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Benefit Plan Trends-Volume 60, Issue 8

Lundstrom Insurance Agency, Inc.

2205 Point Blvd., Suite 200
Elgin, Illinois 60123
Phone: (847) 741-1000
Fax: 847-428-8857

This publication intends to provide accurate information pertaining to the subject matter covered, however, it should not be considered as legal or tax advice. It is published and distributed with the understanding that neither the publisher nor Lundstrom Insurance Agency is rendering legal or tax advice. Before taking any action, you should always obtain specific advice and assistance from a competent attorney or tax advisor.

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A report covering plan design and legislative changes

Employers Plan to Hire Full-Time Workers in the Second Half of 2017

In the last six months of 2017, a majority of U.S. employers anticipate hiring full-time, permanent workers, with more than half saying they expect to offer higher starting salaries to new employees, according to a 2017 midyear job forecast released by recruitment website CareerBuilder.
The report's findings are based on national surveys conducted May 24-June 16, which included representative samples of 2,369 hiring managers and human resource managers and 3,642 full-time U.S. workers. The survey found that in the second half of 2017, 60% of employers plan to hire full-time, permanent workers, up from 50% in the same period last year; 36% of employers plan to hire part-time, permanent employees, up from 29% in the same period of 2016; and 46% of employers plan to hire temporary or contract workers, up from 32% in the same period last year.
A majority (53%) of the employers polled said they intend to offer more generous starting pay to new employees in the last six months of 2017, up from 39% in the same period last year. The results further indicated that 32% of employers plan to increase starting salaries on job offers by 5% or more. In addition, 66% of the employers surveyed said they expect to increase compensation for current employees before year end, with 34% saying they anticipate an increase of 5% or more.
A subset of respondents in the employer sample were asked about their motivations for offering higher pay. The findings showed that 72% of the employers feel they have to start paying higher wages because the market for talent has become increasingly competitive, with the majority saying this pressure applies to entry-level as well as experienced workers. While 17% of these respondents said they have to pay more only if the entry-level worker has a college degree, 24% said they have to pay more even if the entry-level worker has no college or training. 
The study also looked at which industries are most likely to add to their full-time, permanent headcount in the second half of 2017. The results indicated that 72% of employers in information technology, 66% of employers in manufacturing, 64% of employers in health care, and 62% of employers in financial services intend to recruit additional full-time staff in the last six months of the year.
Moreover, the study found that across industries, the types of roles employers are most likely to recruit for in the second half of 2017 are those tied to skilled trades (15%), software as a service (14%), cybersecurity (13%), sales enablement (13%), talent management (13%), providing a good user experience (12%), managing and interpreting big data (11%), creating digital strategies (11%), social marketing (10%), e-commerce (10%), developing apps (10%), and healthy living (9%).
Looking at hiring patterns across geographic regions, the study observed that all regions are showing a year-over-year gain in the percentage of employers expecting to hire full-time, permanent employees in the last six months of 2017. Hiring activity was found to be strongest in the West, where 67% of employers said they are planning to add workers; followed by in the South, where 61% of employers reported plans to hire more workers.

Targeted Retirement Plan Communications Can Improve the Participant Experience

As the workforce becomes more diverse and technologically savvy, retirement plan sponsors should focus on providing customized education, retirement readiness tools, situational guidance, and "next best step" trigger events to help employees prepare more effectively for retirement, a recent report by Broadridge Financial Solutions has recommended.
Released on June 7, the report, "Transforming the Participant Experience: Innovative Strategies for Improving Outcomes," observed that converging trends—such as changing workplace demographics, technological innovations, evolving participant demands, increasing margin pressure, low savings rates, and added regulatory scrutiny—are creating challenges and opportunities for new solutions to improve participant experience. Pointing out that millennials are expected to make up more than 50% of the global workforce by 2020, researchers warned that plan providers should be prepared to cater to an increasingly diverse audience, many of whom are "digital natives." 
According to the report, growing numbers of plan sponsors are seeking to transform their participant engagement strategies by leveraging data analytics, participant preferences, and multimedia campaigns to create targeted communications. The authors noted that sponsors are increasingly moving away from legacy platforms that rely heavily on custom coding to modify campaigns and compliance communications, and are instead turning to cloud-based technologies that allow managers to streamline content and easily make changes across multiple communication channels, including digital, mobile, and print. 
The report cited research showing, for example, that retirement plan participation can be raised 30% by effectively delivering personalized communication through multiple channels; and that an omni-channel approach of digital, print, and personalization strategies can save between 10% and 20% in annual communication costs. 
In addition, the report recommended simplifying print materials to ensure that communications are focused on key points, and using online microsites and opt-out programs aimed at retirement plan participants to reduce the need for call center support.
Another important trend identified in the report is the increasing frequency of plan and regulatory changes, which put pressure on plan sponsors to respond quickly to new requirements and plan updates. The authors suggested that automated content solutions can help eliminate the need to constantly create and manage one-off changes, making it possible to issue targeted communications with speed and precision.
Noting that 45% of working American households have no retirement assets at all, and that the retirement savings gap in the U.S. is an estimated $7 trillion, the authors further advised plan sponsors to place greater emphasis on reducing the retirement savings gap. To address the challenges associated with employees who decline to participate in retirement plans and older employees who may be thinking of putting off retirement, researchers recommended developing programs that outline the options for and the drawdown phases of retirement. 

