Arthur J. Gallagher & Co. (AJG) Earnings Call Transcript & Summary

Welcome to our webinar. My name is [indiscernible]. I'll be acting as your moderator today. As people continue to connect, I just want to make sure that you're comfortable with this particular web conferencing interface. I know there's a lot of them out there these days. If you're on a desktop or a laptop computer, look for a control panel over towards the right side of your screen. There's an orange arrow, a box with an arrow in it, that's colored orange. If you click on that, that's a toggle that opens or collapses those sections of controls. And the important thing is down at the bottom of that is a section where you can type in questions for us. If you're on a mobile device, you should be able to tap a question mark icon to get to that same question box. If you want to give me a quick hello, I will be able to see your names coming in or your hellos and know that things are working properly and that my voice is coming through. As you do that, you will notice that you do not see what other people type and they do not see what you type. We do that to protect your privacy and your confidentiality. We won't mention names when we get to the Q&A section. Elizabeth, thank you. You're the fastest typer today. Suzette is here as well, and they're all starting to come in. Great. That's working nicely. Okay. knowing that, that's working, I could just also tell you that we are recording the entire session today. We will post that archive online. And when it's ready, we'll send you an e-mail with a link so that you can review it or share it with your colleagues. Your microphone is muted at all times, so just use that question box to type in questions or comments for us. And that's about all you need to know from a technical perspective. So I'm going to just pause for a moment for the purposes of our recording, and I'll start again with a quick welcome. Welcome. In this web seminar from Buck, a Gallagher company, we'll take a look at how results from our latest wellbeing and voluntary benefit survey highlight ways to improve employee wellbeing programs and support. You're going to be getting insights from 2 experts today. Ruth Hunt is a principal in Buck's Engagement Practice and a global wellbeing thought leader. Tom Kelly is a principal in Buck's Health Practice and our voluntary benefits practice leader. We're going to hear from Tom a little bit later. But for now, I'm going to hand things over to Ruth to set the stage. Ruth, it's all yours.

Thanks so much, Ken. And I do want to say thanks to all again for joining us today. We hope you share our passion for wellbeing. We have a really rich data from this year's employer and employee surveys. So we've distilled some of the highlights for you today in these topic areas. We'll talk about the impact on retention. We'll talk about financial wellbeing, which this year was a #1 concern for employees and how that intersects with physical wellbeing, as we all well know. We'll address the need to look at life stage and life status in terms of supporting wellbeing, the challenges that we're seeing employers face when it comes to measurement and the need to really step up what we're doing around communication and engagement. And we'll talk a little bit about with the wrap-up about next steps for your wellbeing efforts. And of course, we'll stop at the end to make sure that we can capture any questions that you've been typing into chat. We also had some questions in advance of the webinar that we'll be happy to answer as well. So and moving on, just first, we'll start with the survey methodology. Just a few highlights so you know the validity of what we learned. It's our fifth version of the survey that we conduct every 2 years to explore the breadth of wellbeing topics that you see here. And a unique aspect of our research versus what you often see in the marketplace because it is a hot topic as we ask from about employers' input, and we had 255 participants this year and employees, we had nearly 700 participants. Now we also want to emphasize the results are validated. They're representative of both large U.S. employers and the Bureau of Labor Statistics information about U.S. employee demographics. So we feel pretty confident in being able to draw some of the conclusions that we are on these findings. So I'll move us on to be able to keep going. And what we want to do for just one polling question is it's always fun to see what you're thinking and planning to do in your organization for this year. So as you can see our question is simply, are you planning to emphasize and/or add wellbeing resources for any of these areas? And you can select all of them that apply. Now we know as part of our jobs, of course, you're concerned with every single one of these. But we're just trying to get a sense if there are any particular areas of emphasis that you might click on. Maybe you're responding by adding some programs or new benefits or new vendors in some of these areas, or maybe you're also increasing your communication and promotion, perhaps of offerings that are already available that maybe some of these offerings are underutilized, and so you want to make sure that people do take advantage. So please just give us your responses and Ken, how are we doing in terms of answers so far?

Doing pretty well. I'm going to give just a couple more seconds for people to lock in their vote. Please note that you do need to click that submit button down at the bottom to lock in your answers. And of course, when we show the results, you're going to see that the percentages add up to more than 100% since this is a select all that applies. So the way to interpret that when we show you what is -- what percentage of the audience included that answer in their responses. All right. I think we've slowed down the voting here. I'm going to go ahead and close that, and we'll share the results and take a look together.

