V i e w Poi n t
HR Strategies That Drive
C-Suite Results
HR executives have long struggled to demonstrate the value of human
resources at the strategic planning table, especially when HR results are
often regarded as soft or intangible. Recent HR and benefits trends reveal
this may be changing as HR leaders are strategically poised to influence,
support and engage a company’s workforce to impact business results.
N o w i s th e t i m e .
In today’s marketplace, companies
are faced with a multitude of market pressures, compliance concerns
and drastically increasing health care
costs. Companies have already begun
to shift these health care costs and, according to the 2012 Aflac WorkForces
Report,1 they have even started to cut
compensation, bonuses and benefits.
Still business leaders prove they are
both resilient and innovative.
Insights from a 2009 Towers Watson
study reveal that the recession has
served as a catalyst for many businesses to consider additional employee
benefits options and experiment with
different benefits strategies.2 While
38 percent are focusing on cost-reduction efforts, the study found that
50 percent are considering new strategies they would not have considered
otherwise. Another 2012 study from
The Conference Board found similar
results, with 67 percent of respondents saying they have made at least
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some change in their strategy for human capital initiatives due to current
market turbulence.3
Reducing health care costs, increasing
workforce productivity and improving
employee retention rates are complex
business challenges, spanning industries and regions because they are
deeply tied to individual attitudes, motivations, behaviors and circumstances. As business leaders actively seek
new strategies to achieve business
results, HR executives will have a significant role to play in shaping and implementing these strategies, and will
be held accountable for their success.
Whereas in the past C-suite executives may have resisted change, their
eyes and ears are now open to benefits
approaches that will empower and
engage a talented workforce. Along
with benefits partners, HR leaders
can help build strong objectives and
tactics that will have an impact on
their company’s bottom line.
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T h e A d vanta g e s o f P e o p l e C e nt e r e d S trat e g i e s
There is undeniable evidence linking
benefits offerings and employee loyalty. In fact, the 2012 Aflac WorkForces
Report found that workers who are extremely or very satisfied with their benefits program are six times more likely
to stay with their employer, compared
to those workers who are dissatisfied
with their benefits program. Similarly,
when asked what their current employer could do to keep them in their jobs,
49 percent said, “Improve my benefits
package.” It’s clear that HR strategies
can add tremendous value to the organization by understanding their company’s overall business objectives and
actively addressing the roadblocks to
achieving those initiatives.
TOP HR
ISSUE
Strategic business objectives vary from
business to business; still there are
several core strategies that are effective across industry and business size.
The 2012 Aflac WorkForces Report, a
U.S. study of over 6,100 employees and
1,800 business leaders, identifies the
most important issues facing HR decision-makers and their organizations.
The majority of business leaders say
that the top HR issues facing their company right now include: (1) controlling
health/medical insurance costs (38%),
(2) increasing employee productivity (21%), and (3) retaining employees
(17%).
health/medical
1 Controlling
insurance costs.
Ta c t i c :
M a n a g e c o s t - s h i f t i n g a n d i t s n e g at i v e
i m pac t o n w o r k e r s .
Every company has unique challenges
when it comes to managing the costs
of employee benefits, and it is not surprising that rising health care costs
continue to be a challenge for both
employees and employers. Controlling
medical costs is nothing new. While
average premiums have increased by
9 percent for family coverage in only
a year’s time,4 according to the Kaiser
Family Foundation, average premiums
for family coverage have increased by
113 percent since 2001 and health care
spending has exceeded U.S. economic
growth in every recent decade.5
One of the main ways companies manage these costs is to shift increases to
the workforce. Unfortunately, many
workers are unprepared to handle the
additional expenses. According to the
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2012 Aflac WorkForces Report, 33 percent of employees say they do not have
enough money to meet their current expenses and just over half (51%) say they
have less than $1,000 to pay for out-ofpocket expenses associated with an unexpected serious illness or injury.
Many workers remain unaware and
even skeptical about cost increases.
Nearly half (44%) believe rising health
care costs have little or no impact on
the overall growth of their company.
Still, a similar percentage (47%) say
they would feel more negatively toward their employer if the employer
increased health insurance costs. If
employers continue to shift the burden
of health care costs to workers, without
effectively managing the perception of
such increases, resentment among em-
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ployees will continue to rise. There are
many benefits strategies that can help
lower costs while minimizing the cost
shift to employees. For instance, an
increasingly popular method for offering more benefits options without any
direct cost to the company is through
voluntary benefits options. Companies
are also looking to successful low-cost
options such as wellness programs and
offering flex-time options.
Additional options include:
Communicate the Realistic Situation to Employees
»
»
»
Focus on total compensation.
Dedicate time slots to talk individually with workers.
B
ring in financial and insurance experts to talk with workers.
Involve Employees in the Solution
» Ask workers to offer cost-cutting solutions.
» Gain buy-in and insight into desirable/undesirable benefits.
» Create an expense-cutting committee.
