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Human Resources and Employee Benefit Pros Must Protect Their Credibility

October 14, 2014


Human Resource professionals are the butt of many jokes. And sometimes we are also the targets of professional criticism. Jokes can serve as a reminder to not take things too seriously. Professional criticism on the other hand is something entirely different. When someone suggests that HR pros are incapable, we must defend our competence. And benefit pros need to understand that despite the technical nature of the information they manage, their expertise is also subject to scrutiny, especially at this time of year.

Given the many unpopular changes that can occur during benefits open enrollment, including premium increases, the last thing HR and benefit professionals want to get wrong are their numbers. Unfortunately, many HR departments do get the numbers wrong. Sometimes it is a simple mathematical error in calculating the employee's share of the new premiums. Sometimes it is a generalization about Increases that should be more specific. Both situations provide validation to HR critics that HR and benefit professionals lack mathematical and analytical skills.

Take the recent case of Harvard University. Harvard’s VP of Human Resources claimed benefits costs over the previous ten years increased from 8% to 12% of the University’s budget. This increase was used as justification for restructuring the health insurance plans for non-union workers. For the first time ever these workers will pay a small deductible and coinsurance to receive care for most medical services. Before you go feeling sorry for these workers, the new deductible is very low, $250 for individuals. Also, health plan premiums may decrease and are tiered based on salary. Overall, workers at Harvard are not paying as much as other private sector workers for health insurance. But that is not the point of the story. The point of the story is, Harvard’s VP of Human Resources publicly misrepresented her numbers and she was caught in the act.

Turns out that the 50% increase she referenced occurred in the years 2002 to 2003. But from 2003 to 2013 health care expenses increased by less than 6%.

The VP apologized for not being more precise about when the increase occurred and vowed to be more precise in the future. Nice apology but why fudge the numbers in the first place? Why? Why? Why? And of course when Harvard gets it wrong, world-renown leaders in economics and finance, they make all HR and benefit pros look bad. It perpetuates the stereotype of HR people as mathematically challenged and scatterbrained.

Conclusion

It is easy to overlook this Harvard thing as a minor story. HR people are under pressure to keep health care expenses down by any means necessary. And does precision about year on year increases matter when the total employee benefits bill is a half-billion dollars? Yes, it matters.
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