With the unprecedented pace of change occurring in the industry and with so many workers relying on their insurance and retirement benefits for financial security, it seems an important and appropriate time for all stakeholders (workers, employers, brokers and insurance companies) to re-assess their roles in helping Americans protect their financial future for themselves and their families.

But interestingly, Guardian's Workplace Benefits Studyreveals a difference of opinion between workers and their employers in terms of the ”responsibility” that companies have in providing insurance and retirement benefits.

While nearly two-thirds of workers surveyed last year believe it is their employers' responsibility to provide financial protection via insurance and retirement benefits, just 16 percent of employers agree with that.

Of course, it is entirely possible that the word “responsibility” seemed too strong for many employers — perhaps they don't believe it is their duty but rather a paternalistic gesture, or a necessity for hiring/retaining talent. While all are possible reasons, clearly there is a disconnect with how workers view it.

The value of workplace benefits

The average score on Guardian's latest Benefits Value Index is 7.1 — this is a measure of how U.S. workers perceive the value of their employee benefits package on a 10-point scale. Given all of the changes to employee benefits plans the past few years, from the introduction of PPACA and exchanges to the continued cost shifting and plan design changes, 7 out of 10 is perhaps a surprisingly good score.

Interestingly, it's actually up compared to 2012, when it was 6.8, which may seem counter-intuitive. Based on the research, we are actually seeing an increased appreciation and realization of how valuable benefits are. For example, workers who say their employer provides them with a total compensation statement that details the value of the various benefits they receive have a BVI score of 7.8 and a much greater appreciation of their benefits compared to those who don't receive a total comp statement.

It truly makes a difference when workers understand exactly how much their employers are contributing and how important these benefits are to their financial security. Workers are becoming increasingly more aware of how much their workplace benefits contribute to their overall financial security:

73 percent say it plays a major role in how financially secure they feel
68 percent say that more than half of their financial security depends on their workplace benefits.

Not surprisingly, those who rely on their workplace for most of their household's financial products/services report higher BVI scores (7.8 versus the 7.1 average).

DIY financial planning falls short

Yet, many working Americans do not have access to insurance and retirement benefits or do not have the discretionary income to pay for them:

1 in 3 have no disability insurance
1 in 4 have no life insurance and
1 in 5 have no retirement savings plan

Another reason for low participation in these benefits is the lack of professional assistance available to help workers in making the best benefits choices for themselves and their families.

Many are not seeking the proper assistance while making benefit decisions. Many may confer with friends and family or read through their company's benefits materials, but less than one-third say they relied on any professional financial support during their most recent benefits open enrollment

Today, even more workers are self-professed “do-it-yourselfers” (DIY) in their approach to financial decision making, with 4 in 10 saying that they prefer to do their own research and make their own decisions without any help.

Millennials are more likely than others to be DIYers, and they are more likely than others to say they have used Google, websites and newspapers to learn about their workplace benefits. Less than 1 in 5 have consulted with a financial advisor.

An increasingly diverse U.S. workforce means that the one-size-fits-all strategy to benefits communication — which may have worked in the past — is quickly becoming obsolete.

Today, a more targeted/tailored approach is required and that is what consumers surveyed told us that they want — and expect — from an enrollment experience. Their expectations are based on other purchasing experiences, retail or otherwise.

Tailor benefits and communications by career stage

We know that for many workers, benefits decisions center around their annual medical plan changes. However, for non-medical benefits (such as life insurance, disability, and supplemental health), 1 in 4 admit to simply checking the box, making the same selections as the prior year without consideration for whether their needs have changed, or whether their employers are making new benefits options available.

But career stage and life stager changes are when consumers are more likely to recognize that their insurance and savings needs may be changing — and more likely to think twice about their benefits options.

For example, two segments of American workers at opposite ends of the career spectrum have markedly different needs, concerns and attitudes towards benefits, communication and enrollment.

Early entrants are Millennials, mostly between the ages of 22 and 28, within five years of starting their careers. They are single with no dependents, and if they aren't still living at home with their parents, they rent rather than owning a home.
Near retirees are baby boomers between ages of 57 and 62 and within five years of their planned retirement. Most are empty-nesters, they still own their own home and many are grandparents. These two worker segments are very different demographically. They are aslo quite different in terms of work stage and life stage and their personal and financial concerns and priorities.

Early entrants are most concerned about making ends meet — paying their monthly bills, including rent and college loans. Not surprisingly, they are also concerned about job security (they have experienced a very difficult job market since the 2008 recession) but they also place a high priority on work/life balance. And most don't want to follow the same path as their parents, devoting 20-30 years of their careers to a single employer only to be downsized or outsourced out of a job.

Conversely, near retirees have different priorities. They are most concerned about life in retirement — having sufficient health insurance and having enough savings to live comfortably in retirement.

Early entrants find the workplace a convenient and reliable source of information about insurance and financial products. They also like obtaining these products at the workplace. They view the convenience of payroll deduction as a big advantage, so they would prefer to have even more benefits options at the workplace. And because most don't have a relationship with insurance companies or financial advisors, they rely mainly on Google or friends and family for information and advice on benefits options.

Near retirees place greater value on their benefits. They have traditionally been more engaged in the benefits enrollment process and are more likely to use their benefits compared to early entrants. Their average BVI score is 7.5 compared to 6.8 for early entrants. Near retirees have seen their benefits reduced significantly in the past five to 10 years and they are concerned about losing even more, so they are much less optimistic about the value of their benefits in the next few years compared to early entrants

Regardless of age and circumstance, all respondents said they need more help with benefits decisions. Clearly, benefits are highly valued by today's workforce and they desire that their benefits be tailored for their work and life stages.

The industry will continue to manage unprecedented change. Even now, many employers are outsourcing production of enrollment materials, conducting enrollment meetings and hosting online platforms; but employers are less likely to involve their outsourcing partners in helping them with their enrollment strategy and planning activities. This may be a missed opportunity for enhancing the employee experience and boosting participation.

Instant Insights /

Rethinking responsibility: The role of workplace benefits in financial security

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