Six Trends Shaping The Future of Voluntary Benefits
COVID-19 has often been identified as the driving force for companies to place a greater focus on employee wellbeing.
While the pandemic accelerated this focus on employee wellbeing and benefits, organisations were already on the journey of addressing the four pillars of employee wellbeing: physical, financial, social and emotional, through the provision of meaningful benefits programs.
Overall, organisations have homed in on the employee experience and are now committing significant time and resources to their overall employer value proposition(EVP) as they look to address the key risk concern in retaining and attracting talent.
One area that organisations are doing this is through the introduction of voluntary benefits programs to complement their core employee benefit offerings, as part of their overall rewards strategy.
Voluntary benefits providers have felt the pressure to innovate at speed. Employees are becoming more knowledgeable and digital user experiences in the consumer sector have raised expectations to new levels.
The market has responded by delivering next generation solutions aligning more closely to the individual employees needs, delivered through personalised digital experiences driven by data and analytics. However, there is still more to do and we expect innovation to continue at pace.
As companies look to tackle retaining and attracting new talent in the new normal, Aon has identified a number of trends that have helped providers and employers make better strategic decisions and will continue to shape voluntary benefits solutions in the next few years.
1. Beyond Core Offerings
As the talent market continues to grow more competitive across the globe, the importance of tailoring the employer value proposition is critical. Personalisation and relevance are key in addressing the varied needs of a dynamic and diverse workforce.
Generic benefits programs are no longer sufficient in a competitive market.
Increased focus is being given to benefits that sit alongside core benefit offerings in a complimentary manner. These benefits are designed to alleviate employer concerns and reduce or eliminate exposures in coverage. Giving employees peace of mind that should they have a life event in the future that will likely cause an adverse impact they have everything in place to manage the situation financially.
Employers are looking to specialised voluntary benefits solutions to address employee need and at the same time minimize the impact on bottom line. This is where employers are also looking to brokers to negotiate enhanced packages.
Reviewing specialised voluntary benefits packages to ensure they are valued, relevant and sustainable can also have a positive impact on the bottom line. Brokers can play an important role in negotiating enhanced packages that suit the specific needs of an employer and its workforce.
2. Digitalised Offerings
The key to a successful voluntary benefits program is providing employees readily available, easily accessible solutions that help them understand the value they are getting from their benefits and ensuring they know how to access them or use them effectively.
Digitalised solutions are now the bare minimum expected by employees when looking at an employer of choice and it’s the norm as per their consumer experience. Successful employers provide employees with choice, flexibility and control to tailor benefits to suit their personal and changing needs.
Successful delivery hinges greatly on the collection of data and subsequent quick analysis to enhance experiences for each individual, and this is almost impossible to do without an effective digital experience. This now aligns more with the types of experience offered in the consumer sector, where experiences are interactive, personalised and highly data driven to meet the audiences needs.
From an employer viewpoint, it also ensures simplified and efficient administration and deployment of such programs which helps manage value and bottom line considerations.
3. Turbo Charging Employee Communications via Data and Analytics
Employers are now looking for their voluntary benefits communications to be better informed with real time, easy to access data to help them make better decisions. However, without an effective ‘always on’ communication plan to help educate their target audience, programs can often fall well short of their goals and struggle to justify a return on investment.
Communication programs focused on behavioural changes, rather than just awareness, enable employees to take action to better manage their overall wellbeing strategy.
The key is to design communications to help employees understand and realise the value of their benefit programs through sustained, targeted and personalised messaging.
This type of connectivity will ensure employees are getting the right message, at the right time, in the way they choose.
4. Value-based Offerings
With the enhanced availability of data and analytics to accurately measure the success of benefits programs, the need to deliver value-based solutions has never been more pertinent.
One approach to value-based offerings is through reviewing pricing. Organisations are now looking for a Voluntary Benefits partner who has the buying power and access to a broad portfolio of solutions to negotiate holistically, taking advantage of opportunities to bundle and deliver better pricing outcomes.
However, competitive pricing is not just about dollars when making better decisions on how to demonstrate the value an employee receives from their investment over a sustained period of time.
When looking at pricing, employers should focus their product strategies on actual relevance to employees. Are they actually using the benefits on offer? The cost of the programs is less important than the material value to the employee in determining success.
Organisations are now taking a holistic view of their programs to create greater effectiveness of how they manage their overall portfolio strategy while also keeping an eye on their bottom line.
5. Increased Transparency
Across industries, employee expectations are changing. Many want to be better informed through greater transparency into costs, processes, and the overall value chain with the companies they engage with and choose to be employed by.
As such, employers are seeking more claims data transparency, and employees are looking for more support to choose where their benefit dollars are going.
This trend is also helping build new customer care models, such as policyholder care centres and concierge services that help employees work through their benefits. As more carriers enhance their ability to automatically pay claims, they will also need to regularly provide reporting and data that helps policyholders assess performance.
6. Customisation Options
Whether new to the workforce or nearing retirement, employees want choices to fit their specific need for themselves and their families. As the voluntary benefits marketplace comes into its own, even more customisation options are becoming available to service an increasingly diverse workforce and assisting employers to address the areas where core benefit programs are unable to do so.
Employee benefit plans are now evolving to focus on all dimensions of employee wellbeing in the event of a claim - not just physical health, but also financial, emotional, and social. And as data and analytics as well as technology evolve, it’s likely employees will be able to customise their plans even further.
The market has demanded innovation from providers to help them tackle key people challenges. The industry has responded, raising the bar around what defines a successful voluntary benefits program.
Organisations that optimise rewards and ensure they are delivering on their purpose see the most successful rewards programs. It’s also important for employers to communicate those benefits to employees.
An effective voluntary benefits programs allow employers to drive employee wellbeing, manage talent risk, and recruit and retain employees.
As organisations face challenges and difficult choices, business leaders must take advantage of the opportunity to fully reimagine their rewards strategies. With many organisations starting on their journey with their rewards programs in a post COVID-19 era, this change is only the beginning.
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