Many Workers Regret Their Benefit Decisions and Want More Help

More than one in five American workers report that they often regret their benefit choices, and more than half say they would appreciate more help from their employer in making benefit decisions, the results of a survey on benefit communications conducted by employee communications platform provider Jellyvision have revealed.
The online survey of 2,043 US adults who are employed full-time, are eligible for company-provided benefits, and do not have health insurance through Medicare, Medicaid, or the Veterans Benefits Administration, was conducted from February 24 to March 17, 2017. In addition to finding that 21% of the respondents say they regret some of their past benefit choices, the survey showed that 55% of employees whose companies offer health insurance indicate they would like help from their employer when choosing a health plan, 49% of respondents say they find that making health insurance decisions is always very stressful, and 36% of respondents say the open enrollment process at their company is extremely confusing.
The survey also looked at how workers respond to efforts by their employer's benefit communications. The results showed that 60% of respondents prefer to receive information about company benefits electronically, and that 20% of respondents say they do not always keep up with benefits correspondence. For example, the findings indicated that some employees do not attend company benefits meetings, never read their company benefit summary plan description, or file or throw away paper benefit materials unread.
In addition, the survey uncovered a number of employee knowledge gaps around health care costs and high-deductible health plans (HDHPs). The findings showed that 54% of the workers surveyed are unsure of when they can make changes to their insurance during qualified life events, and that 43% are unclear on where to direct their health insurance questions. The survey also found that 41% of respondents are unable to identify all of the elements that add up to the full cost of their health care, such as employee and employer contributions and the cost of care; and that 50% of respondents admit they are not knowledgeable about HDHPs.
Researchers emphasized that these knowledge gaps can play a critical role in how employees use and value their benefits. The survey showed, for example, that the employees who claim to be knowledgeable about HDHPs are much more likely than those who said they are not knowledgeable to positively describe the option, with 26% of the knowledgeable respondents, but only 9% of those who said they are not knowledgeable, describing HDHPs as affordable.
As well as asking workers about their employers' benefit communications, the survey asked respondents to react to a possible repeal of the Affordable Health Act (ACA), particularly as it relates to employer-provided health insurance plans. While 61% of respondents said they do not think a repeal would affect them personally, most expressed support for key ACA provisions on annual (72%) and lifetime coverage limits (74%), coverage of preexisting conditions (80%), free preventative care (78%), and coverage of adult children up to age 26 (67% of those who have children under age 26), with the majority saying such provisions are "absolutely essential" or "very important."

Executives Report Barriers to Improving Worker Experience 

While executives say they understand the importance of worker experience and its impact on customer experience—and, thus, on customer loyalty and revenue—many business leaders struggle to fully implement programs that create meaningful links between worker experience and customer experience, according to a study conducted by Forrester Consulting on behalf of global services company Appiro. 
The results of the study are based on interviews and an online survey carried out between February and April 2017 of 450 business leaders at the manager level and above in the United States, the United Kingdom, Germany, France, Japan, and Australia. The findings indicated that 90% of the business leaders surveyed believe engaged workers are able to provide superior customer service, and that 88% believe that worker experience directly affects their company's bottom line, including revenue and the overall return on investment of business objectives.
However, 87% of the executives surveyed reported that they face hurdles when trying to improve worker experience in meaningful ways. Researchers also observed that many leaders lack focus in their approaches to improving worker experience: 70% of respondents identified more than eight solutions for improving worker experience, and 48% admitted that they address worker experience in an ad hoc way that results in less substantial implementation.
The findings further suggested that worker experience is not an implementation priority for most executives: only 26% of the business leaders surveyed said their company has a formal, dedicated worker experience program, and 20% admitted to doing nothing to address worker experience directly.
Researchers also pointed out that while there is a growing belief that worker experience affects customer experience and the bottom line, relatively few companies evaluate worker experience by assessing improvements in their customer experience rates. When the executives were asked what metrics they use to evaluate the success of worker experience efforts at their company, the top responses were worker productivity (56%), worker retention (46%), engagement with work (44%), and profitability (43%). By contrast, the respondents were less likely to say they use customer experience scores (42%) and customer retention (32%) to measure the success of worker experience initiatives. 
The survey results also indicated that more than three-quarters (79%) of the respondents acknowledge that their business faces challenges in delivering a superior customer experience, several of which are related to worker experience. When asked to identify the sources of these problems, 29% said organization structures prevent the business from delivering the intended customer service, 28% admitted that workers aren't empowered to fix the customer experience when they find problems, 26% said the business lacks the technology it needs to properly support customers, and 26% acknowledged that workers' goals don't reflect the business' customer experience goals. 

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

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