Benefit trends to watch for in 2011
Colorado’s workforce is considered one of the top in the nation, including a designation by Forbes magazine as one of the two best labor pools in the country. The positive impact of a skilled, educated and engaged workforce on a company’s success is not lost on Colorado employers.
However, as the economy begins to shift back to an employee-driven environment, and it likely will, companies will need to boost retention of top talent. Business leaders and their HR staff should consider the following benefit trends that can influence future retention success.
Trend One: Benefits Will Become an Even Greater Differentiator
One vital differentiator in an employer’s ability to compete for talent will be its ability to demonstrate value and goodwill to its workers by offering a benefits package unmatched by competitors. With health reform and the establishment of minimum benefits standards and the option to move from employer plans to exchange plans, major medical coverage will likely become more homogenous than it is today. In addition, 42 percent of employers believe significantly diminished benefits packages for employees are a likely outcome of health care legislation,1 according to a recent Aflac study.
All of these factors will create an opportunity for companies to distinguish themselves as an employer of choice by offering a more comprehensive benefits program than most. At the same time, HR professionals will be pressed to offer health care benefits options that will soften the impact of the inevitable cost-shifting and rising out-of-pocket costs on their valuable workforce.
Trend Two: Wellness Initiatives Are Crucial, If Employees Use Them
Wellness will be a hot topic for years to come, particularly given the focus it is receiving within health reform. While the new legislation affords many provisions to entice companies to build or enhance their wellness programs, the old challenge of giving workers incentives to take advantage of preventive measures still exists.
For many HR executives, the success or failure of wellness plans will likely depend on the amount of participation, or nonparticipation, on the part of employees. Businesses will need to seek out creative, innovative approaches to boost worker participation.
For example, some companies have leaned on a universal motivator – money. Imagine if employees were paid to go to the doctor for preventive procedures, checkups or vaccines. An increasing number of HR executives and workers are discovering that some voluntary insurance plans include a Wellness Benefit that will not only cover the expense of the preventive procedure (i.e., mammograms, vaccines, etc.) but even pay policyholders cash benefits to use it. Other incentive programs may include an awards program based on points earned when achieving a wellness goal.
Trend Three: Employers Will Need to Improve Employee Engagement and Education of Benefits Options.
There is often a large disparity between HR executives and their employees when it comes to the effectiveness of benefits communications. According to the 2010 Aflac study1 of employers and employees, 40 percent of HR executives said they believed they were “extremely/very” effective in communicating about benefits, whereas 40 percent of employees rated their HR departments “somewhat” effective in communicating about benefits, and another 27 percent said “not very/not at all effective.”
Given the growing complexities brought on by health reform, 2011 is an ideal time to begin closing that communications gap. More than half (55 percent) of employees rely on their HR departments to inform them about benefits and that reliance will only grow in the next year.1 For example, workers will need to be educated and advised about the potential impact the flexible spending account limitations and caps will have on their budgets. Or, large departures from traditional health care plans in favor of health savings plans alongside high deductible health plans, as an example, will require a major education effort.