Benefit costs less of a priority as employers compete for talent
To better compete for top workers, more employers are tweaking existing benefits or adding new offerings.
As competition for talent heats up amid very low unemployment, winning workers has become even more important than controlling the costs of employee benefits, according to the 2018 Gallagher Benefits Strategy & Benchmarking Survey.
Indeed, 60 percent of 4,241 U.S. employers surveyed by Gallagher say that attracting and retaining talent is their number one operational priority — in sharp contrast to the 37 percent of employers who rank controlling benefit costs as their top priority. And nearly half (45 percent) of employers have chosen not to increase employee cost sharing of health care benefits.
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“While keeping a lid on costs is always important, we are seeing a clear shift in the market as employers are having to compete more aggressively for talent in the face of the lowest unemployment rate in nearly 50 years,” says William F. Ziebell, president, Gallagher Employee Benefits Consulting and Brokerage.
“Today’s workforce is comprised of five very different generations, meaning it is no longer good enough to simply offer standard medical coverage and a competitive retirement plan,” Ziebell says. “The 2018 Benefits Strategy & Benchmarking Survey uncovered best practices that address employees’ total well-being, which will positively impact organizational retention and recruitment efforts.”
More employers are implementing well-being strategies that are more holistic, according to the survey. More than six out of ten employers (62 percent) now offer employees access to financial advisors and nearly half (47 percent) provide financial-literacy education to help employees make better saving and spending decisions. The research also showed 43 percent of employers are taking steps to gauge employee retirement readiness, compared to previous years (33 percent in 2016).
More than half of employers (55 percent) now provide a telemedicine component to their health care benefits, an increase of more than 100 percent from 2016, when just 24 percent of employers utilized telemedicine. The survey also found employers are looking for ways to reduce medical expenses by encouraging their employees to live healthy lifestyles. The most popular physical well-being benefits include flu shots, tobacco cessation programs, health risk assessments and biometric screenings.
To better compete for top workers, more employers are tweaking existing benefits or adding new offerings. Examples include:
– More than one in five employers (22 percent) now offer employees three medical insurance plans, and 13 percent offer four or more options.
– Nearly half (46 percent) of employers provide tuition assistance, up from 42 percent in 2017. The most common tuition reimbursement amount totaled $5,250 annually per employee.
– Nine of ten (89 percent) employers say they now offer employees life insurance, a five percent increase from 2017.
– A majority (70 percent) of employers provide access to employee assistance programs, an 11 percent jump from 2017.
However, the survey also found that just 13 percent of employers say they have a comprehensive communication strategy to guide how they collect and share benefits information with employees, and most (74 percent) say they have a communication strategy for just some of their benefits and well-being offerings.
More than half of employers (59 percent) expect to increase their headcount over the next two years, but that will be a challenge considering there are currently more job openings than individuals to fill those positions, Ziebell says.
“Employers must get smarter about working within their budgets to offer benefits and compensation packages that engage their teams,” he says. “At the same time, it will be imperative for organizations to clearly communicate the offerings and measure their effectiveness. The days of ‘set it and forget it’ in regards to compensation and benefits are over.”
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