As a followup to my last article, I have been asked by several people for my views on the benefits of the future. In this article, I suggest that the benefits currently being sold within the voluntary benefits market are not necessarily the ones that employees want. Benefits such as critical illness and AD&D have their place in a more consumer-driven marketplace. However, I do not see the market for these benefits to be as robust as it is in the United States. As indicated in my last article, we do not have the same burning platform in Canada as they do in the U.S.—healthcare costs/reform—which makes these benefits so popular south of the border.
Sadly, I don’t have a crystal ball to be able to predict the future. However, some of my perspective that “employees want different” is formed based on some recent research completed by Mercer. In 2011, Mercer completed a global survey focused on exploring what is on the minds of employees with respect to their benefit plans and the choices that they are able to make. The survey—entitled Making Smart Benefit Choices—unearthed a couple of interesting themes.
The first theme, which supports the notion of employee choice, was that the majority of employees would be prepared to pay more out of their own pocket for benefits they deem to be of value. I think this would be a surprise to many benefits plan sponsors. The second theme related more specifically to the topic of perceived value. When asked to rank the relative importance of the benefits that they would like to purchase, Canadian employees placed group auto and homeowner insurance at the top of the list. Benefits such as critical illness and optional life were also on the list. However, AD&D did not make it. Benefits for lifestyle support, pet insurance and concierge services were highly rated. So it appears that employees have a less traditional and perhaps more enlightened view of benefits.
When you think about what benefits might be important in the future, it is helpful to consider some of the factors that might influence future buying preferences/behaviours. Some of the interesting trends that stand out include the following:
Convenience—When you ask many people to identify the most important aspect of a buying decision, it may be cost but more often than not it’s convenience. We buy things that make life easier and save us time. And we want to buy things that are easy to buy. This is why online shopping is so popular and—despite knowing it might not be good for us—why fast food consumption continues to be so strong. This certainly has implications for how we deliver benefits but also for the type of benefits we offer. Benefits focused on making the lives of employees easier (e.g., concierge-type benefits) have the potential to be wildly popular in the future.
Going mobile—Advancements in mobile technology have already profoundly changed our lives and the pace of change will only get faster. Mobile technology has the potential to radically change how we deliver healthcare. Mobile technology has created a connected and linked society with access to limitless amounts of information and the potential to link daily activities never before contemplated. There are already many mobile applications in the market that allow an individual to track their daily activities. Imagine the potential in linking this data to the benefits offered within a workplace—to allow individuals the opportunity to customize benefits plans that are completely aligned with how they live their daily lives. And less reliance on “bricks and mortar” healthcare in the future opens up tremendous opportunities for employers and employees to participate more fully in the delivery of healthcare. This could have broad cost implications. Going mobile will also clearly change how we communicate benefits in the future. Paper could soon be a thing of the past.
Healthcare—It’s hard to imagine a health care system in the future that looks anything like it does today. It seems inevitable that Canadians will be required to more fully participate in the funding of health care if we as a nation remain committed to a universal health care system. We seem to be on the path of fundamental reform. Benefits focused on offsetting the cost of higher individual co-pays and/or benefits that provide for quicker access may be in our future. And demographically driven benefits such as eldercare and long-term care should be attractive in the market.
Wellbeing—People are increasingly focused on wellbeing: physical, mental, emotional and financial. More people are aware of the perils of living their lives “the wrong way”; however, they don’t know how to make the necessary changes on their own. Benefits that help employees (and dependents) make the right life choices and help them to live their lives well will be highly valued in the future. I really like the idea of health coaches—why not a coach for all aspects of wellbeing?
Values—With each generation, their base values change. The “new generation” is far more interested in sustainability than the generations that preceded them. I don’t know how this necessarily translates into a new employee benefit, but I do think organizations that tap into the different values of their employees will win the war for talent.
A final word about the benefits of the future. I do believe that the future role of the employer in the provision of employee benefits will be that as facilitator and that customer will increasingly be the employee and their family members. Therefore, flexibility and ease of access will be critical in the delivering of any new product.
The next decade will be pretty interesting.