STUDY OF EMPLOYEE BENEFITS: 2006 & BEYOND - Prudential

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Summary of Key Findings Theme One: Benefits Matter Eight in Ten Plan Sponsors Remain Committed to Offering Competitive Benefits Programs An unexpected finding, considering recent press coverage on benefits cutbacks, suggests that plan sponsor commitment to offering a competitive employee benefits package remains quite strong—even in a challenging economic environment. This trend is true among companies of all size categories, but particularly for larger firms. As plan sponsors look to balance employee needs with the bottom line, many will reduce their benefits expenses by increasing employee cost-sharing on contributory plans, offering a wider range of voluntary benefits, and introducing more flexible plan designs. To further reign in costs, finance and procurement are increasingly influential in benefits decisions in larger companies, where the decision process is becoming more complex. Theme Two: Teach Them Well Employees Want Greater Support in Understanding and Using Their Financial Benefits This research highlights gaps between employees’ greatest financial and lifestyle concerns and employer priorities in terms of addressing those needs. However, many plan sponsors want to do more and expect to do so in the next five years, to better meet their employees’ needs. As consumers rely on the workplace for a growing share of their insurance and savings products, effective benefits communication and education are becoming more essential. However, many plan sponsors agree that their current education/communication efforts are lacking, particularly for benefits such as group life, disability, and long-term care insurance. Over the next five years, more employers will be tailoring benefits offerings as well as personalizing benefits communications to better address the diverse needs and life stages of their changing workforce. Theme Three: Lifestyle Benefits Offer Win/Win Solution Healthy Lifestyle Emerges as a Holistic Desire for Employees and a Cost-Reduction Strategy for Employers As the lines continue to blur between their work and personal lives, employees are feeling stressed and desire better balance in their lives. A more balanced, healthier lifestyle is an aspiration for many workers and increasingly, they are turning to their employers for help in the form of flexible work arrangements and paid time off policies. But lifestyle issues are equally important for plan sponsors because a healthier workforce leads to lower medical and disability costs, as well as improved morale and productivity. As more employers see value in offering employee assistance programs, wellness programs, disease management, and mental health counseling, access to such plans is expected to grow significantly by 2010. 38
Theme Four: Positive Online Outlook Online Tools Are Popular and Opportunities Exist to Improve Utilization and Performance The increase in benefits-related web technology during the past five years has been an important trend and one the research indicates will continue through 2010. Thanks to the availability of more transactional functionality, plan sponsors are shifting many of their paper-based processes and administrative tasks to the web as a means of controlling benefits costs and increasing self-service options for their employees. However, the desired benefits of these online tools—saved time/money, improved data quality and access—have not yet been fully realized. For many employers, utilization of online technology is lagging, in part because performance is falling short of expectations. Regardless, more plan sponsors and employees anticipate using them in the future. Benefits providers can improve utilization and satisfaction with web tools by focusing on ease of use and site navigation, as well as providing increased training and user support. Theme Five: The Progressives A Small But Growing Segment of Plan Sponsors Finally, our study looked at employers who are taking a progressive approach to benefits. Rather than limit benefit availability, these employers have expanded their employees’ access to a wide range of financial and non-financial benefits and consider it critical to offer and subsidize a generous benefits package. The number of progressive businesses—68,000 or 11% of the market—creates an interesting segment for comparison. These progressive employers believe their actions are long-term solutions that will contribute to their companies’ success. Looking Forward Through <strong>2006</strong> and Beyond The employee benefits industry is more dynamic than ever given the various economic, demographic, social, legal/regulatory, and competitive forces at work. As plan sponsors look ahead and consider the role of benefits within their organizations, more significant change is likely in store. Benefits will continue to be a critical tool for attracting and retaining talent but the range of benefits offered, how they are funded, and the ways in which they are communicated and delivered will evolve as the composition of the workforce experiences even greater change. 39
Page 1 and 2: PRUDENTIAL’S GROUP INSURANCE STUD
Page 3 and 4: Welcome The cost of employee benefi
Page 5 and 6: Methodology This study surveyed a b
Page 7 and 8: Benefits Matter Eight in Ten Plan S
Page 9 and 10: Commitment to Benefits Spans Most C
Page 11 and 12: Benefits Decision Making Is Increas
Page 13 and 14: The Gap Among Top Financial Concern
Page 15 and 16: Voluntary Benefits on the Rise, But
Page 17 and 18: Most Plan Sponsors Do Not Require C
Page 19 and 20: Plan Sponsors and Participants Are
Page 21 and 22: Employee Concerns Extend Beyond Fin
Page 23 and 24: Interest in Lifestyle Benefits Vari
Page 25 and 26: Positive Online Outlook Online Tool
Page 27 and 28: Web Technology is Empowering Employ
Page 29 and 30: Plan Sponsors Want Enhanced Perform
Page 31 and 32: Criteria for Progressive Plan Spons
Page 33 and 34: Progressives Are More In Sync with
Page 35 and 36: Progressives Also Outpace Other Com
Page 37: Progressive Employers Value Persona
Page 42: About Prudential Financial Currentl

STUDY OF EMPLOYEE BENEFITS: 2006 & BEYOND - Prudential

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