the future is here: evolved benefits…with purpose · source: freelancing in america: 2016 (note:...

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

© 2018 Willis Towers Watson. All rights reserved.

willistowerswatson.com

© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

“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



A Dynamic Market

3

Number of Hospital Deals

The volume of

hospital M&A

deals has

increased

since 2009



A Dynamic Environment

4

Facebook

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



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



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.



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



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


Freelance Business Owners


Moonlighters


Temporary Workers




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



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



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



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



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.


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%



“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



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’)



What drives value for employees?

Note: Percentages indicate ‘Agree’ or ‘Strongly agree’.


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



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)



The Future of benefits – trends expected to drive action

18

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



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%



We are at an

The Future has

arrived – and so

has the need for

an evolved talent

experience and

benefits mindset

20



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



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



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



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


© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.25

“I’m not talented enough to

be unprepared…are you?”

— Monroe Stahr in The Last Tycoon



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



Questions

& Answers



Thank you!

the future is here: evolved benefits…with purpose · source: freelancing in america: 2016 (note:...

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