How employee benefits mitigate talent risks

Organizations should focus on flexible working and personalized benefits if they want to attract, retain, instill pride in and relate with key talent. Here’s how to make sure your value proposition and benefits plans engage the current and future workforce so that employees become brand ambassadors.

According to our Global Talent Trends research, people are more likely to accept a job offer from, or stay at, an organization that is empathetic and enriching, fosters a sense of belonging and creates connections with its purpose. Many organizations should urgently reimagine the employee experience to be successful at attracting, retaining and inspiring talent.

Building a strong employee value proposition (EVP) aligned with an organizational strategy is imperative for firms that want to recruit high performers while energizing and retaining the current workforce.

The People Risk report 2022 found that 78% of HR and risk managers agree that talent practice exposures are a serious threat to business. The changing nature of work ranked #5 out of all 25 people-related risks.

Challenges to navigating new business models and technology should force a refresh of the employee experience, with a focus on flexible policies and procedures to support an increasingly diverse workforce.

Firms are grappling with issues surrounding hybrid working, use of contractors and technology adoption, along with innovation and workforce management.

The MMB 2022 People Risk research found that the greatest barrier to addressing talent risks is “difficulty in managing personal behaviors,” which is common in situations of rapid change and evolution and where competencies such as adaptation, resilience and working effectively despite uncertainty become imperative.

Companies should challenge the status quo and consider how employee benefits and support programs can enable these competencies, thereby serving as an expression of the company’s values.

Five key global findings from the People Risk Report 2022

The pandemic has served to accelerate the changing nature of work, creating a focus on flexible working, technology adoption and automation, and the need for reskilling. Employees now expect to have flexible working models as well as the right technology and supervisors who support these models, while organizations need to consider different skills than those needed in the past. Failure to manage these shifts can lead to unattractive and inequitable offers that disengage the workforce. Fortunately, HR and risk professionals are aware of this people risk and have ranked it #5 out of 25 in our survey.
Remote work, coupled with many employees reevaluating their careers, is resulting in turnover and the tightest labor market in memory. The challenges organizations face with “the Great Resignation” are reported in the media on a daily basis, and we would have expected a higher ranking for talent attraction, retention and engagement risk given that context. Further, HR needs to consider that talent risk affects many aspects of the business, including productivity, cybersecurity, the ability of the organization to grow or even its ability to meet contractual obligations.
Succession and key person risk was ranked #3 overall last year by HR, but it dropped this year to #17 and #14 among HR and risk respondents, respectively. HR leaders may be distracted by difficulties with recruitment. Losing a key person without making a smooth knowledge transfer can adversely affect employee morale and risk customer relationships.
Although conduct and culture fell to #16 out of 25 risks (down from #10 last year), a growing focus on stakeholder activism has made this more important than ever. Tolerance of misconduct, including bullying and harassment, is low, and failure to manage such behaviors can have legal implications for businesses, alienate customers and cause reputational risk. Organizations may also need to redefine their cultures, especially if collaborating in an office environment has been a key component.
Business travel and mobility risk ranked #24 out of 25 people risks. This risk creates issues in areas such as crisis/evacuation management, business/colleague dissatisfaction and duty-of-care gaps.

Trends to watch

Our Global Talent Trends research showed that 62% of employees would not join a company unless they could do remote/hybrid work, and 72% of HR leaders are acutely concerned with the deterioration of culture as hybrid working gets scaled.

Despite this, our People Risk research encompassing the views of HR and risk professionals revealed that less than half of organizations surveyed have effective policies and support systems to enable remote, hybrid or other flexible ways of working. This is a problem given how the absence of such programs could lead to a deterioration of work/life balance, an increase in absenteeism and presenteeism, erosion of company culture and increased data security threats. Employers should adapt and continue to find ways to meet the unique needs of employees, who otherwise will find work elsewhere.

Firms should also redesign benefits to fit a more diverse employee market and create well-being programs and benefits that connect with colleagues’ pride and purpose. In the past, flexible plans were centered on different life stages, but real personalization is far more comprehensive. HR and risk teams should also look at benefits through the lens of vulnerable populations and consider personal circumstances, such as values, life goals and family responsibilities, to be inclusive.

Employees are less likely to leave their jobs when they feel supported. In fact, in our Health on Demand research, more than half of employees (54%) surveyed globally place the ability to customize benefits packages to meet their personal needs as a priority.

Organizations trying a more human-centered approach would be well advised to ensure that basic needs are being met and well-being is not overlooked. During the pandemic, we witnessed the impact of health coverage gaps; for example, people not having coverage for basic primary or preventive care or even sick leave. To create a culture of well-being and resilience, employers should:

Play a role in helping workers protect against risks — including helping staff manage catastrophic personal life events.
Ensure a psychologically safe — not just physically safe — workplace.
Address leadership problems that are inconsistent with creating a culture of health — this extends to job design, which may not have previously considered well-being or protecting employees’ non-work time.
Address discrimination and bias, and create an inclusive environment where people can be safe regardless of religion, gender, race/ethnicity, LGBTQ+ status or disability.

Efforts to build a solid, people-centered foundation will not go unrecognized. A key factor here is making sure leadership rewards are aligned with people risk management values and priorities. As the scope of executive performance goals evolves beyond financial performance to broader stakeholder concerns, workforce health should be considered.

What firms can do

For those organizations looking to seize the risk mitigation opportunities that employee health and benefits programs bring, there is an opportunity to:

Reduce attraction and retention risk by taking a fresh look at your EVP, including total rewards. Aside from reliable benchmarking, this necessitates an advisor that can assess every element of your employee experience, including an expanded definition of benefits encompassing digital-first supports. It also requires understanding what innovative and progressive employment brands are providing so that you can create a competitive advantage.
Segment employee populations and conduct focus groups and surveys to gain a better understanding of employee needs. Understand which “moments that matter” are top of mind and how you can better support them. Once this is done, look at different ways to add choice to plan design. Where possible, allow employees to select from a range of benefits, including a manageable number of solutions that have been assessed for quality and ease of access.
Deliver a consumer-grade experience, and make sure your benefits touch on all aspects of physical, emotional, career, financial and social well-being. Employees should be able to access benefits in one place rather than hunt through a patchwork of programs that have been bolted onto your intranet.
Build cultures of health — including teams where individuals feel accepted and respected as well as safe and healthy. Engage in deliberate and meaningful actions that support individual and organizational well-being, and create strong communication about these efforts and your benefits through frequent, targeted and prompt delivery of information.

This year’s People Risk report contains many ideas on how to get started and how to leap ahead.

Our Global Talent Trends research shows that one in three employees would give up a pay increase to gain more benefits for themselves and their families. As organizations modernize their EVPs, employee benefits provide an attractive source of differentiation.

Report

People Risk 2024

04/23/2024

Diverse mates working on startup project use tablet discuss online apps, caucasian company representative meet with client showing explain offering presenting new services on electronic gadget concept

Article