Mercer study looks at HR’s challenges and opportunities
Earlier this year, Mercer published its 2017 Talent Trends study—a sweeping examination of what employees value and what employers are doing to attract the workers they want. It comes at a crucial time because, according to the study, 43% of C-suite executive respondents and 34% of HR professionals agree that competition for talent will continue to increase this year.
One of four major trends that Mercer identified is what it calls “A workplace for me.” The study found that “employees are seeking more flexible and personalized work arrangements. More than a list of cool benefits and perks, personalization itself is fast becoming a differentiator.”
“We asked what would make employees choose one company over another … taking pay out of the equation. Time off was the clear winner.”
—Mercer Talent Trends 2017 Global Study
The worldwide study, which is based on data gathered from 400 business executives, 1,700 HR professionals and 5,400 employees, found that “the majority of employees want more flexibility, and 40% of HR respondents acknowledge that offering more flexible ways to work would improve their employees’ ability to thrive.”
Job flexibility can take many forms, because employees who value flexibility want their work to be structured, as much as possible, to their own individual habits and strengths. We’re all unique, so let the work and rewards fit each one of us as much as possible, the theory goes. Summarizing the value of personalization and flexibility for employees, the study states, “Flexibility comes down to finding a way to integrate one’s work and personal life.”
Mercer’s study probed the aspects of flexibility that were of the greatest interest to employees. The report states, “We asked what would make employees choose one company over another—providing an exhaustive list and taking pay out of the equation. Time off was the clear winner—either more of it, or at least the flexibility to spread it out, or even work fewer hours for less pay.”
“Perks such as fitness and recreation facilities, well-being services, and financial advice were all present, but ranked lower on the list.”
In analyzing employees’ preference for time off as a flexible benefit, Mercer notes, “When employees were asked about their biggest concerns for the near future, the themes across geographies and generations were all the same: first, health (61%); then wealth (23%); and finally, career (16%).
The current study found that employers are moving toward making flexible work arrangements available to employees—up to a point. “Sixty-two percent of companies already have pockets of flexibility in place, but only 35% say that it is a core part of their value proposition. An additional 27% offer flexible work options only when requested by individuals and sanctioned by managers.”
When employees were asked about flexible work options currently in place at their employers, “they generally reported support from their managers (61%). However, 33% of employees indicated that they had requested a flexible arrangement in the past and were turned down, and 50% expressed concern that working part-time or remotely would negatively impact their promotion opportunities.”
This trend of employers and employees striving for greater personalization of benefits and work arrangements was raised by a panel of benefits experts gathered at a recent Sun Life Summit. One panelist, Jacki Bassani, North America talent and rewards business leader at Willis Towers Watson, cautioned employers not to assume they know what their employees value.
“When we begin working with an employer, we start by asking employees what they want,” he said. “Don’t assume you know. For example, we’ve been surprised by the level of interest that younger employees have shown in retirement products. We thought that since their retirement is so far into the future, that wouldn’t be a priority. But they have been influenced by seeing their parents getting close to retirement and not being financially prepared.”
Employees need to be educated about all their benefits choices, Bassani suggested. Sometimes employees aren’t aware of what their total rewards are. “If the organization wants to make changes, is it willing to maybe give up some things in order to have other benefits?”
Some benefits options that can be personalized are relatively inexpensive, but the value they bring can be significant, Bassani noted. “It could be something like reeducating the employee about coming back to work after a maternity leave.”
Another panelist, Jason Averbook, CEO of LeapGen, said, “We need to take the transaction (of buying benefits) and turn it into an interaction. If we do that, people are going to understand more about the rewards that are available to them.” He likened the personalized benefit buying experience to purchasing from Amazon (including product reviews and suggestions of related products to consider, such as “People who bought this item also bought …”).
David Daskal, communications expert at Jellyvision, the company that created the ALEX benefits decision-making software, said humor can be effective when explaining benefits options to Millennials. He was asked if it is possible to use humor to explain to Millennials the intricacies of a high-deductible health plan (HDHP) compared to a more traditional health plan.
“Absolutely,” he responded. “That is a prime time to engage employees with a little bit of humor. You could start with an email or text (Daskal favors texting to a Millennial audience) to get their attention. The next step would be an explanation of the key provisions of the HDHP. A final communication could return to a more humorous tone.”
Chicago-based Jellyvision has approximately 350 employees, mostly Millennials. Daskal said two of the perks that have proven popular with their Millennial employees are a free lunch once a week and the company’s paying the cost of employees using a bike-sharing program to commute.
HR’s harnessing of tech
If employees are looking to their employers to provide them with a better work/life balance, employers, for their part, seek workers whose strengths and everyday work performance align closely with the company’s goals. According to the Mercer study, technology is making it easier to satisfy both aims.
“The good news is that advances in technology (from employee portals to career matching apps to benefit management platforms) are making it much easier to bridge the gap among workers of various generations, job types, and genders and those who work at home and in the office,” the study states.
“Also, the micro-segmentation science of personas commonly used in marketing is starting to be applied to people strategy. These realistic representations of employee ‘types’ can enable HR to better target employee benefits and communications.”
Use of technology in the hiring process also helps to more closely match the company’s needs to a potential employee’s strengths. The study points to Goldman Sachs, where “undergraduate candidates now submit online, pre-recorded video interviews as their first-round evaluation for internship positions. Candidates record answers to a set of pre-defined questions … Interviewers then can rank and compare candidates against one another.”
Not all of the Mercer study data points toward a smooth meshing of employer-employee aims. One obstacle to employee productivity is job stress. A 2016 Mercer study found that people spend an average of 13 hours per month worrying about money matters while at work. In the current study, only 19% of employees predict that their workplace will become less stressful over the next two years.
Mercer’s analysis suggests that a communication disconnect about salaries is a source of job stress for employees. According to the study, “51% of companies say they provide information on pay bands, but only 34% of employees agree.”
As HR departments contemplate how to synchronize the company’s objectives with the needs of its employees, one clear challenge will be the shifting definition of jobs within the organization. Long-term, those shifts are expected to be dramatic. Bassani said at the Sun Life Summit that 65% of today’s kindergartners will hold jobs that do not exist today. The Mercer study states, “Having a strong decision-making science underpinning job changes has never been more critical, especially as new jobs are emerging faster than ever before.”
Clearly, HR departments have their work cut out for them, both short-term and long-term. For benefits brokers and the employers they work with, it should be an exciting ride.
Thomas A. McCoy, CLU, retired in 2013 as editor-in-chief of Rough Notes magazine.