Magazine article Risk Management

The Future of Employee Benefits

Magazine article Risk Management

The Future of Employee Benefits

Article excerpt

As a number of management, demographic, technological and legislative trends are reshaping the workplace, more and more employers are recognizing the need to adjust their employee benefits programs. For one thing, traditional programs providing medical, dental, life and pension benefits are becoming more flexible to meet the needs of an increasingly diverse work force.

Indications of how the work force is changing are readily apparent. Women are well-established in the workplace, and the differences in compensation and benefits between men and women are disappearing. Government data indicate that the number of minorities and immigrants participating in the work force will increase. Statistics also project that the overall population growth will slow to a point that we have not experienced in decades, shrinking the pool of young workers. At the same tithe, the graying of the U.S. population and its longer life expectancy will create strains on the retirement system that must be addressed.

The structure of the workplace is also changing. "Doing more with less (and faster)" is the byword not only of employee benefits programs but of the global business community as well. Organizations throughout the world are reevaluating processes and questioning how products and services can best be delivered to their external and internal customers.

As part of this process, mergers and acquisitions are continuing to transform many industries. According to Securities Data Co., 1996 was a record year for merger activity, fueled by consolidation in the retail, communications, insurance and utilities industries. In addition to creating employee anxiety, these transactions have a number of effects on employee benefits programs. Programs sponsored by different companies often have to be combined, which can be especially difficult in international transactions. Further complicating this issue is the fact that staff consolidations usually take place at the managerial level. In many instances, the employee benefits department is asked to administer more complicated programs, involving additional employees, with a smaller staff.

Rising to the Challenge

As employees come from increasingly different educational and cultural backgrounds, their expectations are changing as well. In this environment, employers are being asked to go beyond traditional benefits to offer more lifestyle-related options (see Table 1). The ground rules for rising to this challenge will include:

Giving employees more choices. Allowing workers to customize their benefits programs will make them happier, more productive and better able to meet their individual and family needs. Because people need different benefits at various times in their lives, employers are being asked to provide more choices.

Providing information so employees can make long-term choices. Because it is increasingly unlikely that they will start and end their careers with the same employer, employees have to consider the long-term implications of their benefits choices, and employers will have to educate employees on how to make the best choices.

Making benefits portable. Employees who understand the economic climate will expect their benefits to be portable, and this portability will ultimately drive individual financial security more than tenure with one employer.

Communicating the true value of benefits to employees, supervisors and managers. Employees who are satisfied with their benefits are likely to have an increased commitment to their employers and will begin to see their benefits not only as a part of their current compensation but also as a contribution to their future financial security. Similarly, supervisors and managers who understand the value of the company's benefit programs can use those programs to recruit, retain and motivate employees.

     TABLE 1
The Changing Face of Benefits

As employee benefits programs change to meet
the needs of an increasingly diverse workplace, employers
are providing a number of lifestyle-oriented benefits and
services in the following categories:

     Personal Finance

Retirement and Financial Planning
Legal Services
Home Purchase Assistance
College Tuition Assistance
Estate and Will Planning
Discounts for Major Purchases
Auto and Home Owner Insurance
Special Rate Credit Cards

     Transportation Benefits

Ride-share Incentives
Transportation Reimbursement

     Time Off Issues

Personal Leave Benefits
Vacation Planning
Vacation Buying and Selling

     Quality of Life

Personal Development
Social Networking Opportunities
Tuition Assistance Programs
Meals/Food Subsidies
Community Volunteer Assignments
Personal Time Management Assistance
Employee Support Benefits
Child Care and Elder Care
Dry Cleaning Pickup and Delivery
Home Repair Arrangements and Assistance
Entertainment Discounts
Automobile Repair Assistance

     Mental and Physical Health

Wellness Programs
Comprehensive Employee Assistance Programs
Resource and Referral Services for Medical Problems

Using Technology

Better use of technology has been key to employers' delivering more comprehensive services, often at a lower administrative cost. …

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