Mercer’s recent report finds that employees place a high value on healthcare—now more than ever.
By Jeff Miller
Uncertainty about employment, healthcare and the financial future has become a fact of life for many employees, and employers continue to respond. Often partnering with outsourcing providers who can deliver optimal programs, technology, and administrative efficiencies, companies are focusing efforts to train, educate and encourage workers to take greater responsibility for their well-being, their career development, and retirement prospects. The goal is to help them recognize and optimize the full value of the employment proposition offered by their companies.
It’s no surprise then that there’s a growing awareness of the value of benefits among today’s employee population, given the current economic volatility and rising healthcare costs. According to our 2011 Mercer Workplace Survey, nearly eight out of 10 employees say their benefits are one of the reasons they work where they do, and almost as many (76 percent) say that benefits make them feel appreciated by their company, while 91 percent say that getting health benefits through work is just as important as their salaries.
Those results represent significant increases from last year: a nearly 7 percent increase of respondents who say their benefits are one of the reasons they work where they do, and a 5.5 percent increase in those who say their benefits make them feel appreciated. Perhaps more dramatically, the percentage of those who say they are willing to pay more out-of-pocket costs than have their healthcare benefits reduced has risen from 67 percent in 2010 to 75 percent this year.
If anything, the survey emphasizes that benefits are a pivotal part of the employee experience—now more than ever. For employers, it underscores the opportunity to position their benefits program as a differentiating strategy, a high road to the coveted employer of choice status. But the implications of this heightened benefits awareness extend far beyond recruiting and retention—they lead employees toward greater engagement, personal accountability, and overall satisfaction.
Again, there’s strong evidence to support this. The 2011 survey notes a higher level of participation in programs that encourage personal accountability, as nearly a third of employees say they take advantage of their employer’s wellness program “a great deal,” up from only 23 percent last year, while 26 percent say they take advantage of their employer’s disease management program “a great deal,” up from 15 percent last year.
But uncertainty remains, especially regarding the impact of U.S. healthcare reform, which may be driving employees’ appreciation of benefits. More than a third (36 percent) of surveyed employees—double the 2010 level of 18 percent—report that their employer has indicated that changes in their health plan will occur as a result of healthcare reform. And, as already noted, 75 percent now say they would rather pay more out of pocket than have their health benefits reduced.
This attitude shift only reinforces the need to simplify the complex topic of healthcare reform and make it more understandable and meaningful for employees, especially with implementations taking effect in 2014. Employers can build on this momentum by providing education and programs that encourage informed decision-making and health-conscious behaviors.
And this points to more opportunity for benefits outsourcing partners, whose self-service tools, targeted education, and technology platforms help to highlight the employee benefit spectrum as part of a total rewards and a total retirement planning program that include 401(k)s, IRAs, and other investments. In that regard, employers and their benefits outsourcing providers appear to be making real headway. The 2011 Mercer Workplace Survey notes a general increase in employee confidence attached to almost every dimension of retirement planning. Up most conspicuously is confidence in “knowing how to calculate how much money you will need in retirement”—up nine percentage points from 2010, to 67 percent of survey respondents.
Indeed, the economic climate has triggered a new focus on retirement preparation among plan participants, both young and old. Declines in the value of many 401(k) accounts, along with a troubled real estate market, continue to make retirement readiness a key dimension of the benefit value proposition, encompassing defined-benefit (DB) pension plans as well as defined-contribution (DC) plans, along with outside assets and options such as IRAs and annuities.
It’s a complex, clouded landscape, but the silver lining suggested by the 2011 Mercer Workplace Survey is that employees seem to be turning their uncertainty about the future—in terms of everything from healthcare reform to job security and retirement adequacy—into a greater appreciation of and accountability for their benefits as well as a desire to become more involved in the relevant decisions. For benefits outsourcing providers, the imperative is clear: make it possible and more efficient for employers to manage the benefits proposition—and justify the value their employees’ place on benefits.
Jeff Miller is president and group executive of Mercer’s outsourcing business, based in Norwood, Mass. He may be reached at email@example.com