Prepare your clients’ benefits strategy to withstand economic and workforce challenges

No matter where you look right now, headlines are filled with news about the current economic state. The price of everyday items, interest rate hikes by the Federal Reserve, and an unpredictable stock market are just a few of the topics that have been dominating news outlets. The economic turbulence we’re experiencing is being caused by numerous factors, including supply chain issues, the war in Ukraine, and lingering effects from the coronavirus.

In my last article for BenefitsPRO, I wrote about how most employers are looking to cut costs while strengthening their benefits offerings during this challenging economic period. This remains true; however the priorities for many employers have shifted in the past few months.

Let’s explore the shifting dynamics and how to prepare your clients’ benefits strategy to withstand the resulting challenges.

Economic conditions are creating new dynamics for employers

The economic turbulence we’ve seen over the past few months is shifting the dynamics between cost-containment and a battle to retain top talent. Economists are putting the probability of a recession in the next 12 months at over 60%. But while experts can use models and give their best predictions, we really have no idea.

And even though uncertainty remains, we’ve seen a variety of “recession-proofing” measures across several industries. So, in many ways, I think the shift has already begun.

While recruitment and attracting talent were the burning topics just six months ago, the focus has now shifted to retaining that talent. For employers, keeping their best people motivated during times like these is really challenging, but it’s key for them to keep employees motivated and aligned to their company’s goals during turbulent conditions.

The secret to a balanced benefits strategy? Listen to employees 

Getting the pulse of organizations you work with is critical, and it’s as easy as listening to employees. In the same way that engagement surveys help executive teams hone in on strengths and areas of opportunity within the company, benefits check-ins can give you a clear picture of what your clients’ employees value. 

Ensuring that employees are getting the most out of their benefits requires a combination of knowing what benefits are important to them and implementing a regular communication strategy to improve benefits utilization and satisfaction. 

Retain talent and reduce wasteful spending by providing benefits employees value 

Top talent wants to work differently in 2023, or rather, wants to stay working the way they want to work. Before the pandemic, only 6% of workers primarily worked from home. Even more mind-blowing, roughly 75% of them had never worked from home. The Pew Research Center now reports that nearly 60% of U.S. workers “who say their jobs can mainly be done from home are working from home all or most of the time.”

It’s hard to find a larger paradigm shift in how we work over the past few decades. With that in mind, it’s critical to make sure that your client’s benefits package and total rewards strategies align with their current and future needs.

Employees want benefits that address their full selves. And with benefits accounting for roughly 30% of the average cost per private industry employee, benefits utilization and satisfaction are critical. 

So, how do we achieve a top-notch benefits program while not overspending?

Taking a look at benefits utilization is a great place to start. From there, you can easily identify “wasteful” benefits that employees don’t use and reduce or eliminate costs going towards those programs. 

Every company is going to have fewer resources to deploy towards total rewards this year. No one’s going to get the budget to increase mental health benefits by 25% in 2023. So, it’ll be key to maximize investments and make sure the areas to which your clients are allocating resources are performing well.

Use health care consumerism tools to maximize savings

People don’t  intrinsically desire health care benefits; they want instant access to high quality care that they can afford. They desire to be healthy. This desire remains, but employees’ understanding of the packages sometimes falls behind with how complex some benefits packages can be. 

HealthJoy’s 2022 Employee Benefits Insights Report surveyed over 1,500 employees and found that almost half of employees rarely or never consider how the cost of their health care choices impacts their employer. And when things like this happen to employees, it can end up costing them, and the company, a significant amount.

The role of business leaders and their advisors is to identify the most impactful resources and remove any barriers to accessing these tools. Health care consumerism tools are one of the most impactful cost-saving solutions available for both employees and employers. Make these tools available and promote understanding of how they work to maximize health plan savings. 

Once you’ve done that, move on to teaching employees to become educated health care shoppers. This vital step is the only way to create sustainability. If there’s a knowledge gap, they might not understand that consumption influences how much they’ll spend (and how much companies will) next year.

Creating a population that understands the resources available and how to shop for the best healthcare options will give you the best chance at minimizing costs. And your clients will thank you for the savings.

Conclusion

While we all sift through this period of economic turbulence, be sure to put what we learned today into practice. By creating educated health care consumers, eliminating low-utilized programs, and listening to employee feedback on benefits, your employer clients will be able to come out of this period stronger than ever.

Justin Holland is the CEO and co-founder of HealthJoy.