This is the third article in a series of articles on meeting fall 2018 open-enrollment challenges for 2019 benefits. The first article in this series was Online Platforms Transform Open Enrollment. The second was For Open Enrollment, Communications Get Social.
Employees' desire for benefits tailored to their own needs is changing the mix of offerings this open-enrollment season.
"There is clear incentive for employers to get their benefits right and focus on the individual," said Chris Bruce, managing director at Thomsons Online Benefits, a benefits management software firm. "Employees today don't want to be just another number; they want to feel listened to, understood and cared for by their employer," he added. "Delivering a personalized benefits scheme, which is able to accommodate an individual's interests and life goals, is instrumental in achieving this, helping to ensure [employees] remain at the organization and have the support they need to work at their best."
For example, next January General Mills is increasing fully paid time off for new birth mothers to 18 to 20 weeks, up from six weeks, and parental leave (for fathers, partners and adoptive parents) to 12 weeks, up from two weeks. To help employees at all life stages, the company is also introducing or improving other benefits, such as:
- Caregiver leave. General Mills will offer caregivers two weeks of paid leave to care for an immediate family member with a serious health condition.
- Bereavement. The company will provide up to four weeks' paid time off for employees following the death of an immediate relative.
- Short-term disability. Employees will receive 100 percent paid time off for up to eight weeks and 65 percent of pay for up to 26 weeks.
These new benefits apply to both salaried and nonunion production workers in the U.S.
"We spent a lot of time talking with employees at different life stages and asking questions about their pain points and what contributes to feeling torn between work and home," stated Jacqueline Williams-Roll, chief HR officer at General Mills. "Out of those discussions, we developed a strategy to focus on those moments when employees really need support the most."
A 2018 survey by TriNet, an HR services provider, found that 91 percent of employees at small and medium-size businesses view nontraditional benefits as important to their job satisfaction. Nontraditional benefits include perks such as flexible work schedules, expanded paid time off, commuter benefits and remote-work options.
Overwhelmingly, most of the approximately 3,000 employees of TriNet's U.S. clients who were surveyed said that providing nontraditional benefits improves morale (85 percent of respondents), retention (82 percent) and company culture (73 percent). Among other findings:
- Employees overall ranked flexible work hours as the most important nontraditional benefit.
- Respondents ages 25 to 34 ranked extended paid leave, such as paid parental time off, as most important.
"With low unemployment and more jobs available than job seekers, it is an important time for companies to re-evaluate their incentive and benefit offerings to recruit and retain employees," said Catherine Wragg, senior vice president of HR at TriNet. "Nontraditional benefits can help employers stand out by offering uncommon perks that can be meaningful to employees."
In Thomsons' Global Employee Benefits Watch 2018/19 survey of 2,200 employees, almost 30 percent of prospective employees would ask about benefits in a first-round interview, showing "a direct relationship between an employer's ability to attract talent and the benefits they provide," Bruce said.
"It is time for employers to move beyond a one-size-fits-most approach to benefits, as employees across generations are seeking a wide range of flexibility, choice and decision support," said Julie Stone, a managing director of health and benefits, North America, at consultancy Willis Towers Watson.
While 91 percent of employees feel companies should offer customized benefits packages, only 72 percent of HR professionals do, according to HR Blindspot Report 2018 by benefits-software firm League. The report comprises responses from 538 HR professionals and 289 employees at large U.S. companies.
The disparity "is likely due to the larger personalization trend in society," said Michael Serbinis, League’s founder and CEO. "Millennial employees, for example, have grown up in a world where they can personalize everything from coffee to computers, so it's not surprising that they want to personalize their benefits as well."
Mix and Match
Core benefits such as health care and retirement savings plans address challenges faced by nearly all employees. In contrast, voluntary benefits that employees select and pay for, in whole or in part, might address the needs of 5 percent to 25 percent of workers. These are the employees "for whom pet insurance, legal or ID theft-prevention services, or critical-illness coverage may be important," said Peter Marcia, CEO of YouDecide, a voluntary-benefits outsourcing firm.
