Employers Concerned About Meeting A Diverse Workforce’s Benefit Needs
Meeting the needs of a diverse workforce is second only to cost as the greatest challenge employers face regarding workplace benefits.
That was among the key findings in a study conducted by LIMRA and Ernst & Young. Patrick Leary, LIMRA corporate vice president, workplace benefits research, and Chris Morbelli, EY managing director, life and group transformation, presented the findings during Wednesday’s session of the LIMRA virtual annual conference.
In its research, LIMRA and EY sought to answer the following questions:
- What are the next series of unmet needs for workers that can be a potential space for growth in workplace benefits?
- How will the workplace benefits distribution landscape change in the next 3-4 years?
- How will the third-party landscape (distributors, tech companies, etc.) continue to evolve and what must carriers do to remain relevant and competitive?
- What will be required of technology to address these needs in order to enable growth?
- How do these needs and trends differ among small, midsize and large employers?
Five key trends emerged from the research.
- A more heterogenous and fluid workforce changes what, why and how benefits are offered.
- Expanded benefits are key to meeting post-pandemic needs and winning the war for talent.
- Brokers are still valued, but their role is evolving rapidly.
- Unmet needs and lack of employee understanding have made education crucial.
- As technology accelerates, the industry is ready for a fully integrated, data-driven ecosystem.
For each of those trends, researchers offered a prediction.
Prediction #1. In five years, fewer than 50% of workers will be traditional in-office employees. The gig economy and the “Great Resignation” will reshape the definition of the workforce and the nature of work.
Most employers transitioned to hybrid models as the pandemic accelerated the need to create new work arrangements. The majority of employers say a substantial portion of their company’s employees will continue to work remotely at least part of the time. A hybrid workforce will be the new normal, making it necessary to reimagine the benefits delivery process. In addition, more than one-third of midsize and large employers said they expect to hire more freelance workers over the next five years – presenting a new segment of workers seeking benefits.
More than two-thirds of employers said cost is their biggest benefits concern with 30% saying they are most concerned about meeting the needs of a diverse workforce.
Prediction #2. The nonmedical benefits market will grow by 20%. This is driven by a push toward more holistic products and services, as well as the importance of attracting and retaining employees as the war for talent continues.
About two-thirds of midsize to large employers believe their companies will offer more benefits in five years. But nearly half of all employers believe their employees will pay a greater share of their benefits over that same time period.
Prediction #3. The role of brokers will evolve, becoming less product-oriented and more consultative. More than 72% of employers believe their broker plays a more strategic role beyond presenting benefits.
Between 65% and 75% of employers said they are satisfied with their brokers, suggesting they will continue to rely on their services. Sixty percent of midsize and large employers said they will be more reliant on their brokers over the next five years.
Prediction #4. Technology will transform the way benefits education is delivered, creating more personalized experiences and boosting adoption rates. More than half of workers said they do not understand their benefits, and 60%-70% of workers said their employer does not communicate benefits well to the workforce.
Prediction #5. Digital capabilities will dominate every aspect of worker benefits in the future. Seventy percent of employers believe they will rely more heavily on benefits technology in the next five years while most employers expect a more digital experience for their workers.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
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