Great article from our partner, United Benefit Advisors (UBA) by Bill Olson
With apologies to the band R.E.M., this article is not about their music, nor their album, but about how automatic enrollment has significantly helped people. Think of all the payments you currently have automated. You probably have automatic deposit of your paycheck, automatic bill pay for your utilities and other monthly bills, and maybe even a recurring automatic payment and delivery of pet food from Amazon. Now, think of something that’s important that you wish you could automate. This is not the time to mention your daily fix of Starbucks, but about saving enough money for retirement.
There are families that have a similar system where they placed a large jar in the kitchen. Everyone, kids included, would put their spare change in the jar every day. At the end of the month, the family would use that accumulated money in a fun way. An article titled, “Automation Making Huge Retirement Plan Impact,” in Employee Benefit News references how a defined contribution plan provides an excellent way for employees to seamlessly save money for retirement. As employees started joining the plan, with a typical contribution of 10 percent or higher, including employer matching, participation increased nearly 20 percent in the company’s retirement benefit according to the article. This was up more than seven percent from just five years ago. Looking at this by generation, millennials are used to automation and, consequently, are reaping huge rewards from this type of plan.
However, all age groups benefit and a company can modify the plan to increase participation. For example, if a company has a matching rate of 50 cents on the first three percent to 25 cents on the first six percent, it automatically gets employees saving an additional three percent they wouldn’t normally save. Another way is to have annual automatic increases in contributions. A bump of a percentage point every year up to a maximum rate will help employees the earlier they start.
Of course, there should always be an opt-out option for people who don’t want to have the contribution rate increased, have a separate retirement plan, or simply don’t want to save using the company plan.
See the original article Here.
Olson B. (2017 March 28). Automatic for the people [Web blog post]. Retrieved from address http://blog.ubabenefits.com/automatic-for-the-people
Do you know everything you need to know about your 401(k)? Check out this great article from Employee Benefit News about the top 10 misconceptions people have about their 401(k)s by Robert C. Lawton.
Unfortunately for plan sponsors, 401(k) plan participants have some big misconceptions about their retirement plan.
Having worked as a 401(k) plan consultant for more than 30 years with some of the most prestigious companies in the world — including Apple, AT&T, IBM, John Deere, Northern Trust, Northwestern Mutual — I’m always surprised by the simple but significant 401(k) plan misconceptions many plan participants have. Following are the most common and noteworthy —all of which employers need to help employees address.
1. I only need to contribute up to the maximum company match
Many participants believe that their company is sending them a message on how much they should contribute. As a result, they only contribute up to the maximum matched contribution percentage. In most plans, that works out to be only 6% in employee contributions. Many studies have indicated that participants need to average at least 15% in contributions each year. To dispel this misperception, and motivate participants to contribute something closer to what they should, plan sponsors should consider stretching their matching contribution.
2. It’s OK to take a participant loan
I have had many participants tell me, “If this were a bad thing why would the company let me do it?” Account leakage via defaulted loans is one of the reasons why some participants never save enough for retirement. In addition, taking a participant loan is a horribleinvestment strategy. Plan participants should first explore taking a home equity loan, where the interest is tax deductible. Plan sponsors should consider curtailing or eliminating their loan provisions.
3. Rolling a 401(k) account into an IRA is a good idea
There are many investment advisers working hard to convince participants this is a good thing to do. However, higher fees, lack of free investment advice, use of higher-cost investment options, lack of availability of stable value and guaranteed fund investment options and many other factors make this a bad idea for most participants.
4. My 401(k) account is a good way to save for college, a first home, etc.
When 401(k) plans were first rolled out to employees decades ago, human resources staff helped persuade skeptical employees to contribute by saying the plans could be used for saving for many different things. They shouldn’t be. It is a bad idea to use a 401(k) plan to save for an initial down payment on a home or to finance a home. Similarly, a 401(k) plan is not the best place to save for a child’s education — 529 plans work much better. Try to eliminate the language in your communication materials that promotes your 401(k) plan as a place to do anything other than save for retirement.
