Worcester Business Journal

www.wbjournal.com January 18, 2016 • Worcester Business Journal 37 As goes UMass Memorial, so does Worcester E D I T O R I A L The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. A nyone even remotely involved in the Worcester business community knows that there is a laser- focus on revitalizing the region's portfolio. Worcester has long suffered from the outside (and sometimes internal) perception that it is too provincial and stagnant. Government and private sector leaders have come together and put Worcester on the map as the smarter alternative to Boston. Just look at all the changes to downtown. In order to reinvent Worcester, something more than rebuilding infrastructure is needed. We must be honest with ourselves about the elephant in the room – our inability to compete with other cities in attracting and retaining millennials. It is predicted that in 10 years, millennials (people between the ages of 18 and 34 today) will comprise around 75 percent of the global workforce, according to the Deloitte Millennial Survey. In order to survive and grow, it is imperative for Worcester to have a strong millennial population. But how do we get them to choose Worcester? Although updating downtown is a huge step in the right direction, the more subtle answer is the more difficult. We need to understand and cater to their value system. Millennials are often misunderstood. They are labeled as lazy, disloyal and entitled. While it is true that millennials are more likely to jump from job to job unlike their gen-Xer parents, it is not because millennials are not talented or are disloyal – it is because they are not being correctly motivated. Though compensation is still a large factor for millennials, career development, personal recognition, leadership opportunities and work-life balance carry much more weight. To compete in the job market, we need to adapt and create the work environments that millennials seek. Gen-Xers and above remember the sacrifices they made for career success – missed youth soccer games and parent- teacher conferences, and ultimately, many divorced. Millennials witnessed those sacrifices and as a collective group have decided to modify it. Millennials want flexible schedules, the ability to telecommute and real vacation time. Gone are the days when employees will obediently sit at a desk from 9 to 5 just for the sake of sitting there. Millennials insist on co-parenting with their spouses, maintaining a healthy lifestyle and having me time. Companies in competing cities are investing significant resources in updating their technology to better accommodate employees' work-life balance. Worcester needs to jump on board. Millennials want to work where they can grow quickly. One perception of Worcester that is attractive to millennials is that someone who is young but talented and hungry can quickly rise in the ranks. Never underestimate the appeal of being the big fish in a small pond. To keep millennials engaged, we need to treat them like future leaders and truly believe it. Mentor them. Teach them about the business – not just things in their particular job title. Include them in higher level meetings and ask their opinions. Assign them leadership roles on projects. Tell them when they have done a good job. Tell them when they have done a bad job. Introduce them to other leaders in the business community. Involve them in the community. One thing Worcester is not lacking is a sense of community. Get them to buy into that. Ultimately, Worcester's success depends on our ability to attract millennial talent. This requires us to understand them and adapt to them. Otherwise, the stereotypes of an outdated and stagnant Worcester will be self-fulfilling. n AiVi Nguyen, a partner at Bowditch & Dewey, focuses her practice on business and employment litigation. Investing in millennials is an investment in Worcester BY AIVI NGUYEN Special to the Worcester Business Journal V I E W P O I N T AiVi Nguyen Lost in all the talk about moving its grade from BBB+ to an A- is that it's not local boosters singing the system's praises, but a bonafide, outside source recognizing UMass Memorial Health Care for its operating improvements over the last two years, which – not coincidentally – align near the start of the tenure of CEO Eric Dickson. Now, what Wall Street ratings firms like isn't necessarily what Main Street Worcester is going to like – cost reductions that can include layoffs, expense cutting, higher prices – but this is still a strong indication that the hospital system is heading in the right direction and will continue to do so in the near future. This kind of upgrade doesn't come easily – despite the apparent randomness of rating firm announcements – but as the result of plenty of shrewd decisions made with a grander plan in mind. Since assuming the CEO role in 2013 – when the system had operating losses of $57 million – Dickson laid off 600 clinical and administrative employees; sold off Wing Hospital in Palmer, which was on the fringes of its market area, to Springfield-based Baystate Health; stood toe-to-toe with union groups in negotiations, and played hardball with an independent neonatal physician group that has been resistant to joining the larger UMass Memorial physician group. These types of decisions can make executives like Dickson wildly unpopular in their own organization and even in their own communities, and clearly Dickson has earned some enemies. But taken together, these are also the kind of tough issues that are necessary to tackle so that the overall organization remains healthy and viable over the long-term. After that fiscal 2013 where it posted $57 million in losses, UMass posted profits of $61 million and $47 million over the last two fiscal years. Last year its patient population grew by about 2,000 while its gross revenues were up to $2.2 billion, a growth of $22 million over last fiscal year. The upgraded ratings from Moody's and Fitch bring with them their own financial benefits. Because the system is now more investor-friendly, it can negotiate lower interest rates on loans and demand better financial terms when it goes to the market for funding. That will come in handy this month as UMass will issue $177 million in new bonds for investors as it seeks to upgrade facilities and refinance existing debt. The length of those bonds runs through 2040, so the system will have locked in 24 years of better financial terms, saving millions of dollars over that time period. With an operating margin that has been between 2 and 2.5 %, the hospital system's long-term success is hardly locked in – its leaders will need to continue to be vigilant and deftly manage change as the industry continues to go through an evolution in how health care is delivered and paid for. However, for the region to have its largest employer clearly on top of managing change is a positive sign, and it stands to add to the confidence of the many businesses and residents who rely on a strong regional hospital system. The healthcare sector remains the largest employer in Central Massachusetts, and it only stands to grow in the coming years, while the region's robust higher education community continues to expand on health care as one of its primary learning tracts. All of these synergies can lead to more startups and spin-off companies, thus growing the healthcare industry in Central Massachusetts. A stable and healthy UMass Memorial is good for Worcester and good for the region. n W orcester isn't one of those industrial cities that is dependent on one employer for a majority of its jobs, but, still, when the city's and the region's largest employer is trending in a positive direction, the city and the region stand to benefit. In early January, UMass Memorial Health Care got some very positive news from a couple of rating agencies – Fitch Ratings and Moody's – saying they were returning the No. 1 local employer, which has some 13,000 workers, to an investment-grade status. The upgrade is happening three years after UMass Memorial had been downgraded based on shaky financials, declining patient volumes and investor wariness about its operations. Lost in all the talk about moving its grade from BBB+ to an A- is that it's not local boosters singing the system's praises, but a bonafide, outside source recognizing UMass Memorial Health Care for its operating improvements over the last two years, which – not coincidentally – align near the start of the tenure of CEO Eric Dickson.

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