Today's diverse workforce brings dramatic change to HR

For the first time in history, America's workforce is composed of four distinct generations - just one of many trends propelling the benefits industry towards consumer choice and driving the growth in voluntary employee benefits, according to a report just released by benefits leader Unum in conjunction with LIMRA International.

HR Trends and Challenges: The Changing U.S. Demographic, Economic and Social Landscape of the Workplace provides a comprehensive review of studies from Unum, LIMRA, Society of Human Resource Management and other trade, business and government research. The result is an overview of key issues facing the benefits world:

  • A multi-generational workforce. For the first time in history, employers may have as many as four distinct generations in the workforce - each with its own set of values, communication styles and attitudes about work-life balance.

  • An evolving American household. Single Americans now outnumber married couples with children; nearly 30 percent of all children live with a single parent; and many adults are caring for children, spouses or aging parents.

  • An aging workforce. The aging of baby boomers will have a profound impact on the workplace - whether they retire in mass numbers or stay in the workplace beyond traditional retirement age.

  • Ethnic diversity. The growth rate of certain ethnic groups, particularly Hispanics and Asians, will significantly impact the composition of the labor force.

  • Rising healthcare costs. In 2006 these costs grew at twice the rate of inflation and twice the growth of workers' earnings.

    "Today's benefits professionals are trying to navigate through this mosaic of diversity, while balancing pressures of cost and increased competition for labor," said Mike Simonds, senior vice president of product development and marketing for Unum US. "The one-size-fits-all benefits plan of the past is no longer the best option. Today's employees need more of an a la carte selection of benefits so that coverage can be tailored more precisely to the needs of each individual."

    HR Trends and Challenges discusses the evolution of the benefits industry, providing a glimpse into the flexible benefit offerings of the future, rather than the uniform benefits packages of the past. It draws parallels to the changes that began nearly 20 years ago in the retirement market in which defined-pension plans began to give way to the defined-contribution and employee-participation plans of today. The same factors are fueling the growth of consumer-driven health plans and the voluntary benefits market.

    "More and more, employers are providing a base of insurance coverage for their employees and then providing access to an array of voluntary benefit choices," Simonds said. "This flexibility of choice enables younger employees to pursue coverage that is most relevant to them - like disability or accident insurance, while older workers may want to examine long term care or supplemental health options."

    HR Trends and Challenges notes that this shift in benefits decision-making highlights a critical issue for the insurance industry: a lack of employee awareness and understanding of the benefits available to them. Research confirms a lack of the basics of insurance benefits - from the types of coverage available, to its relevance to life situations, to adequate coverage amounts.

    "As employers shift these decisions to employees, it is imperative that we educate our workers about these products and the value of coverage," Simonds said. "Otherwise, we'd be handing over the keys to the car without teaching them how to drive. And this decision is too important to risk a financial wreck."

    Unum presents HR Trends and Challenges as a white paper and booklet. The research also forms the basis for, the third in a series of websites patterned after and

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