Welcome to Mercer's podcast series on the new shape of work. I'm Kate Bravery, Mercer's advisory and insight leader. And today we're talking about trends and challenges around securing and improving the total well-being of our workforce, something I know many of us on the call have a vested interest in. Whether it's personally or professionally, probably both. But [INAUDIBLE] me unpack this topic and discuss some of the current trending practices.
I'm joined today by two learned colleagues of mine at Merce. [INAUDIBLE], Mercer's global leader in longevity and flexible working, and Dr. Luke James, workforce health leader for Europe. Yvonne Lu, wonderful to have you join today. And we're actually in person, which is very unusual. Welcome to the podcast.
Great to be here, Kate. Thank you.
Great. Well really looking forward to the conversation today because the last few years have seen a lot of discussion and debate on the topic of workforce health and wellbeing. On the one hand, we've seen the rise in prioritization of wellbeing coming out of the pandemic years. And I think some of those expectations are not going to recede. Whilst at the same time, we're now seeing unprecedented health inflation and pressures on budget.
Which of course, is driving the optimisation narrative that we've all touched in one way or another. And at the same time of that challenging juggling act, we also got the introduction of AI, and specifically generative AI, which I think is inspiring us all as to what could be around health and how that huge data set that our organizations have could influence the recommendations, or the nudges, so that people make better health and wealth outcomes for the long term.
So it's a very exciting landscape, and I'd love today to sort of ground the discussion in how are clients responding to the situation? What's the implications for the HR strategist? What's the-- what is the reality for the benefit leader's budget? Because ultimately, employees are going to bear the brunt of some of these policy decisions and investment choices.
So maybe I can start with you. Given it is such a dynamic environment, what are the biggest challenges that clients are coming to you about across Europe, and maybe how are you seeing the dialogue change over the last year?
Yeah, great. So I think it's fair to say, it's kind of perfect timing to be working in the employee benefits, given the dynamic situation you said. But also the macroeconomic picture with the pressures in health economies around the world. And that's really coming to the forefront. I think I would call out kind of three areas of focus for clients that they're talking to me about.
I think firstly is the challenge around, again, the employee value proposition and differentiation in the markets and the war for talent. Clients are looking for a more attractive benefit package, which sets them out from the competition in all areas of wellbeing. And definitely this ability to be more personalized and relevant to different groups within the workforce.
Ensuring you're getting that value and addressing those people risks. So I think that's the first one. Second one I would say-- and lots of conversations around this, really-- is the need for demonstrable return on investment. And a real concern around the rising cost of medical plans. So we're seeing huge increases in utilization since COVID of medical plans.
And partly that's due to access issues and state systems, healthcare systems that are not performing as they should across UK and Europe. And that clearly isn't going to get any better. So we're seeing clients talking about rises in costs. Very high premium increases, 30% to 50%. So that's a real concern for them. And then finally, and I think most positively for me, I'm speaking to lots of clients who are beginning to recognize the importance of shifting the dial into prevention.
So focusing on well-being to mitigate those people risks. You know, whether that's medical related, keeping people well, supporting chronic illness, or financial as well. So a client last week was very keen to start looking at really advanced cancer screening. That's probably the first client I've spoken to throughout my years in my short time MMB that has really wanted to take their kind of screening and prevention to the next level.
So there, kind of three things.
That's fantastic, especially with non-communicable diseases just being such a high prevalence in this country. Really wonderful to hear. So I'm glad you added all that positive note. And it is interesting how benefits, I think, have become a lot more part of the equation when people are looking at that total package, particularly with all the pressure on comp. So I think we've been seeing that, and I'd just read an article last week around how it's becoming even more of the focus, particularly for blue collar workers or frontline workers.
So I think there's some real opportunities there. And that second one around the ROI is interesting. And you mentioned about premiums going up. But part of that is probably due to the lack of preventative health care that happened during those pandemic years that we're now beginning to experience, which is really sad. So great to hear that you're sort of seeing that shift in the narrative. More of that.