According to a recent MetLife survey:
- 73 percent of employees said that having benefits customized to meet their needs would increase their loyalty to their employer.
- 60 percent were interested in having their employer provide a wider array of nonmedical benefits that they could choose to purchase and pay for on their own.
- Most employees would be willing to take a small pay cut (on average, 3.6 percent) in order to have a better choice of benefits from their employer.
MetLife's 16th Annual U.S. Employee Benefit Trends Study was conducted from December 2017 through January 2018, and interviewed 2,653 full-time employees throughout the U.S.
When employers acknowledge employees' personal needs, "it can do wonders for their brand," said Catie Grigsby senior manager for content marketing at Benefitfocus, a benefits-administration technology and services firm. "Imagine one of your top performers sharing that your company's new pet insurance offering saved them from huge vet bills. Or that they have peace of mind for their family knowing they're covered by your identity theft protection or legal insurance benefits. That employee has become an advocate for working at your company, helping you not only retain but attract top talent."
Rather than "just throwing a ton of new options out there for your employees to pick and choose from," Grigsby said, employers should "first understand who [their] employees are to deliver a benefits package that they'll truly find valuable." Employers can achieve this through employee surveys, focus groups and intranet discussion forums, for instance.
In open-enrollment materials, employers can emphasize that voluntary insurance benefits are less expensive than similar coverage purchased outside of work "because employers usually are able to get a group rate," said Jessica Webb-Ayer, legal editor at services provider XpertHR.
[SHRM members-only toolkit: Designing and Managing Flexible Benefits (Cafeteria) Plans]
Communicate Around Life Events
Another way employers can personalize benefits is by tailoring communications to employees by age and stage of life, said Gene Raymondi, founder and CEO of ENI, an employee benefits consultancy.
Often, employees "become lost in a maze of benefits, resulting in disengagement and a lack of knowledge about how their benefits can meet their everyday needs," Raymondi said at the 2018 EBN Benefits Forum and Expo in New Orleans in September. Addressing how benefits can address employees' life events "brings the focus back to the individual."
When crafting benefit communications, consider life events that employees experience at different points along their career—getting married and perhaps starting a family, dealing with personal and family medical needs and caregiving responsibilities, funding their children's education or other financial challenges, and retirement. "Traditionally, even if benefits are consolidated and communicated as one complete package, they still are not cross-referenced and matched to employees' life events," Raymondi said.
"Employers need to use communications strategically to let their people know that they are supported at the moments that matter to them—whether that is reactive (birth of a child) or proactive (anticipating retirement)," according to Thomsons' survey report, which shows that 58 percent of employers are already communicating around important life events or are planning to do so.
Filling Health Care Gaps
In the U.S., nearly half of all employees say they have difficulty affording their health plan deductible, the Kaiser Family Foundation reported last year. As a result, "we've seen employer and employee contributions to consumer-directed health care accounts grow significantly over the past few years," especially around health savings accounts (HSAs), said Catie Grigsby. "Telemedicine, wellness programs and prescription drug discounts are just a few other ways companies can supplement core medical plans and show their commitment to keeping employees healthy."
Peter Marcia advised employers to offer an array of benefits designed to complement core health coverage, such as supplemental hospitalization or critical-illness coverage that can help to offset high deductibles, which may appeal to employees with limited savings or health plans that are not HSA-eligible.
Related SHRM Articles:
Bringing Personal Services to Work, SHRM Online, July 2018
Voluntary Benefits Now Essential, Not Fringe, SHRM Online, April 2018
Benefit Leaders Foresee Greater Employee Choices, SHRM Online, December 2017
Open Enrollment: Voluntary Benefits Emphasize Choice, SHRM Online, September 2017
Open Enrollment: Targeted Communications Address Differing Needs, SHRM Online, September 2017
HR Gets Strategic About Voluntary Benefits, HR Magazine, May 2014
Related SHRM Resources:
Open Enrollment Guide & Resources