Great. Okay. It's always interesting to see what attendees are, how you're voting, if you will. Fascinating to see that 3 out of 4 of you are saying mental and emotional health continue to be a priority. We'll be talking more about that in just a moment. And you're so right that both employers and employees in our survey said that is really critical. And interestingly, financial health is second most. Almost 2 out of 3 of you are saying, you're taking a deeper dive there, and you'll hear more from us today about just how high that priority was in this particular survey. And then, of course, physical health. Glad to see though that work-life balance, almost half of you are taking a look at that. It's pretty hard to say that, that is an intertwined, if you will, with mental and emotional health. So we know that's key. And dependent care support, good to see 1 in 4 of you are saying we're taking a look there as well. Well, thanks so much for sharing what your priorities are for 2024. That tells us how you voted to participate in our session today. So let's dive into the data, starting with well-being and benefit programs impacts on employee satisfaction and retention. As you can see on the next slide, our survey showed that employee perceptions of their employers' commitment to supporting well-being is a positive driver of retention. Now we know that pay is a driver as well. So our survey looked at other factors about correlations with the retention, that is the intent to stay with your company. And as you see on the right, a one-to-one correlation is a perfect driver for retention. I'd like to use the example that if I stand out in the rain, it's 100% sure that I will get wet. That's a perfect correlation. But in the world of statistics, anything with a 0.5 correlation or above is a strong correlation. So these findings are pretty intriguing. And as you can see, the top 3 drivers that we uncovered relate to job satisfaction in number 1 and number 2 and trust in senior management in number 3, but very close behind is number 4, belief in our employers' commitment to supporting our well-being and number 5, a benefits package that meets my personal needs. Now the virtuous circle here is that what we do with our benefit and wellbeing design does impact those top 3 drivers. There are proof points, if you will, that your organization cares for wellbeing, it's really genuine, and that's going to help the job satisfaction and most certainly trust that senior management has our back. We really do have a culture of wellbeing. And the exciting part for all of us on this call is that, that's a powerful purpose for the work that we're all doing every single day. Now not shown here, but we should note 2 out of 3 employers is -- in our survey, employees indicated they would change jobs if they could get better benefits. So we know a strong total rewards package is really critical. And as you can see here, 46% of workers are actively considering a job change. And younger workers according to our data, actually, were even higher. That's 53% for Gen Z. So you may want to target this demographic as you'll hear more from Tom as well to increase their commitment and engagement. Now will all of this turnover happen? Probably not given the ever-changing economic environment, but will employees be less satisfied and engaged, potentially more distractive than unnecessarily? Yes, they just might be. So that's up to all of us to take heat of this data and execute. So I'll turn it over next to Tom, who's going to tell us more with a little deeper dive as well into our findings.

Thank you, Ruth. So Ruth just talked about the importance wellbeing and benefits play in the employee value proposition. Yet as this slide indicates, 55% of employees don't understand their benefits. And it gets worse, as Ruth said, the younger you go. The graph on the left shows there was a direct correlation, the younger the employee, the less likely they were to stay, which is the blue line; the less likely they were to understand their benefits, which is the purple line; and the more likely they were to consider another job for what they believe to be better benefits in the gray line. We were just actually meeting with the company recently who had arguably some of the richest benefits we've ever seen. Their head of benefits was lamenting to us that employees still don't value their benefits. He commented that benefits like a rich pension program don't go as far with younger employees. This really speaks to the importance of being targeted, selective and focused in wellbeing support and the obvious key role that communications play. We'll talk about these in more detail shortly. But before we go, let's turn ahead and look at a bit more data around wellbeing. The chart here shows that employer estimates of their populations' wellbeing, which is the dark blue line across each of these dimensions of wellbeing versus employee self-rating, which is the light blue line, track much more closely in 2024 than when we did this in 2022. There were big discrepancies and employers way over-projected the health of their workforce. It really reflects the movement towards addressing the wellbeing gaps that we noted in our 2022 survey. This suggests employers are more aware of challenges employees continue to face. But despite improvements, wellbeing efforts are still needed as the majority of employees indicated they wanted more resources across all dimensions of wellbeing. Almost 1 in 5 respondents also reported, we're seeing physical, mental and financial health. There were also significant differences when we cut the data demographically. Women, for example, self-rated their wellbeing lower than men across all dimensions of wellbeing. We also found average wellbeing scores vary greatly by industry with health care, retail and higher education in the worst shape. When asked to rank the outcomes they'd like to achieve from wellbeing investments, both employers and employees cited mental health as a priority. It was number 2 for employees, which is in the light blue bar, and number 3 for employer, which is the dark blue or purple bars, you can see on this chart. While mental wellbeing show signs of improvement, challenges continue with employees looking for more help. Younger employees, in particular, were more likely to seek mental health resources from their employer, 51% for Gen Z compared to only 28% for baby boomers. Employees believe improving my financial wellbeing should be the employer's top priority for wellbeing initiatives. Saving money was also listed as a top employee need. Yet this is considerably lower priority for employers, really a disconnect that employers should consider when evaluating program resources. This disconnect also speaks to why 74% of HR leaders surveyed say they've increased their commitment to wellbeing, yet only 50% of employees have seen that increase. A troublesome gap in how employers and employees see their organization's efforts in support and enhancing wellbeing. The American economy has avoided a recession, but inflation and higher interest rates mean households are spending more on bills, food, gasoline and housing. While 2/3 of employees rated themselves financially healthy, which is the blue line you can see going across the bottom of the chart, this was the lowest across all dimensions of wellbeing, 66%. And not a surprise, 92% of employees wanted additional financial resources. The purple line indicates where employees want more resource -- the percent of employees want more resources. 92% want more financial resources, which was up from 79% in 2022. Let's move ahead to explore a bit more around financial wellbeing. So what is driving financial stress? We're going to look at employees most value in terms of resources shortly. But let's start by reviewing some key metrics. 58% of employees surveyed said they live paycheck to paycheck. This was up from 54% in 2022. Additionally, 55% say they're doing the same or worse financially since a year ago. And 1 in 3 say they can't afford a $500 unexpected expense. There is some good news for employees. 72% of employers plan to address financial wellbeing this year. Historically, employer programs -- financial wellbeing programs and policies rightly prioritize long-term security. However, this research indicates employees are increasingly wanting more support for short-term financial stressors. Short-term financial stability really provides the foundation for which financial security and eventually economic mobility for the next generation is built. You probably heard Ruth say before on webinars, you can't win the long game without a good short game. Progressive employers are taking steps to implement real solutions to put money in people's pockets and provide better alternatives to address financial stress better than employees could find on their own. Financial benefits such as financial coaching, emergency savings, support for medical expenses and long-term care have all been some of the fastest-growing benefits. They are also benefits most sought by employees. Because it's so highly personal, financial wellbeing seems to be a topic that can often be overwhelming and lead employers to struggle with how to best support their employees. I don't think it has to be complicated. As a starting point, your benefit plan data yields a wealth of information about your employees' financial health, along with potential gaps in your offering. As a recommended first step is to inventory your data, current financial wellbeing offerings and even promotions. Outcomes from this process provide a baseline for future priorities, including personas for need or for resources, potential gaps or problematic areas, initial ideas for communication or re-promotion of existing supports. In some cases, it could be as simple as repackaging what you might already have in place across your benefit ecosystem. I'm going to now turn it over to Ruth quickly to share a few more promotion opportunities around financial wellbeing. Ruth?

