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You’re probably under pressure to reduce benefits costs as your organization tries to remain competitive in the marketplace.

But don’t neglect your competitiveness in the race to attract and retain the best employees. They’re probably looking for even better benefits to offset static pay raises.

Five key issues are emerging in 2008 for compensation and benefits professionals. According to a new study of employee benefits by Prudential Financial, these issues will only grow more important between now and 2012.

1. Employees will continue to bear more financial responsibility for insurance and other benefits. Many workers already pay a larger share of their health premiums, higher deductibles and higher co-pays for doctor visits. Benefits that companies once offered as paid perks increasingly will become voluntary benefits that employees can choose to buy.

Tip: Share more information with employees about the cost of their health care and the financial consequences of unhealthy lifestyles. Improve employees’ access to data about their own health conditions and medical risks.

2. Disability insurance will become as common as health and retirement plans. It’s a back-burner issue now, but as the population ages, employees will need to rely more on disability insurance to replace lost income caused by chronic illnesses or injuries.

Just 12% of employers in the Prudential study said they make a great effort to help their employees understand the link between disability insurance and income replacement, even though 60% of employees rank financial security during a disability among their top five financial worries.

Tip: Focus on educating employees about disability insurance as much as you do about health insurance and retirement planning.

3. One-size-fits-all benefits information is on its way out. Years ago, when employers were smaller and offered far fewer benefits, it was routine to supply personalized information to each employee about the kinds of benefits that would best suit that worker, depending on age, income, marital status and job function.

That practice morphed into an approach that generally involves handing out more generic, technical information to employees before open enrollment.

Tip: Targeted messages are on their way back. Embrace the notion that employees at various life stages have different benefits needs. Tailor this information for specific groups of employees by collecting more data on employees so you know whom to target.

4. Growing demand from women will spur employers to enhance work/life and financial planning benefits. Female employees are far more likely to value lifestyle benefits—such as flexible schedules and flexible paid time off—than men are (75% for women versus 57% for men).

Tip: Accommodate—and retain—your female workers by allowing them as much flexibility as possible so they have time off for family.

5. Multinational companies will gravitate toward global employee benefits strategies. Within four years, the number of American companies with employees in other countries will grow from 15% to 20%, and the average percentage of employees based overseas will grow from 4% to 6%. Most of these companies manage a hodgepodge of benefits that vary from country to country.

Tip: Focus on the efficiency of tying together your benefits programs. If your organization is midsize, you’re probably in growth mode and can expect your overseas employment to increase substantially over the next few years.

Download the report, Study of Employee Benefits: 2007 & Beyond, from www.prudential.com.

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