Yvonne, would love to hear from your vantage point. What are you hearing from clients? What are some of the big trends that you think we need to be aware of?
Well to build on what we've already heard, I think I'm seeing much more of focus on a holistic approach to well-being. So we've coined this concept of total well-being, which includes an integrated set of elements. So it's looking at mental well-being, physical well-being, financial well-being, social well-being, and career well-being. So all of those-- and social and career may be new terms to break out here.
But this is really about more connectedness at work, post the period of working from home, working remotely. Making sure you've got support network available in that social space. And career well-being is about meeting work-- good work standards, work that you've done. And whether or not it really epitomizes that. So that focus on total well-being as an integrated narrative is where I see a lot of clients going.
And just unpacking that a little bit. Most organizations feel like they've got physical and mental well-being covered. And now, the shift is very much focusing around financial well-being. So cost of living crisis has driven that. Job insecurity's driving that. Living longer, retiring, money running out. All of those are driving organizations to look very closely at financial well-being.
And a great example actually, we're working with one client at the moment. They're doing a financial well-being month in October. They're bringing in all sorts of parties to that table. We're covering off some live stage seminars around what you should do early career, mid-career, late career. The sort of things you should be thinking about. They're also inviting tech specialists, governments.
They're doing this globally for governments, talking about state programs to support. So a really, really interesting way of looking at how to roll out financial well-being program. And I think just the thing around trends is this thing about retirement adequacy. I mentioned it just about people living longer and money running out. So that ties in-- ties in really well with an [INAUDIBLE] education program into late life.
And things like targeting specific groups. So women. Many of you who know me will know that my soapbox is in the gender pension gap. Yes, it really is over 40% in some countries. 26% across the OECD countries, on average. So thinking about financial wellness programs, specifically targeting women. And understanding how that gap is at the moment.
So that's a number of things that I'm seeing and working on.
It's fascinating to see that concept of total well-being expand more broadly. And some of it's obviously come into being because of what we've seen when people get more socially isolated. When they are constantly working from home or have digital fatigue. So I think that's interesting how that's-- how different companies are responding to that. So wonderful to see that dedicated focus on social networks and how we set that out when people join a company or go through a transition. Fascinating.
Thank you for sharing your soapbox. I am always shocked that it's 26% globally. And that 40%, I think, is actually in the UK. Which as a mature country, I find shocking. But we'll put that aside for one. You mentioned there about 100 year life. And I know you've been doing some work with the World Economic Forum on, how do we ensure that people thrive on 100 year life?
And I wonder if you could share some of the insights from the work that you've been doing with them. And maybe some tips for some of the people listening in.
OK. I'll do that very quickly. I think people are generally not financially ready for retirement. Some of them are not mentally ready to give up work either. They want purpose and meaning in their life. The majority-- we've done hundreds of interviews, focus groups, and survey. The majority, as they start to approach late life, they want to work fewer hours. They want to work differently.
So we're seeing things like age retirement programs where you gradually flex in from full time work to full time retirement. Or even new models of work emerging, which is project style work or gig style work. And as you mentioned, this swing towards preventative measures is really a focus. So just helping support people as they move towards those later years with better information around how to prevent and prolong their good health.
Really, really important. And my final tip on that is financial education for all life stages. I think it's really important. You don't just need to leave it until you're 61 or 62 to worry about. The sooner you start, we know the compound interest and other roles there. The sooner you start, the more sustainable it will be and the less stress you will find.
It does cause a lot of stress. Every year, we look at how many hours a week are dedicated to financial worries and we all know what direction that's heading in. But I-- it's interesting, your comment around it's not just, am I financially able to retire? It's also what the role of work plays in our lives and that desire to stay mentally active. You mentioned there about phased retirement.
And obviously phased retirement has benefits both for the employer and for the employee. And certainly as we're seeing, a real challenge around knowledge transfer, around skills coaching. And even some of these young people who missed out on the typical socialization needs, sort of professional development dare I say. So lots of benefits. How prevalent though, is that practice has really taken off.
