Behavioral Economics and Employee Benefits – What can we learn and apply?
Today’s workforce is transforming. The 15th Annual U.S. Employee Benefit Trends Study (EBTS) not only confirms that work life doesn’t look like it used to, it concludes employees are increasingly looking for benefits to provide them with more stability, more protection, and increased financial wellness. And they want their employers to provide it in the form of a complete benefits experience.
I’ll discuss what a complete experience means a little later, but let me be clear: This desire by employees doesn’t simply translate into more benefits. Instead, workers are looking for a customized benefits offering that reflects who they are, what they do, and why they do it.
What Employees Want
The growth of the gig economy has significant implications when it comes to what makes employees happy and what they’re seeking at and from work. Happiness has always been a focus for employees, but employees shifted how they define happiness.
Today, employees are looking for flexibility. Our study indicates more than half of employees want to pursue contract or freelance work so they can take advantage of more flexible hours, as well as opportunities to work from home and work on a variety of projects.
And while happiness and work satisfaction are just as important—if not more important—than how much they are being paid, almost half of employees surveyed are still worried about their financial health. Workers expect their employers to proactively provide solutions to set their minds at ease.
In other words, employees today are looking to their companies to provide them with a sense of both financial and emotional wellbeing.
The Key to Engaging Employees
To attract and retain top talent in this new era, employers must adapt their workplaces to address the unique needs of their employees. Providing workers with the ability to customize their benefits is key to satisfying this desire.
Nearly three-fourths (74 percent) of employees say customized benefits are important when considering a job offer, and 72 percent state having individualized employee benefits would increase their loyalty to their current employer.
We Want What We Want
Today, our lives reflect our preferences. We choose how our coffee is made, create personalized playlists, and decide which apps we have on our phones. In all aspects of our lives, we make choices to meet our unique needs. The same should apply when it comes to benefits.
This is particularly important for driving engagement and loyalty among millennials, the largest generation in the workplace today. Customization for them is inherent, and they want to know that their employers understand and are willing to address their specific needs.
Employees are even willing to pay for benefits that meet their unique needs. Half (51 percent) of employees say they want their employers to provide a wider array of non-medical benefits that they can choose to purchase and pay for on their own. Similarly, 52 percent of employees are willing to bear more of the cost of their benefits to have choices that meet their needs.
When it comes to specific non-medical benefits, over half of employees say dental, vision and life insurance are must-have benefits, and nearly half say the same about short-term and long-term disability.
This presents an opportunity for employers to drive loyalty and employee engagement by providing a wide variety of benefits options.
Creating a Complete Employee Benefits Experience
So how do employers deliver on employees’ expectations? The key is in considering the five aspects that make up a complete benefits experience.
- A broader definition of benefits: When employers offer a breadth of benefit options, they can help alleviate the anxiety that comes with the integration of work-life and home-life. About one third of employees say having short-term and long-term disability benefits reduces their financial stress.
- More customized benefits: When employers deliver tailored employee benefits, they help an increasingly diverse workforce find the security it’s looking for.
- Assistance with choosing benefits: When workers have access to the right expertise, it ensures they can get the help they need to meet today’s challenges.
- A clear explanation of benefits: By providing clearer information about the benefits available, employers can help employees choose the ones that fit their needs.
- A simplified enrollment and engagement experience: Lastly, when employers simplify benefits enrollment, workers can discover the immense value of their benefits. As a result, their appreciation can enhance their loyalty and commitment to their company.
The Opportunity for Employers
The results of this year’s EBTS provide employers with a big opportunity. Employees are not only looking for benefits that help meet their financial wellness needs, but also for employers to help safeguard against work-life stress and anxiety.
With open enrollment coming up in just a few months, it’s a good time to evaluate your benefits processes. Ensure you’re providing benefits that meet your employees’ specific needs, and explain them in a way that enables employees to connect workplace benefits with their financial wellness goals.
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