It Costs How Much to Replace an Employee?

Retaining your good employees

The Right People in the Right Places 

Studies show that the average cost to replace a worker in the US is $17,000.00 (AVERAGE!!). Some HR managers use the rule of thumb that whatever the person's annual salary is - it will cost that much to replace them. One study evaluating the effects of the US Family Medical Leave Act found that "turnover costs for a manager average 150% of salary, including real costs of hiring... and intangible costs such as the new worker's inefficiency and lost productivity while the job is vacant."

Costs of lost productivity are as important as direct costs such as advertising or temporary staff. Total costs easily reach 150% of the annual compensation. The cost will be significantly higher (200% to 250%) for managerial and sales positions.

Bliss & Associates Inc., Wayne, NJ consulting firm

Oh, and if you think you can just hire temporary workers and avoid all those costs, think again. The cost of hiring and getting production from a temporary worker is nearly 40% of their salary, and temporary workers tend to have higher hourly rates than permanent ones - and higher turnover rates as well.

Let's put this in real terms.   The lowest number I have seen anywhere says it will cost you at least 30% of an employee's total annual compensation to replace them. Assume you have 100 employees and your average salary is $10.00 per hour. At $10.00 per hour + benefits (at 20% of wages), your employees receive ~$12.00 hour in wages and benefits. Let's say that you have to replace 15% of your employees every year. Taking the most conservative estimate for employee turnover costs that I have been able to find (30% of their annual wages and benefits); each employee you have to replace is costing you $7,488.00. 

100 employees X 15% X $7488 (including benefits) = $112,320 per year.

And that is using the most conservative cost percentage I can find. If we decide to use the national average ($17,000 / replaced employee) the cost goes to $255,000.00. By using the 'rule-of-thumb' (100% of their annual salary - $20,800.00/ replaced employee), the cost will go to $312,000.00... Staggering!

Why are the costs so high?

Why does it cost so much to replace a departing employee? Some costs, like paying off accrued vacation time or the cost of a help-wanted ad, are obvious.

Other costs include:

Increased unemployment insurance costs
Lost productivity while there is a vacancy
Time costs for the separation (Exit) interview (If your good employees are leaving, you NEED to know why)
Separation agreement costs (legal, financial, medical, retirement cash-out, etc.)
Overtime from other employees to handle the vacancy (which can lead to burn-out or absenteeism)
Time costs to review resumes
Time costs to interview candidates
Interview expenses for the candidates
Possible travel expenses
Possible relocation expenses
Head-hunter or signing bonus fees
Additional bookkeeping; payroll, 401k, etc.
Additional record keeping for government agencies
Reduced productivity while the new worker gets up to speed
Training programs
Corporate history lost
Morale can be affected
Intellectual property lost


There are also risks associated with losing an employee.

Threat of lawsuit
Bad PR from disgruntled employee
Threat that the employee will take clients to a new firm

What can be done about it?

Job descriptions:

Put together a complete job description with tasks and duties outlined in a clear and concise way so that when someone answers your want ad, they know what they are applying for. Minimize that catch-all phrase "Other duties as assigned". This way, the employee knows what is expected of the position and the manager knows what to evaluate for performance reviews.

Pre & Post employment testing: 

Job match/satisfaction can be measured by using the testing and evaluation systems that are available through RP2-Consulting. The cost of these evaluation and testing programs is significantly less than the cost of turnover in the first example above. We can test a candidate before they even show up for an interview and tell you if they have the right attitude, will show up for work when expected and won't take everything in the supply cabinet home with them. We can match new candidates to a given position. We have all heard of the 'Peter Principle' (an individual rises to his level of incompetence). We can look at your existing employees and match their skills and personalities with open positions in the organization. We can also help you identify the right people to put on teams. When teams are balanced (one person's strengths cover another person's weaknesses), results are significantly improved. Finally, managers (and CEO's) need to know their strengths and weaknesses, as those who work with them perceive them. Testing can show you what your true strengths and weaknesses are so that you can focus on improving those things that need to be improved.

Training:

Expecting someone to produce when they do not know how to produce, or what results are needed is absurd. Yet every day, people are hired to do jobs in which they have little or no formal training. Make sure that your employees get the training and guidance they need to meet your expectations. This will lead to better employee job satisfaction and reduced management stress. As a significant side benefit, well-trained employees are more likely to win appreciation for a job well done; and appreciation and recognition among your peers is a huge motivator. We can help you design your training programs to meet your individual needs.

