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Benefit Plan Trends - Volume 62, Issue 3

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 3

Employees Call for More User-Friendly Workplace Technology


The vast majority of employees consider the technology they use at work to be less powerful and less intelligent than their personal technology, and want their employer's processes to be more user-friendly, according to the findings of a global study released on January 22 by The Workplace Institute at software provider Kronos.

The results of the analysis of the impact existing and emerging technologies have on the employee experience are based on data from a survey of 2,807 workers employed in a variety of industries in eight countries (Australia, Canada, France, Germany, Mexico, New Zealand, the U.K., and the U.S.) that was conducted between November 2017 and January 2018.

The survey found that workplace technology frequently fails to meet employee expectations, with nearly half of employees (48%) surveyed worldwide indicating they wish their workplace technology performed just like their personal technology, and only 18% saying they do not want their workplace technology and personal technology to function similarly. The results also showed less than one-quarter of the employees surveyed in Germany (24%), the U.S. (22%), Canada (20%), France (16%), Australia and New Zealand (13%), the U.K. (13%), and Mexico (8%) consider their workplace technology to be more user-friendly than their personal technology.

For example, among the U.S. respondents 51% of employees in the financial sector said they find shopping on Amazon easier than asking their manager to take off a sick day; 53% of contract and field service workers said they consider it easier to talk to personal digital assistants like Alexa, Cortana, and Siri than to their manager; and just under half (43%) of logistics and transportation workers indicated that they find it easier to book a ride through Lyft or Uber than to find out how many vacation days they have left.

The results further indicated than more than one-third of the employees surveyed worldwide (35%) believe their job is harder than it should be because of outdated processes and legacy technology. This attitude was most commonly expressed by respondents in Mexico (45%), France (43%), and the U.K. (40%). Across industry sectors in the U.S., respondents in state and local government (55%), public safety (53%), and finance (43%) were especially likely to say that outdated processes and technology make their job more difficult. Moreover, just 25% of employees surveyed worldwide disagreed with the notion that their workplace technology makes common activities more complicated by adding extra or unnecessary steps.

Not surprisingly, the survey found that in the U.S., younger workers are less accepting than older employees of inefficient workplace technology: while just 20% of boomers said they think outdated processes and technology make their job harder than it should be, this view was much more common among Gen Xers (34%), older millennials (38%), younger millennials (40%), and Generation Z (39%).

 

New Leadership Approaches Are Needed To Cope With Digital Transformation


As the Fourth Industrial Revolution (Industry 4.0) reshapes how the world lives and works, global executives are using a range of strategies to cope with the pressures of preparing their business and their workforce for this new era, a report recently released by Deloitte found.

Industry 4.0 is defined in the study as the combining of a wide range of technologies—including analytics, artificial intelligence, cognitive technologies, and the Internet of Things—to create digital enterprises that are both interconnected and capable of more informed decision-making.

The report's findings are based on a survey of 2,042 C-level executives from 19 countries and all major industry sectors conducted in June-August 2018, as well as on interviews with global industry leaders and academics. The survey showed that of the factors the business leaders said they use to evaluate their annual performance, societal impact (34%) was cited as the most important, far ahead of customer satisfaction (18%), financial performance (17%), employee retention/satisfaction (17%), and regulatory adherence (14%). In addition, more than half (53%) of the executives surveyed reported that their societal impact efforts resulted in new revenue streams.

The study also identified four main leadership personas that can serve as models for leaders in dealing with the challenges associated with the Industry 4.0 transformation: the "Social Supers," the "Data-Driven Decisives," the "Disruption Drivers," and the "Talent Champions."

According to the report, "Social Supers" are leaders who consider societal initiatives fundamental to the profitability of their business, and who are relatively confident in their ability to handle the workforce challenges of Industry 4.0. Compared to the other respondents, "Social Supers" were more likely to report that their workforce composition is prepared for digital transformation (44% vs. 32%), and to indicate that they are willing to train workers (54% vs. 37%).

The report described "Data-Driven Decisives" as leaders who are especially adept at overcoming strategic obstacles, such as organizational silos, that can complicate decision-making processes and hinder innovation by applying a methodical, data-focused approach. The respondents identified as "Data-Driven Decisives" were almost twice as likely as the other leaders surveyed (62% vs. 32%) to say they believe that they are prepared to lead their organizations in capitalizing on the opportunities associated with Industry 4.0.

Meanwhile, "Disruption Drivers" were characterized in the study has having a strong understanding that investment in new innovations is required for growth, and a willingness to invest in technologies designed to disrupt their markets. Compared to the other leaders polled, the respondents labelled "Disruption Drivers" were more likely to say they believe their organization has a clearly defined decision-making process (44% vs. 26%).

Finally, the report described the "Talent Champions" as being especially knowledgeable about the skill sets their company needs, and having a strong belief that their organization currently has the right workforce composition. Compared to the other respondents, the executives identified as "Talent Champions" were more likely to say they embrace their responsibilities to train their employees for the future of work (51% vs. 41%), and that they are willing to invest in technologies to disrupt competitors (42% vs. 32%).