Great. Thank you so much, Tom. This particular example just does a little deeper dive, if you will, around that topic of financial wellbeing. Remember that we said employees are asking for more support for their wellbeing than ever. Well, our 2022 survey said 79% wanted more financial wellbeing resources, but that rose dramatically to 92% this year. And it's the number one employee needs, so we can't ignore it. Our survey also showed employers are realizing the need to go beyond retirement savings plans, as Tom said, with that near-term view. So a few examples we highlighted here could be an interactive microsite such as how universal life insurance with long-term care riders can reassure regarding covering long-term care needs, but also provide benefits in the near term that I might need that could be access to cash value of the policy or loans or even death benefits for my family and that site can provide personas an interactive modeling to help me see the advantage of considering those policies that could be offering guaranteed issue in lower rates than if I purchase them individually. In other words, we really demystify what otherwise might seem to be a complex topic and provide me that financial security and reassurance. Or in the center, we're seeing more interest in microsites to help employees on their financial journey across those life stages, those life cycles starting out with basics on financial goal setting that Gen Z population that's learning adulting in terms of what do I need to be doing in terms of setting a budget and managing my finances, all the way up to aggregated resources, helping me with a variety of needs. Now a personal favorite I like to share is like examples like family building. How our employee resources like third-party offerings or fertility benefits, dualism and like, how do they help reduce barriers to the employees' hopes and dreams? Or finally, our example at the right is just a simple one of a campaign zeroing in on the common challenge of understanding your credit score and how to improve it. We know that's a huge problem across America. Well, in a recent campaign, it was heartwarming to see the employee feedback regarding participant goals and how the resources, the program offerings and the education we're providing support that really were making a difference. Well, lots of examples of ways we can meet those diverse needs. And I'll move on to take it back to Tom to talk a little more on the deeper dive on intersection of financial and physical wellbeing.

