Business to Business Magazine

The tough call
Wells' Healthy Idea
Keeps Employees Happy
by Mary Welch

As corporations struggle with containing healthcare costs and passing more of those costs on to their employees, executives at Wells Real Estate Funds Inc. hardly give the matter much thought. That's because Norcross-based Wells pays 100 percent of the health, vision and dental costs for their employees and their families. That's right 100 percent.

Founded by Leo Wells in 1984, the real estate firm made the commitment to pay the full health benefits of its employees, which now number 570 people. In 2000, as the costs of healthcare became a genuine crisis, Wells extended that commitment to include medical, dental and vision coverage for the employees' family members as well.

The company's creed is "To glorify God and care for people." Paying for health insurance falls under that definition, says Wells.

"I wanted to create a great working environment for people - a safe place where people could come and work and not have to worry about the little things in life," he says. "At the end of the day, the fact that Wells pays for its employees healthcare benefits is about furthering our mission and living by a guiding principle. It's about letting our employees know we are as invested in them as much as they are in us."

Wells' philosophy certainly is going against the grain of what's happening in healthcare benefits. Far fewer employees are covered by employer-sponsored healthcare plans than 10 years ago, and those who are covered are paying 75 percent more for their share of the costs, according to data from the U.S. Bureau of Labor Statistics. In 2003, the average employee contributed $228.98 per month for family coverage and $60.24 for individual coverage, the bureau notes.

"Healthcare costs have increased by double digit percentages year after year forcing employers to grapple with the consequences. Employers know that offering healthcare is a powerful recruitment and retention tool and is an important measure to maintain a healthy workforce," says Susan R.Meisinger, president and CEO of the Society for Human Resource Management (SHRM).

Reprinted with Permission frm Business to Business Magazine September 2004

SHRM just finished a survey of 373 randomly selected human resources professionals and found that 93 percent used cost as a prime piece of data in healthcare evaluation - compared to 44 percent based on quality of treatment, 14 percent on the outcomes of treatment and seven percent on provider availability.

Seventyfive percent have changed their healthcare plans recently with cost being the overwhelming driving factor.

"Human resources professions are diligently working to find the balance of health care plans that are affordable and beneficial," she says.

Wells, a national real estate investment management firm that was the largest purchaser of Class-A office and industrial real estate in 2002 and 2003, can't even foresee changing its ways.

"We really consider it a sacred benefit," says Becky Padgett, chief people officer." We have a commitment to our people and it would not cross our minds to not provide full health care benefits, despite what's going on elsewhere. And, it's not that we pay our employees less than other companies in order to make up the difference. We pay above the market."

Healthcare costs and premiums increased 7.4 percent in 2003, according to the Center for Studying Health System Change. The low- and middle-income employees are typically hurt the most by such increases."Healthcare costs and premiums continue to grow much faster than workers' income, making health insurance increasingly unaffordable for more and more people," says Paul Ginsburg the center's president.

Padgett agrees. "I know of two situations where if our employees had to pay just the usual co-pay, say 20 percent of their medical bills, it would have been catastrophic for them." he says. "If you do what's right for people, the bottom line will take care of itself."

Mike Dobbs, chief marketing officer, joined Wells in large part because of the total environment, including the benefits package. "We do attract the best and the brightest. We don't want people to have to worry about their healthcare costs," he says. "We don't want them fretting about little things.

We want them to be focused on doing their jobs better." Dobbs is quick to clarify that Wells, which has more than $5.5 billion in assets, is a "values-based company rather than Christian one. We have a diverse workforce, including people who represent almost all faiths," he says. "We want the best employees regardless of their religion or even whether or not they embrace a spiritual life."

Dobbs and Padgett say that the philosophy and actions of Leo Wells have filtered down into the corporate culture. "It's engrained in everything we do," says Padgett. "We know the company cares for us and we care for each other and our clients and our community. It's like layers. The first is Leo caring for his employees and then the second layer is for each other and then third, outside the company. We look at ways we can give back."

The company's philosophy almost harkens back to earlier times when the employees were cared for like family, Padgett says. "We really do celebrate the family and working hard as a company.We have wellness programs and, if someone is ill, you'll likely see someone bring dinner over to that employee's family," he says.

"I think it's part of the company's success." It appears to be part of the success of its retention rate. Last year, there was a voluntary turnover rate of 2.9 percent. For Fortune 500 companies, the overall turnover rate is almost 24 percent, according to the Bureau of Labor Statistics.

Leo Wells believes his philosophy and decisions are responsible for the company's success and low turnover rate. "I like to think that's it's part of the reason we have so many people who love working for Wells," he says. "We believe that giving back - both to the community and our investors - is what constitutes success."BtoB the tough call Reprinted with Permission frm Business to Business Magazine September 2004