5. I should stop making 401(k) contributions when the stock market crashes
This is a more prevalent feeling among plan participants than you might think. I have had many participants say to me, “Bob, why should I invest my money in the stock market when it is going down. I’m just going to lose money!” These are the same individuals who will be rushing into the stock market at market tops. This logic is important to unravel with participants and something plan sponsors should emphasize in their employee education sessions.
6. Actively trading my 401(k) account will help me maximize my account balance
Trying to time the market, or following newsletters or a trader’s advice, is rarely a winning strategy. Consistently adhering to an asset allocation strategy that is appropriate to a participant’s age and ability to bear risk is the best approach for most plan participants.
7. Indexing is always superior to active management
Although index investing ensures a low-cost portfolio, it doesn’t guarantee superior performance or proper diversification. Access to commodity, real estate and international funds is often sacrificed by many pure indexing strategies. A blend of active and passive investments often proves to be the best investment strategy for plan participants.
8. Target date funds are not good investments
Most experts who say that target date funds are not good investments are not comparing them to a participant’s allocations prior to investing in target date funds. Target date funds offer proper age-based diversification. Many participants, before investing in target date funds, may have invested in only one fund or a few funds that were inappropriate risk-wise for their age.
9. Money market funds are good investments
These funds have been guaranteed money losers for a number of years because they have not kept pace with inflation. Unless a participant is five years or less away from retirement or has difficulty taking on even a small amount of risk, these funds are below-average investments. As a result of the new money market fund rules, plan sponsors should offer guaranteed or stable value investment options instead.
10. I can contribute less because I will make my investments will work harder
Many participants have said to me, “Bob, I don’t have to contribute as much as others because I am going to make my investments do more of the work.” Most participants feel that the majority of their final account balance will come from earnings in their 401(k) account. However, studies have shown that the major determinant of how much participants end up with at retirement is the amount of contributions they make, not the amount of earnings. This is another misconception that plan sponsors should work hard to unwind in their employee education sessions.
Make sure you address all of these misconceptions in your next employee education sessions.
Lawton R. (2017 April 4). The 10 biggest 401(k) plan misconceptions[Web blog post]. Retrieved from address https://www.benefitnews.com/opinion/the-10-biggest-401-k-plan-misperceptions?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001
Did you know that now more than ever Americans are giving up on their dreams of retirement? Find out about the somber facts facing the older generation of workers in the great article from Benefits Pro by Marlene Y. Satter.
It’s a grim picture for older workers: half either plan to postpone retirement till at least age 70, or else to forego retirement altogether.
That’s the depressing conclusion of a recent CareerBuilder survey, which finds that 30 percent of U.S. workers aged 60 or older don’t plan to retire until at least age 70—and possibly not then, either.
Another 20 percent don’t believe they will ever be able to retire.
Why? Well, money—or, rather, the lack of it—is the main reason for all these delays and postponements.
But that doesn’t mean that workers actually have a set financial goal in mind; they just have this sinking feeling that there’s not enough set aside to support them.
Thirty-four percent of survey respondents aged 60 and older say they aren’t sure how much they’ll need to save in order to retire.
And a stunning 24 percent think they’ll be able to get through retirement (and the potential for high medical expenses) on less than $500,000.
Others are estimating higher—some a lot higher—but that probably makes the goal of retirement seem even farther out of reach, with 25 percent believing that the magic number lies somewhere between $500,000–$1,000,000, 13 percent shooting for a figure between $1–2 million, 3 percent looking at $2 million to less than $3 million and (the) 1 percent aiming at $3 million or more.
And if that’s not bad enough, 26 percent of workers 55 and older say they don’t even participate in a 401(k), IRA or other retirement plan.
With 74 percent of respondents 55 and older saying they aren’t making their desired salary, that could play a pretty big part in lack of participation—but that doesn’t mean they’re standing still. Eight percent took on a second job in 2016, and 12 percent plan to change jobs this year.
