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Benefit Plan Trends - Volume 62, Issue 2

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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VOLUME 62, ISSUE 2

 

Generation Z May Lack Soft Skills As They Enter the Workforce


As members of Generation Z are entering the workforce, they are bringing with them a deep and broad understanding of technology that can help propel businesses forward into the digital era, but they may lack some of the soft skills needed to perform optimally in the workplace, the results of a global study commissioned by Dell Technologies have suggested.

The study's findings are based on a survey conducted from August to September 2018 of 12,086 individuals aged 16-23 currently attending secondary and post-secondary school in 17 countries, including the U.S. The aim of the study was to gather data on current attitudes and opinions on technology and the workplace among Generation Z students who will be entering the labor force in the near future.

The survey showed that digital natives are set to reshape the workforce, as 80% of the Gen Z respondents said they aspire to work with cutting-edge technology. Of those respondents, 38% reported an interest in pursuing a career in IT, 39% said they want to work in cybersecurity, and 46% said they want to work in technology research and development. The findings further indicated that of the young people surveyed, 98% reported that they have used technology as part of their formal education, and 91% said the technology offered by an employer would be a factor in choosing among similar job offers.

The results also showed, however, that many members of Generation Z are concerned that they lack the soft skills and experience employers are seeking. Although 73% of respondents rated their technology literacy as good or excellent and 68% indicated that they have above-average coding skills, 52% acknowledged that they are more confident that they have the tech skills employers want than the non-tech skills, and just 57% rated their education as good or excellent in preparing them for a career. Moreover, while 77% of respondents said they are willing to serve as a tech mentor on the job, 94% admitted that they worry about whether they have the skills and experience employers are looking for.

In addition, the survey revealed that 80% of respondents believe technology and automation will create a more equitable work environment by preventing bias and discrimination, while 89% recognize that we are entering the age of human-machine partnerships. Of this latter group, 51% of respondents said they believe that humans and machines will work as integrated teams, while 38% indicated that they see machines as tools for humans to use as needed.

The findings also suggested, however, that despite having grown up with electronic devices and social media, Gen Zers yearn for human interaction in the workplace. When asked to identify their preferred method for communicating with coworkers, the largest shares of respondents cited in-person communication (43%) followed by phone (21%), while much smaller shares said they prefer to communicate via messaging apps and texting. In addition, 75% of Gen Z respondents said they expect to learn on the job from coworkers or other people, 58% said they prefer to work as part of team to working independently, and 53% indicated they prefer going to a workplace to working from home.

 

Workers' Financial Well-Being Is Linked To Their Job Performance


There is a significant relationship between the level of financial stress workers experience and their on-the-job performance, according to the findings of a study of employee data published by human resources consultancy Willis Towers Watson on December 27, 2018.

Researchers cited the results of the "2017/2018 Willis Towers Watson Global Benefits Attitude Survey," which showed a clear relationship between employees' financial worries and their work performance, engagement levels, and record of absences. Specifically, the survey revealed that employees who were struggling financially lost 41% more work time to absence than peers without financial worries, had lower engagement levels than their peers without financial worries (51% vs. 29%), and were less productive than their peers without financial worries (32% vs. 5%).

To examine the performance gap between employees who are and are not financially stressed in greater detail, the study used a large employer's records of work quantity and quality for a relatively homogeneous group of 17,587 employees serving in consumer-facing roles. The financial stress level of each employee was categorized as high, medium, or low based on a range of indicators drawn from the administrative records. These indicators include whether the employee was contributing to a 401(k) retirement plan, had taken a loan or a hardship withdrawal from 401(k) plan savings, was subject to active wage garnishment, and had a recent qualified domestic relations order.

The results of this analysis showed that 24% of the employees had high stress levels, 33% were experiencing medium stress levels, and 43% had low stress levels. Additional analysis indicated that middle-aged employees (aged 35-54) were far more likely to be in the high and medium financial stress groups than their younger (aged 18-34) and older (aged 55+) counterparts.

The findings also showed that having more family responsibilities was associated with higher stress levels. For example, researchers noted, 69% of the high-stress group, but just 42% of the low-stress group, had children; and more than a quarter of the high-stress group, but only 10% of the low-stress group, were single household heads.

The relationship between financial stress and time lost to absence was measured by employees' use of sick days, unpaid leave, and non-pregnancy-related disability leave. The results indicated that for every one absence day taken by the employees with low stress levels, the employees with high stress levels took 1.75 absence days, and the employees with medium stress levels took 1.37 absence days.

The full study sample was then split into two subpopulations according to their job characteristics: field technicians or phone agents. The analysis found a strong association between financial stress and job performance among the field technicians, as the field technicians with high stress levels had significantly worse work performance than their peers with low financial stress. For the phone agents, the pattern of differences was found to be similar, but less pronounced. Researchers pointed out that this variation in the patterns of the phone agents and the field technicians suggests that the impact of financial stress on productivity may differ across occupations.

