by Bill, Management

On ObamaCare, Employers, and the Full-Time vs. Part-Time Decision

3 Comments 18 February 2013

With full implementation of the Patient Protection and Affordable Care Act (aka ObamaCare) now within sight, every organization with a payroll and a modicum of good sense is getting serious about determining their strategy and tactics with respect to the act.

Some have already decided to go ahead and upgrade their health care insurance programs to make them compliant with both cost and coverage requirements of the act. Many are taking a “watchful waiting” approach to see how the first few organizations that pay a fine and dump their workforces (in whole or in part) onto the state insurance exchanges fare. Many others, particularly in the retail and hospitality sectors, signal that they will be shifting even more to a workforce constituted of part-time workers in order to escape the act’s coverage requirements. At first blush, the act seems to incentivize some to do just that. Although every management must decide what’s in the best interest of their stakeholders, it is this last group that we’d like to focus on.

In a recent webinar sponsored by People Report and Black Box Intelligence (very credible organizations that provide info. services to the restaurant industry), the unmistakable take-away was that reliance on part-time vs. full-time workers will be a Big.Dot.Issue. 82% of the mostly restaurant managements surveyed indicated that cutting worker hours in order to reduce the number of full-timers with mandated benefits would be their likely approach. Further, 80% of those surveyed indicated that it was their intent to hire a greater ratio of part-timers going forward.

On the surface, swapping one full-time worker for two or more part-timers seems a perfectly sensible thing to do if it helps you avoid a significant expense for worker health care benefits. Yet, managements that make such a move based purely on avoiding the cost of employer-sponsored health insurance are opening yet another, possibly costlier can of worms.

Regardless of the number of hours each person works, the addition of each incremental real, pulsating human being (RPHB), aka “heads” to the beancounters in the crowd, adds significant complexity and cost to the mix. Here are just a few of the factors to consider:

  1. Additional pressure on the physical plant (think bathrooms, parking spaces, work stations, et. al.)
  2. The task of communicating with and leading, directing, guiding the workforce becomes more complex. At some point, additional managers must be hired due to span of control issues.
  3. Recruitment and training costs go up, way up.
  4. Barring some clear and reasonably predictable way to migrate from part to full-time status, you must either recruit from a totally different demographic, or face the prospect of having a bifurcated (and not necessarily enchanted or engaged) workforce. (Think A-scale and B-scale and how well that worked for commercial airlines.)

We don’t advocate one approach over another. Rather, that each management team get beyond the surface considerations and consider all the implications. And, not to put any pressure on you, but you need to do it soon.

*****

A pathfinder in the arena of leadership and employee engagement, Bill Catlette is a seminar leader, keynote speaker, and executive coach. He helps individuals and organizations improve business outcomes by having a focused, engaged, capably led workforce. He is co-author of the Contented Cows leadership book series, and Rebooting Leadership. For more information about Bill, his partner Richard Hadden, and their work, please visit their website, or follow him on Twitter at http://twitter.com/ContentedCows

 

 

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3 Comments so far

  1. Todd Noebel says:

    I think that there will be significant compliance pressure (read audits) on the companies as well as the local & state governments that try to restrict hours and move to this “part-time” workforce. Layer those audit pressures on top of the admin burden required to be compliant and many companies will be strained to keep up. Now factor in the issues you mentioned around hiring, managing, training and retaining people related to this new workforce model and I see some ugly days ahead for my fellow HR professionals.

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  3. Richard Hadden says:

    Hi – thanks for your comment on the blog theme. This is the Daily Edition theme from WooThemes. I’m not sure if it’s still available, but you could check their website to see.

    Thanks again,
    Richard Hadden
    http://contentedcows.com


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