Principal to Cut Jobs

We've seen this coming for a long time. My wife works in the health division and she's not very surprised. Probably for the best in the long run.

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Originally Posted by cjb1978

I am talking from a cost benefit point of view.

Meaning if Principal cuts their health benefits from providing their own to assigning this duty to an outside vendor then the costs will go up for the employees of Principal.

So in short, the cost of benefits is going up for the employees and any new people coming on board will have to offset this cost to them by asking for more money per year.



No it is called looking at the bigger picture.

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But you're using an improper (though understandable) assumption. That is, that Principal Financial Group is a customer of its own Principal's Health Insurance. I don't believe that is the case. In fact, I think the company (and many other large mult-nationals) now "self-insure" for health benefits.

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Originally Posted by JY07

That's probably a pretty good call; it seems like principal is laying off 100+ employees on a regular basis

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Yeah, look for companies that remain as bloated as possible. :jimlad:

I dont' think Principal is doing anything different with their workforce than want most companies in this financial services sector of the economy have been doing over the last 3 - 4 years.

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Originally Posted by cjb1978

Mostly I was looking there as the health benefits being one of the main pros of taking a job there.

It is with the Individual Life group within there.

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i think we've identified one of the problems with health care......

i think health care should most certainly be detached from the employer.

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Originally Posted by CyPride

i think we've identified one of the problems with health insurance......

i think health care insurance should most certainly be detached from the employer.

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fixed it for ya.

That may be true, but I don't follow how this supports that argument. In fact, I'd suggest it is the exact opposite. You could argue this demonstrates why there is a benefit to employer provided health insurance. That is, they have a motivating factor to offer the best possible benefits to attract that best possible workforce. Take away that motivation, and what is left to drive the best possible health coverage possible?

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Originally Posted by capitalcityguy

Yeah, look for companies that remain as bloated as possible. :jimlad:

I dont' think Principal is doing anything different with their workforce than want most companies in this financial services sector of the economy have been doing over the last 3 - 4 years.

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or look for a company that doesn't constantly put itself in that position to begin with... this situation doesn't obviously fit that mold, but every other layoff they've had does

As for your second paragraph, I don't think the economy was to blame when they shed a good portion of their workforce when they went public in the early 2000's... someone who worked there then would have to give you specific numbers

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Originally Posted by JY07

or look for a company that doesn't constantly put itself in that position to begin with... this situation doesn't obviously fit that mold, but every other layoff they've had does

As for your second paragraph, I don't think the economy was to blame when they shed a good portion of their workforce when they went public in the early 2000's... someone who worked there then would have to give you specific numbers

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Interesting prospective…although I do not agree.

My second paragraph spoke to the financial meltdown the last few years (i.e.….3-4 years) and had nothing to do with the "early 2000's" so I'm not following how you make that leap. But if you want to go there. Principal and the rest of the financial services sector had to endure all the negative effects of 09/11 on the economy and corresponding market meltdown/recession. Also, yes, a mutual insurance company does operate differently than a stock insurance company which as I recall, Principal went public in late 2001.

No offense, but your post seems to drip with emotion (for some reason…is there personal history there? ) and is without a lot of economic or financial market's reality.

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Originally Posted by capitalcityguy

Interesting prospective…although I do not agree.

My second paragraph spoke to the financial meltdown the last few years (i.e.….3-4 years) and had nothing to do with the "early 2000's" so I'm not following how you make that leap. But if you want to go there. Principal and the rest of the financial services sector had to endure all the negative effects of 09/11 on the economy and corresponding market meltdown/recession. Also, yes, a mutual insurance company does operate differently than a stock insurance company which as I recall, Principal went public in late 2001.

No offense, but your post seems to drip with emotion (for some reason…is there personal history there? ) and is without a lot of economic or financial market's reality.

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My point was the layoffs aren't necessarily related to the recent economic downturn when they have a pattern of regularly overly building up the employee base and then trimming it down (that's why i brought up the 2001 example, which was prior to 9/11, and the economy was great).