So just to quote some data from global talent trends pre-pandemic, we saw about 70% of companies globally had offered phased retirement. By the end of the pandemic, it doubled to over 38%.
Wow.
And I believe it's still on the increase because a lot of the work I'm doing now is exactly this. So I know the pace is really up.
Yeah.
So it's becoming quite low. Companies, countries even, are realizing that demographic pressures are shrinking. Birth rates, increasing life expectancy. Real pressures on the labor force. So companies are really trying hard to-- and want to-- retain that skills and experience. So think it's on the increase.
OK. That's really good to hear. That's really good to hear. Look, I might come back to you. We've been hearing from Yvonne some of the more bleeding edge practices around being and financial well-being being part of the package. But often for many, it is health care. Health care coverage and now health care prevention, which you just were beginning to touch on.
I wonder if you could maybe share what the dialogue is, or some trending practices, around helping people to have longer term positive health outcomes. Similar to Yvonne was talking about in terms of longer term wealth outcomes.
Yeah, sure. I mean, we all know nipping something in the bud early, whatever the issue is. Financial, emotional, medical is ultimately the way to gain control quickly. And I think the important thing here is that these issues aren't mutually exclusive. So if, for example, the financial impact and career impact of having a serious diagnosis such as cancer is well documented.
And to Yvonne's point, as we spend longer in the workplace and get older in the workplace, we are going to develop more diseases that we're going to take into the workplace. And so, you know, it really is important that we support employers in looking at how they essentially risk stratifying their population from a very early age when they enter the workplace in terms of how they educate and support in preventing some of this disease, which is going to be a huge burden for both the individual and the workplace.
So you mentioned earlier non-communicable diseases like diabetes, obesity, cardiac. You know, I think employers can have a real important role to play there in both lifestyle and behavioral change. And support for those who've already got that condition. We talked about cancer earlier and cancer screening. We're seeing later diagnoses at later stages. There's worrying evidence coming through recent reports.
Coming out on the increasing rates of cancer amongst millennials. And--
Really?
Increasing rates of cancer, what they call-- we would call early onset cancer. So that's published in the last few days in BMJ oncology of under 50s. Now no one knows really why that's happening. We're kind of guessing lifestyle and genetic factors. But nevertheless, it's worrying. And so again, I think employees can play a significant role in encouraging lifestyle change but also supporting kind of screening programs.
And new-- we talked about bleeding edge stuff. There is stuff out there that is coming along that is extremely exciting and available in terms of genetic type testing. So something called polygenic risk scoring, which I think will really transform how we understand an individual's risk. So the example there is that you won't use age as a threshold for having a mammogram.
You will use a relative risk based on your genetic profile from a simple test. So that allows us a much more personalized approach. And I think the main thing that-- when I talk to employers about-- is you have to remember the workplace is such a powerful community and channel for adoption of those new behaviors. Because after all, we spend a lot of time in the workplace.
And to Yvonne's point, we're going to spend even longer. So it is a huge opportunity, I think, to address some of these issues around chronic disease and cancers.
I couldn't-- I couldn't agree with you more. And it's wonderful to see that this dialogue is at a really lively one now because we do spend an extraordinary amount of time at work. And there is behavioral changes happening in society at large that we need to intervene anywhere. There's a great Netflix show at the moment on the blue zones, which is where people have been living.
And unfortunately, those blue zones are getting smaller and smaller because of some of these changes. But it's no longer the church or other institutions that have the most influence. It is organizations. So we have a societal responsibility, I think, to be influencing that agenda. And just because want to say the word, polygenic risk scoring, I think, is fascinating.
But as you were talking there, Luke, it did make me think about, who has that data? And is there any potential misuse of that data? Because already today, organizations don't have enough data to make predictions around a whole range of how the information gets used. I'm just curious about that topic. Is that also part of the discussion?
