Archive for April, 2009

Swine flu: time to review business continuity plans

April 29, 2009

Businesses were urged to review their business continuity plans amid warnings that a swine flu could lead to absenteeism rates of up to 40% if a pandemic takes hold.

The warning follows growing concern over the H1N1 virus, which has led to between 20 and 80 deaths in Mexico, with further cases reported in US Spain and New Zealand.

Analyst firm Gartner advised businesses to place IT at the forefront of their business continuity plans as the virus spreads.

“It is important to have pandemic contingency plans that define what you would do if the workforce absenteeism rates exceeded 40% or you had to close your offices. As you develop and refresh those plans don’t forget that mobile and wireless technology has a part to play,” said analyst Nick Jones.

Gartner advises businesses to use wireless broadband to allow employees to work remotely. Organisations should consider buying mobile broadband adaptors with built-in wireless capability.

“It is also probably a good idea to spread your purchases across several networks, because if there is a pandemic or epidemic, some may become overloaded,” said Jones.

Businesses should consider using mobile devices in new ways, said Gartner. For example, they could send a copy of their disaster recovery plan to every employee’s smartphone. And they could use video phone calls as a low-cost alternative to video conferencing.

“You may need to enable teleworking for a lot more staff very quickly. Do you have plans and infrastructure that can cope?” asked Jones.

Gartner advises firms to identify key skills and begin cross training staff to ensure they can cover critical business operations. Firms should make sure that retrained staff are given access rights to relevant IT applications, as provisioning often causes delays and disruption.

Business should assess which parts of their operations will be sustainable with high absenteeism rates. They should begin testing their business continuity plans immediately to identify and take remedial action in problem areas.

• Two people in Lankarkshire have been admitted to hospital after possible infection with swine flu. More than 20 people who have come into contact with two patients have been given drugs and are being monitored closely.


Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit


Facebook costs Swiss woman job

April 28, 2009

A Swiss insurance worker lost her job after surfing popular social network site Facebook while off sick, her employer said on Friday

The woman said she could not work in front of a computer as she needed to lie in the dark but was then seen to be active on Facebook, which insurer Nationale Suisse said in a statement had destroyed its trust in the employee.

“This abuse of trust, rather than the activity on Facebook, led to the ending of the work contract,” it said.

The unnamed woman told the 20 Minuten daily she had been surfing Facebook in bed on her iPhone and accused her employer of spying on her and other employees by sending a mysterious friend request which allows access to personal online activity.

Nationale Suisse rejected the accusation of spying and said the employee’s Facebook activity had been stumbled across by a colleague in November, before use of the social network site was blocked in the company.


Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit

Humor and Stress Management

April 24, 2009

Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit

Michelle Rodger: Why redundancies should be the last resort for business

April 23, 2009
WITH unemployment soaring above two million you could be fooled into believing that redundancies are the best way to cut costs.

In theory it makes sense: fewer staff and the associated costs loosens the straitjacket around cash flow and potentially shores up the business until the tide begins to turn. And everyone else seems to be doing it.

st a business softie who doesn’t like sacking folk. Even those traditional harbingers of doom, the accountants, agree that redundancies as a cost-cutting measure should be a last resort.

It’s not often you hear bean-counters suggesting staff cuts should be put on the back burner, but the Association of Chartered Certified Accountants has recommended spending, yes spending, on people.

According to ACCA, now is a good time for businesses to invest in their current talent pool, and add even more depth to that pool with continued investment in training and professional development.

That way, when the anticipated upturn in the economy does arrive, next year or the year after, your business is well placed to take advantage.

It’s all about talent management; attracting, retaining and developing top talent. Getting it right during times of instability means leveraging the very best from your employees; loyalty and commitment can wander if staff are worrying about job security.

If your staff are less connected to the business and morale plummets then productivity will take a hit and costs will rise relatively.

The answer, according to Tony Osude, the head of professional development at ACCA, is to focus on getting talent management practices right.

His experience shows that those organisations that take “holding positions” or “paths to growth” strategies with investment in people, typically are those that are fastest to recover and will ultimately, enjoy more sustainable commercial success over the longer term.

