Tug of war: The state of employer/employee relations

There’s a lot of buzz right now about the state of employer/employee relations. Who’s in control?

Tough choices

Employers are more aware of employee needs than ever. It’s difficult enough to increase wages due to inflation, but employers are now being asked to provide richer benefits to keep talent. It’s an employee market, which has put more pressure on employers.

I’ve witnessed two reactions: The first is not making changes because the employer believes continuity is king. They’ll keep the employee cost share the same, even if it means taking it on the chin. The second is trying something new to retain and add employees. Benefits have re-emerged as a leading catalyst to retention. Transparency is also sneaking in; hopefully with more to come.

Jeff Fawver, senior benefits consultant, Alera Group, