Employers shift benefit strategy focus to well-being, broader packages and new tech
Controlling costs is still a top factor, but employers are looking to better connect with employees and their benefit needs.
What’s on employers’ agendas for their benefit strategies in the coming years?
A more concerted push to promote employee well-being, broader benefit packages and use of new technologies to support employee decision making, according to Willis Towers Watson’s 2019 Benefits Trends Survey.
“While controlling costs remains their top challenge, employers are increasingly focused on a broader benefit strategy that goes beyond their core health and retirement offerings,” says Jennifer DeMeo, the firm’s senior director, retirement. “In addition to the traditional emphasis on plan design and cost management, employers are looking for ways to better connect with employees to meet the benefit needs of a diverse workforce and to get the most value for their benefit spend.”
Related: How much employers spend on their top 5 benefits
The result? A more comprehensive benefits strategy, starting with well-being, according to responses from HR professionals from more than 4,300 companies across 88 countries. Indeed, a significant majority (80 percent) of respondents say that incorporating employee well-being into their benefit programs is their highest priority over the next three years — including physical, emotional, financial and social well-being programs.
Other top priorities within an expanded strategy include aligning benefit provisions with employee wants and needs (64 percent say it’s their highest priority), enhancing work policies (61 percent) and incorporating inclusion and diversity into benefit programs (56 percent).
An increasing number of employers are planning to include the use of technology to deliver benefit messages to employees — 82 percent of respondents say they plan to do so over the next three years versus 44 percent who did so over the past three years. More employers are also planning to create “a shopping experience” when employees sign up for benefits — 65 percent will over the next three years versus 38 percent who did so over the last three years.
“Most employers are giving their employees choice across their core and voluntary benefits. However, there is still much opportunity to enhance employee engagement, including widespread adoption of new decision-making technologies,” says Julie Stone, the firm’s managing director, health and benefits. “Employers are also moving forward by incorporating human-centered design thinking into their overarching benefit strategy, thereby improving their ability to tailor their communication to various segments in the workforce.”
What are the top challenges that employers top challenges expect to face over the next three years? Not surprisingly, rising benefit costs tops the list (82 percent say this), followed by difficulties communicating benefit choices to employees (53 percent); the differing wants and needs of a multi-generational workforce (50 percent); and lack of employee engagement with their benefit programs (47 percent).
Another challenge employers plan to tackle: improving their current benefit programs’ overall effectiveness. Just four in 10 respondents say their programs currently are effective at offering significant choice and flexibility in benefit selection, while just under half (49 percent) are effective at tailoring their benefit packages to support their employees’ needs.
Moreover, less than three in 10 respondents (28 percent) say they are effective at using decision support and other digital tools to drive engagement. As such, a significant majority (84 percent) plan to focus on the talent experience over the next three years, compared with 54 percent over the past three years.
Another weak spot: less than three in 10 respondents (28 percent) say they are effective at using decision support and other digital tools to drive engagement. In an effort to improve employee engagement, 84 percent of respondents plan to focus on the talent experience over the next three years, compared with 54 percent over the past three years.
Another way employers can increase engagement, especially with younger workers who want their employer to share their social values: enhancing corporate social responsibility policies and aligning them with their benefit strategy. Indeed, 70 percent of the respondents say they plan to do this over the next three years — nearly double the percentage of respondents who focused on CSR policies in the past three years.
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