Author Peter Sheahan puts it simply in his business book Flip. He tells a story about a firm of accountants which had just shed a significant number of staff in anticipation of the downturn. On repeating this tale to a rival firm of accountants, he was asked for the contact details of the staff that were let go. According to Sheahan, the first firm may have better short-term profits but when the current financial crisis passes the second firm will be eating the first firm for lunch.

Talent management is increasingly at the fore of strategic business thinking. A recent survey by HR software provider StepStone highlighted that 70% of business leaders think talent management is becoming more important to their company.

And 42% – like Sheahan’s forward-thinking accountancy firm – think the recession will be a good opportunity for them to target talented employees who have been made redundant.

The same survey, however, revealed that only 35% think talent management is part of HR’s role. StepStone sees this as bad news, insisting that HR leaders should be “joined at the hip with CEOs”.

But I would suggest the remaining 65% are right. Talent management is far too important to be shoved exclusively under the HR departmental umbrella. Every department in a business has a key, but differing role to play in developing, supporting, retaining and motivating talent.

So do you have a talent management strategy? Or do you have a people development plan? Or a recruitment and retention initiative? Whatever you call it, it should be as high on your agenda as a financial or marketing strategy.

Or how about some easily implemented solutions like those employed by entrepreneur Gill Ferguson? Having spent years honing her skills recruiting for some of the country’s top employers, she set up her own Search and Selection company last year.

Ferguson believes that moving talented staff around the organisation can result in creative solutions and an engaged and motivated workforce.

She recommends prioritising recruitment – the vacancies you have may not be ones the business needs to meet future demands – and a robust induction programme to ensure new hires hit the ground running.

Identify potential trainers in your business that can train in-house and keep costs down.

Or consider joining a training consortium: it’s a critical time to keep delivering training and development. There are significant cost benefits from sharing the financial burden through a consortium.

Talent management is simply about having the right people, trained in the right skills, performing at the best of their ability, in the right role, at the right time. It’s about aligning their personal development with your business and financial strategy. Our need for talent has never been greater.


Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit

EU give small firm aid deal all clear

April 23, 2009

Aufzählung EU legislator allows Austrian proposal.
Aufzählung Firms must prove pre-crunch health.

Vienna.The European Commission (EC) yesterday announced it had approved a state assistance program for Austrian businesses hurt by the credit squeeze in 2009/2010.

EC Competition Comm- issioner Neelie Kroes said: “Such assistance will help Austrian firms overcome their financial difficulties caused by the ongoing cre- dit squeeze without doing much harm to economic competitiveness.”

The EC has put a limit of 500,000 Euros on the amount of state assistance that can be given to any one business and restricting it to firms that were not yet in financial difficulty as of 1 July 2008.

The assistance can take a number of forms, including subsidies, interest-rate red- uctions, public bonds and state guarantees. The mon- ey will come from the Austrian framework for ass- istance measures to combat the financial and economic crisis, which has reserves of 300 million Euros.

The money, however, is not supposed to go for employee ski events like the one Bank Austria’s owner UniCredit Group provided last week.

The Group spent 350,000 Euros on an employee ski event as it sought state aid for its Austrian subsidiary.

The Group rented a huge circus tent for the closing event. The tent covers an area the size of a football field, is over 20 metres high and will have taken a total of five weeks to put up and then disassemble again after the event.

UniCredit organisation chief Thomas Brugger ad- mitted the total cost of the tent would come to just over 350,000 Euros.

Brugger said: “We have always had a closing event lasting five-to-six hours. Since Schladming doesn’t have a hall seating 4,000 people, we had to resort to a tent.”


Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit

Liverpool PCT’s Active Workplaces scheme aims to improve employee health

April 22, 2009

EMPLOYERS in Liverpool are installing gym equipment and giving out healthy snacks to help workers improve their wellbeing.

The PCT has launched an Active Workplaces initiative, which encourages managers to actively promote healthy lifestyles.

Staff at Alder Hey Children’s Hospital are now benefiting from the scheme, with the installation of new fitness equipment.

In response to feedback from staff the on site Alder Hey’s on-site fitness centre has been upgraded to include facilities which accommodate different levels of fitness and shift patterns.

Further workplaces in Liverpool will receive fitness equipment and discount gym passes over the coming months.

