The Benefits Solution

Engineering Financial Wellness Through Loyalty, Insight & Structured Education

Why employee engagement should be your focus in 2018

by Randy Stram

Mr. Stram is senior vice president, Group Benefits at MetLife. Visit www.metlife.com

MetLife released in January its list of top trends to watch in 2018, based on the 15th Annual Employee Benefit Trends Study (EBTS) and other industry indicators. What is most eye-opening about the trends this year is the overarching theme of employee engagement. And, it’s more than just a common thread. It comes through in neon lights.

As the workplace continues to evolve, employers’ ability to engage their people and cultivate loyal, productive workforces is paramount to their ability to differentiate and reach business goals. Therefore, as brokers and advisers talk to their clients about business needs and goals for the New Year, it’s almost certain that employee engagement will top an employer’s list on both counts.

As you prepare for conversations with your clients, take a look at the five trends MetLife is watching in 2018, and why they’re deserving of your attention:

Human/machine balance

New technologies like artificial intelligence have the potential to positively impact employee benefits and those parties who deliver them, from insurers to brokers and even employers. For brokers, for example, AI can reduce administrative tasks, help to understand consumer behavior, streamline the claims process, and even help prevent fraud.

But from the employee retention perspective, new technology also comes with the imperative to place a renewed focus on engagement. According to Pew Research, almost three quarters (72%) of Americans are worried about a future where robots and computers are capable of performing many human jobs – more than double the 33% of people who are enthusiastic about it.

Smart employers will stay ahead of these concerns and show their employees that they care – and are investing in them – by meeting their personal needs.

Benefits play a key role. About 75% of employees say that the ability to choose their benefits keeps them loyal to their employers, according to EBTS. Employees’ ability to customize their benefits to meet their needs even tops working from home when it comes to loyalty.

Benefits customization is also particularly important to Millennials, now the workplace’s largest demographic. More than three-quarters of Millennials say benefits customization is important for increasing their loyalty to their employers compared to 67% of Boomers, according to EBTS.

New formula for engaged employees

For the last several years, voluntary benefits have been on the rise. Employers have been integrating voluntary offerings, like accident insurance, critical illness insurance and legal services plans into their benefit programs, so they have wide array of options available to meet employees’ diverse needs.

However, as we head into 2018, we expect to see the bar continue to rise. In addition to medical and voluntary benefit options, employees are also turning to their employers for financial wellness resources, and will continue to do so, making medical + voluntary + financial wellness the new formula for engaged employees.

A 2016 LIMRA study showed that the workplace has now overtaken the retail marketplace as the primary source of life insurance, illustrating how people are looking for solutions to help protect their income at the workplace.

However, the financial support resources employees are seeking extends beyond benefits. MetLife’s EBTS shows that more than half of employees say that financial planning programs are important for increasing loyalty to their employers, creating a key opportunity for engagement.

Financial wellness has also become a business imperative—by reducing absenteeism and increasing productivity, engagement and loyalty, financial wellness programs can positively impact businesses’ bottom lines.

While employers recognize the need for these programs, they need help navigating available solutions and implementing the program that works best for their employees. When it comes to financial wellness resources, for example, employers aren’t currently keeping pace with employee demand. In fact, only a third of employers (33%) say they are very likely to offer wellness benefits and just 18 percent currently offer financial planning programs, according to EBTS.

Employers who get ahead of this trend and provide the financial wellness resources employees are seeking will stand out at employers of choice.

Personalized prioritized

In 2016, MetLife engaged in research with four employers across diverse industries and found that despite employer or industry, employees have four common unmet needs when it comes to their benefits: they can’t navigate the information explosion at enrollment time; they don’t have the time or energy to dig in to the information they receive; they don’t know who to turn to with questions; and when employees don’t understand their benefits, they assume they don’t need them.

To break this cycle and help employees understand how benefits can help support their financial wellness goals, smart employers will do two things in the year ahead: deeply understand their workforces and utilize those insights to execute a personalization strategy.

