The American labor force is going through a significant transition that employers across the economy are already feeling in fundamental ways. For insurance carriers in the group and voluntary benefits space, this represents a double-edged sword. Not only do they need to be mindful of their own employees, but they also need to be prepared to deliver a range of products that can address the emerging and future needs of both plan sponsors (plan participants) and plan members (employees) alike.
For years, economists and demographers have identified 2020 as THE year when Millennials would exceed 50% of the US labor force. That’s now happened, and employers have had to rethink some fundamental aspects of their businesses, including knowledge management and transfer. Taking seven years to train someone who only plans to stay in their current gig for four created some obvious and ominous problems. On a recent Silicon Valley Innovation Tour, a senior Salesforce executive revealed an interesting fact about their company’s human capital management; Millennials represent 62% of their current employee base. Living in the past may be great for country music ballads, but it has no place in managing a dynamic business today.
Another key issue, however, may be less obvious: the intertwined relationship between employers and employees on health and financial issues. The term “financial wellness” is increasingly used by carriers to reflect what they see as a critical issue—employee productivity and retention.
A recent Employee Benefit News article highlighted a new issue of concern. Increased morbidity and a decline in life expectancy in the United States have a potentially profound impact. As a result, employers are taking a more proactive role in the lives of their employees, looking to create a more virtuous cycle through relationships with clearer reciprocity.
The article highlights programs carriers are bringing to market, reiterating points Novarica made late in 2019. “Financial wellness” cuts a wide swath conceptually, but being engaged in the benefit selection process is critical for understanding plan members’ desires and preferences. Health savings accounts are prominently mentioned by EBN, which validates TIAA’s recent decision to offer them. It joins Voya and MetLife—other notable new market entrants.
Other benefit options that are both meaningful to younger employees and offer features such as portability and flexibility will likely be more important in an economy where things move quickly and the useful life of many technologies is getting shorter.
Employers and benefit providers can’t get too comfortable. Generation Z is now entering the work force, with the third year of the generation poised to graduate from college in 2020. While they have similarities with Millennials, there are also differences. It turns out that human capital, like technology, will also be more dynamic in the future. Now is a great time to plan for that and avoid falling into an “OK, Boomer” trap.
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