November Edition: Skills-based practices, health trends, climate change investments, and Ilya Bonic

Mercer News & Notes returns to bring you more insights, research, and bold ideas for November.

What are the benefits of skills-based practices?

In a talent landscape where jobs and skills are changing faster than ever, many employers are looking for new approaches to evaluating, recruiting and rewarding talent, as well as mapping individuals to tasks within their organization.

To solve for this need, employers are shifting toward skills-based talent practices, which allow them to more effectively understand and plan for the critical skills they’ll need to compete in a competitive future of work.

But the adoption of skills-based practices is a journey, and to help accelerate this transformation we’ve identified five key steps towards a more agile and flexible workforce:

1. Build the business case
2. Align the key performance indicators (KPIs)
3. Design with end in mind
4. Prioritize change management and communications
5. Drive and sustain

Explore how you can take a skills-first approach to talent management.

Getting the right balance between managing costs and meeting employee needs

Medical trend rates are beginning to exceed pre-pandemic levels, putting mounting pressure on HR and benefits managers to closely evaluate costs and demonstrate ROI on every dollar spent.

At the same time, employee needs are only becoming more urgent, and organizations have become increasingly aware of the impact and value that critical health benefits play in both their employees’ lives and their employer brand.

Across this landscape, we’ve identified four key trends driving the future of employer provided healthcare:

1. Double-digit cost increases: 86% of insurers globally believe medical inflation had a significant or very significant impact on the 2023 medical trends.
2. Skills shortage: 70% of insurers expect using AI for first-line diagnosis and/or navigation to have a transformative impact on employer sponsored health care over the next five years.
3. Insurers are responding to employers’ need for cost containment: 42% of insurers have not updated deductible/excesses and co-payments and have no plans to do so.
4. The need to address coverage gaps: 56% of insurers do not currently cover targeted mental health, socialization and learning issues for children, teenagers and families.

Understanding these trends and their impact is crucial for employers to design appropriate healthcare plans that meet the needs and expectations of employees.

How can investors address the causes and the impacts of climate change?

With extreme floods, droughts and wildfires now the norm in many regions, the physical damages wrought by climate change are influencing investment and insurance decision-making. There is a growing recognition of the importance of taking adaptive action to increase climate resilience.

Climate transition needs a broader definition, one that expands beyond carbon reduction to address the issues of nature loss, physical risks and adaptation. Any definition should also encompass engagement in the circular economy and support for the principles of equality for sustainable development. We advocate for an expanded view of climate transition, comprising five interrelated issues:

1. Mitigation
2. Physical risks and adaption
3. Natural capital
4. Circular economy
5. Fair carbon budget

Explore how investors can ease the transition to a net-zero economy by adopting new tools, strategies and frameworks developed for a more holistic approach to climate investing.  

This month we’re thrilled to shine a spotlight on Ilya Bonic , President of Mercer’s Career business and Head of Mercer Strategy. With over 25 years of experience in the field of human resource consulting, Ilya is a key member of Mercer's global leadership team and globally recognized expert in people and talent strategies.

Over the course of his career, Ilya has worked across various regions, including the Pacific, Asia, Europe, and the USA, collaborating with major multinational companies to address their critical people-related challenges. Ilya's primary focus is the impact of people strategy on organizational performance, and he has a wealth of experience helping clients navigate challenges like business model changes, economic cycles, the pandemic, and the challenges and opportunities presented by technological advancements and generative AI.

Though he’s based in New York, Ilya can frequently be found in Mercer and client offices around the world as he works to guide both colleagues and clients through some of the greatest challenges facing the future of work. When away from the office, Ilya enjoys the outdoors and sporting activities like running and tennis, and making the most of non-work time with family and friends.

Are you already connected with Ilya? If not, check out his profile, follow, and connect with him to keep up with Ilya’s latest work and thought leadership, and don’t miss his new book, Work Different: 10 truths for winning in the people age, co-authored with Kai Anderson and Kate Bravery and released on November 30.

And that’s all we have for this edition of Mercer News & Notes newsletter! We hope you’ll join us again next month as we continue to bring the latest insights directly to you, and please share any thoughts or recommendations on topics you’d like to see in our next issue in the comments below.  👇

Don’t forget to follow Mercer on LinkedIn for the latest insights and points of views on all things future of work, and feel free to reach out if you’d like to hear more about any of the topics discussed today!

The information contained in this document is provided for informational and educational purposes only. It should not be relied upon as investment advice or an offer or solicitation. The information represents the views and opinions of the author(s) regarding the economic conditions or financial instruments referenced herein. The opinions expressed are subject to change without notice. 

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