Gideon Ben-Tovim, Chair of Liverpool PCT said: “It’s been proved that a motivated, healthy workforce is more likely to perform well.

“We hope our investment in this equipment will mean improved morale and reduced absenteeism.

“The staff at Alder Hey do a wonderful job and we are delighted to be able to support them in this way.

“This is another example of the PCT working with the community to make state-of-the art equipment accessible to people who work and live in the city.”

Angela Jones, Chair of Alder Hey said: “Our workforce is our most valuable asset and this investment in their health and wellbeing will play a major part in ensuring ongoing delivery of world class care.

“As England’s first health promoting paediatric hospital accredited by the World Health Organisation we are committed to ensuring wellbeing at work remains a priority.

“This Active Workplaces initiative has given us a real boost and we are grateful to Liverpool PCT for enabling this.”

Liverpool-based charity health@work has been promoting such measures for 15 years in the city.

During the last few years the organisation has helped employers implement measures to improve diet, reduce smoking rates and lower alcohol intake.

It also carries out surveys to assess workers’ health concerns.

Keith Gorman, programme manager, said: “We work with employees and workers to promote healthy lifestyle at work.

“We helped companies give support for staff who wanted to stop smoking, working with the PCT.

“We are also helping employers to draw up alcohol policies, and to make it easier for workers to talk to their bosses if they feel they are drinking too much, without fear of being sacked.

“Diet and exercise are our current priorities.

“One of our projects involves employers putting fruit on display for their staff to eat.

“We give them the fruit for 12 weeks and after that they can decide whether to provide it themselves.

“it is a way of introducing fresh fruit into people’s diets, when it might be difficult to get hold of it near by.

“In some offices we help with the installation of healthy vending machines that offer staff an alternative to chocolate and crisps.

“Improving the health of a workforce and managing stress levels is beneficial to everyone because workers will be more productive and have less time off.”

Sue Weir, chief executive of Liverpool not for profit organisation Medicash, which helps staff spread the cost of healthcare, added: “Looking after the wellbeing of employees is crucial for an organisation to survive.

“Whilst the right level of stress keeps us motivated, increased pressure and worry relating to the economic climate can lead to low morale, ill health and high staff turnover.

“Employers should encourage employees to look after their health and this need not be expensive.”

“Balancing work and home life so that both areas are fulfilling and productive is a must.”


Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit

Increasing employee skills will benefit your company in the future

April 21, 2009

In my role as Northern Ireland adviser on employment and skills and a member of the UK Commission on Employment and Skills (UKCES), I am one of the signatories to a call by UKCES to companies to resist the temptation to cut training budgets.

We all know from experience that finding skilled people again could prove extremely difficult. Skills shortages were a problem well before the recession.

We all believe that the skills of our people are our best guarantee of future prosperity — and the best investment a business can make in challenging times. I appreciate that cutting training budgets may appear to be the quickest way to cut costs. Demand for employees in manufacturing tumbled to a record low in February, according to the Purchasing Managers’ Institute.

Making people redundant is usually a very traumatic experience for senior managers particularly in smaller companies. It’s a decision which few business leaders take easily. Many companies, therefore, are currently trying to hold on to employees by measures such as short time working or cutting wages and salaries.

To conserve cash, they are postponing non-essential investments and cancelling projects that they no longer consider viable, and adjusting capacity and inventory levels for decreased demand.

To help manufacturing companies in particular to preserve skilled jobs, France, Germany, Spain and several US states have already introduced employment subsidies.

Schemes like the US WorkShare programme allow companies to reduce employees’ hours and make up the difference through unemployment benefits. Interestingly the Republic is considering such an initiative. In the UK, the Engineering Employers Federation and the Unite and GMB unions are now pressing the government to introduce wage subsidies to preserve skills. The UKCES message is that the reskilling and upskilling of the people we employ must remain a high priority, particularly during difficult times when increasing productivity is the best way to ensure survival and to prepare for growth in the future.

Experience shows that companies which invest in training when times are tough are in the strongest possible position to gain competitive advantage in recovery.

Companies could cross-train factory staff in different roles for increased flexibility in response to fluctuating demand.