Predictably, the situation is worse for women. While 54.8 percent of male respondents aged 60+ say they’re postponing retirement, 58.7 percent of women say so.
Asked at which age they think they can retire, the largest groups of both men and women say 65–69, but while 44.9 percent of men say so, just 39.6 percent of women say so.
In addition, 24.4 percent of women peg the 70–74 age range, compared with 21.1 percent of men, and 23.2 percent of women agree with the gloomy statement, “I don’t think I’ll be able to retire”—compared with 18 percent of men.
And no wonder, since while 21.7 percent of men say they’re “not sure” how much they’ll need to retire, 49.3 percent of women are in that category.
Women also don’t participate in retirement plans at the rate that men do, either; 28.3 percent of male respondents say they don’t participate in a 401(k), IRA or other retirement plan, but 35.4 percent of female respondents say they aren’t participating.
For workers in the Midwest, a shocking percentage say they’re delaying retirement: 61.6 percent overall, both men and women, of 60+ workers saying they’re doing so.
Those in the fields of transportation, retail, sales, leisure and hospitality make up the largest percentages of those putting off retirement, at 70.4 percent, 62.5 percent, 62.8 percent and 61.3 percent, respectively. And 46.7 percent overall agree with the statement, “I don’t think I’ll be able to retire.”
Incidentally, 53.2 percent of those in financial services—the largest professional industry group to say so—are not postponing retirement.
They’re followed closely by those in health care, at 50.9 percent—the only other field in which more than half of its workers are planning on retiring on schedule.
And when it comes to participating in retirement plans, some industries see some really outsized participation rates that other industries could only dream of. Among those who work in financial services, for instance, 96.5 percent of respondents say they participate in a 401(k), IRA or comparable retirement plan.
That’s followed by information technology (88.2 percent), energy (87.5 percent), large health care institutions (85.8 percent—smaller health care institutions participate at a rate of 51 percent, while overall in the industry the rate comes to 75.5 percent), government employees (83.6 percent) and manufacturing (80.2 percent).
After that it drops off pretty sharply, and the industry with the lowest participation rate is the leisure and hospitality industry, at just 43.4 percent.
Satter M. (2017 March 31). Half of mature workers delaying or giving up on retirement [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/03/31/half-of-mature-workers-delaying-or-giving-up-on-re?ref=mostpopular&page_all=1
Are you trying to help your employees increase their financial well-being? Check out these 5 great tips from Employee Benefits Adviser on how to help increase your employees’ investment into their financial wellness by Joe Desilva.
Now more than ever, employers offer a wide array of benefits to build engagement and culture within their walls. Healthy snack options adorning the kitchen? Check. Fitness stipends? Check. Competitive work-from-home policies? Check. These are all nice-to-have extras, but employees are increasingly concerned about a more fundamental concern: retirement planning. And it’s here where employers are not providing enough enticing options as they are with the other, flashier perks.
One of the biggest issues employees face as they plan for retirement is economic uncertainty. Only 21% of workers are very confident that they will have enough money for a comfortable retirement, according to the 2016 Employee Benefit Research Institute Retirement Confidence Survey. This should matter to employers because financial uncertainty can have a negative effect on work performance, according to a study by Lockton Retirement Services. The study found that one in five workers reported feeling extremely stressed, mostly because of their job or finances, and those reporting high stress were twice as likely to report poor health overall, leading to more sick days and decreased productivity.
Boosting financial wellness programs not only can help employees’ finances in the long term, it can possibly help employees manage stress and increase productivity in the short term. Employers seem to understand this. In fact, 92% of employer-respondents in a study commissioned by ADP titled Winning with Wellness confirmed interest in providing their workforce with information about retirement planning basics, and 84% said the same of retirement income planning.
Yet, even though many employers appreciate the value of these programs, 32% are not considering implementation. The appetite exists for retirement planning, but the prospects of starting a program appear to be daunting. The truth is, it can be easier than you think.
