By Elizabeth Halkos
Do you have to be a psychic to predict industry trends? I think not. Predicting or forecasting about uncertain events isn’t based on extrasensory perception, intuition or even black magic – such as if a psychic is predicting when someone might get married. Nor is predicting industry trends about making an informed guess or having a scientific explanation.
Most of the time, predicting industry trends is based on experience or knowledge.
Certainly, with benefits, it’s more about understanding the industry and what its players — the workforce, employers, brokers, providers and others – are saying and doing.
No longer a “Nice-Extra” but a “Must-Have”
Gone are the days where voluntary benefits are simply a “nice-extra” for employee benefits. Today’s diverse, multigenerational workforce has such varying characteristics, lifestyles and preferences, that employers no longer can provide one-size-fits-all benefits even in the voluntary arena.
The current tight job market has employers vying to recruit and retain top talent. So it’s no surprise that voluntary benefits are now a critical “must-have” in the employee benefits package. In addition to explosive growth in the range of available voluntary benefits in recent years, their popularity among employees is reaching new heights as well. A broad benefits package sends a good message to employees and potential recruits. It positions a business as a company that listens, cares and is worth working for.
Voluntary benefits offer employees a variety of specialized benefits so they can choose the ones they want. And the range of options is impressive—from voluntary benefits that supplement “core” benefits including health, life and disability insurance, to the plethora of others that span identity theft protection to pet insurance to employee purchase programs and even student loan refinancing arrangements and egg harvesting.
In addition, voluntary benefits are a cost-effective method for employers to provide a broad benefits package that give employees options. That’s important because only 60 percent of employees believe their employer’s benefit plans are competitive with those offered by other organizations, according to the PwC 2018 Employee Financial Wellness Survey.
So what can we expect in 2019 in the voluntary benefits arena? Here are my predictions on what we’ll see the voluntary benefits industry focusing on next year.
- Addressing Student Loans.
Student loan debt continues to reach record highs and it even exceeds credit card debt and auto loan debt. More than one-third of employees overall (and 55 percent of millennials) said student loan repayment is a must-have benefit, according to a Unum study.
A few employers – Sotheby’s, Estee Lauder, and others – have started offering a monthly contribution toward employees’ repayment of the principal amount of the student loan debt, up to a maximum dollar amount per year. That’s one way to address the issue. And it resonates with employees who are burdened with student loan debt. According to the American Student Assistance, 86 percent of employees would commit to a company for five years if the employer helped pay back their student loans.
With only 4 percent of employers currently offering employees some form of assistance to repay student loans, 2019 is going to see more employers and the industry itself finding ways to offer student loan refinancing and repayment benefits.
- Taking Care of the Caregivers.
Caregivers make up a significant portion of today’s workforce. Today’s multigenerational workforce includes employees who care for parents, adult children and even grandchildren. Then there’s the “sandwich generation” that has aging parents as well as dependent children that need their help. These caregivers provide support on a variety of levels — emotionally, financially and with general caregiving assistance.
Nearly one in four employees is providing financial support for parents or in-laws; and among employees with adult children, 42 percent are providing financial support to them, according to the PwC study. The National Business Group on Health says that 75 percent of caregivers report having trouble meeting their financial needs.
Elder care support, childcare, adoption assistance, financial wellness benefits — all are increasingly important to the caregivers. Next year will see employers being more comprehensive with benefits that address the comprehensive needs of employees who serve as caregivers.
- Facilitating Savings.
The statistics are staggering — employees are still struggling to meet their financial obligations paycheck-to-paycheck. GoBankingRates.com reports that 69 percent of Americans don’t have $1,000 or more in savings to use for emergencies; MarketWatch.com (gobankingrates.com); nearly 50 percent of Americans owe $25,000 or more in non-mortgage debt (marketwatch.com); and the typical worker has saved $0 for retirement.
It’s time for the industry to help employees start to take control of their financial future by encouraging savings. Look for more financial services benefits in 2019 that offer automated savings plans as a voluntary benefit.
- Encouraging Utilization of Financial Wellness Benefits.
Financial wellness has been an industry buzzword for a couple of years now and many employers have added a variety of financial wellness and education voluntary benefits to their employee packages. But only one-third of employees utilize the financial wellness benefits their employer offers, according to the 2018 Workplace Benefits Report from Bank of America Merrill Lynch. The report also showed that employees want more personalized and direct guidance than macro-level programs.
It’s a simple fact that when financial wellness benefits aren’t used, they don’t work. Adoption and engagement should be our focus now. In 2019, employers and the industry alike will be searching for ways to make these benefits more engaging, personalized and effective in order to help their employees improve their financial flexibility and well-being.
- Communicating Year-Round.
With so many benefit offerings available today, it can be mind-boggling to employees to be aware of them all and to understand them. In addition, a recent Unum study showed that 49 percent of workers say they spend 30 minutes or less reviewing their benefits prior to enrollment.
Year-round benefits communications in a multitude of communication methods targeted to each generation and on platforms and devices they pay attention to should be mandatory. Even gamification has become a popular, creative method of communicating. 2019 will see employers and the industry re-dedicate itself to benefits communications, understanding and engagement.
Five years ago, our voluntary benefits trends included proclaiming that voluntary benefits “had arrived;” that “non-traditional” benefits were coming on the scene; and that employees’ financial stress would lead to more attention to financial wellness benefits. Much has happened in the voluntary benefits arena since then. 2019 is going to see even more growth and refinement of these benefits that provide so many options that resonate with employees.
Elizabeth Halkos is chief operating officer at Purchasing Power.