Leadership:

The best plans and initiatives are all for naught if your leadership does not focus on what is working and where you want to go. Have you ever been backing out of your driveway focused on the trash-can you had to avoid hitting at all costs - it's right there in the mirror, just behind the vehicle, if you hit it your whole morning will be ruined - and like a laser, you run right into it...

We go where we focus. One key to your success is to focus on retaining your employees. Working to make them successful is far less expensive than replacing them. Treating them with respect and honor while making them feel like they have a stake in the company and its success will lead to your success. Focus on where you want to go not where you don't want to go. Looking at mistakes and finding fault is focusing on the past and the errors made there. Learn from mistakes and move on. Plan the future your organization wants. Focus on applauding success, both individually and for the team/company.   

Eric Omer is an Author, Speaker & Business Coach. A graduate of the University of Texas, (Austin) he has over 20 years of national and international business experience with both small and Fortune 500 organizations. He developed his trademarked '9 Core Business Fundamentals' based on his business consulting experiences. Eric offers a free 2 hour consultation/business evaluation that will show you the strengths and weaknesses in your organization.

Eric is available for one-on-one business coaching, public speaking and training in Leadership skills and Project Management.

For more information about Eric and his company 'RP Consulting' go to [http://www.rp2consulting.com].

The High Costs of Being Overweight

Do you know that the high costs of being overweight are affecting your pocketbook and health? If you do not lower your body fat, not only will the extra weight continue to cost you more, but your life may in danger. It is estimated that six out of ten Americans are overweight, and the numbers continue to grow. Even the number of overweight children is growing. In children ages six to ten, 19% are overweight.

The weight loss industry thrives as people go from one diet program to another. This yo-yo effect of weight loss and weight gain is not only unhealthy, but costly as well. The diet industry takes in over $160 billion a year. Life expectancy is also being affected. Premature deaths, due to obesity, are on the rise.

High Costs

The direct medical costs to this nation are estimated by the Centers for Disease Control to be $147 billion a year. As Americans consume more calories, costs rise. Medical costs associated with rising obesity have nearly doubled in the last decade.

Being overweight is costly to the individual and the nation. Overweight leads to:

Higher life insurance costs
Higer health insurance premiums
Airlines charging more for those they determine are obese, because added weight leads to higher fuel costs
Ambulance services now charge extra for those weighing over 350 pounds

Research at the University of Alabama revealed that people who are overweight are less like to be hired for jobs, wait longer at restaurants for service and are less likely to be able to rent an apartment. Overweight people tend to miss more work which is costly to employers.

Health Problems

One of the biggest problems of being overweight is the impact on health. Not only is diabetes on the rise among adults who do not lower body fat, it is a growing problem among children. Type 2 diabetes, which has been known as "adult onset diabetes" is now affecting children and teenagers. Forerunners of heart disease are showing up in children as young as twelve.

In addition to an increase in diabetes.being overweight can lead to:

High blood pressure
Strokes
Depression
certain forms of cancer

These increases cross all ethnic and social groups. The hugh increase in prescription drugs to control these diseases has also contributed to the increase in medical costs.

Gain Control

It is easy to blame TV and fast food restaurants. In fact, it is personal behavior. No one forces anyone to order double cheese burgers, large fries and milkshakes. Buffets are popular because you can go back and pile on a second portion. The Centers for Disease Control and Prevention said that American do not eat enough produce because of temptations of fast food. Eating more fruits and vegetables will lower health care costs and obesity according to the Center. Except where a medical condition is present, people are responsible for their own weight gain.

Now is the time to look at how the high costs of being overweight are affecting you. Gain control of your eating habits and health. You have nothing to lose except the excess weight. Not only will you save money, but more importantly, you will save your health and your life. The longer you wait, the more you are at risk. Start today to improve your health and lower your costs.

Lois Bernstein is a former master teacher, adjunct professor, student teacher supervisor, curriculum developer and researcher. She is currently tutoring in reading, writing, study skills and math.

