In today's employee benefits landscape, personalization is a hot topic for everyone involved — employees, HR and benefits leaders, and benefits advisors. Employees are increasingly seeking benefit plans that align more closely with their unique needs and goals; but, there's a catch. Employees are hesitant to share the kind of personal data that’s necessary to achieve the tailored benefits experience they want. This push and pull presents a puzzle and an opportunity for benefits advisors who want to go beyond having a transactional relationship with their clients and become trusted advisors, helping organizations deliver a more personalized, holistic employee benefits experience.

The demand for personalization

The evolution to a four-generation workforce and the increase in remote and hybrid work arrangements are among the cultural shifts that have driven the desire for greater personalization of benefits. Research by LIMRA, for example, found that baby boomers place 13 percentage points more emphasis on the value of physical benefits such as health insurance than Generation Z. On the other hand, Gen Zers place eight percentage points more emphasis on the value of mental health benefits compared to boomers. Gen Z feels mental health benefits are as significant as vision insurance and almost as important as dental and medical insurance.

However, the desire for personalization cuts across all generations. Nearly 90% of employees desire benefits that resonate with their specific situations, such as a health care plan tailored to their lifestyle.

This increasing demand for personalization is not lost on employers. LIMRA’s research found that nearly a third of all employers (and 40% of organizations with 1,000 or more employees) say that meeting the needs of their multigenerational workforce is a primary challenge. BenefitsPRO has reported that with employment dissatisfaction remaining roughly constant across generations, a benefits design strategy considering generational and lifestyle differences may boost an organization’s chances of achieving its retention and recruitment needs.

The personalization push has another wrinkle that advisors must be aware of in order to fully support employers today. In the age of personalized recommendations from services like Netflix and Amazon, employees are asking why their benefits can't be similarly customized. Whether a Gen Z professional is navigating their retirement savings plan or a boomer parent is exploring their health care options as their needs change, personalized benefits can simplify choices and enhance satisfaction within the company. But that’s only possible with the right benefits administration system and helpful, accessible employee education. Here, too, employers are aware of the pressure to respond. An Aflac study found that 8 in 10 employers feel that their benefits provider must lead in technology.

The personalization paradox: A broker’s challenge and opportunity

Here’s the paradox: Despite their desire for a more personalized benefits experience, employees are reluctant to share personal data. Providing the kind of personal data needed to design a truly personalized benefits plan and deliver a smooth and personalized benefits enrollment experience has raised concerns over employee privacy.

Only 27% of employees are comfortable with their employers using personal data to improve their benefits experience. The reluctance to share personal data stems from privacy fears, exacerbated by frequent data breaches and scandals. Employees are not alone. A staggering 77% of Americans express little trust in companies handling their data responsibly.

Employees in particular worry about who accesses their information, potential misuse, and whether it could impact coverage or premiums. This large gap between the desire for personalization and the concern for data privacy poses a significant challenge for HR and benefits leaders who are responsible for crafting and advising on benefit strategies. But, it also provides a massive opportunity for benefits brokers to play a supporting role.

Helping employers walk a fine line

Transparency is vital to bridge this gap. Employees need clarity on what data is collected, its purpose, and how it's protected. Benefits advisors and employers must demonstrate robust measures to safeguard privacy and build trust actively. Brokers have an opportunity to help ensure their clients work with benefits administration vendors who can deliver that clarity.

However, reassurance isn't enough; employee confidence requires tangible actions. Regular updates on security measures and privacy practices and involving employees in data usage decisions can foster trust. It's crucial to understand that regaining lost trust is a challenge, as any breach could have long-term repercussions on employee trust and the employer brand.

The broker’s best friend: Technology that supports employers

Finding the balance between personalization and privacy hinges on technology. Here, too, broker have an opportunity to be trusted advisors to their clients who are dealing with another challenging paradox: While 75% of employers say it will be essential for them to become familiar with AI to stay competitive, 56% say that its growing use scares them. Meanwhile, 48% of employers and 38% of employees say AI could help them better understand their benefits coverage.

AI can offer tailored benefits by analyzing general data trends and avoiding overly personal details. Anonymized data can help predict relevant benefits for different life stages. However, transparency about AI's role is critical; employees are clearly skeptical of moving towards technology that may compromise their privacy. Benefits advisors can help companies work with benefits administration providers to clearly outline data use and address potential inaccuracies in AI-driven recommendations.

Additionally, employers can implement strategies to minimize data use and limit exposure by collecting only essential data. Also, offering employees control over their data, such as opting into personalization, respects individual privacy preferences.

The contradictions and possibilities are clear

At its root, the biggest contradiction seems simple: Employees want personalized benefits and a personalized benefits experience, but they fear for their privacy in today’s data-driven world. The possibility for advisors to play a key role in helping HR and benefits leaders balance those feelings is also evident. Benefits advisors can advise employers on meeting both needs by prioritizing transparency, data protection, and using AI responsibly.

Ultimately, achieving balance is the key — earning trust while delivering the personalized experience employees desire. Success in this arena results in better benefits packages and strengthens employees' confidence in their employers and their connection to brokers beyond being transactional vendors.

Instant Insights /

The personalization paradox: A broker’s challenge and opportunity

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