 

Retirement Plan Enhancements Are Linked To Higher Savings Rates


Retirement plan sponsors are implementing significant plan design enhancements, and these improvements appear to be driving recent increases in contribution rates, the results of an analysis of survey data released on January 23 by the Plan Sponsor Council of America (PSCA) indicated.

The "61st Annual Survey of Profit Sharing and 401(k) Plans," which reflects the 2017 plan-year experience of 605 defined contribution plan sponsors, found that in 2017 plan sponsors were contributing an average of 5.1% of pay to their employees' 401(k) accounts; and that the average deferral rate of participants increased to 7.1%, up from 6.2% in 2010. The research also showed that plan sponsors have been implementing a series of plan design enhancements that may be supporting higher saving rates, including higher default rates, more generous matches, and earlier plan eligibility.

The survey found that increasing shares of eligible employees are participating in their workplace plan. Researchers noted that the percentage of eligible employees with an account balance has risen by more than six percentage points in the last 10 years. They also pointed out that at 12.2%, the total savings rate reported for 2017 was well within the 10% to 15% range recommended by financial professionals.

The results of the analysis further showed that among the supportive plan design trends are a shift toward more generous matching formulas, with the use of dollar-per-dollar matching of more than 3% of pay increasing by nearly 50% from 24.1% in 2016 to 35.8% in 2017. The survey also found that employers are continuing to adopt automatic enrollment, with 61.2% of plans reporting in 2017 that they were using it to increase enrollment. The findings additionally revealed that in 2017, 60% of automatic enrollment plans were using a default deferral rate of more than 3%, up from less than 30% of plans 10 years ago.

The survey findings also indicated that nearly one-third of plans provided a suggested savings rate for participants in 2017, and that more than four in 10 of these employers suggested a rate of 10% or more. Researchers further observed that the share of eligible participants making catch-up contributions has been growing steadily, and had reached 29.3% in 2017.

 

Workplace Benefit Offerings Show Signs Of Declining


While the labor market remains tight, the percentage of employees who report that their employer offers benefits has been declining, according to the results of an annual survey that looks at employee satisfaction with their workplace benefits conducted by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates.

The survey of 1,025 U.S. workers aged 21-62 was conducted on June 21-27, 2018. When the respondents were asked what benefits their employer provides, health insurance was the most frequently cited (78%), followed by dental insurance (68%), and retirement savings plans (67%). Researchers pointed out, however, that fewer employees were receiving benefits from their employer in 2018 than in 2017, and that declines in the shares of workers reporting that their employer provides certain types of benefits were observed for eight out of the 10 most popular benefit offerings between 2017 and 2018.

The results also showed that just 12% of the employees surveyed reported accessing voluntary benefits, and that of these respondents, 61% said they do so because it is less expensive to purchase the benefit through their employer than on their own.

At the same time, however, the survey found that employees are generally satisfied with their current benefits package, with 51% of respondents reporting that they are very or extremely satisfied with their benefits, another 30% saying they are somewhat satisfied, and only 9% saying they are not at all satisfied.

When asked about their financial worries, the workers surveyed reported feeling more stressed by the prospect of not saving enough for retirement than about any other financial concern that might be addressed through employee benefits. Broken down by generation, the survey found that baby boomers were more likely than millennials to report that saving enough for retirement is causing them financial stress, while millennials were more likely than baby boomers to say that paying monthly bills and student loan repayment is causing them financial stress.

In addition, just 37% of the surveyed employees said that their employer or benefits company provides no education or advice on benefits. However, depending on the benefit, between 64% and 76% of respondents reported that they find it either somewhat or very easy to find information on what is included, and 64% said they are extremely or very confident in their ability to make benefits decisions.

The survey results emphasized that health care is a critical issue for employees, with 73% of respondents reporting that health insurance is one of the top three most important benefits they take into account when considering whether to stay in or choose a new job. By contrast, only 57% of respondents indicated that a retirement savings plan is among the three benefits they value the most.

When asked about their confidence in specific aspects of the health care system now and in the future, just 34% of respondents said they are confident that they are able to afford health care without financial hardship today, and only 30% indicated that they are confident they will be able to afford health care over the next 10 years. Nonetheless, one-half of respondents with health insurance coverage said they are extremely or very satisfied with their current health plan, and 65% reported that they are generally confident that their employer or union will continue to offer health insurance in the future.

The results suggested that employees' dissatisfaction with health insurance is mainly related to cost: just 22% of respondents said they are extremely or very satisfied with the cost of their health insurance plan, and only 21% indicated they are satisfied with the costs of health care services not covered by insurance. In addition, 47% of the workers surveyed reported having experienced an increase in health care costs in the past year; and of these respondents, substantial shares said they had decreased their contributions to retirement plans (24%) or to other savings (41%).

 

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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