Thank you, Ruth. So the connection between different facets of employee wellbeing is more obvious than ever. I think the pandemic highlighted the ways decreased mental health, for example, and physical health are intertwined. And recent research shows that ongoing stressors around finances, how they impact mental and physical health. This interconnected means that even more in the face of inflationary pressures, rising medical costs, dwindling household savings, employers have a unique opportunity to help improve employees wellbeing by bringing creative solutions that extend beyond traditional core benefits. As you are fully aware, medical and pharmacy costs keep rising. According to Gallagher's 2023 Workforce Trends Report, 1 in 2 employers increased employee cost share in 2023. Living paycheck to paycheck has a unique way of focusing priorities and decisions. If I see a doctor, will I still have enough money to make my rent? This is a reality for many, as we saw in the stats earlier around the percent that live paycheck to paycheck. Nearly 1 in 3 employees said they want additional support for unexpected medical expenses. This was up from 23% in 2022. Also of concern, 56% of employees say inflation and/or rising costs will delay or impact their ability to obtain health care in the coming year, pretty scary. People with medical debt have tripled the rate of mental health conditions, such as anxiety, stress and depression. Again, the interconnection of wellbeing. Unexpected health care costs leading to debt, which then drives to worsening health creates a vicious cycle that is increasingly hard to break. That's why 79% of employers surveyed said they're interested in emerging solutions they may help employees eliminate financial barriers to obtaining care. The good news is there's a lot more innovative solutions popping up in the marketplace. Related, employers are beginning to see the impact of COVID-19 due to the delayed care and many anticipate more late-stage cancers. For most employer plans, cancer has overtaken musculoskeletal conditions as the top driver of large companies health care costs. There's also been a rapid development of new diagnostics, drugs, treatments such as immunotherapy and targeted therapy, along with genetic testing, which are being used to screen more types of cancer. In the current economic climate and with health care costs and oncology spending on the rise, employers plan to invest in new solutions and in their employees. 50% have at least one cancer prevention program in place. 1 in 5 plan to offer voluntary cancer support and savings benefits. 76% have a cancer center of excellence in place -- will have a center of excellence in place by 2025. Cancer is unlike other health conditions, a one-size-fits-all solution doesn't work for cancer like it works for other chronic conditions and benefit packages need to reflect this. Another growing area for increased support is weight loss. Nearly 1 in 3 employees say they want more resources for combating obesity. This jumps to nearly 41% for Gen X. The skyrocketing popularity at pricing new anti-obesity drugs like Ozempic and Wegovy put employers in a bind. They must decide whether to broadly cover GLP-1s for everyone who qualify clinically or limit that coverage. Helping control workers' weight could not only help employees become healthier and more productive but also potentially save on health care costs for the organization. What's anticipated a higher percentage of employers will cover weight loss drugs in 2024, HR decision-makers must balance the cost with how this creates better benefits as well as how it helps boost mental and physical health. So should you cover? What should you cover? How do you handle specialty meds? Do you carve out? Do you go with alternative networks? Definitely a lot of questions employers are asking that we don't fully have time to unpack during today's session, but definitely an area we're doing a lot of work these days and certainly an area we're closely monitoring as well. The National Council on Employee Aging was just quoted as saying long-term care costs represent the single largest financial risk facing families today. That's alarming when you consider 70% of employees will need long-term care, yet only 16% have a plan to cover. To make things worse, by the year 2034, there'll be more people over the age of 65 than under 18, the first time in U.S. history. So given the stress on Medicaid, it's no surprise that state governments are looking for solutions. Following the lead set by Washington state, there's now 16 other states denoted in pink on this map that are considering public options to support long-term care. For this reason, it's not a surprise that approximately 1 in 2 employers plan to review long-term care options in 2024. And as we saw with the state of Washington and the chart off to the right, employer-sponsored options were considerably better options for employees in terms of getting more for their money and a stronger benefit. But there's a number of other reasons employers should consider outside of legislation. It's a great benefit to support the E&I and making female-friendly benefits because females typically pay 20% to 40% more than their male counterparts if they secure this coverage outside the workplace. Gender neutral rates provide a better value in the workplace. It's one of the fast -- long-term care is one of the fastest-growing benefits between 2022 and 2024. 4 in 5 employees want to purchase this benefit through their employer. It's a top financial stressor for those aged 40 plus, and it's a top benefit sought by Gen X and boomers. And finally, perhaps obvious is another great benefit that supports financial wellbeing, which we've already established, ranks very high with employees. So let's start to look at another important consideration for your wellbeing strategy, providing support by life stage and life status. I think we've talked about that gone are the days when giving employees a traditional health insurance plan and retirement savings account are sufficient to attract talent. Today's employees, particularly those from younger cohorts, are looking for a holistic approach to their overall wellbeing that supports physical, mental, financial health as well as dependence and work-life balance. For this reason, 67% of employers said they plan to implement greater personalization and choice in the coming year. I'm sure if I could remind everyone out there who is groaning and saying how much is enough. The key for employers is to ensure you're offering the right programs, being targeted, selective and focused on the support you offer to your people, it's more important than ever. To ensure your investments are being made in areas that will drive maximum impact and strategically match benefits and support programs to top priorities in your workforce, you need the right data and you need the right insights. These slides show some examples of wellbeing resources that rank high overall across dimensions. These might be a good place to start. The survey also revealed notable differences in wellbeing across life stages, genders, income levels and other demographic segments such as communities of color, reinforcing the importance of employers to taking a data-driven approach to design their benefits and wellbeing program. For example, the data showed, women rated wellbeing lower than men across all areas of wellbeing, which I referenced earlier. Younger employees seek more resources overall. The younger you went, the more resources they wanted. Lower-income employees prioritize support for day-to-day expenses. Millennials prioritize family forming benefits such as child care and education support. And for your Gen X population, long-term care and college savings would be great additions to your benefits package. The same holds true when considering promotion. I'm going to turn it back to Ruth to talk about the importance of targeting by life stage. Ruth?

