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HR Trends And Challenges Presentation


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What are the benefit needs of your employees? Do you have mulitple generations in your workforce? What can you do to offset the increasing cost of healthcare for your employees?

These are a few of the questions that will be answered in this presentation geared for HR and Employee Benefits Brokers.

HR Trends And Challenges Presentation

  1. 1. HR Trends and Challenges Benefits for a changing workforce
  2. 2. HR Trends and Challenges research Important trends in the demographic, economic and social landscape of the U.S. are driving change in the workplace — from how businesses recruit and incent workers to how they fund benefits. Unum , in conjunction with LIMRA International , has gathered existing data assessing current trends as they apply to employee benefits.
  3. 3. Overview <ul><li>Rising healthcare costs </li></ul><ul><ul><li>Impact on employers </li></ul></ul><ul><ul><li>Drivers of healthcare cost increases </li></ul></ul><ul><ul><li>Consumer-driven healthcare plans </li></ul></ul><ul><ul><li>Managing employee health </li></ul></ul><ul><li>Aging population </li></ul><ul><ul><li>Predicted workforce shortage </li></ul></ul><ul><ul><li>Keeping aging employees in the workforce </li></ul></ul><ul><ul><li>Shift in retirement benefits </li></ul></ul><ul><ul><li>Need for long term care insurance </li></ul></ul><ul><li>Diversity in the workforce </li></ul><ul><ul><li>Multi-generational employees </li></ul></ul><ul><ul><li>Changing composition of the U.S. household </li></ul></ul><ul><ul><li>Ethnic diversity </li></ul></ul><ul><ul><li>Voluntary benefits </li></ul></ul><ul><ul><li>Work-life balance </li></ul></ul>
  4. 4. The impact of rising healthcare costs on the U.S. workforce
  5. 5. Employers’ greatest challenge For four consecutive years, the top U.S. companies have identified healthcare costs at the top of the list of pressures facing business.
  6. 6. Healthcare premium increases <ul><li>Insurance premiums rose 87% between 2000 and 2006 — more than four times the growth in wages. 1 </li></ul>1 Kaiser Family Foundation, “Healthcare costs: A primer,” August 2006.
  7. 7. Drivers for increased healthcare utilization <ul><li>Aging population </li></ul><ul><li>By 2030, 20% of the population will be 65 or older. 1 </li></ul><ul><li>Advances in medical treatment </li></ul><ul><li>Chronic diseases are more likely to disable an individual than to cause death before the age of 65. 2 </li></ul><ul><li>Health risk factors </li></ul><ul><li>Smoking, obesity, lack of exercise and diabetes increase healthcare costs by 400%. 3 </li></ul>1 Mercer/Marsh, Trends in Health, Productivity and Absence Management Programs: Highlights of the 2006 Mercer/Marsh Survey, September 26, 2006, p. 5. 2 Carion, Mary Beth, “Actions Speak Louder than Trends,” Health Insurance Underwriter, February, 2006, p. 64. 3 Mitchell, Kenneth, “Productive Aging: The New Life Stage,” World at Work Journal, First Quarter, 2006, p. 66.
  8. 8. Impact of healthcare costs on employees <ul><li>Healthcare premiums have been rising five times faster than workers' earnings since 2000 1 , and the percent of workers participating in their employers’ plans has been dropping. 2 </li></ul>1 Kaiser Family Foundation/HRET, Employer Health Benefits: 2005 Annual Survey , 2005, p.5. 2 FRBSF Economic Letter, “Health Insurance Costs and Declining Coverage,” #2006-25, September 29, 2006, p. 2.
  9. 9. Helping employees manage their health According to a 2007 survey, three-quarters of employers who had successfully lowered healthcare costs offer their employees health-risk appraisals and a nurse line. 1 1 Watson Wyatt, “12th Annual National Business Group on Health/Watson Wyatt Survey Report,” 2007.
  10. 10. The impact of an aging U.S. workforce
  11. 11. The aging workforce <ul><li>In the next ten years, the 55-and-older age group is expected to grow at an annual rate of nearly four times that of the overall labor market. 1 </li></ul>1 Merrill Lynch, “Preparing Your Business for the ‘New Retirement’,” 2006. [cited May 23, 2007]; available from
  12. 12. Workforce projections <ul><li>Approximately 60% of HR executives see signs of a talent shortage already. Nearly 10% more expect it before 2010. 1 </li></ul>1 Horrigan, Michael W. “Employment projections to 2012: concepts and context,” Monthly Labor Review, February 2004. 2 Watson Wyatt Worldwide, “Communication Plays Critical Role in Improving Retention Power of Health Benefits,” press release, February 23, 2005. Labor projections through 2012 2 170 160 150 140 130 120 110 2002 2004 2006 2008 2010 2012 144.9 144.0 165.3 162.3 (in millions) Available workers Labor needed
  13. 13. Preparing for an older workforce In the event of a labor shortage, incenting older workers to stay in the workforce will be critical.
