Businessolver’s 2021 Trends And 2022 Predictions With Jon Shanahan

William Tincup:   Ladies and gentlemen, this is William Tincup. You’re listening to the RecruitingDaily podcast. Today, we have Jon on from Businessolver. And we’ll be talking about their report that they do. It’s Businessolver’s 2021 trends and 2022 predictions. I’m excited to learn on both sides. And I know y’all are going to be excited to learn as well. So, we’re just going to jump right into it. Jon, why don’t you do us a favor and the audience a favor and introduce yourself and Businessolver?

Jon Shanahan:   Yeah. Thank you. John Shanahan, president and CEO of Businessolver. Businessolver is a technology company that provides software and services to our clients and their employees. What we do is, we help all of their employee benefits, elections, transactions, dollars, get where they’re supposed to go, so the employees can get value out of those things that we call, as employee benefits. We spend a lot of money on them. So, what we do is really important, because we’re helping our clients and their employees get the value that they not only pay for, but deserve. When we’re talking about recruiting and retention, that’s really important because it’s a big part of your paycheck. And oftentimes, people don’t really get the value or don’t understand how to get the value of their benefits. So, that’s our job and we love it. And-

William Tincup:   I love that.

Jon Shanahan:   We work hard at it every day.

William Tincup:   And it’s not a benefit if people don’t use it. Right? It’s nice that it’s listed on the careers page, but if people aren’t consuming it and adopting it, using it, et cetera, then it’s not really a benefit.

Jon Shanahan:   It’s not.

William Tincup:   Because I’m curious, do you also help with communication strategies and helping people understand, getting both from the benefits folks, the wonky people that live in benefits admin? Do you help them with the marketing? They’re my friends, so I can talk like this.

Jon Shanahan:   Yeah.

William Tincup:   Do you help them with more of the marketing side of things?

Jon Shanahan:   Yeah. we’ve been on this journey, from how to choose your benefits. So really think about it like, we created the TurboTax version for employees, just so you didn’t have to be an expert. You just needed to know information about yourself and about your family and a little bit on your health and how active you are. So, we just made it easy to select.

Jon Shanahan:   Now, we’re really on this journey of moving from that, how to choose to how to use. And along that-

William Tincup:   Very nice.

Jon Shanahan:   Path, there’s all of that, what’s the best way to make this more of a marketing effort? Because benefits don’t have the best user interface if you… We put all these acronyms around them. We make it really tough to understand. We do different things at the state and federal level. So, we have, certainly over the last two years, really ramped up our consumerism efforts, which is really individual-based marketing, to help employees better understand their benefits and how to use them.

William Tincup:   That’s wonderful. Because again, it’s great that you have mental health professionals or access through an EAP. That’s a great benefit and your insurance covers it and all of that stuff but if you don’t know that, it’s a big giant, so what? Thank God you’re actually helping people with that. That’s been a problem for HR for a long time, as you well know.

Jon Shanahan:   Yeah, for sure.

William Tincup:   Let’s jump into the trends. Let’s go back to, here we are, 2021. What did you see? What are some of the trends that you saw?

Jon Shanahan:   Yeah. We had a lot of compliance trends, for sure. We had this funky thing called ARPA. We had different states wading into ACA. To your point, we had this big challenge around the virtualization of benefits. You probably remember that, prior to the pandemic, it wasn’t uncommon for employers to host a benefits fair and have lots of providers and vendors and business all show up and it was like a party. Annual enrollment’s going to happen. Here’s all the partners. You can ask them any questions.

Jon Shanahan:   Well, that pretty much was eliminated through 2020 and into ’21, as we are completing another annual enrollment. So, this virtual benefits fairs, we started to pivot to everything virtual and really getting people more engaged with their mobile. We also saw different employee behaviors, around when they were wanting to think about their benefits and access their benefits. So, good increase in adoption with our AI solution, we call Sophia. Good increase in our mobile adoption and a very different kind of pattern around… I think the way I looked at it was, from what the data showed us was, people were busy with their life and their work all day long. Because we used to think, employees will set things aside, and they’ll get thinking about their benefits between nine and five. And we definitely saw that shift out.

Jon Shanahan:   So now, more into the evening, I guess, when maybe you could have finally get together and talk about it, we thought that trend would occur for a long time. It really was pushed forward through the pandemic. So, looking at the benefits, what we would call after hours, and so that puts more pressure on us to be better communicators after hours, provide other solutions through chat, through mobile, through AI. I only think that’s going to increase. And then we’ve got a continued desire by employers, to cost shift and cost share. And what that means is, moving to high deductible health plans and really wanting employees to be engaged in having some alternative funding [inaudible 00:   06:   25] alongside like an HSA or an HRA.

