Four Employee Benefit Trends to Gain & Maintain a Competitive Edge
Embrace these trends to stay in the game.
June 21, 2018
Todd Miller, Managing Benefits Consultant, The Partners Group
Sponsored by The Partners Group
The improving economy is making it increasingly challenging for companies to attract and retain the high-caliber talent necessary to remain competitive. Despite having three generations in the workforce to draw from, each has its own needs, desires and preferences. Add to that the upsurge in people working from home, the growth in the demand for financial wellness, and the strong need for greater efficiencies in human resource departments. The landscape is now more complicated than ever. Here are four trends that may help your business address these challenges.
TREND 1: PERSONALIZED BENEFIT PROGRAMS FOR A MULTI-GENERATIONAL WORKFORCE
A growing challenge facing employers today revolves around recruiting and retaining a workforce comprised of three diverse generations: Baby Boomers, Gen Xers and Millennials. Each has its own needs and priorities, so here are some steps you can take to embrace flexible benefit strategies and engage your entire workforce:
-Start by looking at what employees need versus what they have. According to the Employee Benefits Research Institute, nearly 7 out of 10 Boomers rank their health care coverage as the most important benefit (higher than their 401(k) or pension). Gen Xers say not having enough money at retirement keeps them up at night, while most Millennials prefer a higher take-home pay versus paying more for benefits. By designing a benefits program that meets the needs of a diverse workforce, youll be better prepared to attract and retain employees.
-Employee benefit communication should include multiple channels that allow employees to self-select the communication method they prefer. According to a survey done by OneDigital, Boomers like honest simple language surrounding their benefit and financial planning programs, while Gen Xers prefer casual informational sessions, and Millennials prefer multi-platform employee-facing communications.
-Pay attention to employee demographics when designing your benefit program. Each generation values benefits differently. Millennials might value a high deductible health plan that is 100% employer paid, versus a low deductible plan they would have to subsidize. Boomers, on the other hand, are more likely to value a benefit program that they help subsidize, but also provides a higher benefit level.
TREND 2: A SHIFT IN BUSINESS CULTURE TO A “GIG” ECONOMY IS RESULTING IN THE RISE OF PORTABLE BENEFITS
A gig economy is the term for an environment where temporary jobs, or “gigs”, are commonplace, and where employers outsource to short-term, independent workers on a contractual basis. Consequently, organizations are able reduce their expenses in terms of benefits, office space and training.
-Of the 158 million workers in the U.S. workforce, 55 million are gigging, or working for themselves, as estimated by Upwork, a gig economy website. Intuit, the owner of TurboTax, is seeing the increase in gig workers firsthand. They estimate the gigging workforce now makes up about 34% of the entire workforce and is expected to reach 43% by 2020.
-Portable benefits legislation has been introduced to address this growing workforce in Washington State and New Jersey. It would require companies to pay into a non-profit fund that would provide health insurance, retirement and other benefits to the gigging workforce. Funding could be supported by a fee assessed to the consumer and would allow this group of professionals to have access to the same level of benefits as their W2 counterparts.
-More employers are offering voluntary benefits to recruit and retain part-time employees. Voluntary portable products can include items such as life insurance, critical illness, accident insurance, 401(k) or 403(b) plans, as well as health savings accounts (HSAs).
TREND 3: FINANCIAL WELLNESS PROGRAMS ARE GAINING TRACTION IN THE WORKPLACE
Where traditional benefits, such as medical, dental, life and disability income insurance, are lagging, financial programs are closing the gap. Employers now see financial wellness programs as a way to expand their compensation and benefit programs to better attract and retain a diverse workforce.
-The reality is most employers are in early stages of developing these programs and some employers struggle to clearly define workplace financial wellness.
-The key to any successful financial wellness program is to understand your employee demographics and design a plan that meets their needs. Do your employees need guidance on basic financial principles, or would they value other programs, such as tuition reimbursement or a 401(k)?
-Most importantly, employers need to integrate their financial wellness programs with their existing benefit and compensation package. According to MetLifes Work Redefined: A New Age of Benefits, 30% of employees working for large organizations who were surveyed say they lay awake at night worried about money, and 23% say they are less productive at work because of financial worries.
-Finally, consider including online/digital access to education and tools. Offering a balanced, well-communicated program will help maximize participation among your employees, as well as become a marketing tool that can turn your company into an employer of choice.
TREND 4: GREATER USE OF TECHNOLOGY TO DRIVE CONSUMERISM AND DECISION MAKING
Here at The Partners Group weve seen a dramatic increase in the need to help our clients better understand their options when evaluating payroll and human resource information systems (HRIS).
-More employers are turning to technology to help automate benefit enrollment, onboarding, recruitment, and performance management. To meet this need, The Partners Group has invested in internal resources to help guide our clients through a discovery process and pair them with the right solutions.
-Technology is also playing a huge roll in employee and consumer cost transparency tools. To serve this emerging market, a number of digital health tools have come to market, which are designed to help consumers manage their health care spending and decision-making. Some even provide incentives to steer consumers to low cost, high-quality facilities.
-Telemedicine and digital health is on the rise. Telemedicine is not new; but as more people become comfortable with it, the trend toward greater use has been undeniable.
-The growing availability of DNA and genetics testing, health screenings, and health information is making our society more knowledgeable. This presents a significant challenge to the insurance industry, as possible buyers will already know their likelihood of becoming ill.
About the author:
Todd Miller, Managing Benefits Consultant, The Partners Group in Bellevue, WA.
The Partners Group (TPG) is the largest independent benefits broker in the Northwest with more than 145 employees serving clients from five offices in Washington, Oregon and Montana. [email protected], www.tpgrp.com.