Thanks, Tom. Well, we thought we'd show a few examples here of ways to add greater personalization and creativity that we know can have proven impact regardless of the stage of the members of your workforce. One example is TikTok style videos. They can be brief, they can be engaging, a fun way to deliver your messages quickly and offer the promise to users. You won't waste their precious time, but you give them information of value, they can look them up on their phone at a convenient point in time or using internal or even external social media channels can help create buzz around your programs and your priorities. We see a lot of that going on LinkedIn, for instance, with the pride that employers are showing or podcasts can be a fun way to share messages with your workforce and educate them. And of course, don't forget about decision support. We've had strong success with interactive quizzes that can be an opt-in type of personalization. A series of lighthearted questions can help identify whether the respondent has a particular worry or a priority and conclude at the end with personalized recommendations. So having a baby soon, the recommendations page can suggest you consider hospital indemnity insurance. Or you ask is it fur baby part of your family. Well, then pet insurance might be right for you. And you'd be surprised how valuable people see those offerings to their situations. And of course, don't forget, in our world of high-tech channels to include high-touch events like webinars or road shows and reaching out to employee resource groups, creative ways to get people together because we so often hear in focus groups and feedback, please talk to us if this is really important. So that balance of high tech and high touch. And on our next slide, we'll just talk a little more about that challenge of mental wellbeing. And I know that the majority of you here, the #1 rating was we're definitely focusing on mental wellbeing, and we're happy to see that. You can see that it continues to be a challenge as before the pandemic, and it is today. Our survey said nearly 1 in 5 say they have deteriorating mental health, didn't even just stay stable. It's actually getting worse. So clearly, we're not back to some kind of a [ healthful ] new normal. And the industries where we saw the biggest challenges were health care, retail, higher education. I know some of our listeners today are from those industries and you're probably maybe not in your head right now. As Tom pointed out, there are issues in terms of subgroups, women and younger employees. And in this case, they are self-rating their mental wellbeing the lowest. Overall, mental health was the #2 employee priority versus #1 being financial. And so it was tied with reducing the risk of burnout. I've heard burnout said more in just the last year or so than I've heard in many, many years. And of course, that is the #3 employer priority, which just simply shows us right there near the top. And yet there's a gap in the rating saying is our current mental wellbeing support helpful. 59% of employers think they're doing a great job, only 30% of employees do. That's a pretty big sizable gap saying we need more help. So just a couple of examples here. On the lower right, you can see opt-in personalization once again, where it's not intrusive because I have the opportunity as a reader on that microsite to be able to click on the specific need that I or my family are experiencing and then I can do a drill down on that tile to resources tailored to that problem. So it's no longer just a generic call the EAP, but it's telling me more specifically, how I could get maybe to different types of counseling services or online self-help resources or resilience or mindfulness training? So grouping the challenges by need makes it really come to light that you have help tailored to me. Or as you can see in the center, if you have an existing website that's trying to summarize your offerings, create an infographic that shows me how to array and you have an array of solutions that could go from the left with that self-help approach for those employees who just want to learn more, all the way moving over do I need more coping scale opportunities, maybe that resilience training as we talked about a moment ago, all the way over to clinical counseling resources and finally, crisis response, that risk of self-harm or suicide for myself or my family member. These kinds of education approaches can help with understanding, they help reduce barriers to getting needed support and care. And of course, if you have gaps in your continuum of resources, you can reassess your offerings and make sure you make changes that are going to provide the needed support. So I'll turn it back to Tom to talk a little bit more about dependent support.

Thank you, Ruth. Employees desire for more support for dependent saw one of the largest increases. It jumped from 70% -- it jumped to 70% as compared to 50% in 2022. That's probably not a surprise when you consider millennials who are now the largest segment of the workforce. About 40% of them identify as parents. Interest in child education, caregiving, pregnancy, fertility support, new baby support and even benefits like hospital indemnity whose top claim is maternity, all saw jumps in employee interest. Nearly 1 in 3 employers said they plan to prioritize women and parents as part of their benefit strategy. Employee expectations can't be ignored if employers want to attract the right talent, and these benefits provide a differentiated value proposition that helps reduce distraction, supports productivity and aligns with the interest level of your population. Of all the resources employers can offer, PTO ranked near the top for employees. With 37% of employees wanting their employers to provide more flexibility in their PTO policies, up from 34% in 2022. Gen Xers interest in more flexibility jumped from 31% in 2022 to more than 50% in 2024, showing their increased desire for work-life balance. For employees with unlimited PTO, 62% reported having a good balance of work in personal life. So really recognizing the adverse effects on job satisfaction, productivity and wellbeing when employees have insufficient flexibility and/or time off. Employers are responding. Emerging strategies include crediting work experience, offering more days off and additional paid leaves for family emergencies and even converting unused days to financial wellbeing dollars. Certainly, the interconnectedness of these benefits. We talked a lot about being creative to support employees beyond traditional health and retirement benefits, which is important, but may not be enough. We've also talked about integrating greater personalization and choice. With that being said, I realize the challenge the companies face. Corporate budgets are facing headwinds, and you probably need to provide not only competitive benefit programs but cost-effective solutions. That's why today's voluntary benefits menu can help provide that flexibility, that choice needed to overcome a range of personal choices -- challenges. 86% of employers said voluntary benefits are key to their wellbeing strategy, and the menu today is dramatically different than even 5 years ago. But it's not just about saving money from your budget. These plans are viewed as very positive by employees. 75% of employees say benefits through their employer provide a better value than buying similar services themselves. That was up from 61% in 2022. 77% say voluntary benefits are an essential part of a comprehensive benefits package, up from 68% in 2022. One important note, though, about voluntary programs, it's not just about adding more. A key for employers is to identify the top needs and priorities given the profile of their workforce and then prioritize those offerings to deliver the greatest impact. To address diverse needs and other strategy, employees are increasingly evaluating as lifestyle planning to spending accounts or planning accounts. Nearly 1 in 2 employers said they plan to evaluate LPAs or LSAs in the coming year. Lifestyle spending accounts let employees choose how to spend an employer's subsidy based on wellbeing categories or pillars of approved expenditures. Categories and parameters are completely customizable for your organization. The covered expenses could be things that resonate with your employee population or are intended to help solve specific HR benefit issues. Employers can include things to support financial wellbeing, like we've talked about today, college savings, emergency savings, financial coaching or even support to cover unexpected expenses like a new appliance or tires or car repair service or perhaps to expand your dependent support, to help with tutoring costs for children or child entertainment. Employers can get as creative as they want covering even voluntary benefit programs. It is important to note that it is considered taxable income, but it can be an effective strategy to provide choice and to address diverse needs. The [ type ] labor market has helped part-time workers demand the kind of work -- the type of working conditions, hours and even benefits they want. There's nearly 2 openings for every worker seeking a job. As a result, as compared to 2020, employers are 4x more likely to prioritize benefits for part-time and gig workers. When we asked employers how they best plan to support this need? Nearly 45% said they would provide support via voluntary options, which can include access to public marketplaces where employees can recognize savings via subsidies. For even displaced employees, employers can explore voluntary lower-cost medical plan alternatives for employees who are newly COBRA eligible. This can significantly reduce claim costs and provide employees with more affordable marketplace options. Clearly, a win-win for employer and employee. So important to keep in mind these nontraditional populations. So providing targeted health and wellbeing benefits is key, when there are too many that can become confusing for participants to know where to go for resources, this can lead to wasted costs and point solution fatigue for employers and employees alike. This warrants creative approaches to measure and communicate, which will turn now. Monitoring vendor performance and impact is too often overlooked or handled in a [indiscernible] fashion. According to our survey, 1/3 of employers don't measure or aren't sure of the impact of their wellbeing programs. And more than 1/3 of employers say they don't receive data on their voluntary programs and don't understand the level of employee utilization or things like claims or loss ratios. The challenge for employers is how to define their strategic focus, measure what's working, what's not working and determine the right balance of programs and support. That, in turn, can help prioritize wellbeing investments. Employers should constantly reevaluate point solutions to determine continued relevance, performance and alignment with the evolving strategies for assessing and meeting employee needs. We're also seeing a lot more employers utilize pilots to test and refine new solutions along with promotion strategies. On this slide, you're seeing just a quick example of an effective dashboard used to measure the impact of wellbeing programs. It doesn't have to be complicated, but the key is to measure and attract the progress of programs and make sure they are meeting your objectives. So I'm going to turn it over to Ruth, who's going to share a few more insights relative to communications. Ruth?

