Many workers may not appreciate the work that their Human Resources department handles, but a well-oiled HR machine may make or break the overall morale and loyalty of employees. In turn, this contributes to the overall success of an organization. Despite this, we find that Human Resource and Employee Benefit professionals are typically short on time, resources, and in some cases, support. This is all the more reason that those working in HR and Benefits need to take extra steps to keep up with new trends, services, and developments within the industry to excel within their important roles. In our 2016 Employee Benefit Trends Report, we highlight some of the significant updates that help both HR professionals and the employees they support.
Here, we've highlighted what we feel are the top three trends most important to ensuring you're creating and maintaining a valuable benefits program within your organization for 2017.1. FinTech
Technology has become essential to our everyday lives, so it comes at no surprise that it's merged with finance to allow consumers guidance and support along their financial journeys. FinTech gives individuals the ability to be in the driver’s seat so they can more easily navigate towards financial success with the help of things like mobile apps, online resources, and social media. Why should HR execs care? Stress due to financial instability is becoming more and more commonplace and affecting workers every day. In research from the 2016 PwC Employee Financial Wellness Survey:
• At least 52 percent of employees are stressed out about the state of their finances.
• 45 percent of employees agree that money challenges were one of the biggest stressors in their life, more than any other life choice.
• Instead of pulling from an emergency savings account or even applying for a loan, at least 43 percent of respondents state that they feel will need to have to dip into their retirement savings to pay for non-retirement expenses.
All of these challenges can lead to real health and productivity problems in the work place such as:
- Increased absenteeism
- Lack of morale
- Increased health risks related to stress, including cardiac disease
The most significant way to combat these issues in the work place is to start or improve your Financial Wellness program. Learn more about researching, implementing, and measuring the success of this type of program here.
2. Health Savings Accounts
Health Savings Accounts are saving vehicles that make it easier to put away money for costly medical expenses such as, cancer treatments, an extended hospital stay, or a broken limb. They are also a great tool for both routine benefit costs and saving for your healthcare needs in retirement, besides being able to save money, you gain the added benefit of three significant tax advantages:
• Pre-taxed and/ or tax-deductible contributions
• Earnings on the account build tax-free
• Distributions for qualified expenses from the account are not subject to taxation
This knowledge, paired with data from Center for Medicare and Medication Studies shows that projected annual healthcare growth will be 6.2 percent through 2022, which indicates that HSAs will continue to be an incredibly useful tool for employees. So, if you want to guarantee that HSAs are available to your employees, ensure that your company offers HDHPs (High Deductible Health Plans), so they qualify for them and start to develop a strategy to educate employees and provide them with tools to make HSAs best work for them.
3. Money Market Reform
Money Market reform took effect in October 2016. Before the reform, money markets were the major option for DC (Defined Contribution) Plans because of their traditionally stable values and accessibility to the investor’s funds. They are also known for their equal distribution of stability, yield, and liquidity. Now with the reform, features that once made investments relatively easy to manage, are gone, or at least harder to access. Here are some of the new developments that investors need to be aware of due to the reform:
• Because of the new regulations, Money Markets will not have the trifecta of stability, yield, and liquidity anymore
• The SEC now allows prime funds to charge customers a redemption fee during volatile periods
Even though there are restrictions to the Money Market fund, don’t let that dissuade your employees from making this saving vehicle apart of their arsenal to creating a financially healthy future.
So What Now?
Now that you have a better understanding of today’s employee benefit trends, what are the next steps? A great first step is to do an audit of your company’s retirement plan. What areas are you successful in already? Where could you improve? And how do these align with the latest updates in the current industry?
If you want to learn more about these and other topics, check out our 2016 Employee Benefits Trends Report. Hopefully, we've helped you create a good foundation to build an employee benefits package that represents the new developments for you and your employees.