A global survey of benefits professionals by MBWL International has identified communication, cost constraints, and governance as major challenges facing organizations in 2024.
Daniel Drolet, senior partner, group benefits at Normandin Beaudry, said global benefits leaders are facing an ever-changing set of challenges.
“And their priorities are evolving accordingly,” said Drolet. “With the right strategies and governance, they have a tremendous opportunity to add significant value to their organizations and employees worldwide.”
John-Paul Augeri, managing director and global EB consulting leader at Milliman, focused on the significant economic and political uncertainty around the world.
“Employee benefits remain critical to the employee value proposition worldwide and increasingly challenging to get right,” said Augeri. “It is incredibly important for multinationals to review their approach to global benefits management and strategy, to optimize return on investment and maximize their limited time and resources.”
The 2024 Global Benefits Forecast, which gathered insights from 147 multinational organizations, reveals that despite these obstacles, there are significant opportunities for organizations to enhance their employee benefits strategies.
Key challenges
Communication breakdown: Communication is cited as the number one challenge to successful employee benefits engagement. Organizations struggle to effectively communicate the value and details of their benefits programs, which impacts employee understanding and utilization.
Cost constraints: Cost remains a significant barrier to the implementation of employee benefits. High costs are particularly challenging for the IT and professional services sectors, where organizations must balance financial constraints with the need to provide competitive, employee-centric benefits.
Governance issues: The effectiveness of global benefits management and governance has declined over the past three years, with only 39% of organizations able to effectively measure and monitor benefit costs. This trend highlights the need for improved governance structures and strategies.
The Canadian angle
Normandin Beaudry, a joint venture partner in MBWL International, provided specific insights for Canadian organizations following the release of the 2024 Global Benefits Forecast.
This year’s survey shows that flexibility continues to be a critical benefit strategy consideration. Notably, three-quarters of Canadian organizations either offer or are keen to offer benefits choice or flexible benefits.
This is a notable difference from the global results, where only two-thirds of respondents expressed the same objective, they said.
Significant trends
ESG and DEI priorities ESG considerations, particularly Diversity, Equity, and Inclusion (DEI), remain crucial in shaping benefits strategies. Age and generational considerations, along with equity across job grades, are highlighted as top DEI areas requiring attention. Despite this, organizations report that the overall contribution of ESG factors has plateaued, with initiatives focusing more on employee wellbeing and workplace safety rather than broader environmental impacts.
Talent and growth The survey underscores the importance of benefits in enhancing an organization’s Employee Value Proposition (EVP). Flexible working arrangements and healthcare are identified as the most valued benefits by employees and are deemed critical for attracting and retaining talent. However, there appears to be a misalignment between what organizations focus on and what is most important to their EVP, suggesting a need for a strategic reassessment.
Employee experience Flexible and hybrid working models have become integral to modern benefits packages. While healthcare and flexible working are top priorities, the survey indicates that organizations are still grappling with the optimal implementation of these policies. Employee wellbeing and company culture are the primary drivers of current flexible working policies, reflecting a shift towards more employee-centric approaches.
Looking ahead
The survey provides several recommendations for organizations to enhance their benefits strategies:
- Ensure governance fit for purpose: Align governance protocols with organizational structure and priorities, focusing on actionable data to understand and predict benefit costs.
- Prioritize ESG and DEI: Address shortfalls in current governance and aim for desired states in these critical areas.
- Improve communication: Leverage a range of communication approaches, from traditional methods to the latest AI technology, to better engage employees.
- Consider fresh benefit reviews: Regularly assess benefit programs to ensure they reflect new priorities, such as DE&I and flexibility.
The full report is available at https://mbwl-int.com/insights/2024-global-benefits-forecast/