The Future is Here: Evolved Benefits…with Purpose
Modernizing Your Benefits Strategy for Today and Tomorrow
Presented by Willis Towers Watson
July 12, 2018
John Bremen Randall Abbott Julie Stone
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“Without a sense of purpose, no company
can achieve its full potential…[and] will
provide subpar returns to investors…”
— Larry Fink, BlackRock, 2018
Source: Blackrock Larry Fink’s Annual Letter to CEOs, 2018
An Evolving Mindset…
2
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A Dynamic Market
3
Number of Hospital Deals
The volume of
hospital M&A
deals has
increased
since 2009
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A Dynamic Environment
4
Officially the world’s
largest country
Text messages
Each day, the number of text messages
exceeds the population of the planet
The Internet created
2.6 jobs for each one it
lost, but they are very
different kinds of jobs
33% of today’s
U.S. workforce are
freelancers and will
grow to 43% by 2020
65% of children
entering school today will
have jobs that do not
exist yet
Today’s average
student will have
10 to 14 jobs before
age 40 (though not necessarily
because they want to)
Baby Boomers
One retiring every
nine secondsbetween now
and 2029
Generation X
Population peaks in
2018
Millennials
Largest populationin the workforce
today (1 in 3 American
workers)
Generation Z
Entering the
workforcein large numbers
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Generation Z’s
top three "must haves"
for their first job are:
Source: Monster Multi-Generational Survey
▪ health insurance (70%)
▪ competitive salary (63%)
▪ boss they respect (61%)
5
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43%
59%
73%
62%57%
38%
23%26% 25%
44%
54%
65%68%
2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Employer confidence in sponsoring health care benefits is on the rise
6
How confident are you that your organization will continue to sponsor health care benefits to active
employees in 10 years? (Very confident)
Sample: Employers with at least 1,000 employees.
Note: Responses represent “Very confident.” Years 2004-2017 are based on prior years of the survey.
Source: 2018 Willis Towers Watson Voluntary Benefits Survey; Willis Towers Watson Best Practices Survey, various years; Willis Towers Watson Emerging Trends Survey, 2018
5-Year Confidence: 96% very confident, that the organization will continue to sponsor health care benefits in five years.
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The nature of work and the employment relationship is changingA plurality of work is already here
7
Talent platforms
Traditional employees Outsourcing
Robotics Artificial Intelligence
Free agents
Volunteers
Alliances
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Increasingly, strategies must consider these non-traditional workers
8
Source: Freelancing in America: 2016 (Note: Estimates of non-traditional workers vary significantly by industry)
55 million Americans are freelancing –
that’s 35% of the U.S. workforce
Independent Contractors
~35% of the independent workforce
Diversified Workers
~28% of the independent workforce
Freelance Business Owners
~7% of the independent workforce
Moonlighters
~25% of the independent workforce
Temporary Workers
~7% of the independent workforce
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Wellbeing has emerged as a broader strategic principle for organizations
9
PHYSICAL
Includes lifestyle behavior choices to
improve health, avoid preventable
diseases and help members manage
existing medical conditions
84%
EMOTIONAL
Relates to mental health concerns
such as stress, depression and
anxiety
71%
How important will the following be to your organization’s health and wellbeing activities over the next three years?
FINANCIAL
66%
Having control over daily or monthly
finances, on track to meet goals, ability to
absorb a financial shock and have the
financial freedom to make choices
SOCIAL
Sense of involvement with family, friends
and other people within our communities
49%
Source: 2017 WTW Best Practices in Health Care Employer Survey.
Sample: Companies with at least 1000 employees.
Note: Percentage responding ‘Very important’ or ‘Important’.
72%
Differentiate our health and
wellbeing from other
organizations with which we
compete for talent, customize
for critical workforce segments
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What was once foundational is now top of mind for employeesEmployee views on top drivers of employee attraction and retention
10
Rank Top Drivers of Attraction Top Drivers of Retention
1 Base pay/salary Base pay/salary
2 Health and wellbeing + retirement Opportunities for career advancement
3 Job security Health and wellbeing + retirement
4 Opportunities for career advancement Job security
5 Vacation, paid time off Trust, confidence in senior leadership
6 Opportunities to learn new skills Opportunities to learn new skills
7 Reputation of the organization
as a great place to work
Length of commute
Source: Willis Towers Watson 2016 Global Workforce Study and Global Talent Management and Rewards Survey – US Results
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Benefits matter to employees
11
Note: Percentages indicate ‘Agree’ or ‘Strongly agree’.