House Costs in the Modern Day

To know of the property costs in the Modern day, one has to consider a whole lot of factors. One has to place various countries into perspective prior to making any comment on the totality of the matter at hand. History and economy of countries are also to be taken into consideration for an honest analysis, which explains why we'll keep our ambit of discussion limited to The united states and Countries in Europe in general. The reason behind this being the provision of documented records on these countries.

In America, the beginning of the twentieth century saw the middle class being championed that has a lot of policies made to help them to climb the property ladder and gaze after a top standard of living. Lot of money was pumped into health insurance and innovation of science. This produced solutions less expensive plus more available to the center working course people in America. These were given high quality education which in flip ensured they got employment at high paying industries. This cycle gradually expanded from your metropolitan areas to suburbs and prosperity was being created and distributed broadly. This gave individuals a massive disposable income which in turn fuelled consumer ism. An enormous provide chain of almost anything came to exist that has been hitherto unheard of. A booming real estate market came into existence and the ones bought house like hot cakes during Xmas, causing property costs in the twentieth century to leap higher than predicted.

The insurance policy sector saw the ability and started insuring properties and health of workers. Life span also increased and the ones started investing heavily on houses as well as other this kind of properties that would make their post-retirement existence more enjoyable. Exactly the same phenomenon was replicated across Europe barring several Eastern European countries exactly where property prices did not change a lot neither did the general living condition of its inhabitants. Europe such as the United Kingdom noticed a ballooning house market and people began borrowing heavily and spending them on luxurious way of life items and actual estates, which triggered property costs through the beginning of the 21st century skyrocket before the bubble popped and recession set in.

In the developing or underdeveloped nations, there exists a school of thought who blames the potent countries of mandating policies that were formulated by way of a handful of powerful corporations or authorities officials that were detrimental to the event of the people. Without any voice of their particular the poor sank deeper into poverty and rising house prices in the Twenty-first century ensured that they by no means made it to the top of the ladder ever.

Even though most of the Twenty-first century is however to unfold, chances of equilibrium among the developed and underdeveloped nations are slim. As of now anyone will agree that property costs in the 21st century have gone down considerably, but one cannot predict the long run with any greater diploma of accuracy than may be predicted until recently.

Estate agents in Earlsfield - Desouza Property

Managing Professional Liability Costs With Peer Review

If your hospital is like many across the nation, you're facing a crisis in being able to manage your professional liability costs in the face of rising lawsuits and rapidly increasing premiums. What's the root cause of this problem? Well obviously it's lawsuits coming from patients who have experienced sentinel events or negative outcomes such as deaths, hospital readmissions, etc. While these patients and their families are entitled to relief in certain circumstances when medical treatments go bad, the fact is that most hospital administrators are being crushed by the rise in liability costs.

If you are a hospital administrator or CEO and looking for remedies in this regard there are a number of things that you can be doing. First and foremost is taking a holistic look at your quality of care delivery system and in particular, look at your quality management system. Taking an outside assessment of your quality management system can provide insight to where your potential root causes are that are leading to sentinel events and in turn produce the kind of litigation and lawsuits that drive insurance premiums up.

These premiums don't get driven up only by actions in your own hospital but by actions across the board in all hospitals. In our litigious society today it's no secret that when people feel that a service provider (particularly in the medical environment) has wronged them, their first impulse is to find a litigious, fee hungry attorney who is willing to take on a malpractice suit or a suit against the hospital on contingency. Since it doesn't cost them anything to sue, it's very easy for them to get started.

Who bares the brunt on these costs? In general, ultimately consumers do as well as health plans, hospital providers - everybody suffers under an overly litigious system which rewards people for bringing suits against others. If you are a hospital in today's environment there is no question that liability insurance premiums are on the rise and are going to continue to escalate. The exception is those hospitals that can demonstrate the absolute best practices when it comes to quality management.

We talk to hundreds of hospitals across the country every week. In our dealings with them we've come to realize that liability insurance carriers who are protecting hospitals are increasingly either requiring or strongly recommending that their risk management professionals insist upon sending all sentinel events out for external peer review. Why is this? The fact is that hospital peer review is rapidly becoming a best practice for insuring rapid case resolution, root cause analysis of sentinel events, and illuminating conflicts of interest when it comes to insuring quality and patient safety.

