Aligning With the New Dynamic of Workforce Benefits
The widespread disruption of the working world since 2020 has created a new dynamic for the marketing and distribution of workforce benefits: today, workers are more than employees and benefits are more than insurance. To compete effectively in the new world of work, organizations must align their value propositions to this new dynamic. Whether you’re a manufacturer, distributor, technology provider, or other player in the workforce benefits ecosystem, the new landscape will demand a realignment of your offerings and support models.
Today’s workforce is more heterogeneous than ever before. There are now five generations represented in the workforce, each with unique needs, and each demanding a different employee experience. There is greater diversity as employers continue thoughtful assessment of the makeup of their workers. The prevalence and impact of non-traditional work models are growing as employers look to leverage independent contractors, contingent, and freelance workers to address their rising labor costs and human capital requirements. Workers can now look to a growing gig economy for new opportunities. Remote and hybrid work arrangements are now commonplace. These trends present both challenges and opportunities for organizations to help employers and workers address their insurance and related protection needs.
Success in this new world of work will require an understanding of the consumer (i.e., employees) like never before. But headwinds persist. Recent research from LIMRA and EY finds that while most employers feel they understand the benefit needs of their employees, employees do not share this sentiment. Only 4 in 10 workers feel their employers understand their benefit needs “very well.” Our research also finds that employees do not have a full understanding of what benefits are available to them and feel their employers do not do a very good job of communicating their benefits. Employers that do not find a way to close this gap will face even greater challenges in finding and retaining talent. As such, traditional means of education, communication, and enrollment will no longer suffice, and a new approach focused on an engaging customer experience will define future success.
A better connection with employees will require a re-imagination of how employers position benefits within their overall employee value proposition, with employee wellness at the core. No longer can benefits education and enrollment be a once-per-year event where employees learn about and make decisions within a narrow window of time. Instead the industry must transition to ongoing communication and engagement efforts with a focus on employee wellness. Programs supporting financial, emotional, and physical well-being will help employees “connect the dots,” make informed decisions, foster greater understanding of their benefits, and drive participation in both insurance and non-insurance plans.
Digital will take center stage in this transformation as organizations align with the new dynamic; what were once “nice to haves” are now table stakes in the delivery and administration of workforce benefits. Our research shows that employers value a wide array of digital services across the value chain, many of which are not currently available. These unmet needs signal opportunities for better digital support, a gap that many technology providers are anxious to fill for employers. Digital solutions will likewise support engaging employee experiences aligned with wellness-based initiatives. Leveraging data and analytics and incorporating concepts of behavioral economics can create personalized and customized experiences to help employees navigate their benefit offerings and make informed decisions.
A new sales and service model for workforce benefits is emerging, with a primary focus on the employee experience. To succeed, companies must align product and service offerings with an increasingly digital consumer and capitalize on new opportunities resulting from changing priorities.