  14. 14. Health issues and the older workforce <ul><li>Once older individuals suffer an injury or illness, they typically recover more slowly than their younger counterparts. 1 </li></ul>1 Mitchell, Ken. Health and productivity in the aging American work force: realities and opportunities, Spring 2005.
  15. 15. Diversity in the workforce
  16. 16. A multi-generational workforce <ul><li>Traditionalists (ages 60 to 78) </li></ul><ul><li>Value hard work </li></ul><ul><li>Dedicated </li></ul><ul><li>Team-players </li></ul><ul><li>Baby Boomers (ages 41 to 59) </li></ul><ul><li>Optimistic </li></ul><ul><li>Driven </li></ul><ul><li>Enjoy challenge </li></ul><ul><li>GenXers (ages 28 to 40) </li></ul><ul><li>Value flexibility </li></ul><ul><li>Autonomous </li></ul><ul><li>Technologically savvy </li></ul><ul><li>Gen Y/Nexters (under age 28) </li></ul><ul><li>Confident </li></ul><ul><li>Achievement-oriented </li></ul><ul><li>Like collaboration </li></ul>Source: Ceridian Connection, Generational Competence:TM A New Approach to Human Capital Management , Ceridian, July, 2005. [cited May 23, 2007]; available from,3263,13072,58763,00.html
  17. 17. The changing household <ul><li>Since 1970: </li></ul><ul><li>The percentage of people who are married with children has dropped from 40% to 23%. 1 </li></ul><ul><li>The number of non-family households has risen from 19% to 32%. 2 </li></ul><ul><li>The incidence of unmarried cohabitation has increased ten-fold — reaching 5.1 million opposite-sex couples. 3 </li></ul>1-2 U.S. Census Bureau, “Families and Living Arrangements in 2003,” pg. 2, Figure 1. [cited April 16, 2007]; available from 3 Group Life Insurance: Factors Affecting Industry Prospects, LIMRA International, 2006, p. 14.
  18. 18. Ethnic diversity <ul><li>The overall annual growth rate of the U.S. workforce over the next decade is projected to be 1% . </li></ul><ul><li>The annual growth rate in the U.S. workforce over the next decade is expected to be 2.9% for Hispanics , and 2.8% for Asians . </li></ul>Source: United States Department of Labor, News Bureau of Labor Statistics, “Foreign-born Workers: Labor Force Characteristics in 2005,” April 14, 2006. [cited April 16, 2007]; available from
  19. 19. A product portfolio for the changing workforce
  20. 20. The shift in retirement benefits Today there are approximately 48,000 insured defined-benefit plans compared to 170,000 plans 20 years ago. 1 1 U.S. Dept of Labor Employee Benefits Security Administration, Private Pension Plan Bulletin Historical Tables, March 2007, Table E1.
  21. 21. Consumer-driven healthcare plan <ul><li>Employers’ thoughts on CDHC </li></ul>Employers moving or looking to move to a full-replacement CDHC Employers planning to offer CDHC as a short-term option before moving to CDHC on a full-replacement basis 2% Employers who had CDHC plans but reverted back to HMO/PPO plans Employers not considering 32% 31% 12% 13% 10% Employers looking at it (not yet offering) 66% of employers are considering CDHC Employers planning to offer CDHC on a slice basis going forward “ 2006 NAHU: ChapterHouse Benefit Buying Trends Study,” ChapterHouse, 2006.
  22. 22. Current voluntary benefits offerings Today, more than half of U.S. employers with ten or more employees offer voluntary worksite benefits. 1 1 LIMRA, The Voluntary Benefits Report Card: The Employer’s Perspective , preliminary findings released March 15, 2007.
  23. 23. Growth in voluntary benefits Sales of group products have declined in the past five years, while sales of voluntary products have increased.
  24. 24. The need for income and asset protection Americans currently have a negative personal savings rate 1 for the first time since the Great Depression. 1 U.S. Department of Commerce, Bureau of Economic Analysis, January 2006. Poll: Will you have saved enough money to pay for your long-term care if the need arises? Wall Street Journal Online/Harris Interactive, “Preparing and Paying for the Cost of Care as We Age,” Personal Finance Poll of U.S. Adults, February, 2006. 33% 24% 31% 41% 33% Not sure 39% 56% 46% 30% 41% No 28% 20% 23% 29% 26% Yes Age 55+ Age 45-54 Age 35-44 Age 18-34 Total
  25. 25. Consumer knowledge of benefits <ul><li>Comprehensive employee education is critical to employees’ effective use of programs, services, and benefits. </li></ul>
  26. 26. The future of employee benefits <ul><li>Healthcare costs continue to rise </li></ul>Employers shift benefits costs onto employees Aging workforce and looming labor shortage Diversity steadily increases in the workforce Americans continue to spend more than they earn Employers must satisfy employees’ broad and diverse needs for effective coverage while managing the costs and complexity of benefits administration.
  27. 27. <ul><li>© 2007 Unum Group. All rights reserved. Unum is a registered trademark and marketing brand of Unum Group and its insuring subsidiaries. Insurance products underwritten and services offered by the subsidiaries of Unum Group. </li></ul><ul><li>For broker information only. </li></ul>MK-1152 (09-07)