook is that you are very likely to see 1% to 5% of the survivors now planning to leave
as well, as soon as they can find alternative employment. Then you may experience difficulty trying to find
replacements.
Communicate
This is best described as painting a picture, regardless of the economic situation, of why your company is
sustainable and what your peoples’ roles will be. If the responsibilities of the remaining staff are going to be
enlarged because of your staff reduction, at least you have been up front about it.
Put A Leash On Grief
Although you can appreciate why some of your people feel a sense of loss and anxiety over layoffs, its not healthy
for the employee or the company for anyone to get stuck in the grief. Such employees need to be helped and
encouraged to move on. Management needs to focus on team-building, rebuilding loyalty and engaging the leftover
workforce.
Manage the Rumour Mill
In the circumstances we are discussing, employees will gather and talk about what’s happening, how they are
feeling about it all and what they think will happen. It’s inevitable. So recognize this and hold informative meetings
and reassure your people that if and when something is troubling them, they are welcome to go to their main
leader/ manager to ask / discuss whatever is on their minds.
Acknowledge Contributions
How did you acknowledge contributions before the restructuring? If you were doing things that were well received
by your people, keep doing the same thing. If you weren’t doing anything previously, it’s time you started. At the
minimum, do what we outlined in the third bullet point under “Must Do Management Actions” above.
Final Reminder re Stress
Stress starts in the head, the mind. Then just as surely as a slow poison, it begins to spread throughout the body
and eventually, if sustained for long enough, it may do serious damage to the immune system. From there,
sickness, disability, extended absenteeism may follow. For the company , this translates into unwanted expense for
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sick pay, the loss of a productive employee and the cost of a replacement for the disabled employee so the
required work will get done by someone, although not as well and not as quickly.
Most of you are already using the management actions we have put forward for your consideration.
If you are, everybody wins…..the employee, the company, and you. You will be really “walking the talk of
leadership”.
I hope that it feels good, that you enjoy it and that it helps you to deal with the challenges you face everyday,
especially in this recessionary period.
____________________________________________ //___________________________________________
That’s it for this time. Please check out the articles in this edition. You may read something that will be of value to
your organization.
Once again, keep in mind that excellence in everything you do is always an available choice. Use that personal
power within you to make a decision to:
CHOOSE TO BE OUTSTANDING!!
See you next time!!
Jerry Jellison
JJ HR Services
Call: 403-225-0181
email jjj1@jjwritesmith.com or jjj1@telus.net.
Website – www.jjwritesmith.com
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