A 2020 vision: Is your benefits package ready for the future?
Benefits play a pivotal role these days, and pros know how tough it is to keep good people, so many employers are upping their game when it comes to offering their employees a comprehensive benefits package.
They’re being strategic about designing a robust package tailored to their employees’ unique needs and one that can convince upper management that this is what the company needs to retain – and attract – the right people moving forward.
The workplace is becoming more multi-generational, as millennials start to dominate and older workers delay retirement. More than a third (37%) of employers say they’re making changes to their benefits package, or plan to do so in the near future, according to Aon’s Benefits and Trends Survey 2019.
No longer a one-size-fits-all package
There’s no such thing as a basic benefits package (healthcare, dental, vision, pension, etc.) or a one-size-fits-all package anymore. Companies are now asking employees what perks or benefits they want. And employers are listening.
Most employees at small and medium-size companies (91%) view nontraditional benefits (flexible work schedules, expanded paid time off and working remotely) as important to job satisfaction.
Offering the right employee benefits is one of the “Top 10 HR challenges of 2019,” according to a recent report from HR compliance firm XpertHR.
To help employers effectively create a competitive package, XpertHR suggests that benefits pros take certain steps:
- Measure benefits against competitors and assess what the marketplace is offering
- Identify benefits that have the lowest employee participation levels and redesign or eliminate them
- Tailor benefits according to the needs and interest of multiple generations
Now let’s take a look at three key developments shaping the world of employee benefits – and how you can decide from a myriad of offerings what’s right for your employees.
Trend No. 1: Millennials are disrupting the benefits game
Now that more than a third of the workforce are millennials and nearly half will be by 2020, have you rethought your benefits strategy to cater more to this group?
Healthcare is the most important benefit to millennials, according to a recent Fit Small Business survey. But, at the same time, debt-ridden millennials are worried about the cost of going to the doctor. That’s why many employers are taking a proactive approach to offset costs.
The health savings account (HSA) is “the most millennial-friendly benefit,” wrote Amino digital health company CEO David Vivero in Forbes. “It’s an excellent way to save money while you’re in your young, healthy years.”
“Your millennial employees will also appreciate the flexibility of an HSA, which can be used to pay for anything from acupuncture to contact lenses to medical supplies,” says Vivero, a millennial himself.
And employers are buying into the concept, since employee participation in HSAs grew from 50% in 2017 to 81% in 2018, according to a Benefitfocus report.
Best benefits strategy: Make it easier to “doctor shop” for services, get online appointments and visit providers via telemedicine.
Student loan repayment ranks high with millennials. Companies that offer relief in this area will have a big leg up on the competition and likely be able to bolster dwindling retention rates.
More than a third of employees said student debt repayment was a must-have benefit, according to Unum survey, but that percentage leaps to 55% for millennials.
A growing number of employers, including Estée Lauder, Pure Insurance and Carhartt, have added student loan assistance to their benefits packages in 2018.
There’s also an emerging group of third-party administrators offering student loan programs, such as Fidelity’s Student Debt Employer Contribution program and CommonBond, which also offer benefits for parents to help plan for their child’s education.
Family benefits is a crucial benefit that millennials want. “Having comprehensive family benefits – fertility, infertility, pregnancy, maternity and parenting benefits – can make one company stand out from the rest,” said Paris Wallace, CEO, Ovia Health in Forbes.
Paid leave benefits are becoming a must-have for employers that want to have any shot at attracting and retaining top-performing employees. A SHRM study says 29% of employers offered paid paternity leave in 2018, up from 8% in 2016.
Flexible schedules “can also be a make-or-break benefit for young millennials,” adds Wallace. And it’s a close second to paid family leave as the most popular benefit overall, according to a recent benefits provider Unum survey.
Trend No. 2: Employers get innovative to rein in high healthcare costs
Savvy benefits managers need to know what’s in the pipeline for health care in 2019 and beyond so they can stay competitive:
- Healthcare costs for employers are expected to reach $15,000 per employee in 2019, according to the National Business Group on Health.