Jon Shanahan:   I think those are trends that are, here to stay and will continue to grow. But in some ways I think it probably advanced the communication and the technology around benefits by a few years, pushed those curves faster because we had no other way to deal with it. We had to deal with some of these more advanced forms of technology.

William Tincup:   I love that. Let me ask two questions around… One’s around remote and the other is going to be around hybrid.

Jon Shanahan:   Sure.

William Tincup:   Remote being, did you see anything in the data or your experience of what the employee population needs, that might be different because of the pandemic, from a remote perspective? The hybrid is going to be a similar question. It’s going to be, with some type of hybrid work model, where we have some employees coming in, some employees never coming in and then some type of mixture of flex in the middle. Do we need to think about or did you see in 2021 that, as people were doing some type of hybrid model, that they needed to do different things with benefits?

Jon Shanahan:   Yeah. I think we continue to have our clients annual events. We just did it virtually. We do our empathy study. We’ve been doing an empathy study with Edelman, our marketing firm and partner, for quite a while here now. We saw some big changes in the data. We also experienced them as an employer. what I said to our clients, when I talked to them in May of this year, I said, not everybody can go into a hybrid mode. Not everybody can go into a completely virtual home short mode.

Jon Shanahan:   I can just speak to you, what we see in our empathy study, and what we’ve experienced as an employer. So, it’s through that lens, I’ll answer your question. What we saw in our own employee population is that our solvers, our employees felt like they could be very productive working remotely. 97% said they were fine working remotely. They felt safe working remotely, and it was the flexibility they needed to have. They rewarded us with the same or higher levels of quality.

Jon Shanahan:   We pulse our employees. And what that means is, we ask them to rate themselves on a color scale, just like our employees. So, blue is, you’re in a super good spot. Green, you’re in a really good spot. Yellow, there’s something wonky, and your supervisor needs to check in with you. And red, it’s a full on alert. We had 94% of our employees, all through ’21 and for large portions of ’20, reporting blue or green. It worked for us. I think, our empathy study showed that one of the most important things that employees wanted, was flexibility in their work arrangement. And those were really high scores.

Jon Shanahan:   When we asked them in the past, when we asked them, what’s the most important benefit an employer can provide, in the first three years of this study, we would get things like better mental health benefits or-

William Tincup:   Right. lower deductible.

Jon Shanahan:   Yes. Lower cost, ancillary, we’d get all that typical [crosstalk 00:   10:   06]

William Tincup:   And insurance. Things that we laugh about now, clearly but back then, they were critical. Absolutely critical.

Jon Shanahan:   We’ve made progress in some of those domains. There are a wider range of cooler benefits coming to meet more age groups but by far and away, coming out of that ’20 and 2021 in the empathy study, what you saw is this shift to, hey, you’re going to give me flexibility in my work arrangement, where I work, when I work, how I work. That is a huge benefit for me.

William Tincup:   That tracks for me, because it also tracks to resignations. If you’re not going to give me flexibility, I’m going to go get flexibility. Someone will give me flexibility. So again, it’s adopt or perish. So, I think that’s made leadership look at benefits in a different way, look at flexibility in a much different way.

Jon Shanahan:   Yeah.

William Tincup:   I love that you’ve got the lens of being able to see how an employee population changes, and then what leaders need to do to change with them.

Jon Shanahan:   Yes. It’s critical. If you want to avoid… What I said at that time is, to our clients, if you have the flexibility to do it and you want to be an employer of choice, you have to do this. By the time you figured out that your turnover is starting to creep, it’s too late. You’ve got to be in front of this. I said, “I’ll speak to any CEO. I’ll speak to any HR team, but I just firmly believe we’ve got the data to show to you, because we’re monitoring and talking and surveying our employees to show you that, with key initiatives, like what we call workspace anywhere and our peak program, and then my time, which is just to pivot on time, away from work.” Those are key things that we did to make sure we’re out in front of it. And I think it’s really paid off for us.

William Tincup:   Is my time in a way that y’all think about it or the way that you help your customers think about it. Is that, not forced, but is it… You’re really not required to take it, but you’re really encouraged to take my time. Because that unlimited PTO thing that we could probably spend an hour talking about unlimited PTO, go back and forth on that but we won’t do that. However, I love the, my time. I’m just.. It brought up the question of, okay, well, how do you facilitate folks not feeling guilty?

