Gallagher’s 2020 Benefits Strategy & Benchmarking Survey reveals why well-being, engagement, and communication are the top employee benefits priorities for 2021, discusses Rhonda Marcucci, Vice President, HR and Benefits Technology Consulting Practice Leader, Gallagher.
For me, 2020 can’t end too soon. I believe this sentiment is widely held. It has been a challenging year for everyone, but especially so for employers – most of whom faced some big first-time challenges associated with remote operations and a supporting people strategy.
As I began to consider trends in employer benefits for 2021, I thought about how different this article might have been a year ago, before COVID-19. Last year, with most employers projecting an increase in headcount due to strong economic and revenue prospects, I would likely have focused on the highly competitive talent pool and how benefits help employers compete.
Today, it’s a different story. But even if priorities have changed, your workforce and talent strategy remains critical to organizational success. Organizations have shifted their priorities from talent attraction/retention to business continuity, which requires, for many, achieving economic recovery and financial stability to avoid furloughs and layoffs. This calls for a people strategy that supports organizational resiliency – to succeed in an environment where expecting the unexpected is the norm. In short, talent remains a priority, but with a slightly different bent.
Engaged Employees Will Drive Organizational Success
In good times and bad, organizational success relies on engaged employees because engaged employees are productive employees. Employers often fail to make the connection between benefits and engagement. Still, today’s employees value organizations that recognize that the whole person comes to work each day – not just the part with the skills to do a job. Benefit offerings that consider the full scope of an employee’s life can go a long way in keeping employees committed and engaged, resulting in greater productivity.
In 2021, technology will continue to be an enabler of employee engagement. However, the context in which employers must engage their workforce is now (and will likely remain) quite different than it was a year ago. This is due, in no small part, to the large percentage of employees who now work remotely.
According to Gallagher’s 2020 Benefits Strategy & Benchmarking SurveyOpens a new window , 86% of employers expect to retain their pandemic work-at-home policies after it’s deemed safe to return to the workplace.
With COVID-19, technology previously viewed as “nice-to-have†quickly became “must-have,†including tools to engage employees in activities overseen by HR, such as benefits offerings and enrollment. More broadly, employers are embracing technology that supports employee well-being –physical, financial, career, and emotional – especially in a remote environment.
While HR has traditionally been the loudest advocate for employee well-being, the C-suite’s growing interest reflects the connection between employee well-being and employee engagement. Employees who struggle with health or financial issues are more likely to be distracted and unengaged from work.
While some employers are looking for a path to “return to normal,†the smart ones are focused on normalizing workforce changes and developing a people strategy that uses modern technology to support employee engagement and drive organizational success in a “new normal.â€
Gallagher’s 2020 Benefits Strategy & Benchmarking Survey identified the following workforce productivity trends related to benefit offerings, employee well-being, and employee communications and engagement.
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1. Expansion of medical coverage offerings
Pre-COVID-19, employers were already increasing the number of medical plan options they offer as a way to attract top talent. Employers providing three or more choices increased from 35% in 2018 to 40% in 2020. During that same period, the percentage of employers offering only a single plan declined 6 points, to 25%.
While the heated talent war may have cooled somewhat, look for a continued expansion of plan offerings, including voluntary coverage, to both help retain talent and boost employee financial well-being within specific categories of need, such as critical illness, hospital indemnity, supplemental disability, and long-term care.
The financial uncertainty triggered by the pandemic has also caused employees to think more about medical coverage. More than 40% of employers anticipate salary freezes in 2021 for both non-management (42%) and management/executives (43%). The increase in the number of medical plan offerings and the greater overall complexity of benefit options has given rise to the need for better decision-support tools – technology to help employees both choose and use their benefits. Expect the growth of this tech category to continue in 2021.
2. Acceleration of telemedicine adoption
Employers are also mindful of their own financial situation. With no real resolution in sight to the high cost of healthcare, employers continue to pursue healthcare cost-management tactics. While the adoption rate for telemedicine was already on the rise, the pandemic significantly accelerated that growth.
Employers reported digitally delivered healthcare as the most prevalent and fastest-growing tactic (59%) for healthcare cost management. Increased adoption of telemedicine is greatest among small- and mid-sized organizations (less than 1,000 employees).
Other cost-management methods used by a third or more of employers include providing well-being incentives (45%), increasing employees’ cost share through higher premium contributions (43%), and implementing plan design changes (37%).
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3. Enhanced communication and connection with employees
Communication cultivates employee engagement. Employers made impressive headway on employee engagement in recent years, according to GallagherOpens a new window . In early 2020, more than half of surveyed employers (53%) reported their workforce was “highly engaged†– up 11 points in just one year. Employers are actively tracking engagement, evidenced by Gallagher data that shows a significant increase in the use of employee engagement surveys. In 2020, 46% of employers conducted an employee engagement survey, up from 41% in 2019 and from 38% in 2018.
Now that face-to-face contact is limited, digital forms of outreach are even more critical to measuring and maintaining high engagement levels among workers. Gallagher’s 2020 HR Technology Pulse SurveyOpens a new window asked employers what technologies they wish had been in place prior to the pandemic. Topping the list was tools to support communications and engagement, especially among large employers.
Mobile technology is pervasive, including in the workplace. In the pulse survey, 52% of employers reported using mobile to support employee communications and engagement. While some may find it surprising that this percentage was not higher, the survey also found that an additional 18% “desired mobile access†Â– including 34% of large employers. This raised the ratio to 70% of employers that used (or wish they could have used) mobile to engage and communicate with their employees during the pandemic.
New technology supports the connection between mobile and employee benefits. Mobile apps can bring all organizational benefits together and push information out to encourage a greater year-round engagement with their benefits, including related to telemedicine, employee assistance programs, and decision support for price/quality transparency of healthcare providers. In addition to building awareness of benefits, mobile platforms reach employees where they live, reducing the number of basic inquiries that occupy HR staff time, time which can be redirected to more strategic activities.
In 2021, expect to see the continued use of mobile technology for employee communications and engagement – advancing the current top methods for mobile for engagement: vendor-provided HR technology apps (53%), SMS text (51%), and mobile-responsive intranet websites (49%).
Use Technology To Align Trends With Strategy
Changes brought on by the pandemic have reshaped the focus and direction of organizational strategies for 2021, including people strategies. Despite the refocusing of priorities, technology will continue to improve the organization’s response to rapid change and help achieve desired outcomes.
Gallagher’s 2020 Benefits Strategy & Benchmarking Survey found that 69% of employers expect to expand and/or replace HR technology by 2022. While this survey was conducted during the early stages of the COVID-19 outbreak in the U.S., I’m confident that employers understand the critical role technology plays in responding to and aligning with workplace trends, including those related to employee communications and engagement, benefits, and employee well-being. The strategic use of best-fit technology will enable a more productive workforce and deliver greater business success.
Why do you think well-being, engagement, and communication should be the top employee benefits priorities for 2021? Share your thoughts with us on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window .