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Will employers capitalize on their emerging benefits clout?

The 14th Annual U.S. Employee Benefit Trends Study reveals a growing opportunity for employers to help their businesses succeed by further enriching the benefits experience for employees across generations. The Study shows that as workers continue to navigate financial uncertainty, they are putting down roots with their employers – and in turn, are seeking more support and guidance when it comes to their benefit options.

Employers can capitalize on this new environment by not just sponsoring benefits, but actively promoting solutions that resonate with employees. The Study demonstrates how a wide range of benefits supported by a commitment to education, communication, and strategic relationships can help cultivate a happier, healthier, and more loyal workforce. 

 

Putting Down Roots

Employee Loyalty Springs Out of Uncertainty

In contrast to decreasing unemployment numbers, the Study finds that American workers remain pessimistic about their financial futures. Less than half feel in control of their finances. And, compared to last year, even fewer expect their situations to improve in the next year (46% in 2015, compared to 52% in 2014).

Employees who say they feel in control of their finances Employees who say they feel in control of their finances

As financial concerns rise, employees are putting down roots with their employers.  Over half of employees say that they are satisfied with their current jobs and are committed to their organizations’ goals. An increasing number say that they plan to be with their companies a year from now. 

Still, worker appreciation – which can foster loyalty, productivity, and stronger business results – should not be taken for granted. The Study shows that it comes with certain expectations around the employer’s role in their employees’ financial security. 

71% of employees consider work to be the foundation of their financial safety net.

Employee benefits play a critical role in fulfilling these employee expectations. Sixty-two percent of employees agree they’re looking to their employers for more help in achieving financial security through employee benefits. Half of employees strongly agree the benefits they receive at work help them worry less about unexpected health and financial issues. Seventy percent of employees say customizable benefits would increase loyalty to their employer.

Because of the benefits I receive at the workplace, I worry less about unexpected health and financial issues

This is good news for employers who look to non-medical benefits to cost-effectively support their retention and budget objectives. Still, the Study shows that many employees do not fully understand how certain non-medical benefits fit into their lives. Therefore, it is critical that employers create optimal enrollment conditions, enabling their employees to make informed decisions about which benefits best suit their specific needs.

The Human Touch

Delivering the Value of Benefits through Consultative Engagement

As in other years, employees continue to ask for a range of solutions, especially more common benefits such as medical, prescription, 401K, dental, life, and vision care coverages. Overall, employers are keeping pace with many of their employees’ top “must-have” requests. However, there are large gaps in accident insurance, critical illness, and hospital indemnity.

Employees' must-have benefits vs. Benefits offered by employers Employees' must-have benefits vs. Benefits offered by employers

The Study found that most employers understand how non-medical benefits can provide a range of financial protection features, such as offsetting out-of-pocket medical expenses. Yet, only 47% of employees believe that supplemental health benefits can help close these gaps.

I agree that non-medical benefits can limit out-of-pocket medical expenses.

When it comes to communicating and educating, one-on-one stands out. When employees were asked about the benefit resources they find most effective, one-on-consultation stood out well above other resources.

In fact, Millennials led their generational counterparts in valuing one-on-one consultations. This may seem surprising given how technology-focused this group is, but the Study finds that when it comes to choosing benefits, 60% consult with their families and friends. This further underscores how the personal touch can win over the touchpad.

 

Millennials vs. All employees Millennials vs. All employees

Despite employee preference for one-on-one, only half of employers offer it. Employers should continue to evolve their enrollment strategies to help their employees better connect the value of non-medical benefits to their day-to-day lives.

Better Together

Employees Are Benefiting from Smart Relationships

As employers seize the opportunity to better accommodate the growing needs of employees, it is important that they forge the right relationships in order to deliver simple, effective benefit solutions.

With the continued focus on retention and cost-saving objectives, employers are embracing the advantages of consolidating to fewer carriers. Plan design, claims management, and implementation all rank highly as advantages of streamlining the number of carriers employers use in their benefits delivery mix.