Here are five simple steps an employer can take to start helping employees find tools and information to help them better manage their finances and grow more confident in their financial futures.
At a time when employee retention is crucial, it’s important to create a support system for employees as they plan their financial futures. With so many workers concerned about retirement security, employers have a clear opportunity to step in and help. Whether it’s enabling employees to save more for retirement or learn about budgeting, financial planning can potentially serve as another popular perk among that list of nice-to-haves.
Desilva J. (2017 March 16). 5 simple steps clients can take to boost workers’ financial wellness[Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/5-simple-steps-clients-can-take-to-boost-workers-financial-wellness
Are you using HSAs to help save money on your healthcare cost? Find out from this article by Employee Benefit News on how the market for HSAs is set to grow exponentially over the next few years by Kathryn Mayer.
It’s about time for health savings accounts to take the spotlight. And that’s going to be a good thing for employees, industry experts say: Not only will HSAs help workers with their healthcare expenses, but the savings vehicles also will put them on a better track for retirement planning.
“The market is going to blow up,” American Retirement Association CEO Brian Graff said this week during the NAPA 401k Summit in Las Vegas, citing new healthcare reform proposals — including the GOP’s American Health Care Act — as well as a better understand of HSAs as reasons for the predicted growth.
The ACHA, which doubles HSA contributions, “dramatically increases the incentive for employers to offer high-deductible health plans,” he said. The GOP plan expands the allowable size of healthcare savings accounts that can be coupled with high-deductible insurance plans, up to $6,550 for an individual or $13,100 for a family. It also expands qualifying expenses to include health insurance premiums, over-the-counter medications and preventive health costs.
By 2018, there will be 27 million HSA accounts and more than $50 billion in HSA assets, according to estimates from the Kaiser Family Foundation cited by Graff. Currently, there are 18 million accounts and $34.7 billion in assets.
Those statistics — and proposed healthcare reforms — are catching the eye of the retirement industry: The accounts have the potential to become “more compelling than a 401(k),” due to tax-deductible and tax-deferred incentives, Graff said.
“We have to think about what this means for our industry,” he said.
In a live poll during a conference keynote, three-quarters of retirement advisers noted they do not offer HSA advisory services. That number, Graff predicts, will change radically over the next two years.
Current proposals are positioning HSAs a hybrid of medical and retirement savings, Graff said. “It’s not just a health account, it’s a savings account.” Healthcare expenses are a major concern for retirees and often cause employees to push back plans for retirement. If HSA funds are not needed for medical expenses, the money can be withdrawn after age 65 and taxed as ordinary income.
Graff says plan sponsors and retirement advisers should encourage employees to first max out their HSAs and then match their 401(k)s.
The HSA is “the nexus between healthcare and retirement,” Daniel Bryant, an advisor with Sheridan Road, said during a standing-room only panel on HSAs Monday.
Meanwhile, added panelist Ryan Tiernan, a national accounts manager with American Funds, “it’s the biggest jump ball no one has cared to jump to. HSAs are probably the most efficient way to save and invest for your biggest expense in retirement.”
Mayer K. (2017 March 22). HSAs to see explosive growth [Web blog post]. Retrieved from address https://www.benefitnews.com/news/hsa-market-going-to-blow-up?tag=00000151-16d0-def7-a1db-97f024b50000
Have your millennial workers started saving for retirement? If not take a look at this great article from HR Morning about the amount of money millennials need to save for retirement by Christian Schappel.
Want to jolt your younger workers into contributing more to your company-sponsored retirement plans? Just show them this figure.
After looking at several studies, estimates and financial experts’ opinions, Robert Powell, USA Today’s retirement planning expert and editor of Retirement Weekly, is predicting that millennials will need upwards of $2.5 million saved to comfortably retire.
That estimate is for the youngest millennials — those born in the late 1990s.