Seek Effective Ways to Fill Coverage Gaps
» Ask benefits advisor/broker for solutions to control costs.
» Consider voluntary benefit solutions to better protect workers.
» Work with carriers to negotiate reduced costs.
TOP HR
ISSUE
2 Increasing workforce productivity.
Ta c t i c :
Engage workers with better protection
and coverage.
With the majority of companies saying
that their business has either maintained or declined over the past 12
months, it is not surprising that 1-in-5
employers (20%) say that increasing
employee productivity is the top HR
issue facing their company right now.
To most effectively utilize existing resources, savvy
HR leaders are providing employees with benefits that
adequately protect and secure workers:
» 5 8% say an overall benefits package is extremely/very important to their
work productivity.
» 5 6% say a flexible work schedule has a strong/very strong impact
on helping them cope with personal issues.
» 4 7% say adequate insurance benefits has a strong/very strong impact
on helping them cope with a personal issue
» 7 3% of workers who are extremely/very satisfied with their benefits are not
at all likely to look for a new job in the next year (more than six times those
who are dissatisfied with their benefits).
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+
One way employers can ensure that
employees are adequately protected
is to offer a range of benefits offerings.
Workers are more likely to take
advantage of benefits programs that
meet their needs, and they want
options that are tailored to them. The
Aflac study found that 67 percent
would be more likely to take advantage
of a benefits package tailored to their
personal situation. Many employees
also say they would be likely to apply
for the voluntary benefits options if
these options were made available by
their employer, and they are interested
in participating in wellness initiatives.
Both options can be low cost and
offer opportunities for proactive
health management options to meet
employee needs.
When businesses offer robust benefits and workplace options,
they still may not be communicating their programs effectively
to help employees feel valued and rewarded for their hard
work during a down economy.
When businesses offer robust benefits
and workplace options, they still may
not be communicating their programs
effectively to help employees feel
valued and rewarded for their hard
work during a down economy. The
2012 Aflac WorkForces Report
found that 45 percent of workers say
their organization communicates
too little about benefits, which is not
surprising when you consider that
most companies communicate less
than three times a year about benefits.
In the absence of information,
employees are left to turn to less-than-
ideal sources to gain insight and advice.
Surprisingly, 2-in-5 workers (41%) say
they receive information and/or advice
on employee benefits from friends or
family. Meanwhile, only 13 percent
prefer to do so.
The Aflac study found that nearly
2-in-5 workers (39%) agree that they
need to be more engaged in making
benefits decisions, a sentiment shared
by their employer. Business can begin
to bridge the engagement gap by
investing time and resources behind
more effective and more frequent
benefits communication.
This can include initiatives such as:
» Producing employee newsletters or lunch-and-learn sessions to provide
ongoing guidance to workers.
» P
roviding online benefits portals or platforms where employees can have
immediate access to their benefits plan.
» D
eveloping customized benefit booklets, and using FAQs and other marketing
pieces that advise employees on how to best utilize their benefits.
» S urveying the workforce to determine specific benefits needs and desires
among employees.
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TOP HR
ISSUE
3 Retaining employees.
Ta c t i c :
E s ta b l i s h HR a n d b e n e f i t s o f f e r i n g s t h at
d e m o n s t r at e t h e c o m pa n y c a r e s a b o u t i t s w o r k e r s .
+
Nearly 1-in-5 employers (17%) say retaining employees is the most important HR issue facing their company
today. What many employers may not
realize is that employee loyalty, or lack
thereof, is highly correlated to the degree to which workers feel their employer takes care of its employees, and
whether the company is a great place to
work. Consider this: 76 percent of U.S.
workers who agree that their employer
takes care of its employees are unlikely
to look for another job in the next 12
months. Additionally, a full 66 percent
of workers who are extremely satisfied
with their job also believe their employer has a reputation as a great place
to work.
76% of U.S. workers who agree that their employer
takes care of its employees are unlikely to look
for another job in the next 12 months.
Unfortunately, many workers do not
think their companies have their best
interest in mind. The Aflac WorkForces Report found that only 24 percent of
workers today strongly agree that their
employer takes care of its employees,
and less than half of workers (44%) believe the objective of their company’s
benefits program is to take care of its
workers.
These negative perceptions can have
a significant impact on retention. In
fact, 35 percent of workers who don’t
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believe their company has a reputation
as a great place to work are extremely
likely to leave in the next 12 months.
This compares to a full 40 percent of
workers who believe their company has
a great reputation and say they are very
unlikely to look for a new job in the next
12 months.
When working to design an organization’s benefits plan, the importance of
offering a wide range of benefits options and investing in the brand’s reputation shouldn’t be underestimated.
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C o m m o n R o ad b l o c k s and S o l u t i o ns
t o O f f e r i n g R o b u st B e n e f i ts and
D r i v i n g B u s i n e ss R e s u lts
Actively leveraging robust benefits programs and addressing common roadblocks
will help HR executives to drive bottom-line results and ensure that employees are
better prepared for whatever life may bring.