Jon Shanahan:   Yeah, no, that’s a real problem. A lot of employers have adopted it and found it. They don’t… I think we had a specific objective in calling it my time to really tell people they’re in control of it. It’s theirs. They need to use it. And we were encouraging some flexible language around it. Of course on the other side of that always is you’ve got to get your work done. But we want to make sure that you are taking time off and I think we do monitor it to make sure that we’re not seeing unhealthy patterns of people just not taking time away or what we also focus on is not ever just really taking time off. If you take a two week vacation, but you’re monitoring your email every single day, then you probably didn’t get the rest that you needed. So it is a balanced conversation around, yes, this is your time you need to take it, but you really need to have clear time away from work so that you can disengage and really focus on your life, your family, et cetera.

William Tincup:   Yeah. And for the leaders, you brought it back to productivity, which I really like, it’s like, this is a game of productivity. Let’s not make any mistakes about it. We want desire, need our employees to be productive and they want to be productive. So like everybody wins here. It’s calibration. How do you calibrate to make sure that they do those things? Well, let’s flip over to predictions. Let’s see… We’ll pull out the crystal ball. What do you… Because again, you’re at the end of the season, I guess, people… What is it? July 1st and December 31st… Those are your two critical dates in benefits. So what are you looking at for 2022?

Jon Shanahan:   Well, I don’t think we’re… What we would say, looking on the RFP side of the world, we’re not back to normal yet. I think the uncertainty in the last quarter has made it difficult for people to budget and to know how to think about where they’re going into their future. So the highline, we’re not through this yet. And we still have some, I think probably difficult periods to get through here over the next four or five, six months as we go through the winter. And you can see that show up in some uncertainty in the buying side of things. I think, just general on the healthcare side of things, the backlog is real and it’s difficult and it’s going to… We’re going to have medical inflation because just like we’ve had supply and demand, supply chain problems everywhere else we had to look around, we’ve definitely got it going on in the healthcare arena.

Jon Shanahan:   So I think that’s going to increase costs in general, which again, I think will put a burden on cost shifting and cost sharing for employees and employers. I think if you step back from it and you say, okay, well, if we’ve got those macro things going on, then what does it mean? What it means to me is, and to us as a business is you will need to be on the highest performing benefits technology software, and really work with your provider because coming out of this, then if your costs are going up, employers will then be trying to figure out, well, what changes can I make in my benefit program? And how can I do that? And you have to have a nimble technology to do that. We saw a bit of it in ’21.

Jon Shanahan:   I think we’ll see a lot more of it in ’22. And then, I don’t know if it’s the final one but for me, I think another big one is I think with millennials on, down and in particular, millennials being the largest working population, I just see a different way of going about procuring benefits, how they think about benefits. And with generations now straddling everything from I’m just getting into having children or having life events to people exiting because you still have the second largest working population looking to retire. I think the pressure on having a more diverse benefit program for a lot of reasons, not just generationally, geographic is another big driver in there, but then there’s other drivers that pressure is large and growing.

Jon Shanahan:   And I think there’s going to be pressure on the benefits decision makers, the younger benefits decision makers coming in on how do I attack this? It used to be… It was one benefits program work for everybody it’s really not true anymore and there’s just so many great options that your benefits shelf is going to be huge. I think it’s going to be big. It’ll be significant.

William Tincup:   Do you foresee a world where it’s just highly personalized, super highly personalized for that person and that person’s family, et cetera, where there’s just an amount of what the company will put towards benefits and in use whatever you want? Use them in any array that you want, that makes sense for you and your family. Again, I’ve got some friends in their twenties and they’re super healthy. And so they look at in health insurance, they’re like, “Yeah, I might go to the doctor next two or three years.” It’s just a different mentality.

Jon Shanahan:   It is.

William Tincup:   And, again, I was like that in my twenties, so I get it. However, when you have kids, you think about really it’s them being sick all the time. And so I think your priorities change, but the question of just getting people over that, because you started off with the cookie cutter, which we all grew up with like, okay, benefits, everyone’s got them all, there you go have fun. Do you see a world where we just throw the cookie cutter completely out and just like, okay, it isn’t a fixed or finite the amount of money that the company can contribute is finite but outside of that pick what you want.

Jon Shanahan:   I think there’s going to be a period. If you think about it, just like stepping back from a Businessolver perspective, just with call it, 1400 employees. Pre-pandemic, we were very focused on called seven-ish office locations. And that probably reduced our footprint to maybe 25 states or something like that. Because we had a view that while we had remote employees, we probably only had 20, 25% of our population that was remote. And now we sit at something like 46, 47 states and you just have to look through a different lens and just start with the easy one, healthcare got all network considerations. And how does your program work, work if your employee is in Redmond Washington or in Boca Raton Florida and it just grows from there.

