Employee retention higher priority than revenue and sales growth, study finds

This year, retaining cornerstone workers through employee benefits and meaningful DEI is a top goal for many organizations, and may be focused upon more than revenue and sales stepping into 2024.

These estimates were revealed in Gallagher’s 2023 U.S. Organizational Wellbeing Report, which pulled from about 4,000 firms across the U.S. The report noted a large emphasis on employees in particular. This year, nearly 3 in 4 employers forwarded their employees’ base salaries, while 40% of employers invested in expanded medical benefits.

“An organization’s ability to retain employees ultimately impacts its bottom line because hiring and training a new employee usually costs much more than retaining someone who is already on the payroll,” said William F. Ziebell, CEO of Gallagher’s Benefits & HR Consulting Division.

“The workforce makeup and employee needs are evolving at a rapid rate. As a result, employers have to consider more comprehensive benefits and compensation offerings that can enhance the overall employee experience.”

According to the report, 4 in 5 employers anticipate a moderate or significant rise in health care costs, perhaps a direct correlation to more than half of firms surveyed increasing their cost sharing. These factors affect employer-sponsored health care, and reveal themselves as increased health plan premiums. Employers are utilizing telemedicine, health care decision support and cost-transparency tools in an attempt to offset growing expenses. Telemedicine saw growth among cost-management options, up to 63% (from 58% in 2022). An increase in the utilization of cost-transparency tools and health care decision support was also noted.

Increased DEI was another area of emphasis in the report. Demonstrating genuine and consistent communications surrounding DEI initiatives can positively impact the working environment for all employees. Key elements of management and total rewards also incorporate DEI, including:

• Succession planning (30%)
• Benefits (29%)
• Compensation (28%)
• Performance management (22%)

Related: Growing number of tech pros dissatisfied with employers’ DEI efforts, study finds

“Now more than ever, it’s important for organizations to ensure their benefits and overall vision are well matched with the interests of employees,” said Ziebell. “While diverse benefits may come with more complexity, providing a people-first framework helps to address differing employee needs and interests.”