H R R o a db l o c k 1 :
T o o m u c h a d m i n i s t r at i o n, t o o l i t t l e t i m e .
S o l ut i o n :
L e v e r a g e b r o k e r o r b e n e f i t s pa r t n e r .
Most HR executives feel they simply
don’t have the time or resources at their
disposal. The idea of taking on more
initiatives or administration of additional benefits, such as voluntary, can
appear overwhelming, especially when
HR departments are asked to work
with fewer personnel. What these leaders may not realize is they can lean on
broker services or the administration
services of insurance partners. The administration of many insurance products is built in as a value-added service
to companies. With the emergence of
new technologies, such as online enrollment and tools, and centralized
customer support centers, often the degree of in-house administration is very
small or even nonexistent.
H R R o a db l o c k 2 :
Em p l o y e e b e n e f i t s n e e d s a n d e x p e c tat i o n s
are unclear.
S o l ut i o n :
Clear up misconceptions about
e m p l oy e e i n t e r e s t.
Less than one-quarter (24%) of organizations survey their workers to determine their preferences or needs when
it comes to benefits options. Further,
more than one-third (31%) survey their
employees to gauge their level of satisfaction with benefits offerings. Making
assumptions within the realm of benefits and health insurance can be potentially damaging, not only to workers
who may feel their needs aren’t being
met, but also to a company’s productivity and retention levels.
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Advances in technology as a result of
the digital age have made the ability to
survey workers much more accessible
and at very little cost. In fact, most HR
partners and insurance providers offer
these services either as part of, or as an
added value solution. Companies can
also choose to lean on benefits and HR
partners to help design and implement
outreach tools or initiatives that can
deliver crucial insight into exactly what
employees expect and need.
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H R R o a db l o c k 3 :
Em p l o y e e s d o n ’ t va l u e b e n e f i t s o f f e r i n g s .
S o l ut i o n :
d e m o n s t r at e t r u e c o s t o f b e n e f i t s .
Benefits statements are one effective
and simple solution to demonstrate
exactly how much an employer pays
for health coverage and other benefits
programs. Most HR partners and providers are capable of administering
benefits statements as part of the overall benefit program. Not only can benefits statements shed light on the true
investments made by the organization,
but they can also point out gaps in a
workers’ coverage. By alerting employees that they may be lacking in certain
areas, such as life insurance or critical
illness coverage, companies not only
have better-informed workers but also
a better-protected workforce.
H R R o a db l o c k 4 :
Additional benefits cost too much
f o r w o r k e r s a n d t h e c o m p a n y.
S o l ut i o n :
C o n s i d e r V o l u n ta r y B e n e f i t s .
Many providers offer supplemental
insurance policies at no direct cost to
the company and at a competitive rate
to workers. Adding voluntary plans to
a company’s offerings can help companies build robust benefits packages
while staying within budget/cost constraints. Although only 37 percent of
employers believe so, voluntary insurance benefits have no direct cost to
employers. This misperception can be
a costly one for companies, many of
whom are seeking ways to keep health
care costs down while still providing
access to the coverage their employees
need and demand. Making voluntary
insurance policies available to employees not only has no direct cost to em-
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ployers, but may reduce corporate taxes
by cutting FICA tax contributions.
Many voluntary insurance providers
offer a range of products that fit most
budgets. For example, Aflac offers
consumers basic insurance coverage
options, including accident, hospital
confinement indemnity, and life insurance policies. And voluntary insurance
is competitively priced. For example,
Aflac offers a guaranteed-renewable
individual accident insurance policy
with rates starting at $13.65 per month
(based on individual coverage for ages
18–70, Accident Essentials plan, no riders, payroll deduction).
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conclusion
Companies are looking for innovative
and effective approaches to control
benefits costs, increase productivity
and
retain
their
employees.
Given the importance of benefits
to attract, retain and motivate
talented employees, it is crucial
for HR executives to approach
the C-Suite with results-driven
tactics. Understanding the top HR
challenges and aligning HR tactics
with overall business strategies will
be imperative to making significant
strides with business results and
will help to build a workforce that is
informed, engaged and protected.
Works cited
1
2012 Aflac WorkForces Report, a study conducted by Research Now for Aflac, February 2012.
2
Towers Watson (April 2009), “Benefits in Crisis: Weathering Economic Climate Change,”
towerswatson.com/research/740/, accessed on August 3, 2012.
3
The Conference Board (2012), The 2012 Talent Management Strategies Conference,
conference-board.org/publications/publicationdetail.cfm?publicationid=2148, accessed on August 3, 2012.
4
Kaiser Family Foundation (2011), Employer Health Benefits 2011 Annual Survey, ehbs.kff.org, accessed on August 3, 2012.
5
Kaiser Family Foundation (May 2012), “Health Care Costs – A Primer,” kff.org/insurance/upload/7670-03.pdf, accessed
on August 3, 2012.
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