It's no secret that all insurance companies expend a certain percentage of their revenues on helping their clients to improve their practices in order to reduce costs when it comes to risk management. Professional liability insurers who operate in the hospital group space are using peer review as another strategy to help their clients lower their experience ratio and improve the root cause analysis that leads to a reduction in sentinel events.

The external medical peer review process when integrated into a hospital quality management system provides an outstanding remedy to the professional liability insurance premium escalations that have now turned into a crisis in so many states across America. If you're a CEO or hospital administrator looking for ways to reduce your risk and reduce your liability premiums so that you can reduce the costs of providing services to your patients and your local population, consider an investment in an external review process every time you have a sentinel event that has a potential for litigation. Often times by sending cases out for external peer review, you can prevent any potential lawsuit by insuring that nothing was done wrong by your medical professionals and hospital staff that lead to a particular sentinel event.

Allmed Healthcare Management

Managing Professional Liability Costs With Peer Review

Refinance Closing Costs

Closing Costs. Zero Closing Costs. No Out of Pocket Costs, No Points. We hear a lot about this stuff but when it comes time to refinance, do we really know what closing costs we are paying? The truth of the matter is that mortgage companies know you're fixated on closing costs. Because it's next to impossible to make an apples to apples comparison of closing costs between competing lenders, even with Good Faith Estimates, unscrupulous marketers are frequently able to get you to take your eye off the ball by promising unrealistic closing costs, while smoothly throwing a fastball and couple of sliders right past you for a strikeout. So how do we avoid being hit by the pitch? We need to evaluate the costs as they amortize into the loan, one way or another.

First, I'd like to debunk the notion of "No Closing Costs", heavily advertised by national marketers and banks. Have you ever heard the expression "There's no such thing as a Free Lunch?". All things in this world have costs to produce, and if you know anything about the companies that produce things, you'll agree that they do their darndest to make you pay for them.

Here is a list of things which are the bare minimum costs of refinancing a loan:

Title Search & Title Insurance: An inescapable fact of life, these are the costs charged by a third party company whose job it is to find out whose names are recorded in relation to the property, establish a chain of title going back 24 to 60 months, to uncover any judgments, liens, zoning issues, etc. That's the title search. Title work will also include name searches and "plat drawing". Then, based on a variety of factors, including the level of risk that they perceive from the title search and the value of the property, they underwrite Title Insurance which covers the lender in case they did not find someone or something on title which make the loan uncollectible. Like taxes, there's no way to escape this fee, however you may be able to minimize it if you can use the same company you used when you bought the house or last refinanced (look at the closing documents)

Title Search averages $300 nationally, with some markets coming in lower and some much higher

Title Insurance is Variable because there are so many factors in involved including the property's value, but the national average is about $700, although it's not unheard of for title insurance to cost as much as $3000 or more depending on the size and complexity of the property and the chain of title.

Settlement, the actual coordination of the loan closing, is often listed as an Attorney fee or Escrow Fee. This is necessary to ensure that all the paperwork is correct and that everyone who needs to get a check at closing, be it you, a service provider, your old lender, or any number of creditors you may be paying off. The average is $500, and varies again with the market.

Other title expenses may or may not be required at the discretion of the lender or title company to ensure the security of the property, including surveys, bankruptcy searches, etc. These fees again vary but you can expect your title bill to be the largest third party fees in connection with a loan.

Government Fees: Another one you can't get around is the government's fees which can be broken down into Taxes and Recording Fees, but can include more.

City/County/State Tax Stamps and Intangible or Mortgage Taxes vary so dramatically that I cannot even begin to address this issue here, but range from nothing at all to 3% or more of the property value. This is NOT the same thing as property tax.

Recording fees are the costs your county recorders office charges to file your deed, is mandatory, and range from $75 to $250 dollars.

Other Third Party Fees:
Appraisal: National Average of $350 but can be much higher depending on property size and location.Credit Report: Averages $30Flood / Pest / Other Inspections: Averages $100

Basic Lender Costs:

(remember, there are significant regional variations for these fees, and bigger homes carry bigger fees)

Tax Service: $75 AverageWire Transfer: $35 AverageProcessing: $400 Average

Lender Discount Points:

These are the "Points" on a loan, used to lower the interest rate to help you qualify for the loan based on your income. 1 point is 1% of the loan amount, so one a $200,000 loan a point is $2,000. You usually don't need to pay points if your debt to income ratio or DTI, the measure of all of your debt payments plus your monthly housing expenses under the new loan, are below 40%. DTI guidelines are much more stringent today than they were even 3 months ago, especially for borrowers who are stating their income to qualify for the refinance.

