This is creating a workforce with multi-decade age gaps among employees that can lead to misunderstandings and tension. More than half of employees reported at least moderate levels of friction due to age or generational differences in the workplace. The friction frequently centers on different approaches to problem-solving and communication.
However, a multigenerational workforce also has the potential to increase learning through mentorship and reverse mentorship opportunities, the report said. Sharing skills across generations can build trust and communication. In addition, mentoring programs appear to improve employee happiness and could boost profits, the report found.
“Organizations must foster mutual understanding among employees from different generations and deepen their understanding of each generation’s needs,” advised MarshMcLennan. “By recognizing each generation’s goals, priorities, and values, employers can provide benefits tailored to employees of all ages.”
Artificial intelligence is another area employers should be prioritizing. Human resources is likely to be among the most affected by the expansion of AI, with positive implications including more efficiency, reduced workloads and streamlined tasks. However, these long-term benefits will come with short-term pressure to upskill and help organizations integrate AI into their workflows.
The use of AI is growing rapidly, with the number of employees using generative AI nearly doubling between 2023 and 2024. There is a growing consensus among executives that AI will be essential to remaining competitive. Nearly half of executives at large organizations say they are setting aside dedicated funds for AI spending, and 67% say their organization will likely ramp up AI investment over the next three years.
The report cautions, however, about rushing to implement AI tools.
“Running experiments, testing AI solutions, and measuring results is inherently time-consuming,” said the report. “Rushing or skipping phases of the testing process exposes organizations to a minefield of security, regulatory, legal, and financial risks.”
Meanwhile, as pharmaceutical costs continue to be the biggest driver of health care expenses, companies may want to hit the reset button on prescription spending, the report suggested. Employers can lower their Rx spending by pursuing pharmacy benefit managers (PMBs) that offer different pricing models and encouraging employees to consider alternatives to name-brand medications.
The market for biosimilar medications is expected to grow over the next several years and will put downward pressure on pharmaceutical costs, the report said. These drugs are particularly disruptive for high-cost specialty drugs and cancer medications, which are the primary drivers of health care spending.
“Employers must actively promote biosimilar adoption and ensure robust coverage of biosimilars when reevaluating or renegotiating their PBM contracts,” the report said. “Currently, PBM agreements are more likely to restrict or limit coverage of biosimilars that treat the most common conditions than to cover them.”
Finally, employers should brace for even higher health care costs as part of their benefits strategy. While some employers have considered cutting or reducing health care benefits, most understand that the short-term benefits of such a strategy could create long-term risks, including worsening organizational health, lower employee morale and hiring difficulties.
Health care costs are being driven by several factors, including a tight labor market, an aging population, an increase in chronic diseases, and the continued presence of private equity in health care, said the report. Medical inflation continues to outpace general inflation, with small organizations feeling these increases most acutely.
While employers can’t control health care costs, they can optimize spending strategies to mitigate ballooning prices, the firm said. For example, using high-performance networks (HPNs) can cut costs by up to 15%, and self-insurance can save employers up to 10% over the long term.
In addition, reference-based pricing, which establishes fixed maximum prices for medical services based on Medicare rates, can help employers and plan members avoid surprise costs for medical care.
“Reference-based pricing can save employers up to 20% to 30% annually on health care costs,” said the report. “It can also be used in conjunction with data analytics and reporting tools to help employers create more accurate forecasts of how their health care spending will grow in the coming years.”