The news isn’t quite as bleak for those born in the 1980s. Their retirement savings goal, according to Powell: $1.8M.
Here are the numbers behind the estimates.
Powell’s assuming millennials will need to live on between $30K and $40K annually in retirement (in today’s dollars).
Plus, a modest rate of inflation (2%) will make $1M of today’s dollars worth about $530K in 32 years, and roughly just $386K in 48 years.
You can see Powell’s breakdown in more detail here.
The bottom line is this: For today’s millennials to hit that $2.5M number in 48 years, Powell said they’d need to save about $1,000 per month — and that’s assuming there’s 5% growth on their investments annually. That’s a staggering amount that, most likely, your employees aren’t coming close to hitting.
Still, every little bit helps. And if these figures can encourage employees to increase their savings even a little, they’ve done their job.
Schappel C. (2017 February 23). Expert: the staggering new retirement savings number millennials have to hit [Web blog post]. Retrieved from address http://www.hrmorning.com/expert-the-staggering-new-retirement-savings-number-millennials-have-to-hit/
Great article from SHRM about the importance of educating your employees about their social security by Irene Saccoccio.
Social Security is with you throughout life’s journey, and we want to put your employees in control of their finances and future. With the tax filing deadline quickly approaching, everyone needs to make sure all their ducks are in a row before they file. Do your employees know that Social Security benefits may be taxable?
It’s true. About forty percent of people receiving Social Security benefits must pay taxes on some of these benefits, depending on the amount of their taxable income for the year. This includes all monthly retirement, survivor, and disability benefits. This may happen if your employees have other significant income in addition to their Social Security benefits.
The good news is that it’s easy to find out whether they must pay taxes on their benefits. All your employees need to look at their Social Security Benefit Statement (Form SSA-1099/1042S). An SSA-1099 is a tax form Social Security mails each year in January to people who receive Social Security benefits. It shows the total amount of benefits they received from Social Security in the previous year so they know how much Social Security income to report to IRS on their tax returns.
Your employees should automatically receive this form. If they don’t receive their Benefit Statement or misplaced it, no need to worry. A replacement SSA-1099 or SSA-1042S is typically available for the previous tax year after February 1. Even better news, Social Security has made requesting or replacing an annual Benefit Statement even easier. Now everyone has the ability to download it anytime and anywhere by using our online services.
Your employees can go to our my Social Security page, and select “Sign In or Create an Account.” Once they are logged in, they should select the “Replacement Documents” tab to obtain a replacement 1099 or 1042S benefit statement. Your employees can also use their personal my Social Security account to keep track of their earnings each year, manage their benefits, and more.
Your employees can also obtain a replacement benefit statement by calling us at 1-800-772-1213 (TTY 1-800-325-0778), or contacting their local Social Security Office. People living outside of the United States, need to contact their nearest U.S. Embassy or Consulate.
Handling tax season is all about what you know. Encourage your employees not to wait. They should open a personal my Social Security account today. In addition to getting a SSA-1099 or 1042S, there are many other tools like their Social Security Statement or benefit verification letter that can help them today. Just another way in which Social Security helps them secure today and tomorrow.
Saccoccio I. (2017 March 24). What your employees should know about social security benefits and taxes [Web blog post]. Retrieved from address https://blog.shrm.org/blog/what-your-employees-should-know-about-social-security-benefits-and-taxes
Do you need help boosting involvement in your retirement program? Take a look at this great article from Benefits Pro about how digital media can be the perfect vehicle for increase enrollment in your retirement program by Marlene Satter.
Retirement plan providers need a new approach—literally—when it comes to engaging millennials: going digital.
According to a blog post from Corporate Insight, millennials use, or seek to use, technology and mobile platforms to manage as many aspects of their lives as possible. But when it comes to retirement plans, many can’t.
While millennials are not only much more likely to value mobile access to their 401(k)s than their parents are, plan providers haven’t been as enthusiastic.