Fees & Profit:

Up until now, everything we have discussed has been around the hard costs of the loan. Now we get into the fee for service, where the lender or broker actually tries to make money, not unlike any other service provider such as an investment advisor, realtor or lawyer:

Origination Fees: Often charged as a percentage of the loanBroker/Lender Fees: Again often charged as a Percentage of the loan

It's important to remember that no one can do a loan for free, no matter how good of a customer you are, because each loan is a profit or loss to the lender by itself, and they have to assume that at one point or another the loan must be sold. Their time and their risk are valuable, just as your own or your lawyer's or your realtor's.

Closing costs vary not only by location, but depend heavily on what you qualify for, so your credit will affect the final numbers, especially with regard to Discount Points. Calculating your own closing costs can be best achieved by speaking with a mortgage company who can give you a Good Faith Estimate which outlines all of the above mentioned fees.

Different Ways We Wind Up Paying For Closing Costs

Now that you've seen everything laid out, do you believe anyone can offer a "No Closing Costs" refinance? These hard costs are always paid for one of two ways:

You are billed for each item and can choose to pay them in cash at closing or to roll the costs into the new refinance so that there is no money out of pocket to you. You are charged a higher rate than you would normally qualify for over the life of the loan, which allows the lender to realize a premium, or a profit, which they can then credit toward your closing costs. So if the best rate you qualify for, with no discounts, is 6.00%, raising the rate slightly, to 6.375% or 6.625%, may provide you with a "rebate" which the lender can choose to apply to closing costs.



Sometimes these methods are used in combination. My recommendation is to compare the payments. Let's look at two completely hypothetical examples:

Example 1: Roll Your Costs into the Loan Balance

$400,000 Refinance Loan Amount

$8,000 in Closing Costs

------------------------------------------

$408,000 Financed

At 6.000% Interest over 30 Years

Has a Monthly Payment of $2446 for Principal & Interest

And a Monthly Payment of $2040 for Interest Only

A Typical Minimum Payment Option Would be About $1500

Example 2: Use a Higher Rate to Finance Closing Costs

$400,000 Refinance Loan Amount

"$0" in Closing Costs (assuming the $8,000 in hard costs is advertised as Zero)

------------------------------------------

$400,000 Financed

At 6.625% Interest over 30 Years

Has a Monthly Payment of $2561 for Principal & Interest

And a Monthly Payment of $2208 for Interest Only

A Typical Minimum Payment Option Would be About $1465

The reason I've included Interest Only payment option figures above is to show you how much more interest you pay each month if you choose a "Zero Closing Costs" option from any leading lender, versus rolling those costs into the loan. The final option is to pay for these costs out of pocket, which is not a very popular option today, but deserves treatment.

Example 3: Pay your own closing costs

$400,000 Refinance Loan Amount

$8,000 in Closing Costs Paid out of Pocket

------------------------------------------

$400,000 Financed

At 6.000% Interest over 30 Years

Has a Monthly Payment of $2400 for Principal & Interest

And a Monthly Payment of $2000 for Interest Only

A Typical Minimum Payment Option Would be About $1465

Compared to rolling the closing costs into your loan, paying them out of pocket saves 46 dollars per month of principal and interest or 40 dollars of interest, a savings of about $500 a year or less. So unless you can't get a return of more than $500 per year on your $8,000 investment (about 6.25%), there's no strong argument to pay for the closing costs out of pocket. Online savings accounts and CDs already offer rates equivalent to this, and the S&P 500 has been returning about double this rate, so I personally would rather have access to my money and have it working for me. I won't get into the fact that the extra $500 or so dollars of mortgage interest per year should be tax deductible as well (and please consult your CPA, we don't give tax advice).

Cost - Benefit Analysis

Finally, we can turn to the benefits of refinancing and weigh them against the costs. We are going to do this by taking a before and after hypothetical situation, with the closing costs rolled in.

