A 2020 Vision: Is Your Benefits Package Ready for the Future?
Posted: February 13, 2019
Benefits play a pivotal role these days, and human resources professionals 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 are 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 are 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 is 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.
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 is 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.
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 study by the Society for Human Resource Management (SHRM) 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 is 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 is 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.
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 is 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 technology: 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 is a host of more trendy benefits being offered.
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 is 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 is 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.
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.
Posted In: Employee Benefits; Human Resources, General; Hiring/Recruiting
Want to know more? Read the full article by Rachel Mucha at HR Morning