I frequently come across interesting information that, while not lending itself to a full blog post, is still worth sharing. This post is part of a periodic series in which I summarize this information and provide links for those who want to learn more.
• Diversity at the highest levels may boost company performance, according to a new McKinsey & Company study of 180 public companies in France, Germany, the U.K. and the U.S. The study looks at company performance from 2008 to 2010 and reports that companies with the highest level of diversity at the executive-board level as measured by the number of women and foreign nationals had returns on equity (ROE) that were 53% higher and earnings before interest and taxes (EBIT) that were 14% higher than companies with the lowest level of diversity.
• The use of 401(k) plan loans and hardship withdrawals is disproportionately higher among African-American and Hispanic plan participants, according to a new study conducted by mutual fund company Vanguard. Although there is nothing inherently wrong with plan loans, many participants do not realize that they often pay an interest rate on the loan that is lower than the returns they would have realized by keeping the money invested. Hardship withdrawals, however, not only take money away from retirement savings but participants who make such a withdrawal often pay hefty penalties for doing so.
Vanguard notes that by making some changes to their plan designs, such as limiting participants to one loan outstanding, plan sponsors can reduce borrowing levels across all participants and all racial and ethnic groups.
• We've been talking about wellness quite a bit lately. Today, let's focus on the impact of prompting employees to take action on their health. A research paper, "Following Through on Good Intentions: The Power of Planning Prompts," published by the National Bureau of Economic Research (payment or subscription required), suggests that the right prompt can be as effective as higher coverage levels when it comes to getting people to follow through on necessary medical procedures. More specifically, the study looks at the impact when four companies sent one of two mailings to a random group of employees who were due for a colonoscopy.
In the study, a control group received a mailing with a blank sticky note and a second group received a mailing with a sticky note that prompted the recipient to write down the appointment date for a colonoscopy and the name of the doctor who would conduct the procedure. During a seven-month follow-up period, 6.2% of the employees who received the control mailing with the blank sticky note underwent a colonoscopy, while 7.2% of the employees in the second group who received the prompt to write down the appointment underwent the procedure.
The researchers note that this increase in compliance is roughly equal to the increase in compliance the employer would generate by covering 10% more of the procedure's cost. Most importantly, the increase in compliance was the largest among demographic groups with the highest risk of failing to receive a colonoscopy due to forgetfulness.