The road to today’s benefits packages and employee benefits communications have significantly changed since the establishment of the first employee pension plan in 1875 by the American Express railroad company. Pension plans represented the first step into the benefits landscape. Now, almost 150 years later, the classic pension plan is almost extinct in the private sector.
Paul Horn, the founder of WorkPlace Consultants, LLC, who has worked in the employee benefits communications arena for decades, provides an excellent overview of the development and current issues involved in benefits packages – notably, pension plans and health insurance. His article, Quick History of Employee Benefits in America, traces the evolution of the two best-known benefits. “Today” is a relative term. The working population is in the middle of a revolution. It’s called the Fourth Industrial Revolution, a term coined by Professor Klaus Schwab, who published a book by the same name. On April 5, 2016, Bernard Marr, a Forbes contributor, wrote about this subject, outlining the causes and results. The first revolution was steam and water power; the second was electricity and assembly lines. Computerization ushered in Industrial Revolution 3. The Fourth? Marr states, “…it is the idea of smart factories in which machines are augmented with web connectivity and connected to a system that can visualize the entire production chain and make decisions on its own.” What does this have to do with employee benefits communications?
Millennials Are Driving the Benefits Bus
The largest group in the workforce is millennials, at over 30%. By 2025, they’ll be 75% of the entire workforce. What they are looking for with benefits packages is markedly different from the “wish list” of previous generations. Their emphases are different. It’s the millennials which are causing companies of all sizes to rethink what a makes a great benefits package and how they manage their employee benefits communications. Willis Towers Watson, a global leader in fiscal advisories, brokering and streamlined solutions, targets five compensation and benefits package factors that can motivate the newest workforce generation to either stay or move to a different company. They are:
• schedule flexibility: With more professionals – especially in the science, technology, engineering and mathematics industries – working as contractors, less time is being spent in office environments.
• technology: It’s changing at a breakneck speed, expanding schedule flexibility, communications and even payroll options for current and future employees.
• personalization: As job flexibility is changing, employees want compensation and benefits packages more tailor-made. Millennials don’t have the previous generations’ expectations of standardized salaries and pay increases. Employee benefits communications has to meet this new trend. They are more motivated by how happy they are at their jobs. They also expect to move onto a new company in 1- 1½ years.
• health and wellness: Job stress still ranks high enough (50%) to play a possible role in the development of several diseases. Forward-thinking companies have instituted a variety of health and wellness initiatives, which millennials like. Studies have shown that well-managed health and wellness initiatives along with strong employee benefits communications can reduce everything from the number of sick days an employee takes to drops in hypertension and high blood sugar among employees and a major increase in both productivity and employee engagement.
• compensation and managerial transparency: Salaries remain the cornerstone of the attractiveness or the unappealing nature of a job. Other factors come into play as well for employees: the fiscal health of a company, whether salary increases can be afforded, and how a given company’s job compensation and required skills compare to similar job requirements and skill sets in the market.
Millennial talent recruiting and retention will be healthy and higher with companies that offer these options. So what should an HR pro do?
First, Take a Deep Breath
The first step is to take inventory. Look at the company and assess what is in place at the moment. How does the company compare to other companies in the same business arena? Next, look closely at the big picture. What are the company’s goals? What is possible for the year, for the next five years, or for the next decade? Once the first two steps have been completed, the next is to tackle the realization of Points 1 and 2 with others. Perhaps vendors have programs they can offer, which can be offered to employees. There might be university courses that relate to the company’s business that employees can take. Tuition reimbursement? An excellent benefit. Just make sure your employee benefits communications system is up to the task. In tandem with the third step, build a case for how a program can build a better company. Finally, create a roadmap for the benefits plan that can be shared with and understood by key people within the company…which includes employees. An employee benefits communications system is key in this step as well. The benefits arm of the business world will continue to evolve. Following the outlined steps, and understanding what millennials want means that the arm will be muscular and strong.