Overcoming the Benefits Challenge

For many HR decision-makers, the Great Recession has arguably led to the Great Balancing Act — that is, the all-encompassing struggle to balance the needs of the business with those of employees.

The retail industry is no exception and faces several benefits challenges that stand to greatly influence its success in the coming years.

Retail workers are vulnerable and unprepared when it comes to finances and health. Most retail business owners would be surprised to learn to what extent the economic landscape has impacted their workers’ financial stability, level of insurance protection and overall state of mind.

A 2010 Aflac study found that 54 percent of retail workers are coping with a financial crisis or trying to reduce debt right now. Nearly four in 10 retail employees (38 percent) say they are not very/not at all confident in their financial future, compared with only 25 percent of workers overall.
Contributing to the anxiety is the fact that most retail workers are under-protected by their benefits packages and dissatisfied with the very solutions that could deliver some reprieve from financial strain.

Distracted, anxious workers can lead to serious losses in productivity and engagement on the job, eroding the best of bottom lines in the process.

Shore up gaps in insurance protection to help improve employee absenteeism and productivity. Businesses across all industries and sizes are focusing on maximizing productivity. For retail organizations, absenteeism in particular can directly impact sales generation and customer satisfaction: Of the 59 percent of retail companies that measure employee absence, 45 percent say employee absence is an issue.

One contributing factor is the overall health and well-being of workers. For example, 43 percent of retail employees are experiencing health problems that are impacting their ability to get work done.

Unplanned absences due to health or disability can wreak havoc on a company’s profitability. According to a new survey of employers conducted by Mercer, unplanned incidental absences result in the highest net lost productivity per day — work that is missed or postponed but not covered by others. Survey respondents estimated that when employees are out on unplanned absences, they sustain a loss in productivity of 21 percent.

The majority of retail workers (51 percent) say that adequate insurance benefits coverage would be extremely/very influential in helping them cope with their personal health issues.

Voluntary insurance options offer a solution to maintain a competitive benefits package and keep workers adequately insured. As health care costs soar, many retail organizations are cutting back on major medical insurance coverage to keep costs in check. Nearly four in 10 retail companies plan to increase employees’ share of premiums in 2011, and one in four plans to increase employees’ copayments.
Voluntary insurance has been viewed as a nice-to-have benefit in years past, yet now is considered a cost-effective supplement to core benefits and essential to helping companies achieve their goals. Voluntary insurance plans help people cope with out-of-pocket costs associated with serious illnesses or accidents, including daily living expenses, as well as unreimbursed medical expenses, and have no direct costs to the employer.

Not only do voluntary plans offer workers the option to bolster their insurance coverage, but many plans include a wellness benefit that covers the expense of preventive procedures (i.e., mammograms, vaccines) and even pays the policyholder cash benefits to use it. This can go a long way in encouraging annual visits to the doctor or preventive procedures to support overall health and well-being.

For many retail companies, their workforces are not sufficiently protected against financial and health-related events, and may be contributing to large losses in productivity and engagement on the job. When business owners and HR decision-makers provide options and opportunities for workers to apply for the right amount and type of insurance coverage to meet their needs, the more likely it is that retail workers will be better prepared, healthier and perhaps more productive.