The study concluded, however, that "the impaired job performance observed in the employees with high financial stress are concerning because of the potential impact on customer satisfaction and customer retention, both key determinants in profitability."

 

Employers Enhance Well-Being Benefits to Attract and Retain Talent


As the competition for talent intensifies, employers are stepping up their efforts to recruit, retain, and engage employees by adding or improving benefit programs that address their physical, emotional, professional, and financial well-being, according to the results of an annual survey conducted by Gallagher Benefit Services, Inc.

In the survey, 4,241 employers across the U.S. were asked between January and April 2018 about their benefits and compensation practices and strategies. Attracting and retaining talent was cited as the top operational priority by 60% of the employers surveyed in 2018, up two percentage points from 2017; while just 37% of respondents indicated that controlling benefit costs was their top operational priority, down six percentage points from 2017.

The survey also showed that employers are optimistic about their future business performance, with 95% saying they anticipate having stable or increased revenue growth through 2020, and 59% reporting that they anticipate having a higher headcount through 2020.

According to researchers, the survey findings suggest that employers are increasingly taking a holistic view of employee well-being, and are developing strategies that both engage and appeal to their employees. For example, they noted, 55% of respondents in 2018 said they provide access to telemedicine, up sharply from just 24% of respondents surveyed in 2016; and another 14% anticipate adopting telemedicine by 2020.

The survey also found that significant shares of employers are improving their health care benefits, with 22% of respondents indicating that they offer employees three medical insurance plans, and 13% reporting that they offer four or more options. The survey also found that the share of respondents who said they made health savings accounts (HSAs) available to employees rose to 24% in 2018, up two points from 2017.

However, the findings further showed that employers are looking for ways to reduce medical expenses by, for example, offering preventive care benefits such as flu shots, tobacco cessation programs, health risk assessments, and biometric screenings. Moreover, the share of respondents who indicated that they offer disease management programs designed to help employees with chronic conditions better control their health outcomes increased to 38% in 2018, up nine points from 2017; and another 17% said they plan to start offering these programs by 2020.

The survey also found that the share of employers who rated their health benefits as competitive within their industry or region increased in 2018 to 74%, up from 71% in 2017; but that employees' satisfaction levels with their health options did not change. Researchers speculated that the expense of family health coverage might explain this pattern, as a much smaller percentage of respondents said they believe their family health coverage is affordable (53%) than said they think their individual coverage is affordable (81%).

Researchers observed that as employers are recognizing that financial stressors can negatively affect productivity in organizations, they are increasingly providing financial well-being programs that prepare employees to make better saving and spending decisions. In 2018, 62% of respondents reported offering employees access to financial advisors, and 47% indicated they provide financial literacy education. In addition, 43% of 2018 respondents reported that they are taking steps to measure employee retirement readiness, compared to just 33%
in 2016.

The survey results also indicated that employers are offering a broad range of benefits that go beyond health and retirement plans. For example, 46% of the employers surveyed in 2018 said they provide tuition assistance, up from 42% in 2017. Moreover, 82% of respondents said they offer their employees the opportunity to connect with the charitable causes they champion through volunteering.

 

Many CFOs Lack a Succession Plan That Ensures a Smooth Transition


Even though the departure of a key member of the executive team is among the biggest disruptions a company can face, chief financial officers (CFOs) often fail to put in place a succession plan that can help to ensure a smooth transition when they leave the organization, the findings of a survey conducted by Robert Half Management Resources indicated.

The results of the survey of more than 1,100 CFOs at U.S. companies with 20 or more employees were released on December 20, 2018. The survey found that only 52% of all respondents reported that they have identified a successor for their position, and that just 37% of the CFOs polled who are at a small business (20-49 employees) said they have an heir apparent.

Of the respondents who indicated that they do not have a succession plan, 64% said they lack such a plan because they are not planning to leave the company in the near future. The other reasons given by these respondents for not having a succession plan included a lack of qualified candidates within their current organization (17%), being focused on other priorities (14%), and a lack of concern about the company's future after they have left (4%).

Researchers pointed out that although companies faced with an unplanned departure frequently appoint an interim leader to fill the gap while a search is performed, it is prudent for executives to anticipate such a situation to ensure an orderly succession, and to prevent a protracted leadership void. They also warned that a company that does not engage in executive mentoring and knowledge-sharing can struggle with retention and run the risk of institutional expertise, and that high-level executive absences and departures can cause strategic decision-making to be put on hold. Finally, they cautioned that the lack of a defined advancement protocol can get in the way of internal promotions and undermine organizational confidence, which can negatively affect the professional development not just of executives, but of managers and staff.

 

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 © 2019 Liberty Publishing, Inc. All rights reserved.

 
 

 



 
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