How to Assess Workforce Priorities Amid Regulatory and Economic Shifts

As employers prepare for evolving demands from their workforce, industry experts at a WTW panel held on Wednesday emphasized governance, compliance and investment strategies as focal points for navigating future challenges.

While exact developments from a new U.S. presidential administration and evolving market dynamics cannot be predicted, the panelists gave employers advice on areas for which they can prepare. They all agreed that employers can remain proactive in meeting workforce demands by strengthening governance, monitoring regulatory developments and optimizing investment strategies.

Governance and Compliance

Courtney Stubblefield, WTW’s leader of health and benefits insights and commercialization for North America, highlighted the ongoing importance of governance, particularly in health and wellness benefits. She pointed to finalized rules on mental health parity, which have long-standing bipartisan support, as a key area requiring employer attention.

“Some of the intensity of audits and activity that we saw during the [President Joe] Biden administration would continue, but being in compliance with that, making sure that you’ve done the comparative reviews required there, [is] obviously a very good thing to do,” Stubblefield said.

Prescription drug pricing, another bipartisan focus, remains a significant issue for employers. Stubblefield recommended that organizations remain vigilant and adapt their health benefits programs to address potential regulatory changes.

Retirement and Health Savings Accounts

In terms of the increasingly popular use of health savings accounts, Beth Ashmore, WTW’s retirement client experience leader for North America, acknowledged discussion of liberalizing the benefit, such as increasing contribution limits or decoupling health savings accounts from high-deductible health plans. However, she cautioned that such changes are costly and face uncertain prospects, leaving HSAs largely unaffected in the near term.

Speaking on pooled employer plans as a way for plan sponsors to offer retirement plans, Ashmore said they will continue to offer growth and flexibility for employers and employees.

“I actually think that the pooled employer plans are in pretty good standing,” Ashmore said. “A lot of those retirement policies have been put into place on a bipartisan basis. They’re largely defined contribution, and they allow a lot more flexibility for employers and employees to make sure that they’re having retirement savings.”

Investment and Risk Management

Jon Pliner, WTW’s head of delegated portfolio management, turned the conversation to economic strategies, emphasizing interest rate management and portfolio diversification.

“From an interest rate standpoint, and managing the interest rate exposure, consider whether or not you have the ability to be more capital efficient in how you’re managing that interest rate exposure,” Pliner said. “Maximize the dollar of hedging that you’re doing with each dollar within your hedging portfolio.”

Pliner also recommended exploring real assets, including infrastructure and natural resources, to hedge against inflation and stabilize portfolios.

“In an environment where we may see slightly higher inflation than long-term averages, [investors should be] looking at real assets as an opportunity within the portfolio and going beyond just what we see,” Pliner said.

He also said many plan sponsors are zoning in on real estate, but investors should also look into infrastructure and natural resources. They should evaluate whether their portfolio includes assets with strong, stable return characteristics that can support return expectations while minimizing downside risk, he said.

Business Friendly

Addressing potential changes under the incoming administration of President-elect Donald Trump, Lori Wisper, WTW’s global compensation strategy and design solution leader, noted that no sweeping regulatory shifts are expected in executive compensation, which had been a factor under the prior administration.

“The Securities and Exchange Commission is likely to adopt a more business-friendly stance, particularly toward industries like tech that have faced recent scrutiny,” Wisper said.

She added that existing executive pay programs would largely remain unaffected, but advised employers to stay informed on any sector-specific implications.