Local companies also need to know that there is practical support, including financial assistance, readily available from the Department for Employment and Learning and Invest Northern Ireland to build the talent of their workforce and boost their overall competitiveness for recovery. As Northern Ireland Commissioner, my main role is to provide a voice for the local business community, raising issues proactively and effectively to the UK Government and giving advice on developing policies and measures. I see the following main challenges from an employment and skills perspective:

  • Maintaining employment levels in industries that have long-term prospects in Northern Ireland. There is a need for joined-up support and rapid responses from the relevant agencies and departments.
  • Addressing the skills development needs within industry while the dominant short-term pressures are on cash flow and weekly survival, particularly among SMEs.
  • Maintaining our attractiveness for overseas investors.
  • Ensuring we remain focused on the longer term vision for Northern Ireland as a knowledge based and innovative economy.
  • Building management and leadership capacity of our businesses, as progress in this area can deliver high returns for companies and has long term benefits for the economy.
  • Ensuring that those in the non working population who aspire to employment are provided with the skills to enter the workforce.
  • Ensuring that those about to enter the workforce are better equipped to make a more productive contribution. In particular, adults must have the fundamental building blocks of essential and employability skills.

The immediate challenge, however, is to prevent our skills base from being eroded further by redundancies.

Dr Bill McGinnis, who is from Magherafelt, is Northern Ireland Adviser on Employment and Skills, a member of the UK Commission on Employment and Skills and chairman of the Northern Ireland Exporters Association.


Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit

Is the world of work working?

April 20, 2009
Some economists expect unemployment to top the 2 million mark for the first time since 1997

All UK governments since 1979 have placed more emphasis on the role of people as consumers than as producers

Jobs only capture the headlines when they are being lost. In the good times, the hot topics are sex, celebrities and shopping. Now that unemployment has broken the two million barrier, work is back on the radar. Seventies-sounding phrases like “Labour Force Survey”, “claimant count”, “strike action” and “job centre” are re-entering the lexicon.

February saw the biggest monthly jump in joblessness since 1971, with 138,000 people joining the dole queue. Government ministers have issued a uniform “we feel your pain” message. But their discomfort is real enough. A huge part of Labour’s success story has been a benign jobs market. High unemployment is supposed to be a Tory speciality. “Full employment is not just slipping away,” says John Philpott from the Chartered Institute of Personnel and Development. “It is sinking without trace.”

So when Alain de Botton, the multi-talented philosopher, publishes his new book, The Pleasures and Sorrows of Work, next week, there will be plenty of people feeling pleased to have any work at all. De Botton’s musings on various kinds of work may seem tangential, or even indulgent, to those facing the deeper sorrows of worklessness.

This would be the wrong reaction. The return to the horrors of unemployment is doing more to highlight the central social, economic and psychological importance of work in our lives. Us Brits have a particular habit of pretending to loathe our jobs – Thank God It’s Friday, etc – but perhaps we’ll pipe down a bit now. We might even work a bit harder.

The lengthening dole queue is not only forcing a revaluation of work, but of pretty much everything else. Time magazine, in its latest “10 Ideas Changing the World Today”, suggests that we’re rediscovering the job as the most valuable asset a person can have: “In this new era, a predictable salary is more appealing than the chance of scoring big with bonuses and stock options.”

Back in 1995, Gordon Brown committed Labour to creating “full and fulfilling employment”. Until the world changed in 2008, much of the debate around work has focused on the second half of his goal, on what are sometimes seen as “soft” issues: work-life balance, meaning, camaraderie, flexibility.

On the face of it, the Siberian economic climate could freeze all these issues out. But this does not seem to be happening. A book from 1970, What Color Is Your Parachute? – which is about finding the right job for your own wellbeing – is back on the US bestseller lists, just as their unemployment level breaches eight per cent. “Why are people rushing out to buy a book that talks about more meaningful work?” asks the author, Dick Bolles. “They’re realising they have to rethink work if they’ve got no Plan B. It reframes the whole issue of, ‘What type of work am I willing to do?’ “

De Botton must be hoping that a similar effect will boost his book sales. He points out that most of us are still working at jobs “chosen for us by our 16-year-old selves”. For him, rethinking our working life is part of a broader project to cultivate a more reflective society. Among his many activities, the philosopher-pundit has helped to establish a new School of Life in London, which provides courses for people looking for more interesting and sustainable lifestyles. So far the recession has done nothing to dent demand for this 21st-century university.

