Benefit Plan Trends - Volume 62, Issue 4

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.


 
Serving you, your business and your community since 1956
BPT Header
A report covering plan design and legislative changes
 
VOLUME 62, ISSUE 4

Millenial Managers Are Already Having an Impact on Workplace Planning


As members of the millennial generation enter the managerial ranks, they are bringing new approaches to hiring and workforce planning, according to a report recently published by freelancing website Upwork.

The third annual "Future Workforce Report," released on March 5, explores the hiring behaviors of more than 1,000 U.S. hiring managers surveyed in October 2018. The focus of this year's report is on generational impacts on the workforce, and specifically on how millennials, as well as some older members of Generation Z, are shaping the future of work.

The study found that 48% of the younger generation managers surveyed have already reached the director level or higher, and are thus having a major influence on workforce planning. Researchers noted that this influence will continue to grow, as these younger generations will make up 58% of the workforce by 2028, up from 38% today.

The findings also indicated, however, that the "always-on" workplace is taking a toll on younger managers, as 84% of millennial managers have reported experiencing job burnout. The study further suggested that conventional methods of hiring are no longer providing much relief, as 42% of younger generation hiring managers said they believe hiring has become more difficult in the past year, while just 18% said they think it has become easier.

In addition, the results indicated that supporting remote teams is the new norm, with 69% of the younger generation managers reporting that they have team members who are allowed to work remotely. Of the managers who said they have approved remote work options, 74% reported having team members who spend a significant portion of their time conducting their jobs remotely. By contrast, just 58% of baby boomer respondents said they have workers who work a significant portion of their time remotely.

The study also found that younger generation managers are 28% more likely to utilize remote workers than baby boomers, and anticipate that two out of five full-time employees will work remotely within the next three years. The study projects that by 2028, 73% of all teams will have remote workers. The results were approximated for future projections based on the current results for the respondents of the youngest cohort, Generation Z.

The report further emphasized that younger generation managers are particularly likely to recognize the need for better access to rapidly-changing skills and constant reskilling. However, younger generation managers were found to have a greater tendency than older managers to express support for a more independent workforce approach, as the survey indicated that younger generation managers were nearly three times more likely to say that individuals should be responsible for their own reskilling than baby boomer managers.

The study predicted that by 2028, non-traditional, flexible talent, like freelancers and temporary and agency workers, will account for 24% more of departmental headcount than they do today.

According to the report, the younger generation managers were more than twice as likely as the baby boomer managers to have increased their usage of freelancers in the past few years, and they are projected to continue increasing their usage in 2019.

The younger generation managers were also found to be more than twice as likely as the baby boomer managers to report having engaged freelancers for ongoing, strategic partnerships across multiple projects, rather than for one-time, one-off projects. The primary reasons respondents cited for using more freelancers are to increase productivity, access specialized skills, and drive cost efficiencies.

 

Employees Who Feel Their Work Has Purpose Are More Engaged


Growing shares of younger workers in particular say they are open to leaving an employer when they don't feel engaged and excited at work, or doubt that their work has a broader social impact, according the findings of a study published by employee engagement platform provider WeSpire.

The report, "State of Employee Engagement," released on March 7, included data from an annual survey of more than 1,700 full-time U.S. employees. The survey found that 62% of respondents indicated that they are actively looking for or are open to new opportunities, up four percentage points from last year's survey. Researchers pointed out that this trend is most pronounced among younger workers, with 68% of millennial and Generation Z respondents saying they are actively searching for a job or are open to new opportunities.

In addition, the survey showed that the vast majority of employees care about the social impact of their workplace, with 88% saying they prefer to work at a company that is making a positive impact. The results also indicated that employees were nearly 50% more likely to recommend their employer as a good place to work if they reported feeling that the mission or purpose of their company makes their work important.

The report further noted that while wellbeing and rewards remain the most commonly offered engagement programs, the percentage of employers who provide diversity & inclusion programs rose to 37% in the latest survey, up from 29% the previous year. Researchers commented that this was the biggest increase in any program, indicating that employers are recognizing they need to do more to ensure a culture of inclusivity.

The study also found that in the last three years, the percentage of organizations offering sustainability programs has steadily decreased by around five percentage points per year, dropping to just 13% in 2018. However, the survey showed that millennial employees are more likely than older employees to say they want their employer to offer a sustainability program (23% vs. 18%).

When asked about frequency of recognition, 17% of the employees surveyed gave a rating of one or below on a scale of 0-10, and only 47% gave a rating higher than a five. Researchers observed that if a net promoter type score on recognition were calculated, these survey results would reflect a -38 score.