Hypothetically, let's say that you want to refinance to Lower Your Monthly Payment, Change Your Loan Terms to get a fixed rate, and Take Advantage of the Equity Growth in Your Home to pay off your personal loans and credit card bills, and to improve your home to increase your quality of life. You are not planning to retire in this home, and plan on selling it in 5 years, but like the idea of a secure, fixed rate just in case rates go up a lot over the next 5 years. With the way the economy is going, you also want to keep your mortgage payment as low as possible, so in case anything happens you have the option to pay less on your mortgage.

You have a current mortgage balance of $350,000 dollars on which you pay $2250 per month, and your home is worth $600,000 dollars today compared to the $425,000 it was worth when you bought it.

You have about $32,000 in debts, on which you pay minimum payments of about $1500 a month and would like to take an additional $18,000 to do the kitchen, which you believe would improve the value of your home by $30,000.

So your total monthly spending on mortgage + cards etc. is $3750

Let's say your credit score is 620, very average for a person with your level of credit card and other unsecured debt, and you prefer to state your income.

Hypothetically (this is only meant to be illustrative), you receive a rate quote and Good Faith Estimate which outlines the following:

Quote 1: Conventional 30 Year Fixed

$400,000 Refinance Loan Amount

$8,000 in Closing Costs

------------------------------------------

$408,000 Financed

At 7.250% Interest over 30 Years

Has a Monthly Payment of $2783 for Principal & Interest

A Savings of $967.00 a month

Quote 2: Interest Only 30 Year Fixed

$400,000 Refinance Loan Amount

$8,000 in Closing Costs

------------------------------------------

$408,000 Financed

At 7.500% Interest over 30 Years

Has a Monthly Payment of $2550 for Interest Only

A Savings of $1200.00 a month

It seems like a no-brainer right? The interest only is much lower, however your basic housing expense has still gone up $300, even though you've paid off all the cards and saved almost 1200 there. With the credit cards, even if you experienced a loss of income due to circumstances outside of your control, at least you could have afforded to miss those payments and scratch together money to make your mortgage payment, because the credit card lates would not cause you to lose your house. But with this refinance, which meets most of your goals, now you have to come up with a larger mortgage payment. So you get one more quote for a mortgage which allows for deferred interest, or making a minimum payment when you want to:

Quote 3: 30 Year Fixed Rate Cash Flow option mortgage

$400,000 Refinance Loan Amount

$8,000 in Closing Costs

------------------------------------------

$408,000 Financed

At 7.500% Interest over 30 Years

Has a Monthly Payment of $2550 for Interest Only

Has a Minimum Payment Option of $1497

A Savings of $1200.00 a month on Interest Only

Ability to Defer Interest and Reduce your current minimum payment by over $2250.00

This is a fixed rate loan with the ability to defer interest, or a negative amortization loan, which allows you to use your remaining equity like a home equity line of credit whenever you want, with no closing costs. When you want to make a lower payment so your monthly cash flow goes further, you can do so by making the minimum payment, which borrows from your home equity to cover the difference between the interest only payment and the minimum payment. While the adjustable rate version of these loans are too risky to achieve your particular goals, a truly fixed rate cash flow option might be the answer, fulfilling all of your reasons to refinance while giving you security and flexibility for when a lower payment might be helpful.

Conclusion:

All loans costs money to originate and refinance, even if it's not always clear how you may be paying for them. As we have seen, if you aren't taking out a fixed rate cash flow option mortgage with the intent of only paying the minimum payment, most of the time it's better to roll your closing costs into your loan, so that there is no out of pocket expense to you. Always remember to see if the loan achieves your goals, and don't put too much stock in the GFE's you receive while shopping around, because people, whether broker or bank, are more than willing to lie to you to beat out their competition initially, so they can lock you into a process which you cannot easily reverse. My recommendation is to speak with as many people as you can, but evaluate them on the basis of trust. You may find that the person who gives you the highest quote may be the only one telling you the truth. This is not a simple subject to discuss, and while we have tried to treat the subject thoroughly, a consultation with a refinancing specialist would be the best way to get answers specific to your situation.

Tristan Hunt is a seasoned financial professional with a wealth of experience in the mortgage business, advising clients on their biggest single investment at Refinance One, one of the nation's leading specialty mortgage companies.