A Corporate Insight survey found that 57 percent of millennials consider the ability to manage their retirement plan account via a mobile app “very important” or “extremely important,” versus just 26 percent of baby boomers, but only 10 of the 19 leading retirement plan providers Corporate Insight tracks offer any kind of transaction capabilities via their iPhone apps.q
And that, considering millennials’ preferences, is a failure.
Although it’s considerably better than it was only four years ago, when only two out of 17 firms provided such service, the post says, “the industry has yet to reach the standard set by other financial industry verticals, like banking and brokerage, where mobile transaction functionality is the new normal.”
It’s true that many retirement plan providers have recently introduced mobile apps, but those apps have only limited capabilities compared with the functionalities millennials are looking for.
Then there’s the little matter of advice and education. Thanks to the Great Recession, millennials have a low risk tolerance and tend to stick to very conservative investments.
In addition, they “highly value advice and are not receiving enough of it,” the post says. With millennials the most likely of all generations to seek some degree of professional advice, at 89 percent compared with 78 percent of boomers, only 58 percent say they have been offered this assistance.
Of course, even among those offered advice, just 59 percent have actually taken advantage of it—possibly because they perceive it as expensive and don’t realize that the plan sponsor may be footing the bill instead of the employee.
Better communicating the menu of options available to employees could correct misperceptions, as well as alert employees unaware of the option to its availability.
Millennials are also more open to managed accounts, and those who have them are likely to say they’re satisfied or very satisfied with them.
Fintech firms offering low-cost robo options could boost the participation of young people in their retirement accounts, and as a means of customization they could be key to improving the results of defined contribution retirement accounts in helping employees prepare for retirement.
Satter M. (2017 March 24). Digital approach to millennials can boost retirement savings participation [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/03/24/digital-approach-to-millennials-can-boost-retireme?ref=hp-news
Did you know that there is a direct corelation between financial and physical health? This article from Benefits Pro is a great read explaining the link between an employee’s financial and physical health by Caroline Marwitz
LAS VEGAS — Are poor physical health and poor financial health connected? The benefits industry is making the link, if you consider how many deals between health-related benefits companies and retirement providers have occurred lately.
Obviously, the poor, at least in America, have a more fragile state of health than the more affluent. And as we age, the potential for unplanned health events to hurt us financially increases — and that’s important for retirement advisors and plan sponsors to remember. But what about your typical employees who are neither poor nor elderly?
A study in the journal Psychological Science looked at worker attitudes and actions to find out whether poor physical health and poor financial health might be linked, and how.
The researchers studied employees who were given an employer-sponsored health exam and were told they needed to change certain behaviors to improve their health. Which employees made the changes and who blew them off?
The researchers accounted for external factors such as different levels of income and physical health, and differences in demographics. Yet the results were still startling:
“Employees who saved for the future by contributing to a 401(k) showed improvements in their abnormal blood-test results and health behaviors approximately 27% more often than noncontributors did,” the researchers concluded in Healthy, Wealthy, and Wise: Retirement Planning Predicts Employee Health Improvements.
The employees who made the behavior changes to better their physical health were also the ones who were taking action to better their financial health.
Employee attitudes about the future and how much control they have over it affect whether they take care of their physical health and their financial health. That sense of control, or conversely, that feeling of no control, and thus, no investment in long-term results, is one reason why some employees might not participate in retirement plans, and, maybe, wellness and well-being programs.
What if, along with the retirement health-care cost calculators many retirement plan providers offer, there was a fatalism calculator too? That way you could see right away each person’s sense of control or feelings of inevitability about their future and help them more efficiently.
Because if someone is more fatalistic, telling them about their 401(k) match or pension options isn’t going to make them enroll in a retirement plan. Scaring them with statistics about the high costs of health care in retirement isn’t going to do the trick either. Instead, consider the following points for such employees:
Look behind employee behavior for the unexamined biases and long-held assumptions that are causing it. If they can see that it’s not who they are that determines their future but what they do, it’s a start.
