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Archive for November, 2012

Employee Health Benefit Trends to Watch for in 2013

Employee health benefits will continue to be an important issue to both employers and employees in 2013. With the election behind us, employers are looking to the future and working to determine the impact that recent healthcare reform will have on their business. In 2013 businesses will work to establish a balance between working within the regulations of the Patient Protection and Affordable Care Act (PPACA) while attempting to keep the costs of employee health benefits down.

Even with the rising costs of healthcare, many employers remain committed to providing their employees with attractive and comprehensive healthcare benefits. After reviewing benefits survey data, along with the healthcare coverage trends of 2012, the following predictions can be made for 2013:

Rising Costs

As healthcare costs have risen over the years, employers have been faced with the constant struggle of providing adequate healthcare benefits while keeping within their set budgets. According to benefits survey data, employers are budgeting with the expectation that healthcare costs will rise about 7 percent in 2013. To offset this rise in costs, many employers will raise insurance premiums by an average of 5 percent.

New Healthcare Plan Options

The majority of employers in 2013 will offer high deductible plans as a healthcare coverage option. Many of these plans will include a health savings account, allowing employees to invest money free of taxes to pay for healthcare. These plans are a significantly less expensive option for employers, leading many of them to offer incentives with the plans. Approximately 43 percent of businesses surveyed plan to offer a $500 contribution into each employee’s health savings account for selecting a high deductible health plan.

Increase in Wellness Programs

Many businesses are encouraging employees to be proactive in improving their own health. Utilizing tools like wellness programs and incentives, employees are rewarded for improving health habits to avoid costly, preventable conditions, such as diabetes, obesity and cardiovascular disease. According to benefits survey data, 61 percent of employers cited poor health habits as the largest challenge to providing affordable healthcare benefits. To counter this problem, 48 percent of employees plan on using incentives to increase participation in preventative health care programs.

These predictions, based on benefits survey data, will help assist businesses to develop the budget and plan for the changing costs of healthcare benefits for the 2013 year. For assistance determining future employee compensation, WageWatch offers cost-effective reports, including salary, wages and benefits survey data. To learn more about benefits survey data and other services provided by WageWatch, please call 480-237-6130 or contact us online.


*Data provided by the National Business Group on Health Employer Survey on Purchasing Value in Health Care.

Posted in Benefits & Compensation on November 28th, 2012 · Comments Off on Employee Health Benefit Trends to Watch for in 2013

Market Analysis: Median or Mean

Median and mean are useful measures of distribution that identify central values and tendencies of a data set. In a WageWatch compensation survey, median is the middle wage in a set of ranked market wages, which separates the data set in half. When an even number of wages are ranked, with no true middle value, the average of the two middle data points is the median wage. Median is also called the 50th percentile.

The arithmetic mean which is also called the simple average or mean is one of the most commonly used statistics in business. One of the reasons is that it is very easy to calculate. It is the sum of all values of a data set divided by the number of values in that set.

In a normal distribution of data, the median and mean wages will be within a few cents of each other. When the mean is greater than the median, this indicates the data set is skewed towards higher wages. Similarly, when the mean is less than the median, this indicates the data set is skewed towards lower wages. Skewing typically occurs for one of two reasons: either the data set is not normally distributed, or the mean is affected by outliers or errors in the data set. The first situation is not uncommon and occurs when there is either wage compression or the data is bimodal, meaning that the job description may be too broad and need to be bifurcated into two job titles. The second reason for the mean and the median being significantly different, due to an outlier or data error, is much more of a concern.

Here is an example of how data affects the median and mean differently when an outlier is added to the data set.

Wages in Data Set A                                                        Wages in Data Set B
$9.25                                                                                      $9.25
$10.11                                                                                    $10.11
$10.56                                                                                   $10.56
$11.98                                                                                    $11.98
$12.50                                                                                   $12.05
$12.88                                                                                    $12.31

Set A Median Wage $11.27                                          Set B Median Wage $11.98
Set A Mean Wage $11.21                                              Set B Mean Wage $27.32

In this example, it is clear that once the $125.00 value is added as an outlier, the median wage becomes the better indication of the central value. Comparing the median with the mean from Set B tells us that while the middle wage or median is $11.98, there appear to be employers paying at the top of the market, skewing the mean up sharply. The only way to know for certain if the difference between the median and mean is due to an error is a more thorough analysis of the data. If more data analysis is not possible, then the median is your better statistic to use.

WageWatch, Inc. is the leading compensation survey provider for over 5,000 hotels, non-profits organizations, healthcare organizations and management companies. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.

HR Outsourcing: The Pros and Cons

With the state of the current economic climate, businesses have been forced to make crucial budget cuts. Human resources, as well as other departments, have experienced a decrease in the number of staff members or have been eliminated altogether. With far fewer resources, the remaining staff members are left with the responsibility to manage the workload previously done by many more employees.

The Human Resource (HR) department is at the heart of every organization. It is essential that the HR Department be run efficiently and effectively, even with limited resources.  To ensure that the HR department tasks are carried out, many business owners have begun to outsource some or all of the departments function to provide HR services and data, including compensation surveys.

When considering outsourcing the human resources department, consider the following advantages and disadvantages:


Savings: Businesses will pay far less for outsourced services than they would on a dedicated employee fulfilling the HR role. Many of the companies offering HR services only charge for the services that the business uses. For example, a business owner will accumulate savings by paying for recruiting services on a case by case basis rather than providing a full-time recruiter’s salary.

Efficiency: Upon outsourcing the HR tasks, businesses are able to use their limited resources to focus on building and expanding internal operations. The cost savings allow businesses to allocate funds to other departments, increasing marketplace competitiveness. Additionally, providing the HR department with wage, salary and compensation surveys will increase the effectiveness of operational decision making.

Process: HR outsourcing companies offer a great deal of expertise on the HR industry and are able to implement processes that are efficient while falling within all legal regulations. After thoroughly analyzing a business and its structure, outsourcing companies are able to recommend standardized processes, such as training, hiring and retaining employees.


Expertise: An internal HR department is a valuable asset for businesses. Without one, there is no central hub of expertise with information on employee training and business operation processes. Each business operates uniquely, so it may be difficult for an outside company to understand how alterations in processes can affect employees.

Cultural: Without an internal HR department, employees lose the personal connection of working directly with the team that sets corporate policies, provides training, and manages payroll. This may lead to feelings of resentment that the outside HR team does not have the employees best interest at heart. Employees appreciate the sense of security in having an in-house HR team, who are there to serve them, a feeling that is difficult to recreate when outsourcing HR functions.

In order to achieve operational effectiveness, businesses must provide HR departments, outsourced or internal, with the proper resources, such as wage or compensation surveys, to make decisions that are beneficial to the organization and its employees. WageWatch provides wage, salary and compensation surveys and reports, with data from over 108 markets. With this information, HR departments are able to compare data across national, regional, state, city or property. To learn more about compensation surveys, please call 480-237-6130 or contact us online.