Yes, absolutely. And I think in those situations, you would never expect the employer to be holding that information. So it would be a third party, secured, destroyed after a certain while. That kind of thing. And it's using-- it's using lifestyle data as well to come up with a risk score for you. So it's useful for the individual. So I suppose in that example, we're not saying that your employee would force you to go under a genetic test or anything.
It would be offered and it would give you an individualized risk stand that you could then undertake steps to reduce your risk in the future. But yeah definitely, no-- no holding of genetic information by the employer.
Yeah.
But you know, I've heard you talk in the past about some of the modeling you can do. And that's, again, aggregating the data so that people like you might be a risk of, which I think is fascinating. And Yvonne, obviously the last few years, a lot of well-being teams have been sort of stood up almost independently of the benefits and rewards teams. I'm just curious to sort of see, what are they focusing on at the moment and are those new EX teams, well-being teams, continuing or are they moving back into the more traditional rewards and benefit areas we've seen in the past?
It's really changed. I think, yeah. Even 10 years ago, just definition of well-being has really lost them. I would use that word. So what we're working on, what we're seeing now, is much more the spokesman of total well-being. So much more knowledgement that all of those pieces join up to be true well-being. If one piece of that total well-being is not working well.
Job quality, for example, the mental well-being element. Then it starts to fall apart. So that as a narrative has really, really grown. And most companies now have quite a well-developed, overwhelming strategy [INAUDIBLE]. I think in terms of project type work that we're seeing, that might be of interest to some of our listeners. The concept of flagship benefits is becoming quite popular.
So really just honing in on something that you want to be known for as an organization. So one example may be, for example, we're working with a luxury goods brand at the moment. And this issue of the gender pension gap is a big one for them. Their clients and customers and staff are largely women, so they'd love to fix something that they would love to be known for because it's sort of meaningful to them.
Another example of the flagship benefits is an insurer. So they are very keen to make sure their employees have the best possible risk coverages. So it's working on one particular topic. Another one, to your point Luke-- and I'm very interested to hear about the [INAUDIBLE] cancer. But the screening is also becoming another big one. So companies are wanting to be known for that preventative movement.
We're also looking at headaches as very much a sign of the times. Things like hardship.
Remind me.
Yeah.
[INAUDIBLE]
And these are designed to really intervene, or real crises. So it could be a mental health breakdown. It could be a domestic breakdown. It could be a severe cost of living cash flow crisis where companies are offering grants and gifts from the hardship fund to help employees through these really tough times. And maybe just one other example that's very close to my heart is around health equity and analytics.
So looking deep into the outcomes of these well-being programs for different marginalized groups to make sure that the outcomes are all right. I was speaking at another conference this morning and there was a great speaker. She was Chinese-American and she was talking about her own personal health, mental health situation. She was offered cognitive behavioral therapy, CBT.
And she said culturally it means nothing if you're a part of the connected culture. Don't ask me how I am because how I am, it doesn't matter in my collective. It's how my family and my social network are. So the relevance of CBT. The company thought they were offering a great fix for her, but it was completely culturally irrelevant. So the outcome just--
[INAUDIBLE]
We're just nowhere near what they might be where it's more culturally acceptable. So those are a few examples of projects that we've really been involved in quite deeply recently.
Really fascinating. And you can hear through all of those, the need for more individualization and personalization. And I think that's closer in our sights because we have AI, which can start to look through large data sets and start to make some predictions and modeling. But also, we're beginning to see now with this most recent generation with generative AI, it can also help with some of the decision making and nudges.
I want to look, if you could chat a little bit about, what is the dialogue about AI or generative AI in the health and well-being area? Is there any particular applications you're seeing, or early adopters you could share?
Yeah, great. I mean, it's really exciting, isn't it?
It is. It is so exciting. Yes. Obviously we hope it's going to solve all of our problems.
Yeah.
We're all going to live very healthily past 50 years old.
Yeah, and I think that's probably one of my worries, which I'll come on to. But I think for me, what we're seeing at the moment with ex-generative AI is a bit like what we saw in the democratization of health care in the kind of late '90s, early 2000s. And through access to medical information on the internet. So prior to that, if you were unwell, you had to see a doctor or medical profession.
