The year may be winding down, but experts are already making their predictions for the hottest employee benefits in 2018. In a recent Employee Benefits News article, industry leaders expect benefits in the category of financial well-being to be the highest in demand.
According to the U.S. Department of Education’s National Assessment of Adult Literacy (NAAL), more than 1 in 3 Americans, or over 77 million people, are considered to have inadequate health literacy, which means that they have difficulty with common health tasks like reading a prescription drug label or making a wise health care decision.
It is estimated that low health literacy costs the United States $106 billion to $238 billion annually and accounts for 7 to 17 percent of all personal health care expenditures.
New administrations bring new challenges to the professional realm, and the Trump administration is no exception. Many of the former administration’s health care initiatives are being rolled back or halted. This leaves employers in an uncertain place in regard to compliance regulations and reform laws. This uncertainty comes in addition to the already complicated day-to-day tasks of an organization, leaving many feeling vulnerable.
The following are five important issues that should be closely monitored in 2017:
Unraveling of the ACA and Ensuring Employees are Educated Health Care Consumers: A new administration is now in office and President Donald Trump is vowing to repeal the Affordable Care Act (ACA). The first wave of this dismantling came in an executive order that directs federal agencies to waive, delay or grant exemptions from ACA requirements that may impose a financial burden. Other measures are promised to come later in the year, and experts agree that the “wait and see” approach is best for employers until a clear directive is issued. This means employers should focus their energy on increasing employee health care knowledge in order to make employees more educated consumers.
The process of creating and delivering a manageable and effective benefit communication program can be a time-consuming undertaking, but by following some helpful tips and best practices, you can streamline the success of your program.
It’s hard to believe, but 2017 is here. Predictions aren’t exactly reliable, and uncertainty over impending health insurance laws raises a lot of questions, but as we plan for the year ahead, we’ve tracked down some employee benefit trends to look for.
Tailoring benefits packages to attract and retain millennials.
According to Pew Research Center, millennials represent the largest segment of the U.S. labor force. The pinnacle footprint of this generation may be the value they place on improving and expanding their life experiences over gaining more stuff. When it comes to their work, millennials may be keeping their options open and looking for new jobs. The 2016 Aflac WorkForces Report reveals that 66 percent of millennials say they are likely to look for a new job in the next 12 months. Additionally, more than any other age group, 72 percent of millennials are at least somewhat likely to take a job with lower pay but better benefits, making benefits options an important way employers can attract and retain their workforce
Much has been written about generations in the workplace, most of it focused on baby boomers and millennials. Just like a middle child, members of Generation X have been largely overlooked with regard to their long-term financial needs.
The role of HR continues to change – from coach, counselor, employee advocate, and strategist. HR’s effectiveness requires an understanding of the hospital’s strategic direction, as well as the ability to influence key policies and decisions. While HR leaders have many initiatives, fostering a culture that builds leadership skills and engages the entire workforce is key to success.
Staffing issues remain a top challenge. Significant pressure is on hospitals and health care providers to replace aging baby boomer employees. At the same time, the number of people requiring health care services is increasing. This gap between supply and demand is one of human resources greatest challenges.
With thousands of baby boomers retiring every month, an incredible amount of knowledge is being lost. Salaries have done little to help retain these valuable employees; however, keeping boomers from completely exiting the workforce and staying engaged is important area of focus.
As the economy stabilizes, more employees are willing to change jobs, often citing lack of advancement opportunities, workload, and salary. Retaining employees plays a crucial role in patient satisfaction, organizational culture, and quality of care.
HR leaders must tackle both challenges by fostering environments that promote advancement and training opportunities. One way to achieve this is to pair experienced employees who may be nearing retirement with new hires to develop and implement coaching or mentoring programs. These programs will help build needed leadership skills and positively impact strategic planning, staff engagement, and the hospital’s overall performance.
A competitive compensation and benefits strategy helps attract qualified employees needed to provide care to a growing patient population, but what more can HR hospital leadership do to stay ahead of the challenge?
An employer-sponsored retirement savings plan, such as a 401(k) or 403(b), is a valuable employee benefit. However, a plan that offers employees too many choices with which to customize their account may make the outcomes worse instead of better.
It may seem that more options would make an organization’s retirement plan more appealing, but there could be unintended consequences. Recent research in social psychology has argued that too many choices may create confusion, and may even be demotivating and discouraging to employees. Despite plan education efforts, many employees are ill informed about the available options, either making poor choices or not choosing not to participate at all.
It’s also important to note that too many choices can also make it more difficult for the employer to be clear about plan options and plan expenses.
Donald B. Keim and Olivia S. Mitchell, Wharton School professors, studied what happened when employers streamlined their retirement plans by comparing plan participants’ contributions and assets allocations before and after the changes. In a paper titled, “Simplifying Choices in Defined Contribution Retirement Plan Design,” Keim and Mitchell report that limiting the number of investment options available resulted in the following improvements:
In addition to their diversification benefit, models offer features that may help individuals avoid some common investment mistakes, such as being too aggressive or too conservative and ill-advised market timing. These funds are managed with a disciplined, long-term approach, and are automatically rebalanced to keep investors’ allocations intact.
Employer-sponsored retirement plans are now the primary source of retirement income for most employees. This means employees are the architects of their own destiny when it comes to retirement. Employers can, however, lay the groundwork by using simplified plan design and a strategic communication plan to help employees act.
Employee engagement is important to ensuring the success of any retirement program. But how do you encourage employees to plan and save?
To start, it’s important to understand how employees make decisions. Lincoln Financial Group’s, Participant Engagement Study, found four decision-making styles based on 1) the time participants need in order to make a decision in the plan; 2) whether and how participants involve a financial professional; and 3) what participants say influences their decision.
The advice-seeker – a proactive individual who makes use of available resources, works with a financial professional, saves outside of the retirement plan, and is the most optimistic and confident.
The fact-finder – an individual influenced by the facts and numbers, prefers model portfolios, seeks opinions through research rather than personal advice, and feels both optimistic and anxious.
The decision-avoider – despite consulting a wide-variety of sources, this person fears losing money, takes a lot of time making decisions, and is anxious, overwhelmed and scared about the future.
The instinct-follower – an independent individual who doesn’t consult or rely on outside information or opinion, yet feels optimistic and confident about the future.
When you understand how employees make decisions, you can create an engagement strategy that motivates employees to take action.
Create an engagement strategy for all employee segments. Your strategy must appeal to all decision-making styles, it may be a good idea to consider special strategies for disengaged participants, instinct-followers, and decision-avoiders in particular. These groups represent the greatest area of opportunity.
Employees who are disengaged may be more easily motivated by taking one simple step, such as checking their account balances or meeting the employer’s match. For those who have difficulty making decision or those who rely on their own instincts, invite them to speak with a financial professional. And for engaged fact-finders, provide them with the resources to conduct their own research, such as the plan provider’s website and newsletters.
Optimize plan design to accommodate everyone. Enrolling in the plan, deciding how much to save, and selecting investments are difficult decisions and can be real barriers. To overcome these barriers, consider automatic features, such as auto enroll and auto escalate, as well as streamlined investment solutions (e.g., target-date funds, managed accounts, and automatic retirement income options).
Offer in-person guidance and personalization. Some participants want to be able to interact with a person who is qualified and knowledgeable about retirement planning. A personal approach can help participants address the most personal and influential factors of retirement planning.
Deliver outcomes-focused communication to motivate action. Most employees want to know about what simple actions they may want to take today and what outcome might be expected at retirement, as opposed to the mechanics of how investment or asset classes work.
Employees have mixed emotions about retirement, which affects how individuals engage with their retirement plans and how they make retirement-related decisions. Employers, in partnership with their retirement plan service provider, should use what they know about their particular employee population to develop a strategy that reaches out and engages all their employees.
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Talent Attraction and Retention
Developing a strategic benefits package that targets specific types of employees can help attract the right job candidates to keep your organization running at peak efficiency.
Once you have these top-performing employees, a tailored employee benefits package will serve as a barrier to them leaving—a great benefits package can be a huge advantage when looking at retention strategies because it holds more than just monetary value for the employee. A bigger salary at another organization likely won’t be as strong a pull for an employee tempted to leave if the other organization’s benefits package isn’t as attractive as yours.
Healthy, Productive Employees
Healthy employees are more productive than unhealthy employees. When your benefits package includes a combination of health insurance, along with wellness programs and incentives, and dental and vision insurance coverage, your employees are provided the tools that will empower them to take an active role in managing their health. It is proven that having the correct programs and incentives in place, reduces absenteeism in the workforce.
A good benefits package leads to satisfied employees with higher morale. Employees who find value in their benefits are typically more loyal because they feel valued—which leads to increased productivity and contributes to decreased absenteeism.
Efficient Use of Resources
Many employees are willing to accept good benefits in lieu of a slightly higher salary. This strategy may prove positive to your organization’s budget. Through group rates, the value you present to employees with benefits can be more cost effective than paying a higher salary, thus providing savings along with lower payroll taxes.
Align Your Corporate Strategy
When HR professionals look toward the future, they are evaluating strategies to help manage both short and long term costs. Organizations that align their corporate objectives with their benefits strategy will ensure that the philosophy behind offering the right type of benefits programs will attract and retain the top performing employees they are looking for.