 

New Retirement Savings Plans Are Needed To Ensure Financial Security


While the vast majority of Americans who save for retirement do so through a 401(k) or similar plan provided by their employer, additional types of saving plans may be needed to help the millions of workers who are not adequately saving in workplace plans build a financially secure retirement, according to an article published on March 14 by The Pew Charitable Trusts.

The article, "3 Ways People May Save for Retirement in the Future," was written by John Scott, director of Pew's retirement savings project. Scott observed that "we may have reached the limit of what our employer-sponsored system can do to support a secure retirement," as currently only about half of private sector businesses offer retirement benefits, and even though around 140 million people participate in retirement plans, the proportion of the employed workforce covered by these plans has never exceeded 70%.

Scott argued that while Congress could increase incentives to encourage more employers to sponsor plans, he noted that previous research has shown that small employers are often reluctant to offer retirement benefits because of the plan startup costs and administrative burdens, and that it is not clear that offering them a new tax break would overcome these concerns.

Given that is unlikely that many more employers will start voluntarily offering retirement benefits or that many more employees will start saving on their own, Scott said, new approaches that build on the elements that are known to work in the current system should be considered. Specifically, he recommended the development of a low-cost, portable, individual-based system, managed by a third party, that allows workers to automatically contribute to their own retirement account with each paycheck, and that gives employers the option to add to those accounts through a matching contribution.

While acknowledging that no current initiative fully captures these ideas, Scott noted that recent actions at the state and Federal levels point to the outlines of a system that could cover more workers, without relying solely on individual employers to sponsor their own retirement plan.

Among these initiatives, Scott said, are state-level retirement savings programs for employees without a workplace plan. He reported that California, Connecticut, Illinois, Maryland, and Oregon are implementing programs in which workers are automatically enrolled at a default rate of contribution, typically around 5% of pay, and with the ability to opt out at any time. In these programs, employers facilitate worker contributions through their payroll systems, but otherwise are not involved.

Scott also mentioned that a new approach may come from Congress, as the Retirement Security Act, which would allow any group of employers to share plan costs in group plans known as multiple employer plans, or MEPs, was recently introduced in the Senate. He observed that these plans could be especially helpful to smaller employers wary of the administrative costs of offering a stand-alone plan.

Finally, Scott pointed out that there are more than 10 million independent or contingent workers in the U.S. who have very low rates of retirement benefit coverage. To help these workers save in a changing economy, he recommended the development of retirement savings models that expand coverage options, possibly using new entities affiliated with associations, unions, or industry sectors.

 

Employers Recognize the Value of Integrating Health Care Benefits


Employers are increasingly redesigning their health care benefits by integrating their medical, disability, and other health care-related benefits based on the understanding that integration can improve care, generate cost efficiencies, and contribute to employee retention, the results of a study released by health insurer Anthem Blue Cross indicate.

The findings of the biennial "Integrated Health Report," released on February 20, are based on a survey of 222 employers with 100+ employees. The survey found that more than 71% of respondents reported that they are either actively integrating or considering integrating their medical, pharmacy, dental, vision and/or disability benefits under their health and wellness programs in the next five years, up from 60% of respondents in the survey conducted in 2016.

The report cited previous research showing that when medical, pharmacy, dental, vision, and disability benefits are delivered in silos with little or no interaction between them, employees and health care providers are often left with a disconnected view of total body health. By contrast, the study said, integrated health care is an employee benefits strategy that connects benefits data to the employer's health management program based on member claims and population insights, which provides a fuller picture that ultimately delivers better health outcomes and cost efficiencies.

The report found that among the employers surveyed who said they are actively integrating or considering integrating products, nearly 100% of them reported having integrated pharmacy, vision, dental and/or disability benefits with medical benefits.

The survey also showed that while the cost and ease of administration remain important business considerations for employers, there is a noticeable shift toward attracting and retaining a more satisfied and healthier workforce driving integration. The survey found that 88% of respondents believe that integrated health care benefit programs make an organization a place where people want to work, 90% think that offering integrated health care benefits makes a compensation package more attractive, and 86% believe that integrated health care benefits reduce employee turnover or attrition.

When the employers currently integrating or considering integrating health care benefits were asked how they measure the success of integrated health care benefits, 55% said they measure it by examining member engagement, and 27% said they measure it by estimating how much they are saving.

 

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.

 

 

 



2205 Point Blvd. Suite 200 | Elgin, IL 60123 | p 847.741.1000 | f 847.428.8857