As the workforce changes, employers will have to re-examine their benefits plans and workplace policies to meet the new needs of their employees.
Employers are going to have to be forward-thinking if they want to stay on the cutting edge of benefits offerings and workplace health. Here are some of the trends and innovations developing in the benefits area.
Work/Life Balance
Watson Wyatt’s latest Staying at Work— Effective Presence at Work study suggests that the healthy organizations of the future will do more than just manage claim costs. They will recognize that employees seek a balanced workplace and a workday that enables them to manage competing work/life stresses.
Organizations will need to understand that an employee’s effective presence at work develops and sustains overall workplace health. Despite the impact that workforce productivity has on profitability, it is often overlooked. Organizations tend to focus on the cost of absences, disabilities and returning employees to work as quickly as possible.
However, employers will increasingly realize that an effective presence matters far more than a physical presence. The focus is expected to shift from hours worked to productivity. Employers that learn and understand more about the factors behind productivity—and incorporate programs to enhance those factors— will find that they have healthier, more engaged and effective employees with improved performance. Employees will appreciate the flexibility, and they will manage their time to meet delivery deadlines.
Many employees have expressed a desire for companies to embrace strategies that encourage work/life balance. The availability of non-traditional work arrangements is growing, and this trend will likely continue. The rising costs of commuting, the growing demand for alternative working arrangements and the need to transition employees on short- or long-term disability programs back into the workplace will all increase the need for, and the importance of, a non-traditional workspace.
These new arrangements may also encourage older workers to remain in the workforce longer. For these individuals, flexibility and balance in the workplace will be complemented by recent legislative changes to the Income Tax Act to allow phased retirement.
Mental Health Focus
Mental health issues have a significant impact on both employers and employees. The Staying at Work study reported that mental health issues are the leading cause of both short- and long-term disability claims. Mental illness will continue to be a leading cause of disability over the next 10 years and an important issue for businesses, according to the World Health Organization.
More attention is needed to develop programs that help manage mental health issues before they become disability claims. As Bill Wilkerson, co-founder and chief executive officer of the Global Business and Economic Roundtable on Addiction and Mental Health, noted in his article, “The Stress Invasion,” stress management and wellness programs are an investment in the health and culture of the organization. Employers should consider programs that address organizational issues. For example, mental health risk assessments and return-to-work programs specifically designed for mental illness can be highly effective, going beyond the traditional wellness concepts of promoting healthy lifestyles for employees.
The formation of the Mental Health Commission of Canada (MHCC) is just one of many initiatives that illustrate the increased social recognition of mental illness and the impact it can have on individuals, their families and workplaces. A goal of the MHCC is to address the stigma associated with mental illness, which frequently prevents people from seeking the help they need. Initiatives like this will assist in educating the public, employers and affected individuals.
Communication and Governance
Effective communication and good governance are becoming increasingly important indicators of a healthy organization and a successful healthcare plan. According to Watson Wyatt’s latest Employee Perspectives on Health Care: Voice of the Consumer survey, many employees do not understand how their benefits plans work and are unfamiliar with much of the basic health benefits vocabulary, including terms such as co-pay, deductible and out-of-pocket maximum. Better communication that meets the needs of employees based on generational or cultural differences can help empower employees to become more engaged in their health benefits programs.
Communication is a key element in shifting employee attitudes from benefits as an entitlement to benefits as a shared responsibility, thereby driving employees to change their lifestyle habits. Employers with well-drafted plan booklets and employee communications will be well positioned to encourage shared responsibilities and healthy lifestyles, and will be protected from claims of miscommunication.
However, communication is just one element of good governance. For example, in the future, a growing number of organizations will reject internal audits of disability management processes in favour of having them done by a third party. The government of British Columbia has recognized the importance of third-party audits through its grant to the National Institute of Disability Management and Research (NIDMAR), which will enable NIDMAR to provide third-party audits to employers with few or no disability management systems in place. The importance of audits will grow as more organizations are opting to have their practices—or lack of practices—reviewed as a method of cost containment.
New Partnerships
In today’s marketplace, the lines of distinction are blurring as insurance companies offer consulting and administration tools, employee assistance program providers offer disability management services and consulting firms provide insurance solutions. The merging between consulting companies and vendors is expected to increase as employers focus on health and productivity. Amalgamating these businesses could lead to more competition, better thought leadership and innovative solutions that could lead to lower costs on service delivery and products. However, stakeholders will also have to consider issues of objectivity and conflicts of interest that may arise in such business relationships.
Out of these partnerships, the industry can expect to see new products catered to the changing workforce— in particular, the baby boomers. As this generation approaches and enters retirement, it will demand a broader range of offerings to serve its needs.
Consultants also expect to see an increased emphasis on existing group benefits products. Eldercare, wellness services, critical illness insurance and pet insurance will likely become more prevalent, in addition to products that serve beneficiaries of estates, investment products that are socially and/or environmentally responsible, educational savings products, group legal services and prepaid dental.
Organizations are increasingly viewing group benefits as an investment rather than a cost. They are also accepting the idea of non-traditional benefits and work arrangements. This new holistic approach will likely have a ripple effect throughout the group benefits industry, affecting products, providers, employers and employees over the next decade in a positive way.
Leanne Hull is a research lawyer in the Canadian Research and Innovation Center, and Joseph Ricciuti is director, client solutions, Canada. Both are with Watson Wyatt Worldwide. infocanada@watsonwyatt.com
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© Copyright 2008 Rogers Publishing Ltd. This article first appeared in the December 2008 edition of BENEFITS CANADA magazine.