Source: 2017 Global Benefits Attitudes Survey, United States
52%
compared to 25% of those whose
benefits does not meet their needs
of employees whose
benefits meets their needs are
highly engaged with their job
65%Managing my health
is a top priority in my life
78%My retirement security has become
a more important issue for me over
the last 2 or 3 years
69%Managing my finances is a top
priority in my life
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And are evolving, as the focus is now on benefits preferences
12
154 Unique enrollments needed before two employees have an identical mix of products
Source: 2017 Willis Towers Watson Global Benefits Attitude Survey and PERC Research
Choice and flexibility
increases employee
appreciation of their
benefits packages.
There is a heightened
focus on security.
Employees want to
protect their core
health and retirement
benefits.
Employees of all ages are willing
to pay for greater retirement
security.
Whilst there is a focus on
maintaining ‘traditional’
benefits, employees express
interest in a broader array
of benefits.
It is time to move beyond a
one-size-fits-all approach as
employees express a wide
range of preferences within
and across benefits.
01 02 03 04 05
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Employees are open to being encouraged by their employersBut are wary of receiving personalized messages that may shine a light on their behavior
13
Note: *Percentages indicate ‘Strongly agree’ or ‘Agree’. **Percentages indicate a preference for the statement on a 7-point semantic differential scale.
Source: 2017 Global Benefits Attitudes Survey, United States
Employers should send personalized messages to employees who are not living a
healthy lifestyle**
19%
Of employees would be comfortable if their health plan sent him reminders to refill my
prescriptions or get an annual check-up*
53%
Employers should offer tools that provide suggestions on which medical professionals to use**42%
Of employees think employers should encourage employees to live healthy lifestyles**54%
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“Traditional” benefits still are valued…with interest in broader products and
services is growing along with diverse needs
If your employer provided you with an allowance to
spend on a variety of benefits, where do you think you
would spend your money?
a) Retirement plan
b) Health care plan
c) Life and disability insurance, income protection
d) Financial protection (critical illness insurance, other
insurance)
e) Medical protection (dental and vision/optical plans)
f) wellbeing programs (gym discounts, healthy eating
courses, onsite services)
g) Employee discounts Note: Percentages indicate how much respondents would
allocate if an allowance provided by employers.
Source: 2015/2016 Global Benefits Attitudes Survey, United States.
14
32%
29%
9%
7%
12%
5%6%
Retirement plan
Health care plan
Life and disability
Financial protection
Medical protection
Health and well-being
Employee discounts
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Employee wellbeing is taking on a new importance
15
Source: 2017 Willis Towers Watson Best Practices in Health Care Employer Survey.
Physical wellbeing +57
Financial wellbeing +50
Emotional wellbeing +59
Social wellbeing +37
84%
66%
71%
49%
27%
16%
12%
12%
0.5
2.5
4.5
Progress over the last three years (% of ‘To a very great extent’ or ‘To a great extent’)
Importance over the next three years (‘% of ‘Very important’ or ‘Important’)
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What drives value for employees?
Note: Percentages indicate ‘Agree’ or ‘Strongly agree’.
Source: 2017 Global Benefits Attitudes Survey, United States
Without voluntary benefits With voluntary benefits
Overall, my benefits package meets my needs?
39%
60%63%
71%
54%
72%70%
85%
15%
33% 31%
46%
No choice in core
benefits
Choice in level of
benefits
Flex fund Flex fund with
decision support
1. Employees with greater choice and
flexibility value their benefits more.
2. Most of the gains from offering choice
can be achieved by providing it in the
level of benefits and voluntary
benefits.
3. Online recommendation engines also
improve benefits appreciation.
4. Is there an opportunity for using choice
to enhance the benefits value
proposition?
