The benefits market is undergoing sweeping changes. Here are three ways Human Resources (HR) executives can stay ahead of the changing landscape.
Even before the COVID-19 pandemic, the benefits market was shifting. Employees were becoming more aware and interested in their benefits offerings. As a result, many employers expanded the types of benefits offered – from pet insurance to student loan repayment assistance. The rapid growth of the gig economy led some employers to expand their benefits programs beyond full-time staff to include non-traditional employees. Some employers explored more flexible or remote work opportunities.
Then came both the chaos of the pandemic and the sustained uncertainty of the social upheavals of 2020. Some of these trends accelerated (like remote work) while other needs were revealed, such as incorporating diversity, equity and inclusion (DEI) into benefits. Wellbeing services, particularly emotional health and financial stability, became a pressing issue for HR executives. A global Aon survey found that 42 percent of employees had experienced a decline in their mental health since the pandemic started. The massive economic disruption and displacement also caused more people to be concerned with their financial stability. One study found that 62 percent of Americans worry more about financial instability now than they did in the past.1
The result is that companies are aligning health and wealth benefits more closely under the broader umbrella of “wellbeing.” Aon’s research found that the number of employers offering voluntary benefits increased 27 percent.2 That’s important because improving the performance of individual and organizational wellbeing has a direct impact on business outcomes. An Aon survey of more than 1,600 professionals across sectors and countries found that a 3.5 percent increase in employee wellbeing resulted in a 1 percent increase in employee satisfaction and customer retention.3 It is, however, still early days for this focus on wellbeing.
While 82 percent of companies globally consider employee wellbeing a priority, many firms still lack an overall wellbeing strategy.3
With this backdrop, here are three ways the benefits landscape is changing and key ways HR leaders can stay ahead of these changes.
Consider the needs of the whole employee. Employee wellbeing programs that might have been considered “nice-to-haves” before the pandemic are now increasingly recognized as essential. Financial and emotional wellbeing are especially top of mind for employers because suffering employees are more likely to be disengaged and less productive at work. Studies have shown that financial matters are the top cause of stress and distraction at work for U.S. employees and that U.S. businesses are collectively losing $500 billion per year thanks to that financial stress.
To ensure you’re offering the right array of health and wealth benefits, analyze whether your organization’s current plans still mesh with the needs of employees and the company. Some questions to ask:
- Do your health benefits cover mental health and telehealth services? These services experienced a spike in growth during the pandemic, which is likely to continue for the foreseeable future.
- Do you offer ways for employees to improve their financial wellbeing? Employee financial assistance in the form of voluntary benefits such as tuition reimbursement or student loan assistance can go a long way.
- Are my benefits flexible enough to be inclusive? Implementing health and wellbeing benefits that appeal to a wider range of people can help to create a more inclusive and diverse organization.
Smaller companies that may have avoided some of these benefits in the past because of time and money constraints can consider a solution like Aon Local Advantage, which is designed for employers with 100 to 500 employees to be able to provide health and wealth benefits while also controlling costs.
Stay on top of changing regulations. Recent legislation has opened up new opportunities for employers to save time and money while increasing the value of their employee benefits – especially retirement benefits. For instance, the SECURE Act of 2019 paved the way for the pooled employer plan (PEP) in the U.S., which can help organizations provide a simpler, more cost-effective, and less risky retirement program to their workforces.
For employers, a PEP like Aon’s can potentially cut costs and save time as they offload some of the fiduciary responsibility for investments and administration to Aon, which leverages its existing expertise in retirement and investment solutions. Aon PEP administrators also keep up with changing tax laws and regulations, so that plan sponsors don’t have to, allowing them to focus on offering the right mix of benefits to recruit the best talent.
In addition to financial regulations, health and safety regulations are taking center stage. A patchwork of COVID-19 vaccine mandates from states and municipalities, a federal mandate for healthcare workers, and an emerging backlash of state actions prohibiting such mandates can leave HR professionals reeling from the discrepancies. When (or perhaps if) the dust settles, HR leaders will need clear guidance on how to proceed. Collecting vaccine statuses, setting up testing and reporting protocols, and the attendant administrative burden will require time, effort, and more than a little creativity. With that in mind, having a streamlined administrative process and the right benefits technology are more important than ever.
Utilize technology, but meet people where they are. When the pandemic shut down offices across the country, and many employees switched to working remotely, it changed how HR teams communicated with their workforces and how employees learned about benefits updates. Many organizations now have a multi-generational workforce, and a “one-size-fits-all” approach to employee engagement no longer works. While some employees probably already accessed benefits information on a company website or via emails, others likely learned of company news through flyers in the breakroom or from colleagues at the office.
Understanding how your employees use technology to access benefits is key. An organization can have highly competitive benefits, but adoption will suffer if employees aren’t fully aware of them, don’t have full visibility into the value they provide, or don’t want to navigate a lengthy and complicated enrollment process. Out of necessity, many HR teams quickly implemented a variety of new tools in 2020, including apps, webinars, podcasts and short videos to help communicate benefits to employees they no longer saw in person. But not every tech solution is appropriate for every employee.
Just as your benefits should be flexible enough to meet the needs of diverse groups of employees, so should your communications about them. For instance, new apps may work well with younger or more tech-savvy workers, but text messages or emails with benefits updates may suit others better. Asking, listening, and caring about employees will enable you to tailor your technology to your employees’ needs..
As the benefits landscape continues to evolve, HR executives who can provide the right types of benefits, understand the administrative landscape, and communicate effectively can set themselves — and their employees — up for better outcomes in the future.