Phone: (800)515-8443
Email: Customers@RefinanceOne.net

Favorite Topics Include: Adjustable Rate Refinance,Fixed Rate Refinance & Fixed Rate Cash Flow Mortgages

Health Care Costs Are the Result of Bad Diet Choices

The Cost of Our Food Should be Measured in the Total food, Health Care, Energy, and Environmental Costs of What We Choose to Eat. Looked at this way, it is insane how much we are paying and future generations will be paying for our unhealthy diet pleasures. Meanwhile, half the world is starving and the other half remain overfed.

It is remarkable that the American public, as tight as money is, is so fearful about some unexpected health crisis popping up, that we are willing to pay hundreds and even thousands of dollars per family each month for health insurance, which may get cancelled at the last moment anyway. This is a perfect example of how we have been conditioned to fear things we don't understand.

Rather than taking the time to educate ourselves on how to eat to stay both thin and well, we allow ourselves to be manipulated by our fear of some nameless health catastrophe. And then, overcharged for high-tech solutions that treat only our symptoms. (To be fair to doctors, they can't control what we eat.)

And yet, for all the "protection money" we spend, we are unwilling in most cases to do the things we are told by public health agencies that will prevent many of the most feared diseases. We pay exorbitant charges for health care insurance rather than correct our personal risk factors.

This being January, the month when most Americans decide to get serious about dieting for a week or two, it may be appropriate to look at how insane our dietary habits are.

The diseases that trouble us the most are caused by the junk we eat. Most of them can be prevented by correcting our diet--once and for all--and learning to ignore temptation. We should recognize slick advertisers of unhealthy foods as the Devil's own representatives--and avoid their recommendations like the plague.

What we do instead, with the encouragement of our medical providers, is spend $70-100+ per month for a statin drug to allow us to go on eating bacon and eggs, meats, and ice cream, without worrying about our cholesterol levels. Would it not be simpler and healthier--and cheaper!--to stop eating extra cholesterol? But no, life in modern America wouldn't be worth living without being free to graze on all the delectable goodies that food chemists concoct for us each day--or so we appear to think.

So, because 68% of Americans are overweight, which should be an easy problem to remedy with a little self-discipline, we are prone to become diabetic, suffer from cardiovascular disease, and several cancers. This we know. What are we going to do about it this year? Another bout with the Atkins diet? Or will it be some new diet that is guaranteed to be a marketing success and a weight loss failure?

Weight loss is generally viewed as a simple math problem. Usually, we're given the old choice: We've either got to exercise a lot more or eat a lot less, but most dieters want to do neither one.

There is, however another option that most of us ignore with a passion. And that is changing WHAT we eat rather than limiting how much we eat. Specifically, we're talking about cutting out meats, eggs, and milk products.

That is the key that few of us want to use to unlock the weight loss riddle. More than being a problem of eating too much, weight gain is caused by eating the wrong kind of foods. Anthropologists point out that our digestive systems are not set up to be carnivorous. But since McDonald's and Pizza Huts even provide the food service in many public schools now--and have for some time--most of us find it hard to imagine life worth living without fast foods, fried foods, and junk snack foods.

We have been trained to eat the wrong foods and to expect someone else to solve the medical problems this creates. (And now, it looks like we will all be forced to buy health care insurance, whether we want it or not.)

Health care, as we currently see it practiced, is not the answer, though.

Until we are each able to see the part we play in allowing ourselves to be manipulated by advertisers to eat unnatural, unhealthy foods, we will not be ready to take the first step to permanent weight loss. Short term changes in what we eat, diet pills, and all the new crop of diet books will not produce the desired results until we learn to see how we have been duped by food processors and our government-subsidized industrial system of farming.

We need real food, grown in healthy soils, not colorful boxes of factory-farmed "foods" with minimal nutrients and maximal flavor additives. And, we need to stop eating animals and their by-products. The alternative is to continue to pay outrageous prices for continuing to eat as we do.

One option to the unrealistic expectation of converting the nation to organic farming methods overnight is to encourage everyone to supplement their diet with high-quality vitamin and mineral supplements. It makes sense that much of our overeating is an unconscious urge to get the vital nutrients that should be in our food but aren't, due to depleted soils.

If it seems extreme to suggest we stop eating meat, other animal products(milk, etc.), and processed foods, don't you think open-heart surgery, knee and hip replacements, kidney dialysis on a regular basis, chemotherapy, and Alzheimer's Disease are extreme, too? Countries where the populations live on simple, naturally grown foods, with little meat in their diets rarely get the diseases we do. We should learn from them.