Thanks, Tom. We did ask several questions to assess insights, especially year-over-year to see where the trends are. And as you can see here, we are seeing an ever increasing number of employees asking for personalized communications. Now on the top of the chart, as you can see in the lighter blue for employers, employers, of course, see annual enrollment as a great teach of the moment. Let's take advantage of this. Let's get our people educated. We're already reaching out to them anyway. And of course, that's great. You do want to take advantage of that, but employees are acknowledging, yes. But only about half of them say that, that is really meeting their needs in terms of their top desires for support. And then aside from focused campaigns kind of the second highest in terms of some level of agreement between employers and employees, you can see in the center band here that employees want more of certain channels than what employers, at least in our survey, are delivering. That includes wanting greater personalization, as we've been discussing. They would like help from professional benefit advisers that someone to actually talk to them about their unique needs and how to access solutions that will help make a difference. And employees also would like year-round promotion to meet those life stage and life cycle moments that we've been talking about. I may not have cared about a particular benefit during annual enrollment. So I ignored it, but all of a sudden, I need it midyear. And I know as employers and plan sponsors, that's a great source of frustration. How do I make sure I get that information out at the point of needs in a more personalized way? So the bottom line that in our survey says, employees are not only asking for more support for wellbeing, they're asking for more help and support around communication as well. Our next slide also shows what we asked about regarding preferred channels for benefit communication. Now no surprise that as we've seen for every survey we've conducted and you've seen this in the media, e-mail tops the list. In the pink bar is for the employer, it's clearly the top favorite because it's free, it's easy to execute. But of course, employees can be frustrated with e-mail overload and overreliance can be a problem that we know that they're not even opening those e-mail sometimes or they're skimming them and they're not following through with the desired actions and outcomes. So we know that employers do also prefer online platforms and webinars and videos, but they do more so than employees do. And because in contrast, you can see employees are showing a greater preference for newer channels, such as the things we talked about earlier, podcasts, social media, texting and again, professionals to talk to me. So again, that request help make sense of what's available for my unique needs. These differences taking me back to another survey takeaway point that employers are 2x more likely in our survey than employees to say that they have significantly increased the organization's commitment to promoting wellbeing, 2x different. So in other words, our survey said employees are not seeing it. Employees just aren't feeling that the employer is making that big of a difference. So perhaps part of the challenge is the current offerings, but part of it may well be ineffective communication, the messaging, the tactics that we're using to break through the noise and get to our workforce so they take advantage of our offerings. On the next slide, I just want to revisit a little bit this topic of professional benefit counselors because the findings were pretty compelling on several items that employees are interested in more person-to-person help, whether that's from you as the employer or a plan sponsor or a third party that can spend more time on the topics that are listed with maybe more navigation and decision support help to help me find my way to what I need. So -- but a key takeaway seems to be we need the right balance between high-tech and self-service solutions and information and the high-touch, as I mentioned a moment ago, how do we break through the noise and help those individuals. And another way that I tend to take a look at this, whether -- no matter what these topics are, whether it's my wellbeing resources in terms of the stronger agreement we see by employees needing it or my voluntary or overall benefits or even at open enrollment or onboarding is a lot of the -- what people are asking for according to our survey is so different from our kind of spray and pray communication that we use. We hope that kind of one-size-fits-all message will land where it's needed. We're hoping it will drive action. But people do want it more personalized, including someone to talk to them. And we know that there are solutions out there to be able to help. So just one more example of ideas around what can you understand on the next slide regarding how do I prioritize? What is going to make the greatest impact for my objectives and for my employee audience? So we say measurement is vital, right? Tom talked about it a moment ago. You, of course, need metrics on your plan offerings, but what about feedback from your workforce. Listening strategies, of course, can be powerful in making the business case to leadership for investing in the right solutions that are prioritized as a result of that feedback and input. So a couple of case studies here. One would be surveys. Even if you're only taking a sampling of your organization, it's a chance to ask for input. This case study that I'm showing here happened to ask the entire organization because an objective was to also convey the message that we truly care about your wellbeing and everyone gets a chance to have their say. So their current situation was they offered some supplemental health plans, they had a discount center, but they knew they needed to explore more options. And the results were pretty intriguing them. Universal life with long-term care provision, more than 60% of the workforce was interested, and they also showed high interest in a health payment account, identity theft and legal insurance. More than half of their workforce that they would be interested. And of course, some of these items were put on a road map like the health payment account, but others were implemented right away in the successive annual enrollment. And we were really pleased to see that the actual enrollment well exceeded typical benchmarks. We asked what they wanted. The employer gave it to them and they saw a high level of response. And in fact, management was thrilled to see feedback where people thought, "Wow, our benefits are better than ever, you've expanded them, we love them, we really like these improvements." So the good news is leadership got a lot of credit for having listened and then having made some changes. Our other example here for focus groups, that might be right for you if you feel like you've got survey fatigue. I know in some organizations, you may go to corporate communications and they'd be like, we're not going to put out another survey. Well, then do some listening with a subgroup, give them a chance to have their say. So this was an example where an organization had much more broad offerings. They already were doing a great deal for their workforce, but the organization knew that people were asking for more. So they wanted more ideas to help build appreciation and they wanted to pretest some potential new options as Tom mentioned a moment ago, maybe do some pilots or maybe roll it out to the organization. The results of this were fascinating too. We found there was interest in health payment and lifestyle spending accounts. To put on the road map for the game plans, we were able to uncover personas regarding the diverse needs for benefit choices based on life stages and status. Now we have everyone in that organization talking and the leadership and HR talking about deskless employees because we were able to uncover just how acute their needs really are because they aren't sitting at a computer with e-mail in front of them. It helped us outline strategies for future offerings and enabled better reaching those subgroups as you see here with strategies that could be much more effective than what we've been doing. So we're going to go ahead and wrap up on our next slide to just simply see if we've hopefully provided some ideas for the what's next for your wellbeing offering. And as you can see here, we've simplified it. If you're trying to maximize the perceptions for wellbeing and how people perceive your total rewards, start with listening, learn your workforce needs and risks, conduct an audit of your current offerings, where are the gaps, are there service delivery issues perhaps with some providers that you need to swap or you need to do some program redesign, what are the opportunities there? Explore potential offerings in the workplace or the work -- the marketplace. We know there are new solutions emerging or maybe there are better ways to build that mouse trap in terms of what's in the marketplace, including offerings you can bring at low or no cost because I know none of us have unlimited budgets. And then finally, communicate, communicate, communicate, promoting your current resources that are perhaps underutilized, underappreciated and promoting the new resources that you have to offer to them. So we'd like to turn it now to questions. I can see that some questions have come in while we've been talking.