- By 2030, nearly one in two Americans will suffer from at least one chronic condition, according to a Rand Corp. study in the American Journal of Managed Care.
Chronic-condition management should be at the very top of employers’ healthcare strategies. Reason: Annual healthcare costs for workers with a chronic condition (diabetes, high cholesterol, heart disease, etc.) are five times higher than for workers without such a condition.
Employers are providing disease management programs and health screenings to combat chronic conditions and keep employees healthy. More than half (55%) of employers have made telehealth a part of their health plan, according to the Medical Trends and Observation Report.
By providing access to a healthcare provider on the phone or online, employers are hoping employees will avoid more costly visits to the doctor or the emergency room. For 2019, nearly all large employers said telehealth was one of their top healthcare initiatives, according to the 2019 National Business Group on Health study.
On-site clinics: As many as 65% of large companies are expected to offer on-site or near-site health centers to bolster their benefits by 2020, reports the National Business Group on Health. And many smaller companies are banding together to share the costs of healthcare clinics. Companies have seen major ROI in reduced absenteeism when this option’s added, according to the National Alliance of Healthcare Purchaser Coalitions. Also providing a health clinic can offer same or next-day appointments, which can help solve a concern of millennial workers, who expect shorter wait times.
Wellness tech: With fitness-tracker Fitbit leading the way, firms are investing in the new wave of apps and wearable devices to help employees lose weight, quit smoking or manage diabetes. The remote monitoring technology, where biometric data is transmitted to a provider via scales, glucose meters and heart-rate monitors, is used by 56% of plans.
Trend No. 3: Voluntary benefits are driving retention
More than two-thirds (72%) of organizations increased their benefits offerings to retain employees in the last 12 months, according SHRM’s The Evolution of Benefits report. More and more employers are looking to benefits to attract/retain employers in a tight job market, so there’s a host of more trendy benefits being offered.
Employees want flexibility, choice and non-traditional options, according to a 2018 MetLife survey.
Gym class reimbursement, mental health services and discounted entertainment are now more common than ever.
Companies are using a new breed of work perks to lure employees, according to FitSmallBusiness.com, which explains why the following perks are growing in popularity:
Paw-ternity leave: Pet owners have lower stress levels, creating a more productive workplace. Currently, only about 5% of companies offer this pet perk, with an average leave time of one week.
Egg freezing/fertility: These benefits are on the rise, thanks to big companies like Apple, Facebook and Google at the forefront. With this perk, workers are 62% more likely to stay put, says a new study.
Free life coaching: Mental health and happiness go hand in hand. That’s why companies’ offerings include counseling, healthy living programs and work-life coaching to help employees with both personal and professional goals.
Free beer: Having a beer fridge can lead to a happier staff that’s more committed to the job. About 11% of employees currently enjoy this perk.
Pet bereavement: Even though only a few employers offer this perk, but it is one that 35% of workers want and companies are starting to recognize the upheaval that their employees go through after the death of a pet. Kimpton Hotels in San Francisco offers three days, while Mars Inc. gives workers one day and the option to work remotely thereafter.
Customization is key to the future of benefits and technology can make the process even easier. There are a host of different types of apps and debit cards that can help enhance the employee benefit experience, including:
Free lunch: Ritual for Business, an order-ahead food app, is a brand-new benefit that Chicago Trading Company, Spotify and Verizon Media are offering to their employees.
Pick your own perk: Employers can set a monthly allowance on a reimbursement-free Zestful Perk Card for pre-approved health and fitness, travel, food, etc. services (Netflix, Uber, Airbnb, Southwest Airlines, to name a few).
Mobile-friendly benefits: With the first-of-its-kind Aon app, employees can access benefits all in one place, using facial recognition to log on. It includes push notifications for benefit announcements.
Celebrate your staffers: With the employee recognition Recognize app, you can create your own employee rewards catalog of automatic gift cards (or non-monetary rewards) employees redeem with points.
Employees’ desires for benefits tailored to their own needs is changing the mix of offerings. And this trend will be the key to keeping top talent.