They held the knowledge completely. The only other option you had was probably to go to a library and try and diagnose it yourself through a book. Once the internet took off, you're able to access this whole knowledge base at the press of a button, in seconds. And I think that was a huge change within the medical profession around knowledge. But you had to find that knowledge.
We've now got something that will go and find that knowledge, interpret it, filter it, and present it in a digestible way for you. And I think that's great. But back to your point earlier, I think one of the worries is-- I think what became clear is that that medical knowledge and the internet and Google and all of those things. They do require human interaction as well.
You need kind of that complementing of the human with it. So I think we should always be aware of that. You need-- you need good governance, you need oversight. Back to your point about health equity. You know, where's the governance around these AI algorithms for health equity?
And also when they can take it through to actually presenting in such a beautiful way and confident way. Yes, it-- they're not said-- not giving you something that looks messy and that needs intervention. So if you don't put those guardrails in, the opportunities to sort of defer to the tech could happen.
Absolutely. And I think the tech that we're seeing, the areas that we're seeing, is in a relatively niche at the moment. So things like radiology. So using AI models to enhance a scan, or to actually support the radiologist-- the doctor-- in looking at a certain area in more detail that they might have missed. So accuracy, not missing diagnosis. Being used in that area.
And then the two other areas, just to mention briefly. Our listeners will probably go away and look at these in dermatology. So interpretation of skin lesions and excluding melanomas, serious skin cancers. And then we are seeing-- and there is one firm that I'm aware of that has developed this. It is the kind of use of generative AI in chat bots.
Now I think that's a really interesting, but quite scary area. And again, you've got this issue around, what are employees happy with doing? Interacting with the chatbot, whereas the governance behind that-- the clinical. And so I think there's lots of issues around the medical use of generative AI still to be teased out. More so probably than in other areas like content generation, guidance, and navigation.
Yes, because you move from preformulated look at-- look at things to actually trawling lots of it and then making a recommendation, which gets dangerously close to your profession as a doctor. But fascinating, fascinating. Yeah, Yvonne. Any comments you'd add to that?
I'd just add that as with all digital approaches, the fact that it offers wider accessibility. We get some more people with more house [INAUDIBLE], more cheaply and more quickly. That has to be a good thing. We can't dismiss that. And I was chatting with a colleage the other day and this gave me an example of the use of generative AI. But doctors were using it actually to help them explain complex conditions in layman's language.
And again, I thought that was quite useful.
Yeah.
Because so often, something gets lost in translation, doesn't it? So to know that that's proactively happening is wonderful.
I agree with you. Do you know what? I also read an article the other day about another use of generative AI where in-- when doctors are making-- chatting to a patient, actually taking the notes, making summaries, and then to dos. And actually taking it through to potentially writing out prescriptions that the doctor can sign off. And given how awful doctors' handwriting is, that seems a very sensible.
But back to your point about using layperson's language, the opportunity, then, for the AI to translate those notes into something that anyone can understand, I think, is really powerful. So fascinating. And your comments earlier about just the changing attitudes towards telemedicine and tech is something we've been tracking in global talent trends, but also in our health on demand study.
And I think before the pandemic, there was a real reticence and a real concern about, what would I want to get in what automated fashion? Now I might not want to be told that I have cancer, but there might be other medical results I'm happy to receive. And that's really changed during this period. So it's not just the tech that's advanced, but also people's acceptance of that tech, which is fascinating.
We are going to run out of time, unfortunately. So since we are coming to our last few minutes here, I'd love us to maybe just project into the future. As we begin to think about this exciting, evolving world around health and well-being and the role of the employer in employees health, what do you think it's going to look like for your children? What do you hope the world of work might look like for them?
So I'll go first. So I mean, think my first time-- so I trained for a short time in kind of neural developemnt, psychology in children and babies and the growing brain. And so when I had my kids, I kind of, I suppose, carried out a kind of like micro psychosocial experiment really.
I'm another psychologist. Why else do you have kids?
