Originally featured in BenefitsPro
Unless you’ve been completely absent from the world of employee benefits for the last several months, you’ve probably noticed things have shifted. To put a finer point on it, benefits advisors who want to be trusted partners to their employer clients, retain current clients, and expand their book of business would do well to understand:
- Two parallel trends affecting employee benefits: the cost of health care benefits and employers rolling back workplace and work-life perks
- Why HR and benefits leaders should be refocusing their employee benefits strategies on core benefits in response to these two trends
- How brokers can support companies to refocus employees on the sustaining value of traditional core benefits
Trend 1: Increases in the cost of health care benefits are finally slowing
After years of rising rates that seemed to have no limit, the cost of health care benefits has finally slowed.
The cost of U.S. health care benefits is estimated to increase 6.5% in 2023, compared to the 9.4% hike employers had to suffer this year, according to the 2023 Global Medical Trends Survey from Willis Towers Watson. However, the survey also found that most U.S. employers aren’t budgeting for or planning on slower increases in the cost of health insurance.
Perhaps one reason is that most employers haven’t seen the impact of the projected cooling off of health care benefit costs. Also, as the survey found, employers remain very much concerned about the cost and volatility of health insurance pricing.
Trend 2: So long, bright and shiny perks
In the wake of the triple whammy of COVID-19, ongoing inflation, and continued economic uncertainty, bright and shiny, nice-to-have perks have started to get the ax.
Goldman Sachs cut its free coffee program this past Labor Day, as it implemented a return to the mandatory five-day, in-office workweek.
Goldman Sachs and two rival banks, JPMorgan and Morgan Stanley, have eliminated free tickets to the US Open tennis championship.
In Silicon Valley, Google is cutting back its swag budget and limiting less-than-mission-critical employee travel. The company’s finance head meanwhile told employees to temper their expectations for holiday parties.
Some large marquee-brand companies, especially in finance, banking, and technology, will rely on their allure to retain employees. Think Goldman Sachs and Google, where the “prestige” of long hours and on-the-job contact with key leaders outweigh losing perks like free coffee and tickets to local pro sporting events.
But how many companies can realistically use that same argument? And would you and your leaders want to bet on keeping top talent the same way the leaders on Wall Street and in Silicon Valley are betting?
Why it’s time to refocus on core benefits sales and servicing
On Main Street and elsewhere, employees are likely to react quite negatively to seeing the rollback of “soft” employee perks to which they’ve become accustomed. The results of a move like that are likely to include reduced loyalty, lower productivity, and declines in morale, job satisfaction, and how individuals see their own value or worth.
Benefits brokers can lean into these trends by helping employers renew employee appreciation of the value of essential benefits. Brokers are well-positioned to support companies to make employees and the C-suite more aware of the importance and value of their core benefits — benefits that stand firm against economic pressures, uncertainties, and downturns.
After all, these are the benefits that matter most to employees, are “recession-proof,” and remain relevant year after year. They’re also the benefits that employers and their workforce are ready now to better plan for and be able to afford.
Satisfaction with core benefits is also critical to employee engagement — a point to deliver to employers. Consider these statistics:
- MetLife’s 20th Annual U.S. Employee Benefit Trends Study, released in 2022, found that employees who are satisfied with their wellness and health benefits are 1.6 times more likely to be with the company a year later.
- When asked to select from among 19 core and voluntary benefits, participants in the MetLife survey overwhelmingly cited health insurance as their top must-have offering (86%). Dental and vision ranked third and fifth, respectively.
- The 2022 SHRM Employee Benefits Survey ranked health care as the most important benefit category.
Help employers refocus on the value of core benefits
Brokers can be a trusted advisor to employers by offering benefits administration technology and services from a vendor whose solutions include the ability to deliver effective and clear communication that’s supported with the right data. This can help employees understand that, while ancillary perks are nice to have, the time-tested, must-have core benefits of medical, dental, and vision insurance are what truly matter.
Brokers can be a source of helpful information to employees and HR leaders. Only about half of U.S. employees understand their current health plan. Brokers can offer a benefits administration technology partner that can help employers regularly convey program details year-round and not only during open enrollment season. This can also build stronger relationships with employers by offering a benefits administration solution whose communication functionality allows employers to use a variety of channels. This is critical to ensuring employers reach employees through their preferred method — email, the company intranet, or some other way.
Also helpful is a benefits administration platform that offers decision support tools such as benefits cost calculators, and that provides ways for employees to talk through their benefit choices and coverage options with a customer service rep.
Show them the data
With the right benefits administration solution, employers will have access to hundreds of data points that can help them deliver targeted messaging about the value of core benefits. When a broker offers a solution with that functionality and the ability to effectively tailor communication to separate employee audiences, their clients are much more likely to drive home the value of core benefits to employees.
Of course, employee age, location, job type, and current benefit elections are examples of the most common data points in the HR system. But with the right partner, a broker can also help employers leverage more benefits-related data and create surveys to determine employee expectations, needs, and benefits usage.
The bottom line is that, amid the trends of discontinued perks and a slowing increase in the cost of healthcare benefits, brokers can step up to help employers create defining moments in the employee experience that can help organizations focus more keenly on the sustainable and consistent value of core employee benefits.
Jasper Purvis is VP of Business Development for Selerix, a provider of benefits administration solutions for employers and carriers.