Rahm Emmanuel, the Chicago politician acting as chief of staff to Barack Obama, has said that it is a crime to “let a crisis go to waste”. He was talking about political opportunities. But the combination of an economic downturn, credit crunch and environmental catastrophe does suggest the need for a new way of approaching economics, politics – and the labour market.

“Work has captured the public imagination again,” says Stephen Overell, associate director of the Work Foundation, which campaigns for better work. He points out that work and employment have dropped way down the public radar in recent years. “None of the newspapers have employment correspondents any more,” he says. “Even the Financial Times recently abolished a dedicated staff position.”

All this may be about to change, of course. More importantly, a debate about what we want from our work is likely to begin. The question is not just whether we’re in a job, but whether work itself is working. Noël Coward reckoned that work was “more fun than fun” – but that remains a distant aspiration for many. So while we urgently need economic remedies to improve the rate of employment, it is vital to create good work, too. The labour market does not exist solely to provide labour to capital; it also performs vital social functions. Good work has three central ingredients: it is purposeful, sociable and empowering.

Work which connects the worked to a broader objective is much more valued, in the long run, than boring well-paid shuffling around of paper or money. Those City traders retraining as teachers have got some serious adjusting to do, but the pleasure of doing useful work will outweigh the more short-lived thrill of the Porsche.

One of the most recycled stories on the management circuit is of the Nasa cleaner who, when asked by a visiting bigwig – perhaps even a president (JFK or LBJ): “What do you do?”, answered: “I help to put men on the moon.” This story may well be apocryphal, but it is a perfect example of a worker seeing a clear connection between their day job and the organisation’s overall purpose.

The need for a sense of accomplishment explains why the myth of Sisyphus is so terrible and compelling. Because the rock simply rolls down to the bottom of the hill, his “work” makes no difference. Public servants drowning in paperwork end up similarly disillusioned and resentful – the school head doing the annual report for the inspectors is the 21st-century equivalent of Sisyphus.

As well as purposeful activity, good work provides a social community. One of the best predictors of job satisfaction is the answer to the following question: “Do you have a close friend at work?” Our workmates are just that.

In the management literature there has been an upsurge of interest in “social capital”, the glue that binds organisations together. In a downturn it is tempting for bosses to clamp down on breaks and staff gossiping by the water cooler, but these social ties are what keep the ship afloat. So never, ever cancel the Christmas party.

Good work also gives more power to the individual. All UK governments since 1979 have placed more emphasis on the role of people as consumers than as producers. Consumer choice and power are crucially important. But so too is the need for control and power in the workplace; after all, it would be a serious shopaholic who spent more time on the high street than at work.

Organisations which give employees a real stake in the business create better working conditions but also more sustainable growth. For many years, politicians have lined up to praise John Lewis, the retailer owned by its employees, without doing anything serious to encourage others to adopt the model (indeed, the changes to Capital Gains Tax in the 2007 budget clobbered the employee-owned sector). Now though they should be looking again.

Last year the John Lewis Partnership made a £280 million profit, and every single employee – or partner – got a bonus of 13 per cent of their salary, about seven weeks’ worth of pay. Work being conducted at Demos on models of the firm shows that when workers have a real stake, productivity rises by at least 10 per cent, job satisfaction rises, absenteeism drops and corporate behaviour improves.

Just as important, employees have a real say in the running of the firm. Once this would have been dismissed as a harmless, small-scale exercise in workplace democracy. Now it looks a lot better than the fragility of the stock-owned, greedily led plc.

Why has employee ownership been rejected by Peter Mandelson as a model for the Post Office? He seems to be adopting Thatcher’s TINA view: “There is no alternative.” But here is a golden opportunity to push a better business model, at precisely the moment we are looking for alternatives.

People losing their jobs face severe social and emotional problems if they end up out of work for a year or more. This matters economically, of course. But the scar of unemployment cannot be measured in pounds and pence.

“We’ve spent too long arguing for good work from a business case perspective,” says Overell. “I think we will now see that providing good jobs is in fact a social and moral imperative.” Perhaps it is a fixed, tragic part of the human condition that we only ever recognise the value of something when we’re in danger of losing it.