One, we actually got in advance. So I want to make sure that I address this one right away. Thank you to our participant who said in advance, I'd like to understand ways to assess equity in our benefits offerings? And that's a great, great question because really every employer should be doing this. And we don't have the background on exactly what you were asking, but I would guess you're saying equity from a couple of perspectives. One might be a diversity, equity and inclusion or DE&I perspective when it comes to underrepresented parts of your workforce, people of color or women or LGBTQ. But another one could also be a social determinants of health perspective. So I don't know exactly which one you're asking about. But I will say this that there are some quick tips we could give. We conduct DEI-related program audits to take a look at what are your current offerings, what is the qualitative and the quantitative data regarding use of these and satisfaction with them, what are your claims data telling you? We use benchmarks such as the Human Rights Council, Corporate Equality Index to say what are you offering versus what those best practices would be. That's just one example, benchmarking. I definitely would take us back to employee feedback, whether it's your engagement surveys or some custom surveys or focus groups that you could conduct to find the gaps and barriers. We have heard in listening. We have done people say, very frustrated. They can't find people like me, for instance, in the mental health network. I would like to be able to have more resources that really understand me. Obviously, that's a challenge nationally in the provider community. But if you're hearing that, addressing that is key or maybe even going out for listening to your employee resource groups. Take that sampling of your organization for some of their data. We have spoken with subsets of groups, women's organizations, people of color with different organizations with ERG. So that's another way to benchmark. And then finally just to make sure you take a deep dive with your existing policies, programs, resources. What does your culture tell you? So what kind of gaps are you seeing so that you can align for greater equity? So I hope that's helpful kind of a quick trip in terms of assessing equity. Tom, I'm seeing a question here relating to Tom on long-term care, if I can turn it to you. The question was we've been looking at long-term care, but wondering about the timing of implementation based on the legislative activities that you're talking about. Okay, so they're looking for recommendations on that, Tom.