One way employers can shore up their digital support chain is by moving to a single benefits carrier to limit the exposure of employee data

It’s important to remember that no two employees are the same, and various employers have different populations. For example, a tech company may employ a higher percentage of Millennials than, for example, a farm supplies wholesaler. According to a recent study, farm supplies wholesalers have about 40 percent of their employees, on average, in the 55 and older category.

What this means is that personalized communications are critical to meeting the needs of different employees. Millennials and Boomers, for example, are in very different stages of their lives, and thus are looking for different things from their employers when it comes to benefits.

To effectively communicate to employees about their specific needs, partnering with benefits communications firms is key. And employers are increasingly tapping into these partners. MetLife’s enrollment research found that of those employers who don’t currently work with a firm, 50% said they are likely to use a firm in the next 5 years. And, 25% of employers say a reason for investing in firm is personalized enrollment.

Greater ecosystem integration

When it comes to delivering an engaging benefits experience, partnerships are what to watch in the year ahead.
As the benefits ecosystem continues to expand, seamless integration between carriers, brokers, thirdparties and employers will be a necessary focus. Employers are already offering employees a number of voluntary benefits options, and according to our EBTS study, nearly half of employers say they plan to increase the number of voluntary benefits they provide in the next 1-3 years.

As they do this, employers may have a relationship with a benefits broker, benefits administration platform, benefits communication firm, or a combination of all – in addition to the carrier who provides the benefit. In these scenarios, it’s critical that everything works together.

Employers and employees are also looking to things like online self-service and mobile phone benefits management, which can improve the employee experience, but may also come with new set-up and integration requirements. Along with personalization, employees want simplicity, which will require even more collaboration between all of the parties involved in delivering and communicating benefits. When executed well, a simple, user-friendly experience goes a long way to engaging employees in the enrollment process, and subsequently keeping them loyal to their employers.

Data security dilemma

Data security was on our list of trends to watch last year, and we’ve included it again with good reason. Four in five brokers say they’re concerned about employee data security. This is up 10 percentage points from last year, according to our EBTS.

Cyber threats are also top of mind for small business owners. The most recent Small Business Index from MetLife and the U.S. Chamber shows nearly 2/3 are concerned about a cyberattack.

Outside of financial cost, a data breach could also create an employee trust issue. More than 80 percent of employers say their top benefits objective is retaining employees, according to EBTS. A data issue would certainly undermine that objective and impair the employer-employee relationship.

What could be worse than offering employees an array of benefits to choose from, setting up a financial wellness program to help meet their needs and then having a data incident that undermines the work?

One way employers can shore up their digital support chain is by moving to a single benefits carrier to limit the exposure of employee data.

Bonus: Benefit to Watch – Hospital Indemnity

When designing employee engagement strategies, offering the products employees care about continues to be foundational. Driven by consumer concerns, we believe hospital indemnity is the benefit to watch – and incorporate into offerings – in the year ahead.

Eastbridge’s most recent U.S. Voluntary/Worksite Sales Report showed that of the supplemental health products, critical illness and accident continue to hold larger percentages of the total voluntary sales mix then hospital indemnity, an often lesser-known option. Yet, hospital indemnity sales were up 16 percent year-over-year compared to nearly flat sales of accident insurance and an increase in critical illness sales of 12 percent, showing strong growth.

According to a recent Consumer Reports survey, Americans indicate their biggest concern is health care. Research from the University of Michigan showed that even people with health insurance pay – on average – about $1,000 out-of-pocket for a hospital stay. MetLife’s EBTS shows that more than a third of employees live paycheck to paycheck, which means they may not have the financial resources available to pay this large of an amount.

Particularly with the continued transition to high deductible health plans, employees will look to options that limit their out of pocket exposure and would likely be pleased to see an option like hospital indemnity pop up on the list of benefit options, giving this benefit legs for the year ahead. In fact, 84% of employees say hospital indemnity insurance is a must-have or nice-to have benefit (EBTS).

As you look to the year ahead and work through annual planning, keep in mind these trends for your discussions. By arming yourself with these insights, not only will you add value as a strategic and trusted partner, but will be at the forefront of what employers care about most: employee engagement. ◊