And no, I don't have any bad blood with Principal; just stating the facts... I'm guessing the majority of those who've been there longer than 5-10 years wouldn't say I'm too far off base

The truth is that each lay-off has been for different reasons. The ones early in the decade were there to "trim the fat". The ones in the last few years, besides this health one, were mostly about the poor economy and financial meltdown. Principal is there to make money so they are going to staff accordingly. It's not cheap to hire/fire ee's. To be fair, when I was in mortgage they went from 5 loan officers to 30 in 6 months. They could have doubled this number and still not have enough help but they didn't want to put themselves into that position. We actually turned away 1,000 of customers because we didn't have enough help. They also didn't get into the risky loan products that other companies did, which also lost them a lot of business.

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Originally Posted by JY07

My point was the layoffs aren't necessarily related to the recent economic downturn when they have a pattern of regularly overly building up the employee base and then trimming it down (that's why i brought up the 2001 example, which was prior to 9/11, and the economy was great).

And no, I don't have any bad blood with Principal; just stating the facts... I'm guessing the majority of those who've been there longer than 5-10 years wouldn't say I'm too far off base

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I'm not going to waste my time going and forth with someone who keeps throwing out unsubtantiated "facts" and obviously has an axe to grind.

Dude, it is business, not personal.

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Originally Posted by capitalcityguy

Interesting prospective…although I do not agree.

My second paragraph spoke to the financial meltdown the last few years (i.e.….3-4 years) and had nothing to do with the "early 2000's" so I'm not following how you make that leap. But if you want to go there. Principal and the rest of the financial services sector had to endure all the negative effects of 09/11 on the economy and corresponding market meltdown/recession. Also, yes, a mutual insurance company does operate differently than a stock insurance company which as I recall, Principal went public in late 2001.

No offense, but your post seems to drip with emotion (for some reason…is there personal history there? ) and is without a lot of economic or financial market's reality.

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You are absolutely correct in the portion I highlighted above and Principal is a perfect example. Mutual companies tend to have a much more long term thought process and approach to their business whereas stock companies tend to become somewhat short term focused in their thought process.

http://www.nytimes.com/2010/10/01/he...html?th&emc=th

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Because Principal Financial is primarily in the business of asset management, it decided not to make the investments needed to remain competitive as a health insurer, Mr. Houston said. The company, which focused on plans sold to small businesses for their employees, does not participate in other markets, like selling policies to individuals or for people enrolled in Medicare or Medicaid.
Other aspects of the health care regulations are worrying some state insurance commissioners, who fear that insurers are going to stop selling policies in some areas of coverage. For example, in the case of child-only policies, the new rules require insurers to offer coverage to even those children who are seriously ill, leading some insurers to balk at the idea that they will be forced to cover too many sick children. Aetna, Cigna and WellPoint, among others, have said they will stop selling new policies in some states.

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More insurers are likely to follow Principal’s lead, especially as they try to meet the new rules that require plans to spend at least 80 cents of every dollar they collect in premiums on the welfare of their customers.

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Mr. Laszewski is worried that the ensuing concentration is likely to lead to higher prices because large players will no longer face the competition from the smaller plans. “It’s just the UnitedHealthcare full employment act,” he said.

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Originally Posted by capitalcityguy

fixed it for ya.

That may be true, but I don't follow how this supports that argument. In fact, I'd suggest it is the exact opposite. You could argue this demonstrates why there is a benefit to employer provided health insurance. That is, they have a motivating factor to offer the best possible benefits to attract that best possible workforce. Take away that motivation, and what is left to drive the best possible health coverage possible?

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thanks for correcting my obvious mistake.

do you think this guy is the best possible employee when his biggest motivation for the job is their 'low cost healthcare'.....really??

many reasons to separate health insurance from employment.

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Originally Posted by CyPride

thanks for correcting my obvious mistake.

do you think this guy is the best possible employee when his biggest motivation for the job is their 'low cost healthcare'.....really??

many reasons to separate health insurance from employment.

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Says the guy who can't get my order right at the McDonald's drive thru.

Actually the cost of the benefits to myself is just one of the things I look at when considering a new job.