Yes. So I think the way I would answer it is and so it's what I have been advising organizations. The legislative activity going on is just yet another reason employers should consider long-term care, but it's not the only reason. It's not the sole reason. If you go back to the late 1990s, employers really got it that this is a major need facing my workforce. It's going to impact. Data shows, research shows over 70% of my workforce. So when you think about stressors as it relates to financial wellbeing, long-term care should be at the top of the list. I think all of us can relate to personal situations that we are dealing with. It could be our own parents, et cetera. So this is a benefit that organizations should already be strongly considering even without the legislation. I went through some statistics earlier around how it can support DE&I that's highly sought after by Gen Xers and boomers and employees want to purchase this through their employers. So it's a number of reasons already that it makes sense that I guess my advice would be don't wait for the legislation that -- if and when that happen and we don't -- it happens, we don't have a crystal ball. Then you've already provided a meaningful benefit that allows your employees to opt out of a payroll tax, if that were to happen. And again, we don't know what the legislation is ultimately going to look like. So that would be my advise.

That sounds good. And Tom, I think we've got another one or two here for sure. One -- another question was you referenced some emerging solutions to support employees who are deferring health care as a result of being squeezed financially? So do you have a few examples? We're looking for example.

Yes, I think there's a lot going on in the marketplace that we could probably unpack in the whole session. But a number -- even things -- traditional supplemental medical plans, that market has changed a lot. The plan designs have changed. The providers in that space. There's even new options that bundle all 3 together and pay off of ICD-10 codes. There's tighter integration with medical providers to provide auto adjudication of claims. There's health payment accounts, which essentially allow no credit interest-free line of credit to help employees with unexpected dental and vision and medical and even pet insurance costs where employers don't have risk or obligation associated with it. There's new captive solutions. I touched on some of the cancer support programs and genetic testing benefits. So there's a lot out there that can help employees derisk. And I would say a lot of it depends on ultimately your goals, your current underlying plans to sit down and kind of build a strategy on ways that you could help fill gaps and better support your employees with unexpected medical expenses.

Okay. That sounds good. And Tom, another one that just came in, he is asking about, have you seen any new data on caregiver leaves not just for new parents to bond, but a policy that can be used to care for any family members, maybe similar to an FMLA but a paid option. So any new data on caregiver leaves and creative solutions or ideas on that?

Yes, it's a great question. And so the answer to that is yes. There's a lot out there in the caregiving space. And it's funny, I just got done talking about long-term care. I mean, we're doing some things that are looking to kind of bundle together even a long-term care offering with caregiving. So we understand that oftentimes employees face issues with their own parents in terms of looking after a parent, providing support, looking for resources to help navigate, seeking medical care or even if that helping a parent with lawn care or whatever it may be to the type of caregiving support that's needed. A lot of times, that can go hand in hand with people as they are -- employees as they are thinking about longer care needs. So yes, there are solutions out there that can connect to a long-term care program all the way down to a younger employees that may have additional caregiving needs that can either be offered voluntary or employer paid. So yes, a lot happening in that space.

Okay. That sounds good. And Tom, just as you finished your prior answer, a question came in on. It said health payment accounts, can you clarify probably looking for a little more definition on what's a health payment account?

Yes. So I think we've all heard health savings account, et cetera. What a health payment account is essentially extending a line of credit to employees. It could be $1,000, $2,000. Usually, it aligns with their deductible. No credit checks, interest free. There is a nominal fee to the employer, but it allows employee's if they have unexpected medical expenses to be able to pay those back over time at a frequency that the employee can determine. It could be 6 months, it could be 12 months, it could be 2 years. But employees not faced with that alternative choice or consequence of a credit card or something else that's going to be significantly higher interest or where they incur a lot more debt. Employees have an outlet for their employer to account for unexpected medical expenses.

And I think an important point, Tom, just to reinforce for everyone is that would be a third-party provider extending the line of credit, not the employer.

Correct. There's no financial obligation to the employer and there's no liability to the employer.

Yes. Yes, that's great. Well, we have a couple of more items, but I don't want to take people's time more than we need to. I'll turn it back to Ken wrap up.

Thank you so much to Ruth and Tom. You've seen the e-mails on the screen there. And of course, we love to hear from you. You can always get to us at the buck.com website. We are on all the socials. The site formerly known as Twitter as they like to say these days. Find us out there on X or LinkedIn. And of course, we'd love to hear from you if you want to give us a call. We will be posting this online. I'm going to take a little bit of time to clean it up just a bit. And as soon as it gets posted, we'll send you an e-mail with a link to get to that recording. Thank you so much for joining us today. We look forward to seeing you on future webinars from Buck, a Gallagher Company. Have a very good day.