Dramatic social, demographic, economic and legislative changes have introduced an era of accountability never before seen in the employer-employee relationship. To proactively assist employers in navigating these new dynamics, Mercer has launched “Making Accountability Work: Effective Employer Strategies in a Multigenerational Age.”
Mercer has identified a convergence of external forces that has ushered in this era of accountability and is redefining the very nature of work, health care and retirement, including:
Multigenerational workforce – The Millennials (those born after 1981) surpass the size of the Baby Boom generation and are bringing a vast influx of 20-somethings into the workforce. On the other end of the spectrum, 54% of pre-retirees plan to delay retirement1 which means four distinct generations (Millennials, Gen Xers, Baby Boomers, and Traditionalists – each with its own set of values, attitudes, opinions, and needs) are working side-by-side for the first time in history.
Consumer choice – An explosion of options and access to information has shifted greater decision-making and financial responsibility for health care and retirement planning to the individual. For example, 72% of large employers are now offering voluntary benefits to fill gaps in core employer-paid benefits.2 On the retirement side, despite a recent downward trend in 401(k) plan investment offerings3, the median number of funds offered is 17; 30 years ago the average was just five.
Do-it-yourself culture – Health and retirement programs are following the popular trend toward a do-it-yourself approach, with two-thirds of large employers expecting to offer a consumer-directed health plan (CDHP) in the next three years4, and defined contribution plans serving as the primary retirement plan for 78% of workers.5
Business risks – Health care reform requirements and retirement plan expenses are increasing just as employers face heightened scrutiny on spending and risk management. As a result, 54% of employers offering pensions are likely to use a de-risking strategy in the next two years6 and 58% currently use or are considering a defined contribution approach to control the cost of providing health benefits.7 Employers also face a daunting workforce dilemma; while 64% believe that managing critical talent is essential to success, only 30% say they have programs that are “extremely effective” in achieving this goal.8
Upon analyzing the significant workplace pressures created by this era of accountability, Mercer has identified three critical areas in which to focus its consultative guidance and targeted solutions for employers:
Navigating the changing health and benefits landscape – Employers need strategic guidance to address the cost and complexity of health care reform, which has resulted in a growing demand for new benefit solutions, along with the growing demand for benefit program flexibility, consumer control, and easy-to-use decision aids.
Securing retirement outcomes – Plan sponsors face the challenge of mitigating ongoing pension costs and risks while providing the appropriate defined contribution and savings programs, tools, and education needed to foster a retirement-ready workforce.
Driving talent performance – To drive performance, organizations need help effectively forecasting talent needs, engaging multigenerational employees, mobilizing workforces, rewarding performance, and developing skills.
“For the first time, the workforce is made up of four generations, all of whom are being asked to take more personal ownership of their health, retirement and careers,” said Pat Milligan, Mercer’s President of North America. “This shift toward greater accountability presents enormous challenges for today’s employers, but also represents a significant opportunity to re-energize employee value propositions, control costs, manage risks, and better engage workforces.”
To learn more about how Mercer can make accountability work for both employers and employees follow #accountabilityatwork on Twitter.
1 Mercer Workplace Survey, 2013
2 Mercer’s National Survey of Employer-Sponsored Health Plans, 2013
3 PLANSPONSOR Defined Contribution Survey, 2013
4 Mercer’s National Survey of Employer-Sponsored Health Plans, 2013
5 Employee Benefit Research Institute
6 CFO magazine & Mercer: Redefining Pension Risk Management in a Volatile Economy
7 Mercer’s National Survey of Employer-Sponsored Health Plans, 2012
8 Mercer’s Critical Talent Practices Survey, 2014
Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in more than 43 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting.
For more information, visit www.mercer.com. Follow Mercer on Twitter @MercerInsights.