What might ‘work’ look like in the year 2045? Will most of us be working in an office, or moving seamlessly between a range of employers, roles and locations? How will employee benefits (EB) adapt to our changing needs?
Flexibility and portability will be the benefits buzzwords, as more people around the world move away from permanent roles to flexible and freelance working patterns.
EB professionals need to have one eye on the future and be able to adapt to new ways of working, new regulations and, importantly, new social norms. The fast rise and spread of digital tools have already had a profound impact on how we all work, enabling new working patterns and new business models. The traditional nine-to-five working pattern is becoming a thing of the past. As technology continues to develop and the needs and wants of employees change, this new flexible way of working is here to stay.
In our recent report, we looked to the future and imagined what the world of work and employee benefits might look like in the year 2045, based on our work with multinationals market partners and innovation teams. Here are some of the trends we uncovered that could shape the future.
Portable and credit-based benefit systems
Flexibility and portability will be the benefits buzzwords, as more people around the world move away from permanent roles to flexible and freelance working patterns. Back in 1995, jobs for life and the traditional, office-based, nine-to-five shift pattern dominated the world of work. That’s all changing fast as gig economy operating models not only become mainstream, but continue to be adopted in more professions and industries.
The next 25 years will see multinationals face the significant challenge of managing costs while offering more flexible benefits.
One way that gig workers, freelancers and skilled professionals could access benefits in the future is via a platform that allows workers to manage and ‘trade’ benefits. They could also allow multiple employers to offer benefits to the same employee, via credits or standard payments, on the same platform. This ‘portable benefits’ model is by no means a new idea but there’s still a long way to go in terms of development and it has the potential to expand exponentially.
For example, workers would get a set standard number of EB credits per year to spend on a variety of insured benefits and perks to suit their lifestyle, selecting benefits from a menu of options. Gig workers could have other employers contribute to the platform, as well as transferring contributions from previous employers that they might not have spent yet. Many would also be able to choose to top up their credits with their salary to get more benefits.
The central role of digital platforms
There are plenty of regulatory and compliance challenges that will need to be tackled in order to provide universal, portable benefits portals, but we believe that online benefits platforms – cloud-based systems that bring all benefits into one place – are going to remain key for EB delivery in the future. These platforms are the best way to provide employees with the truly personalised benefits experience they increasingly demand.
Delivering portable solutions for the gig economy is not going to be the responsibility of any single employer. Insurance providers, benefits consultants and brokers could work in collaboration to create a system that helps deliver these benefits. Start-ups or established tech firms are also likely to play in this space.
Digital platforms can also help multinationals, HR and employee benefits functions, and employees themselves, capitalise on tech developments such as artificial intelligence (AI), robotics and distributed ledgers, by creating a valuable ecosystem of data catering to the health and wellbeing of workers. It has been estimated that US$150 billion of global healthcare costs can be reduced through the implementation of AI and machine learning alone, empowering patients and improving detection and diagnostics.
Widening the scope of medical coverage
Another key trend that will dominate the world of employee benefits over the next 25 years is an increase in the number and types of benefits offered. Medical insurance is at the heart of this. We are already seeing an increasing demand for, and the delivery of, benefits covering gender reassignment, fertility treatments such as egg freezing, and mental health programmes, for instance. Employees expect to have access to benefits that suit them, right now.
A recent study from The World Health Organization suggested that by 2030 depression will be the world’s most widespread disease, and as such, it makes economic (and ethical) sense for employers to provide dedicated prevention tools and treatments to help employees become more resilient and care for their wellbeing.
As technology, genetics and medical science continue to offer new personalised treatments and options, one-size-fits-all medical benefits will no longer be fit for purpose in 2045.
The challenge of managing costs
The next 25 years will see multinationals face the significant challenge of managing costs while offering more flexible benefits. Cost is already one of the key considerations due to increased levels of regulation in individual countries, and rising medical inflation. While proving a wider range of benefits might mean losing out on economies of scale, many employers believe that data and digital cloud technologies will enable a much better oversight of costs, allowing them to understand and manage their costs more effectively.
This would be particularly welcome when it comes to tackling ever rising medical costs. Apps, video and new technologies such as virtual reality and AI could help reduce the need for expensive medical consultations and make treatments more accessible. The need to shift from treatment to education and prevention is another recurrent theme – employers will continue to invest in preventative measures and processes to cut costs and will therefore demand more solutions in this space from their benefits providers and partners.
Whatever the next 25 years hold, we believe a broad package of insurance and lifestyle benefits will play an increasingly vital role in attracting, retaining and protecting the talent of the future – no matter where or how they work. For multinationals and EB professionals, now is the time to start preparing for that.
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