Jon Shanahan:   And so I think that the first thing is the pressure from a recruiting perspective, it’s great. And from a DNI and driving diversity in your organization, it’s great. It really helped us on those initiatives to move more quickly. But it does put inherent pressure on having the right benefit program for where everybody, everybody works and lives and meeting all those different needs. And so what I think happens is, we make benefits hard between group and individual. So getting highly customized would mean you could go down an individual route. It’s pretty still, I’ll just say difficult because of how the states weigh in and all of those plans. And it’s just still significantly difficult, but I do see an increased number of benefits and types of benefits that need different challenges and needs.

Jon Shanahan:   And we just put in a benefit as an example for employees that are struggling to find care for their dependence that have special needs.

William Tincup:   Oh, cool.

Jon Shanahan:   And that’s elder care, dependent care. And it’s a real problem for folks that are approaching their fifties and they’ve got parents that start to have issues and it becomes a big burden for them. And so that’s a benefit we adapted in there. You’re right. A lot of people have EAP, build the mental health benefits, the customization on that, that exposure on that it’s been awesome. So I think it’s going to be… You’re going to get more and more personalized because of the sheer awareness that there are gaps in our benefit programs and we need to continue to build those out.

William Tincup:   It’s funny because I’ve seen an uptick in fertility benefits. The desire for fertility benefits. You mentioned cost and I’ve had to explain to employees costs around benefits and it’s not easy. It’s like trigonometry when you try to explain healthcare cost and every year it seems to go up. Yeah. Got it. Totally understand. I want to dig into that for just a second because-

Jon Shanahan:   Sure.

William Tincup:   COVID and a lot of the surgeries that got postponed and pushed back and also healthcare being very hard to staff right now. Extremely difficult to staff, both on the hourly side and non hourly side. It’s very difficult to staff. Do you believe that… When you explain that and do you help your customers explain when they have to go through that cost discussion? Because it’s important. Because it is going to cost more. Even if you just get the exact same staff, you have the exact same plan from last year, [inaudible 00:   23:   13] aside, you have the exact same staff. Yeah. It’s going to be more that just is. Now how do we explain that? How do you explain that and how do you help your customers explain that?

Jon Shanahan:   Yeah, it’s difficult and it’s often not a short term thing. You may make adjustments, like we made adjustments in our plan because we saw that we had issues with our provider being aggressive and helpful in case management and in network management and provider management. And so we made a short term move for a longer term gain and better outcomes for our employees, but they don’t feel that immediately. And in fact your cost can go up before they come down. I think it’s a choice. And I think this is going to be a hard one given where we sit right now. I think employers will have the desire to want to cost share and pass on costs but I think there’ll be extreme pressure on them not passing those costs along.

William Tincup:   That’s right. Because they’ll come up in the form of retention.

Jon Shanahan:   Right. It’ll come up in the form of my paycheck’s smaller. I don’t care. I’ll just go to another employer group where it doesn’t cost as much. So I think that conversation for right now is on, in my mind, is probably on pause. Because you’re looking at it and saying, well, I can’t pass that along or I’m going to… It’s going to affect my retention. I think that actually the better conversation, if you can afford not to pass along right now, the better conversation is to say, is your benefit program aligned with your employee needs? So are you under or overspending? And if so, where and why? I see this all the time with part-time populations. I’ve got 10,000 employees that are full-time and 4,000 employees that are part-time, but I’ve got a hundred percent turnover on the 4,000 employees.

Jon Shanahan:   Well it’s like, well, are you offering any benefits? Even if it’s a limited benefit, are you doing anything to curve the retention curve? And so I think the better conversation we’re having with clients is if you want to manage your turnover and your retention, how are you getting value out of your benefit program? And is that value understood? And are they experiencing it? And the experiencing it, part of it is really important because you can see in the data where you should have claims and if they’re not… The employees are not claiming their benefits, using their benefits, then you need to help and focus on that as well. And I think that’s where the trend goes. I think being able to easily cost shift and cost share, it’s not like it was three years ago, five years ago, it’s going to be tougher.

William Tincup:   Yeah. And again, we come full circle back to usage. If you right size your benefits for your employee population, you meet their needs, maybe even exceed their needs and you’ve communicated it well. And they use those benefits. Yeah. Your cost is pennies compared to your retention cost. But it’s all accepted and in that you’ve right sized it. You’ve communicated they’re using it, et cetera. So, Jon, thank you so much for [inaudible 00:   26:   29] time in your day. I know you got a million jillion things going on and just, I really appreciate you breaking things down and educating us

Jon Shanahan:   That was fun. Glad to do it and really appreciate the time and the questions so, [crosstalk 00:   26:   41]

William Tincup:   And we’ll do it again next year. So we can go back and look at ’22 and see what we got right or wrong and do ’23. But thank you again. And thanks for everyone listening to the RecruitingDaily podcast.

Jon Shanahan:   Cheers. Thank you. Have a good one.