Marwitz C. (2017 March 19). Employee financial health connects to physical health [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/03/19/employee-financial-health-connects-to-physical-hea?ref=hp-top-stories
Has your employee benefits program grown old and stale? Take a look at the great article from Employee Benefits Advisors about the benefits of upgrading your employee benefits to match your employees needs by Chris Bruce
Historically, employee benefits have been viewed as a routine piece of the HR process. However, the mentality of employees today has shifted, especially among the growing population of millennial employees. Today’s workforce expects more from their employers than the traditional healthcare and retirement options, in terms of both specific benefit offerings and communications about those offerings.
For companies, it’s critical they address the evolving needs of their workforce. With unemployment rates plunging to their lowest levels since before the financial crisis, the search for talent is heating up, and organizations need to work harder than ever to retain top talent in a competitive job market. To do this, I see three steps that organizations need to take when rethinking their benefits strategy and engaging with employees: embrace a proactive rather than reactive benefits strategy, think digital when it comes to employee communications and consider the next generation of employee benefits as a way to differentiate from the competition.
1. Reconsider your benefits evaluation process
The benefits process at most companies is reactive — executives and HR only look to evaluate current offerings when insurance contracts expire or a problem emerges. When the evaluation does happen, the two factors that often concern employers the most are product and price. Employers often gravitate toward well-known insurers that offer the schemes that appear familiar. However, this can often lead companies to choose providers who fall short on innovation and overall customer experience for employees.
This approach needs to be flipped on its head. Companies should be proactive in determining which benefit schemes best meet the needs of their workforce. The first step is going straight to the source: talk to employees. Employers can’t know what benefits would be most appealing to their employee base unless they ask. By turning the evaluation process to employees first, companies can better tailor new benefits to meet the needs of their workers, and also identify existing benefits that might be outdated or irrelevant, therefore saving resources on wasted offerings.
Data and analytics also are playing an increasing role across the HR function, and benefits is no exception. By leveraging technology solutions that allow HR to track benefits usage and engagement, teams can better determine what is resonating with employees and where benefits can be cut back or where they should be ramped up.
2. Put down the brochure and think digital engagement
Employee education is another area of benefits that can often perplex companies. According to a recent survey from Aflac, half of employees only spend 30 minutes or less making benefit selections during the open enrollment period each year. This means employers have a short window of time to educate employees and make sure they are armed with the right information to feel confident in their benefits selection.
To do this effectively, HR needs to move past flat communication like brochures, handouts and lengthy employee packets and look for ways to meet employees where they live — online. By testing out innovations that create a rich experience, while still being simple and intuitive, employers can grab the attention of their workforce and make sure key information is communicated. For example, exploring opportunities to create cross-device experiences for employees so they can interact on-the-go, including augmented reality applications or digital interactive magazines. Additionally, for large corporations, hosting a virtual benefits fair can provide a forum for employees to ask questions in a dynamic setting.
3. Embrace the next-generation of benefits
As organizations become more savvy and nimble, personalization will have a huge impact in encouraging employee engagement and driving satisfaction among today’s increasingly diverse workforce. We have already started to see some companies embrace this new approach to benefits, adding out-of-the-box items to normal offerings — from debt consolidation services and wearable health tracking technology to genome testing and wedding concierge services.
The fact is, the days of “status-quo” benefits are gone, and employees today want benefit options that match their current life circumstances. To best engage employees, organizations need to be proactive in evaluating benefits regularly and using analytics to track usage, identify opportunities to implement digital communication elements and look for ways to introduce new benefits to meet the needs of their employee base. By following these steps, organizations can gain a competitive edge when it comes to attracting and retaining top talent.
Bruce C. (2017 March 10). Why employers should rethink their benefits strategies [Web blog post]. Retrieved from address http://www.employeebenefitadviser.com/opinion/3-steps-employers-can-take-to-rethink-benefits-strategy?feed=00000152-1377-d1cc-a5fa-7fff0c920000