16
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Employees Value Marketplaces
17
86% feel more engaged in their
healthcare decisions & 85% feel more
confident making benefit decisions
80% appreciate their benefits more & 84%
appreciate their company more because
of benefits
90% are more aware of their company’s
contribution & 75% feel they get more
value from their benefit dollars
78% are more likely to stay with their
employer because of the benefits
Employee Perspective
2018 Willis Towers Watson Employee Survey: Q.11 Base: Total Respondents (n = 17,284), First time user (n = 7,146), Renewal (n = 10,138)
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The Future of benefits – trends expected to drive action
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Transparency
Create tailored
program and
communication
strategies for
benefits education,
awareness and
engagement
Flexibility and
Choice
Implement benefit
and rewards
programs that
deliver flexibility,
choice and align
technology
platforms within the
organization
Future of
Work
Assess how work
gets done and new
ways to supplement
current work;
understand what is
needed to define or
redefine total
rewards programs
for the new structure
Personalization
Develop action
plans to enhance
employee
experience through
greater
personalization of
benefits via choice
Data-Driven
Decisions
Leverage data,
insights and industry
research to create
tailored strategy
programs
Employee
Experience
Enhance the
member experience
through more choice
with decision
support
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Employers are trending toward Benefits Modernization strategies that:
19
Offer choice in health
plan options
Offer choice and variety
in the types of benefits
(voluntary benefits)
Create a shopping
experience when members
sign up for benefits
Offer recommendation tools that
support enrollment decisions (e.g., interactive videos, algorithm-driven
recommendations)
Today In 2019
Sample: Companies with at least 1,000 employees
Source: 2017 Willis Towers Watson Best Practices in Health Care Employer Survey
Today 84%
In 2019 92%
Today 66%
In 2019 86%
Today 24%
In 2019 50%
Today 44%
In 2019 73%
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We are at an
The Future has
arrived – and so
has the need for
an evolved talent
experience and
benefits mindset
20
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External factors driving the need for an evolved benefits mindset
21
Full-employment economy
and labor shortageWorkforce dynamics Productivity needs
Technology
Human capital sustainability
as a measure of future
business success
A continued VUCA world
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The contextWe need to understand the shifts in organizational thinking created by the new world of work and the agile,
evolved organization
22
Recognition of Human Capital
Progressive organizations focus on
three key characteristics:
Agility
Purpose
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Organizations need both a modernized offering and a new mindset
23
Benefits brand
Benefits mission/vision
Static and structured
Competitive benefits
One size fits most
Voluntary benefits (VBP)
Subsidized price tags
Periodic updates
FT/PT coverage
Automated administration
Compliance-based
Wellness-centric
Traditional benefits tasks are still
critical but thinking needs to evolve
Organizational brand alignment
Talent value proposition
Agile with multiple scenarios
Differentiated benefits
Choice and flexibility
VBP and individual offerings
Explicit/Aligned subsidization
Dynamic innovation
FT/PT/Contingent strategies
Digitized and personalized
Socially responsive
Total wellbeing
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Opportunities for organizations to leverage these inflection pointsAn evolved focus on benefits to deliver today’s employee/talent experience
24
Speed and the
pace of change
Shift from
employee
wellness to
wellbeing
A focus on
purpose and
values
Subsidies that
align with
organizational
values
Human capital
attraction and
sustainability
Technology
optimizes and
aligns the
benefits
experience
Personalized
choice and
employee
expectations
The need for
health care cost
and value
improvement
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“I’m not talented enough to
be unprepared…are you?”
— Monroe Stahr in The Last Tycoon
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Evolving the benefits journey with your organization
26
8 Leverage the power of choice and decision support
7 Acknowledge inclusion, diversity and social responsibilities
6 Examine the needs of contingent workers
5 Understand generational shifts
4 Implement effective wellbeing strategies
3 Acknowledge workforce shortages and talent acquisition/retention
2 Align with purpose and values
1 Continue the health care cost and value imperative
9 Move to a customized, purpose-driven approach that includes voluntary benefits and perqs
10 Leverage technology and digitalization with personalization; integrate benefits delivery
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Questions
& Answers
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