Today’s employees are struggling with financial and health-related issues that impact their wellbeing, and employers are taking note. Designing benefits plans to help workers manage and maintain their health and finances — and thus remain engaged and productive at work — is a top priority for companies around the globe.
But how can employers meet the diverse needs of today’s multigenerational workforce? Younger workers are facing job insecurity, student debt and high housing costs, while baby boomers are approaching retirement, working longer in greater numbers and are concerned about their health and retirement savings.
In addition, the shift from defined benefit (DB) to defined contribution (DC) plans is leaving many workers feeling vulnerable, as it places more responsibility on workers to manage both the costs and risks associated with their financial futures. At the same time, much of the world has seen relatively slow economic growth over the past decade, making it harder for employers to pay for the rising costs in benefits or to significantly increase worker pay to meet increasing demands.
The challenge of providing benefits that satisfy everyone is leading employers to reassess their benefits packages in two main ways:C
- Provide greater benefits choice to meet a growing and broader range of needs Employers are looking to maximize the value of their benefits spend by providing programs that better meet their employees’ needs. The idea of increasing choice and flexibility in benefits programs is not new, however, technological advances are removing some of the roadblocks associated with providing greater choice; reducing the administrative burden and tackling engagement challenges. The emergence of flexible and streamlined administration platforms is enabling a more efficient and customized benefits delivery approach.This suggests a new benefits deal for employees, with more flexibility and choice and a broader focus. But for this new deal to be effective, employers must understand their workforces’ wants and needs, and actively engage employees in their benefits decisions. The traditional methods to encourage engagement — communication, education and incentives — have had limited success. Employers are increasingly looking toward using nudges and social connections to motivate sustainable behavior change.
- Focus on integrated well-being Traditionally, employers have offered stand-alone benefits to address specific issues. But such a narrow view can only go so far to address the broader challenges employees face today. As such, employers are embracing the challenge to address employees’ total well-being. This is not as simple as offering a few targeted programs; these are complex issues that need to be tackled as a whole and with the support of the people closest to us. Employers recognize the need to take an integrated approach to helping employees thrive physically, achieve financial security, attain emotional balance and build strong personal connections.
Key findings
These two forces are leading employers to seek to create a new benefits deal. Willis Towers Watson’s 2019/2020 Global Benefits Attitudes Survey reveals five key findings for employers in doing so:
- Promote financial security Many employees are living paycheck to paycheck, and most workers fear they are falling behind on their retirement savings. These financial worries are having a wider impact: Financial issues are strongly linked to stress and anxiety, poor health, unhealthy lifestyles and reduced job effectiveness. Responding to these stresses, workers are seeking more support from their employers via enhanced benefits deals, with many willing to sacrifice pay in exchange.
- Meet the needs of a changing workforce While employees are looking for greater security in their benefits packages, what security means can vary widely by age, gender, salary, life circumstance and individual outlook. One size does not fit all.If benefits packages are to meet individual needs, employers need to protect core benefits while offering flexibility and choice. Today’s employment deal will need to evolve to encompass a broader range of employee benefits, including voluntary as well as workplace perks.
- Enable choice and help employees make smart decisions How can it make sense for employers to think about expanding choices and broadening the benefits deal, when employees often struggle with the complexity of choices they already face?One option is to narrow and make more manageable the range of choices offered to employees; however, our research suggests employees typically prefer a wider, not narrower, array of options. The question then becomes, how can employers effectively support this? Traditionally, employers have focused on education and communication to help employees make more informed decisions. While this works for some employees it clearly does not work for all, technology and decision-support tools to guide smarter choices are increasingly the favored options for employees.
- Flexible work arrangements The world of work is evolving, and organizations are adapting to new workforce demands. Alongside a greater focus on choice and flexibility across benefits, employers are looking to modernize policies on flexible work and leave arrangements that allow employees to better manage their work/life balance. Our research highlights the value of such policies: Workplace flexibility is closely linked with how much employees appreciate their benefits and the desire to remain with their employer.
- Leverage social connections to drive employee well-being To promote sustainable behavior change, employers are moving away from a focus on incentives and penalties and moving toward using nudges and social connections (via the wider workplace culture and employee community groups). Our research reveals a strong correlation between a socially connected workforce and many behaviors that promote well-being, such as participating in healthy activities, lowering levels of stress and anxiety, and taking positive steps to improve financial situations. For employers, enhancing social connections is potentially a key new lever to improve employee engagement in benefits programs.