Richard Reeves is the director of Demos.


Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit

Fannie Plans Retention Bonuses As Outlined by the Government

April 17, 2009

Fannie Mae, the federally run mortgage finance giant, plans to pay four top executives $1 million or more in retention bonuses.

The bonus plan prompted the company’s federal regulator to defend compensation decisions the government made when it took over Fannie Mae in September. It comes as American International Group faces public outrage over $165 million in bonuses it awarded last week.

Fannie Mae, which suffered $59 billion in losses last year, has requested $15 billion in taxpayer assistance and has said it expects to need plenty more.

Chief Operating Officer Michael Williams is in line for a $1.3 million bonus. Deputy Chief Financial Officer David Hisey is slated for $1.1 million, while executive vice presidents Thomas Lund, responsible for the mortgage business, and Kenneth Bacon, responsible for housing and community development, are each in line for $1 million.

A fifth of this money was paid in 2008. Executives will receive about 60 percent of the remaining funds this year and, depending on performance, as much as 40 percent next year. These executives earned salaries of $385,000 to $676,000 last year.

Fannie Mae chief executive Herbert M. Allison did not take a salary or bonus in 2008. He received $60,000 largely to compensate for his move to Washington to run the company. He was offered a $900,000 base salary. His 2009 salary and bonus haven’t been set.

When it took over Fannie Mae, the government instituted a retention program. Under the program, employees deemed crucial to the company’s efforts to carry out government housing plans are eligible to receive retention payments, but some may not receive any.

“Many employees have received significant pay reductions, with no bonuses for 2008 performance and all past stock grants are virtually worthless. This retention program is pay for specific efforts underway now to meet national goals,” Federal Housing Finance Agency director James B. Lockhart III said in a statement.

“We started to design a retention plan with a compensation consultant even before the [take over] because it was critical to retain their most important asset — their employees — who are being asked to play a vital role in the nation’s economic recovery,” he said. “As the previous senior management teams left, it would have been catastrophic to lose the next layers down and other highly experienced employees.”

FHFA signs off on all major compensation decisions. Freddie Mac hasn’t disclosed its retention payments, yet. It is expected to do so in coming months, and its payments should resemble those at Fannie Mae.

Insiders say that a few hundred people at Fannie Mae and Freddie Mac will receive bonuses, and the average bonus should be in the mid-five figures.

It’s a big contrast to what Fannie Mae and Freddie Mac employees experienced in the past, when their shares were skyrocketing and stock-based awards were a popular way to compensate employees, from entry-level secretaries to senior staff.

Many of those employees lost small fortunes when the companies’ shares collapsed. Stock grants play no role in current compensation practices at the firms.


Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit

Researcher wins $2.6 million grant for depression care study

April 15, 2009

TALLAHASSEE, Fla. — With the nation’s economic crisis contributing to greater workplace stress, providing effective mental health care for employees may be more important than ever.

Unfortunately, the approach most companies take in purchasing mental health care benefits is flawed and unlikely to produce the best outcomes for either their bottom line or their employees’ welfare, according to a Florida State University College of Medicine researcher.

Kathryn Rost, the Elizabeth Freed Professor in Mental Health at the College of Medicine, has received a $2.6 million grant from the National Institutes of Health to conduct research with potential to change purchasing behavior for companies trying to provide mental health care to employees. The work has enormous potential implications that go beyond mental health. Rost is focusing on depression care management, but the findings likely will apply across a broad range of employee health care coverage.

Absenteeism and lost productivity at work due to depression costs American businesses $51 billion annually, according to a 2003 study published in the Journal of the American Medical Association. At the same time, companies that purchase depression care management programs for employees have grown accustomed to basing product selection decisions on cost rather than effectiveness. Ten years of research backed by more than $17 million in NIH funding has provided Rost with clear evidence that the current approach is more costly.

“They’re saving money in one pocket and spending it out of the other,” Rost said, citing the excess absenteeism and lost productivity associated with poorly managed depression. “What we’re saying to employers is, ‘You need to purchase on the basis of value, not on the basis of cost alone.'”

Getting that message across is complicated.

The majority of companies that sell mental health care coverage have been programmed to sell cheaper plans

Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit