Now more than ever, your workers are interested in non-medical benefits.
Why, you ask?
Because thanks to the pandemic, workers have suffered through financial hardships, as well as diminished mental well-being. So, their focus has expanded to include financial, emotional and physical well-being.
Some of the non-medical benefits workers have a growing appreciation and need for are:
- paid family medical leave
- life insurance
- disability insurance, and
- wellness programs.
That’s according to a new study by LIMRA and EY.
Due to this, the researchers predict the demand, along with the fierce competition for employees, “will drive non-medical workplace benefits to grow 20% by 2026.”
Harnessing Growth and Seizing Opportunity: The Future of Workforce Benefits, which was conducted in the middle of 2021, was unique. It not only surveyed employers and workers, but it interviewed:
- workplace brokers
- benefits administration, and
- technology providers.
This gave the study “different perspectives on the current and future state of the U.S. workforce benefits market.”
Here are some trends the study pinpointed that will shape the benefits market over the next five years.
Diversity, expanding benefits
Diversity seems to be the name of the game for the next half a decade. You currently can have up to five generations working for you. And they’re of all different ethnicities and races. And that means they have equally diverse needs and expectations you need to meet. That’s a tough job for any Benefits pro, experienced or not.
Your melting pot of a workforce requires a diverse group of benefits, especially non-medical benefits. That probably means that over the next five years you’re going to have to expand your benefits offerings. While you’ve probably already started doing this during the pandemic, don’t stop. You need to keep expanding to meet your workforce’s ever growing and aging wants and needs.
In fact, two-thirds of midsized and large employers expect their benefits offerings to expand to address the needs of multi-generational workers.
“Our study finds three quarters of employers (76%) believe their employees will expect a wider variety of benefits options in the future,” said Patrick Leary, corporate vice president and head of LIMRA Workplace Benefits Research in a news release. “Employers see benefits as a necessary tool to be able to compete in the war for talent. Despite 54% of employers reporting a decrease in revenue in the last year, the vast majority are not planning to cut back on benefits and almost half are considering offering a customized menu of benefits to help attract and retain talent.”
Employees more appreciative
The study also found that your employees are more appreciative than ever for their insurance benefits. It would seem hardly anything about the pandemic is good. But it has opened employers’ eyes to the diverse needs of employees – not just medical. And it opened employees’ eyes, too. They now see what their company does or doesn’t do for them, as far as benefits go!
Evidence, one-third of all employees — and nearly half of Millennials — say their insurance benefits are more valuable to them since COVID-19. The benefits employees were “extremely” or “very interested” in their employers providing are:
- paid medical leave (48%)
- life insurance (44%), and
- long-term disability insurance (36%).
“Providing a holistic compensation package which offers meaningful benefits is especially important to Millennials, who have always sought to work for employers that genuinely care about their well-being,” noted Leary. “Customized benefits are one of the best ways employers can demonstrate that.”
Digital evolution is a must
If you want to attract and retain top talent, you’re going to have to offer hybrid work models.
The pandemic has opened many people’s eyes to the benefits of working remotely. They now love a better work/life balance. The Great Resignation is proof of this.
And many employers have realized this already. One-third predict the number of contract and freelance workers will increase over the next five years. That means technology is going to be employers’ new best friend. They’re going to need to embrace it to deliver and service their benefits offerings.
“Currently, the vast majority of employers are using digital solutions for a range of services across the end-to-end value chain. There are also a significant number of digital solutions that employers do not have but want, which signals unmet needs,” said EY Americas Life & Group Insurance Transformation Leader Chris Morbelli. “Nearly six in 10 employers that use carrier-provided benefits technology expect to rely on this technology more over the next five years, but a significant portion (44%) of employers are not fully satisfied with the technology provided by their insurance carrier today. This suggests carriers need to hasten their digital transformation to meet their clients’ expectations.”
But it’s not all on employers and Benefit pros that need to embrace technology even more. Your vendors and benefit providers are going to have to step up their game too or lose your business.
Because two-thirds of employers said they’re going to base the selection of their benefits providers on seamless systems. In other words, they want providers whose systems will meld with their benefit technology platform.
And that’s even if it’s more expensive. More than eight in 10 midsized and large companies said carriers’ digital capabilities will play a larger role in the selection of insurance benefits providers.
Just goes to show you the importance employers are putting on benefits. They realize that their benefits are going to be a main draw for attracting and retaining top talent. So, they want system that work flawlessly, even if it has a higher price tag. And they also realize that the system will pay for itself in the end.
“Not surprisingly, COVID-19 has accelerated the transformation in workplace benefits. Not only did it heighten workers’ awareness of the value of life insurance, disability, leave, and income protection products, it also revealed a significant need for streamlined digital access to information and services that employees can access from wherever they work,” Morbelli commented. “Ultimately, rich, personalized benefits that support increased work-life balance and meet the needs of a diverse, multigenerational workforce will be critical to attracting and retaining top talent in the future.”