This year, strategic planning is all about the employee 

My work anniversary falls in the middle of annual strategic planning season, and when I celebrated my 35th year at Mercer a few weeks ago I noticed how different it feels this year. The goal of providing access to quality care while managing to a budget hasn’t changed – in fact, rising inflation has only made that challenge more pressing. What feels unique in my experience is the way that dramatic market changes have dominated strategy conversations. Specifically:

• The war for talent is top of mind across all market sectors, especially for hourly workers – think nurses and truck drivers – and higher-paid tech talent.
• Post-pandemic, flexibility is no longer a “nice to have.” Workers want flexibility in where they work, their schedules and their time off. For many, support for work-life balance and well-being has become a key part of the employment value proposition.
• Inflation makes health care affordability a bigger issue. Paying for care was already a challenge for many Americans – and as prices rise for everything from groceries to gasoline, there’s even less money available for health care. Against the backdrop of the pandemic, that’s a formula for stress.

As employers begin responding to the changing environment, their actions also factor into strategy conversations. In 2021, for the first time ever, average medical plan deductibles were lower (in some coverage categories) compared to the prior year, and some employers that had offered only a high-deductible plan reversed course and added other choices. Employers are also enhancing mental health benefits, adding a wide range of family-friendly benefits, providing access to virtual care – the list goes on.

Together, these market pressures are pointing HR teams in one direction – and that’s to focus on the employee. I’ll share a few thoughts on how you might get started on a more employee-centric strategic plan.

Find out what your employees want.  When it comes to benefits, what are your employees’ unmet needs? Surveys and focus groups are a good way to get that information. Of course, not all employers are willing to take that step, since directly asking employees what they want can create expectations their employer may not be able to meet. Another route is to tap into general research on employee preferences; our recent Health on Demand survey found significant differences in what employees value based on demographics. You can also use demographic data for your population to develop personas to better understand needs and preferences. This type of analysis can also help you discover if some of your current offerings are not highly valued, providing opportunities to consider tradeoffs.

Analyze data on a location-specific basis. To find cost-management opportunities that don’t shift cost to the employee, think local. Comparing cost and utilization across locations can help you spot red flags such as higher-than-average prevalence of chronic conditions or non-emergent use of the emergency room; it may also reveal the impact of market consolidation on prices. If your health plan is underperforming in a given market, it might be time to look for a value-based care network, which can improve employee experience and outcomes without increasing cost. Look at enrollment tends across locations as well. If more employees are choosing the highest-cost plan in a particular location – when it might not be the wisest choice for all of them – some benefits education or a benefits ambassador might be called for. 

Consider how you might be more flexible. Flexibility can take many forms. As we emerge from more than two years of a public health crisis, many employers are debating whether to offer remote or hybrid work indefinitely. Wherever you may land on that, allowing flexible work schedules is another way to meet employee needs. Some employers are re-evaluating their time-off policies and finding that a less-structured design is a better fit for today’s work environment. Finally, the more choices of benefits you offer, the more employees can customize benefits to meet specific needs. Voluntary benefits and lifestyle accounts are ways to expand benefit options.

Given inflation and other health benefit cost pressures, building a program that will help win the war for talent is indeed a balancing act. Keep the employee in focus and get creative – in these unprecedented times, your two best tools are data and imagination.