Absolutely.
Make that a hat trick.
Yeah.
[INAUDIBLE]
So who knows whether it's work. But I think one of my main hates is when they do enter the workplace, which won't be too long, is that hopefully that good work that I've done isn't destroyed by the culture and the organization and the managers and the lack of support. And so I think that's my kind of main hope that will happen. So that we do know that happens because we see rising rates of mental health issues and burnout.
So I think that's my main thing. They don't destroy kind of what I've done and create problems. And then think for me, it's-- I hate they enter a workplace that is advanced and personalized in their approach to what they're delivering. And I don't necessarily mean that all about medical. I mean that financial as well. Mental health support and social connectivity is really important to me.
So this is where you mentioned it earlier and I'm quite passionate about it. But think we definitely lost something on that social kind of networking, connectedness, sense of belonging in the workplace. And while I think we really have to be flexible for people, the ways of working, there is something we're losing by not having that human connectedness, I think, in businesses.
It is interesting because we-- humans are creatures of habit. It was really hard, initially, to kind of adapt but we had no choice. So it was easier because we had no choice. Now we do have choice of adapting back. Because sometimes, there's some hidden benefits that you don't realize if you've never experienced it. And a lot of the young people today haven't.
I hope the kids aren't listening to the call. Those words, don't destroy my work, are really inviting. Yvonne, love to hear from you.
Well it's my grandchildren now I have hopes for because my kids are grown up on their own. And I work two things on my list. I must admit, I really do like this integrated total well-being approach. Meaning that if companies can maintain that looking at every element of that workplace experience, it's so important. Because if there's a week that will destroy another really good work.
And the other thing is quite [INAUDIBLE] at the moment. My husband has been reading all about UPF, or Ultra Processed Foods. And I think the impact on nutrition, the impact on diet. That is-- that new science that's coming through that, new information, it's really compelling. And I'm hoping that my children and children's children grow up understanding the importance of getting back to blue zone.
Yeah.
Type quality. Living, eating well, and fresh air, good exercise. Just those simple values. So I'm hoping for much more transparency around that side of the work.
And it is about value. Because we have, in certain markets, overindexed on work at the detriment of our health and well-being. And it's wonderful to see the two come together. Yvonne, Luke, thank you for sharing all of your insight. I know we could continue longer. I'm going to do my best to summarize some of the-- my key takeaways. You know firstly, I think, to your point Yvonne about it being more integrated.
Well-being is definitely becoming a much more expensive topic beyond just mental and physical health. You know, I was interested to hear the conversation. It's also about job quality. It's also about ensuring we don't have social isolation. Addressing those financial worries head on. And that's leading to a whole set of new benefits from hardship funds and financial education and inclusive benefits.
A lot of the things that should have been in place before, I think, are now bubbling to the fore. And employers are judging their organizations on that package, which is really exciting. Luke, I loved your point there about you've got to ensure that we risk strategize early. Both on the health side, but also on the wealth side. It's very hard to influence things like health equity if we don't look at those early indicators.
And really exciting to hear just some of the new ways that people are being aware of different challenges and measuring some of those risks. I always love it when I learn new things, so polygeneric risk and also UPF. So thank you for both of you for those two. But I think big shift that we're beginning to hear about, which of course, AI is driving us toward is moving away from just protection to prevention.
And I think that's really exciting. The last comment is just, Luke. I think you sort of said it. This workplace is a powerful community. We spend more time there. And to your point, we're going to be spending even more time there. So we've all got a responsibility to influence better health, wealth, and career outcomes. And so you're right. This is a very exciting time to be in this space.
Listeners, I hope you were inspired by these comment as much as I was today. It's been a really fantastic session so thank you both for lending your time. And listeners, if you're interested in this topic or others associated with the new shape of work series, please do visit our interview series on mercer.com. And I think mentioned earlier, a health on demand survey which actually covers a lot of the points that have been brought up today.
Thank you all for joining. Wishing you all a great and healthy rest of day. Thanks, everyone.
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