Navigating the changing benefits landscape

Which is easier: completing your annual income tax return or choosing the right workplace benefits?

A recent Lincoln Financial Group Consumer Sentiment Tracker revealed twice as many individuals found it easier to prepare their taxes than those who found it easy to select their benefits.

This may be surprising, but it is due, in part, to an education gap when it comes to benefits outside of traditional medical plans. Because of this gap, employees struggle to navigate decisions about wellness and supplemental health benefits. 

Yet most individuals who take advantage of wellness programs are satisfied with the benefits they have selected, the Sentiment Tracker found. And there is an impactful solution to simplifying the benefits enrollment process — modernizing how benefits are explained to today’s employees. In addition, employers must understand what employees expect and desire from their workplace benefits. 

Barriers to benefit enrollment and engagement

The barrier to benefits enrollment lies in employees’ understanding and knowledge of the products and solutions that are offered. The Sentiment Tracker showed that 54% of workers said they would enroll in more benefits if they better understood how those benefits could support their personal goals. Employees may fail to fully use the benefits offered to them, leading to missed opportunities for financial security, health and overall wellness. We also know there is a need for improved educational resources and user experience systems, as half of individuals note it is easier to file taxes than to enroll in benefits.

Another Sentiment Tracker finding highlighting the need for benefit enrollment education is that 63% of workers take comfort in the familiar and prefer to keep benefit selections the same year after year — considering new benefit selection only when absolutely necessary. Additionally, some employees struggle to weigh the cost versus value of benefits (26%), are unsure how different benefits work together (23%) and need help prioritizing benefits (21%). This demonstrates the need for an improved user experience and education on how benefits can be beneficial.

For example, wellness programs are gaining popularity in the workforce, with 2 in 3 employees offered at least one program, yet only half of those offered these programs actually use the resources available. Of the half who take advantage of at least one wellness resource at work, very few engage in multiple resources available. Despite the low engagement with wellness programs, 60% of employees who engage with multiple wellness benefits or have seen significant positive impact are very satisfied.

Breaking down barriers to simplify benefits

Employers should focus on spotlighting the wellness programs offered — and showcasing examples of how they can add value — to transform the programs from an overlooked offering into a valuable tool that may positively impact employees’ lives. Gamification can be an effective strategy to incentivize participation by turning wellness activities into engaging and rewarding experiences and fostering an organization’s culture. Providing engaging education tactics will lay the foundation for promoting wellness programs and benefit offerings.

When asked to envision an ideal benefits education program, employees expressed a strong interest in a blend of self-service tools with consultive resources — mirroring the approach of tax preparation companies. This blend of services allows employees to better grasp how benefits offered can work best for their needs through consultations and live chats, interactive technology, self-guided learning tools and more. Taking this approach, combined with continuous promotion, to educate employees about benefit offerings empowers them to take advantage of the right product and wellness offerings. 

Tailoring benefits to unique preferences

In addition to developing a more robust and digestible education program, it’s important that employers understand what employees expect. 

In today’s workplaces, including employee benefits, the spotlight is on what Generation Z and millennials expect. As these generations continue to represent a growing percentage of today’s workforce, we can already see how they are driving changes to fit their unique needs and priorities when it comes to workplace benefits. And with overall employer satisfaction highly correlated to the benefits offered to employees, it’s pertinent to address how benefits play a part in employee and workplace satisfaction.

There is a shift away from traditional benefit packages, as seen by the preferences of younger generations, to new, innovative benefit offerings. When asked, 41% of today’s workforce reported a desire for new and innovative benefits solutions, with Gen Z, millennials and Generation X skewing the numbers higher. On the other hand, 43% of baby boomers show a strong preference for improvements to core benefit offerings, emphasizing stability and reliability.

While retirement benefits remain a consistent priority across generations, millennials and Gen X place a significant emphasis on financial wellness, putting this on par with health insurance. These two generations are likely more established in their careers, focused on building and protecting their wealth. Gen Z, on the other hand, leans more toward prioritizing mental and physical wellness, reflecting their values and advocacy for overall well-being. Baby boomers place a greater emphasis on supplemental health, such as short-term disability and accident insurance, which is likely to protect their savings against an unforeseen accident.

Employers should account for the generational makeup of their organization when crafting a benefits package to better understand the unique preferences and priorities.

The road ahead

The employee benefits landscape is evolving as younger generations in a digital era enter the workforce. Employers should tailor benefits programs to meet the diverse needs of different generations and actively promote wellness resources to bridge the gap between offerings and utilization. By understanding and addressing dynamic benefits expectations and the knowledge barriers employees face, employers can foster a more engaged and satisfied diverse workforce. 

Heather Deichler is senior vice president of product and underwriting for Lincoln Financial Group Protection business. Contact her at [email protected].