By: Alison Peterson (Partner, Aon) | Dany Mathieu (Senior Vice President, Aon)
Employee benefits are key to attracting and retaining top talent for organizations. The Q&A below outlines perspective from Aon executives on what challenges HR and benefits leaders are facing.
Question: What are the biggest challenges facing HR leaders today?
AP: Getting the cost and benefits balance correct. Companies want to make sure they are getting the best return on their investment, but one of the challenges in delivering valued benefits is catering to the different generational needs and desires in the workplace. Customizing certain benefits is very difficult and expensive to do.
DM: Yes, that challenge applies globally as well. One of the things employers are doing is improving employee communication and education regarding healthcare and other benefits to make sure employees understand the value they are receiving from the employer. Companies are also using global wellbeing programs to help employees make more informed life choices without forcing them to do something or coming across as paternalistic.
AP: I would also add that most new hires are excited about the new job opportunity and are more likely to ask about the corporate culture, office environment and perks. Therefore, the value these employees receive through traditional benefits — which is significant — is harder to articulate because many employees assume these are offered and don’t look at the cost breakdown if they are new to the firm.
Question: Where do you expect to see HR and benefits leaders focusing their attention in the coming months to address these challenges?
DM: Aon recently conducted a survey of benefits leaders at companies across the globe and found that a majority of organizations plan to implement or fine-tune their financial wellbeing programs. A lot of younger employees never received basic education on personal finance. Employers that are spending significant amounts of money in retirement savings, employee stock purchase programs and other savings vehicles want to see higher employee participation.
Along with that, we’re also seeing a shift from traditional wellness programs that focus more on physical fitness to wellbeing initiatives that embrace a broader definition of wellness, including physical, social, financial and emotional. Some of that shift is in response to younger Millennials who have different expectations of what the work environment will be like. They want work to be fun and don’t necessarily delineate between work and their personal life; the two are very much integrated. They are looking for organizations that can offer more holistic wellbeing programs.
AP: I also see more companies focusing on customizing their benefits to meet the diverse needs and desires of the workforce despite the difficulty in doing so. Our research has found the number one reward most employees value is base pay followed by short-term incentives. But after that, when looking at things like long-term incentives (which many employees aren’t eligible for) and benefits, the types of offerings that employees’ value is all over the map. HR and benefits leaders have their work cut out for them.
Question: What areas of employee benefits are especially ripe for innovation?
DM: Companies are trying to figure out a way to promote families in an era when you’re always “on” at work. A big element of this is developing more comprehensive family leave policies, including paternal and maternal leave, fertility treatments, adoption assistance and elderly care. Improved family leave policies can also help companies attract and retain more women in the workforce, which is a goal of many organizations across the world.
AP: While traditional benefits like retirement savings and healthcare are really important, where employers can distinguish themselves is around perks, allowances and leave — particularly when catering to younger generations in the workforce.
DM: Yes. Younger generations often want to be part of community building in the workplace. So, while flexible working arrangements are valued, a lot of younger employees also want a corporate culture that promotes community. This can include shared working environments, fun activities and perks in the office and company-sponsored social events and charitable programs.
If you have questions about your benefits programs or want to learn more about how Aon partners with organizations to develop a compelling total rewards strategy, please contact us at firstname.lastname@example.org.