Slideshow 8 benefit trends to watch for in 2016

  • January 07 2016, 12:15am EST

8 benefit trends to watch for in 2016

From boosting wellness program participation to closing the retirement savings gap and more, consultants at Aon Hewitt reveal eight trends benefit managers should keep an eye out for in 2016.

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1. Financial wellness.

Workers need and want help when it comes to their overall financial health. Many employers have been adding tools and resources to help workers manage short and long-term finances. In the year ahead, expect this trend to continue.

Also see: In-Person coaching important component of financial wellness programs.

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2. Work-life strategy.

As workforce demographics continue to change, more organizations will move to PTO banks to allow employees flexibility over their time off, and allow the organization to better manage absences. Employers will continue to consider unlimited paid time off for some employee groups. Paid parental leave programs will continue to increase in popularity, as employers meet the needs of the younger generation in their workforce.

Also see: Nestlé joins Netflix, Adobe and others in paid-leave movement.

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3. Motivating wellness participation.

According to Aon Hewitt research, 29% of employers are interested in using incentives more heavily over the next three to five years to drive employee participation in health programs and influence positive health behaviors.

Also see: Progressive companies take fresh look at what wellness really means.

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4. Helping close the retirement savings gap.

Employers recognize that only one-in-five workers are on track to retire at age 65 and are trying to help increase that figure. They are making it easier for workers to participate in 401(k) plans through automatic enrollment and back-sweeping and making plans richer by improving matching contributions, defaulting workers at higher savings rates and adding automatic contribution escalation features.

Also see: Use of dollar-for-dollar 401(k) matching grows.

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5. Employee selection and assessment.

Employers need to get more out of pre-employment assessments. Organizations are increasingly wanting to move beyond pass/fail and use of assessments solely in the selection process. More organizations will begin to leverage the information obtained through assessments for on-boarding, development, and other stages of the employee lifecycle.

Also see: Hiring managers use data analytics to increase employee retention.

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6. Simplifying retirement savings.

Saving and investing is complex and a challenge many workers feel uncomfortable tackling. Employers are looking for ways to make it easier by adding help tools like investment advice, professionally managed accounts and streamlined fund line-ups.

Also see: Everything you need to know about robo-advisers.

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7. Strategies to control healthcare costs.

With the 2018 excise tax approaching, employers are eliminating richer health plans in favor of lower cost plans. In fact, 41% of employers are considering offering high-deductible health plans as the only plan option in the next three to five years.

Also see: Top 5 healthcare cost drivers.

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8. Paying for performance through variable pay.

More organizations will be turning to increased employee participation in, and higher spending on, variable pay as the means to recognize and reward high performers. 2015 marked the highest level of spend (12.9% of payroll) in 39 years, and Aon Hewitt projects similar results in 2016. This is due to variable pay’s effectiveness in focusing employee behaviors on key goals and a reluctance to increase fixed costs in the form of higher salaries.

Also see: Pay increases remain stagnant, variable pay taking center stage.

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