If, as 45-year cancer researcher T. Colin Campbell tells us, our diet is responsible for 97% of the diseases we get, then it is up to us to stop offering ourselves up as prey for the health care industry. Change your diet and you can change your medical fate.

The irony of this whole milieu of sickness, obesity, and high health care costs is that we are doing it to ourselves by what we choose to eat. As soon as we realize that fact, we can start doing something to reduce our weight and our health care expenses.

As a happy side-effect, changing our unhealthy diet will take a huge burden off our environment and be a good example for the rest of the world.

Paul H. Kemp is an entrepreneur, writer, and amateur athlete.

For more information on how to reduce your personal health care expenses, while improving your health, visit his Web site: http://www.HealthyPlanetDiet.com

Corporate Wellness Becomes CEO Issue - How to Reduce Workplace Health Costs

The Partnership for Prevention was formed to encourage Fortune 1000 companies to consider making workforce health a CEO issue and adopt strategies to promote prevention and wellness. After several years of double-digit rate increases for health insurance, companies are realizing that one of the best ways to slow the cost increases is to have employees take more responsibility for both costs and health choices. A majority of companies surveyed feel that the best way for reducing costs is financial incentives to encourage employees to adopt healthier lifestyles.

Nearly 100% of employers surveyed say that health costs will be a critical or significant concern over the next five years, according to a survey by United Benefit Advisors. More employers are adopting higher deductible health plans with HRA's or HSA'S, wellness programs, and expanded disease management programs in order to control ever-increasing health care costs.

Failure to deal with these issues could be disastrous for an employer. Wayne Sensor, Chief Executive Officer of Alegent Health recently stated, "I think that we have built a health care machinery we can't afford. I think we are choking the economic engine of America." In his October 2005 newsletter, Dr. Andrew Weil stated, "I think rising health- care costs are becoming the major economic issue in our nation". Obesity costs California businesses billions of dollars each year. Projected costs for 2005 may reach 28 billion dollars for direct and indirect medical costs, worker's compensation, and lost productivity. California has experienced one of the fastest growing rates of obesity of any state.

According to California Health and Human Services Secretary Kim Belshe, "The obesity epidemic is more than a public health crisis, it is an economic crisis." What is frightening is that most people do not even realize that they are obese, which is defined as only 20% above normal weight. There is a great need for additional education on weight and resulting diseases, and the workplace is an ideal venue. Wellness education and programs can result in a significant return on investment and, if structured properly, can produce results in a very short period of time.

Although many employers have attempted some form of wellness program in the past, results from those efforts have been disappointing. In many cases, the healthier employees participated for incentives, such as gym memberships, but those who needed it most did not take advantage of the program in a meaningful way. Companies are looking at ways to encourage more employees to buy into the wellness movement.

A recent webinar hosted by Human Resource Executive Magazine and presented by Carlson Marketing Group titled, "Healthier Employees; Healthier Bottom Line: Engaging Employees is the Missing Link in Managing Health Care Costs," drove this point home. This session provided actionable advice on how companies are achieving higher impact with their wellness investments by focusing on employee engagement. It also highlighted how you can create an Economic Engagement Model to forecast the potential impact for your organization.

Employers can simply no longer ignore the issue of their employee's unhealthy lifestyles and must take action to engage them in a meaningful wellness program to reduce health costs, absenteeism and lost productivity. Employees also benefit as they derive better health and greater satisfaction in both their personal and professional lives. The alternative is being caught in a non-competitive position and severely impacting the bottom-line of the business.

Contact me if you want a link to the broadcast.

Michael Framberger was a health insurance professional in California for 28 years, including regional manager for Blue Cross and is the author and creator of the "Get Happy - Get Healthy - Be Wealthy" system.

Michael lectures internationally on Personal and Corporate Wellness and is President of Michael Framberger Seminars, Inc., and National Corporate Wellness, Inc. which offers workplace wellness programs and employee health services to businesses, and connects the benefits broker/agent, HR/Risk Manager & business decision maker with appropriate Insurance providers to show the rewards of a properly designed wellness initiative. For more information see: National Corporate Wellness