Employees Are Benefiting from Smart Relationships

Many employers are also gravitating to enrollment firms to help more efficiently deliver on annual enrollment activities.  Three-quarters of employers have positive attitudes towards enrollment firms and rank a wide range of attributes and services highly across the board. Seventy-one percent of employers say that by working with an enrollment firm they were able to improve communication to employees on what their benefits cover/include. This includes explaining and clarifying non-medical benefits.

Healthy Body, Healthy Wallet

Helping Employees Live Their Best Lives

Employees are faced with a variety of financial concerns, with different perspectives across generations. For example, the Study finds that Millennials are more financially vulnerable than their counterparts and Gen X consider themselves less secure than other generations.

Employees who feel overwhelmed by financial decisions and Employees who live paycheck to paycheck by generation. Employees who feel overwhelmed by financial decisions and Employees who live paycheck to paycheck by generation.

Younger Boomers are increasingly worried about their retirement savings, standing out among their counterparts in this regard.

Over half of employees express concern over having enough money to cover out-of-pocket medical costs that are not covered by health insurance, as well as meeting monthly living expenses and financial obligations. These worries that have increased year-over-year since 2012.

Having enough money to cover out-of-pocket medical costs that are not covered by my health insurance vs. meeting my monthly living expenses/financial obligations Having enough money to cover out-of-pocket medical costs that are not covered by my health insurance vs. meeting my monthly living expenses/financial obligations

Younger workers stand out among their generational counterparts in perceiving employer incentives as effective in alleviating some of these financial concerns.

Younger workers stand out among their generational counterparts in perceiving employer incentives as effective in alleviating some of these financial concerns. Younger workers stand out among their generational counterparts in perceiving employer incentives as effective in alleviating some of these financial concerns.

More than 2/3 of employees are interested in physical well-being programs that reward health behavior. This is especially true among Millennials (75%) and female employees (72%).

Financial and physical wellness are intimately linked. Increase employees' vitality and stamina and their productivity will follow. Likewise, alleviating their financial burdens can contribute to their peace of mind and overall clarity. Employers who embrace this philosophy and hold their employees accountable can expect increasing returns on their investment.

 

Employees Are on the Move

Are Employers Keeping the Pace?

Employees today recognize they are likely to have multiple employers over the course of their career, and many anticipate working into their traditional retirement years. Careers are no longer linear and employee benefit options should be tailored to the demands of the 21st century workplace.

I am extremely insterested in taking benefits with me when I retire or change jobs

Yet, only 44% of employers currently offer portable benefits to their employees.

Benefits in retirement are a key component to employee loyalty.

Four in ten employees say that retiree benefits are a key reason to stay with their employer. Four in ten employees say that retiree benefits are a key reason to stay with their employer.
Four in ten employees say that retiree benefits are a key reason to stay with their employer. Interestingly, this is particularly true among Millennials, who feel the most strongly about this compared to their generational counterparts. This perhaps points back to the lack of financial confidence that these younger workers feel.

About a third of employees plan to postpone retirement, an increase of 5% over 2015. Almost 6 in 10 employees say that they are planning to work or consult once retired. Of this 60%, 44% say that they are planning to work part-time.

Most of the retirees, specifically the Older Boomers, say that they are returning to work to stay active (70%).

With today’s workers redefining what it means to be a retiree, employers must also redefine what retiree benefits look like in order to appeal to this rich reservoir of talent. For example, 63% of employees say that dental is a must-have retiree benefit, while only 42% of employers offer it. Similar gaps can be found across other critical non-medical benefits such as vision and life insurance.

 

Employee-must-have for retirees, Employer-offered to retirees Employee-must-have for retirees, Employer-offered to retirees

Over half of employees say that their employer does not offer any non-medical benefits that are employer-paid. With retiree benefits being such an important loyalty factor for many employees, employers have an opportunity to keep pace in 2016 and beyond.

Capitalize on Change

When companies and their external partners can come together to support and guide employees in the midst of financial uncertainty, they will reap the reward of happier, healthier, and more loyal employees.

Click the button below to download the Insights To Go summary, which provides an in-depth look at how employers can step up to the plate.

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