An unprecedented global health crisis and sudden workplace transformation have exposed two ongoing challenges for employers: 1) improving healthcare access and affordability and 2) bolstering the employee experience (EX). What many people leaders don’t realize, however, is that these issues are deeply connected.
To improve healthcare access and affordability, as well as create a better EX, employees need healthcare offerings that account for their unique demographics, health conditions, and risks, as well as personal preferences and finances. Indeed, an effective EX strategy must take a holistic approach to every interaction and aspect of an employee’s entire journey at your organization, including, but not limited to:
- Workspaces and technology
- Manager, leader, and co-worker dynamics
- Culture, communication, and recognition
- Career opportunities and development
- Contract terms, pay, and benefits
- Personal health and wellbeing
To truly improve EX, organizations must evaluate each of these factors to gauge whether they’re helping or hindering employees’ ability to get work done and lead healthy, balanced lives. And sure enough, recent research shows that 50% of companies have a budget dedicated to improving EX in 2020 — yet many organizations are likely to miss the important role health benefits should play in their strategies.
Health Benefits Are Central to EX
For starters, benefits are a key part of compensation. Especially with rising healthcare costs, the way employees feel about their benefits package affects how valued and supported they feel by their employers.
Prior to the COVID-19 crisis, PwC projected healthcare costs would rise 6% in 2020 — with cost-drivers for healthcare spend growing at a faster rate than utilization. And while there are many variables that will determine healthcare costs over the next year, ensuring employees have access to care and are addressing care needs now can potentially help control a resurgence of expenses as we emerge from the pandemic.
Of course, compensation is just one piece of EX. The strength of employee healthcare coverage also makes a huge difference in people’s actual ability to manage their physical, mental, and financial wellbeing. In other words, health benefits matter beyond just the moment employees choose their plan. They have the opportunity to leave positive or negative impressions throughout the employee lifecycle — during onboarding, open enrollment, and every people need a doctor, fill a prescription, pay a bill, or check their deductible.
The Power of Personalization
The problem is that many organizations provide only standard benefits packages with very little choice. They use data based on generic benchmarks and cost projections, and the result is a set of benefits that don’t fit your workforce’s unique needs.
To apply the EX lens to health benefits, organizations must take a customized approach. They need to identify and evaluate their population’s unique makeup according to age, gender, chronic conditions, risk factors, co-morbidities, personal preferences, and expectations. Then they can create segments and tailor benefits plans to meet people’s needs more accurately and effectively.
Even beyond recent drastic changes due to the COVID-19 pandemic, the data that informs your benefits plans changes constantly. For example, there may be a recent uptick in certain health conditions, new additions to your member base, cost spikes, or new findings on risk factors. Access to the most up-to-date, accurate information is critical for managing your benefits strategies efficiently. Of course, you’ll also need the ability to forecast and model the impact of various changes, all of which helps ensure a holistic, sustainable approach that will help your people and organization thrive.
The Benefit of Customized Benefits
With customized benefits plans based on your population’s unique data, you are more likely to see:
- Decreased health costs for the business and employees
- Increased employee engagement and satisfaction
- Improved benefits utilization and health outcomes
- Fewer instances of absenteeism and poor performance due to illness
- Healthier, happier, and more productive employees
- Better ability to attract and retain top talent with competitive benefits offerings
Those first two bullets are especially important during this pandemic. Customization can help you navigate financial difficulty by reducing costs for your organization and employees — and effectively support your people during a time they need your help the most.