Evolving the benefit mindset: Responding to the pace of change (Part 1 in series)

overhead shot of three people in conversation on benches

Louis Pasteur famously observed that “fortune favors the prepared mind.” This seems particularly appropriate as we reflect on the pace of change in business and the challenge of designing and delivering a competitive and differentiated employer-sponsored benefits portfolio. Today, HR and benefit leaders are challenged to attract, retain, motivate and engage workers while navigating new ideas, changing technologies, emerging benefit-related products and shifting expectations of an increasingly diverse and segmented workforce. Leaders must be agile, adept at change and willing to experiment as they try (and occasionally fail) to keep pace and effectively contribute in a constantly changing ecosystem.

Part 1 in an 8-part series: Evolving the benefit mindset          
In this series, experts from Willis Towers Watson identify eight areas of focus critical for the successful implementation of a benefits strategy in a time of increased automation, uncertainty and changing employee expectations. From the need for agility as business-as-usual to the role of organizational purpose (including the attraction and sustainability of human capital through employee wellbeing and inclusion and diversity programs) and much more – these components are essential tools for any leader in today’s climate.

For decades, benefit strategy has consisted of a three- to five-year plan with intermittent tweaks to accommodate cost constraints, periodic design changes and/or open enrollment requirements. Benefit management has largely remained unchanged and the fundamental tasks (i.e., design, price, comply, communicate, deliver and administer) continue to be important. Yet employers are finding themselves challenged to differentiate their organizations in a highly competitive employment environment.

As a result, the strategic context for benefits must evolve. This doesn’t mean we need to change or discard historically successful benefit management or operational practices. For the record, virtually all of the activities associated with effective benefit management remain essential. But today, the pace of change requires agility and responsiveness as business needs, technology and innovation, workforce complexion and the changing nature of work create an environment in continual flux. Bob Johansen of the Institute for the Future said the best way to operate in such an environment is “to be very clear on where you are going but very flexible in how you get there.” This requires agility.

The Oxford Economics’ Global 2021 Survey identifies key characteristics of agility as the ability to:

  • Consider and prepare for multiple scenarios
  • Innovate
  • Deal with complexity and ambiguity
  • Manage paradoxes and opposing views
  • See “the big picture”

How are leading organizations putting agility into practice?

Benefit leaders must broaden their mindset beyond “just benefits” to also:

  • Support organizational purpose and values
  • Integrate more effectively with the company’s overall Total Rewards strategy
  • Align benefit programs, services and resources with larger wellbeing and engagement efforts
  • Provide a differentiated talent experience.

The good news is that 80% of the benefit leaders who responded to our 2018 Employer Best Practices in Health Care Survey said they have enough funding to deliver existing programs well. The bad news? Only 55% said they have the budget to add critical new programs, and only 41% have sufficient funding to adopt new technologies.

The challenge for employers is three-fold:

  1. Assess the existing portfolio with a fresh perspective to determine whether longstanding legacy program designs still meet employee needs
  2. Evaluate how investments are applied via the subsidy strategy
  3. Evaluate how benefits are delivered and the employee experience it creates

According to our 2017 Emerging Trends in Health Care Survey, 96% of employers are making the employee experience with benefits a top priority over the next three years.

HR and benefit leaders have a tremendous opportunity to build an evolved benefit portfolio that “meets employees where they are.” This doesn’t mean abandoning traditional core benefits, but acknowledging that a one-size-fits-all approach to benefits no longer meets the needs of a diverse and segmented workforce.

In practice, it means offering a portfolio built on the security of traditional core benefits that employees have come to expect, coupled with greater choice and a personalized user experience that offers attention to employee wellbeing and engagement as a catalyst for increased workforce productivity and business results. When these factors converge, the outcome is an evolved benefit portfolio that provides value to employees, customers and shareholders alike.

So how can your organization become more agile in today’s benefit environment?

We’ve identified six key themes to keep in mind as your benefits portfolio evolves:

  1. Embrace benefits, policies and services that will support the changing nature of work and the changing workforce and will be effective in parallel with organizational growth.
  2. Consider any required benefits or services that are unique to a particular workforce segment, as well as inclusion of contingent labor, where appropriate.
  3. Respond to individual needs for choice and flexibility, coupled with strong decision support and aligned with the desired talent experience or “employee value proposition” (which may include both employees and contingent workers).
  4. Integrate benefit policies, programs and practices in support of broader wellbeing and engagement initiatives.
  5. Ensure that benefit policies, programs and practices support the needs of all workforce segments, as well as inclusion/diversity initiatives, meeting participants on their terms.
  6. Adopt an intentional strategy for benefit subsidization that reflects employer values, desired behaviors and encourages higher-value decision-making.

Evolving with agility requires a new mindset for HR and benefit leaders, which includes a shift in understanding and receptivity to change. Today’s “evolved organization” is already acting; its leaders have embraced the change, are continually assessing their organizational needs, and are finding ways to meaningfully enhance today’s talent experience by revisiting and reimagining their benefit strategy. By identifying the plans and practices that are right for their organizations, they’re adapting to suit their needs, thought processes and approaches.

As organizations look to adopt a more agile mindset, each of their journeys will look different; each will find itself in a different place, with varying degrees of urgency and need for change. We recommend organizations step back and assess their status quo in the face of change. This will be both a challenge — and an opportunity — for all. This is not a time for complacency, nor is it a time to presume that what has worked in the past will work in the future. As Monroe Stahr observed in The Last Tycoon: “I’m not talented enough to be unprepared……are you?”

Next in series: Aligning benefits with organizational purpose


This post was adapted from the Willis Towers Watson article, “Evolving the employee benefit mindset and strategy: The future arrived yesterday” by Randall K. Abbott, senior strategist emeritus for Willis Towers Watson’s Health and Benefits practice, John M. Bremen, managing director, Human Capital and Benefits, and Amy DeVylder Levanat, director Human Capital and Benefits. Read the full article.


 

Authors:

John BremenJohn Bremen is Managing Director, Human Capital & Benefits, and Global Co-Head, Health & Benefits, at Willis Towers Watson.

 

Mark HopeMark Hope is Senior Director of Health & Benefits Consulting at Willis Towers Watson.

Categories: Employee benefits, Employee Engagement, Employee rewards, Employee Wellbeing | Tags: , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *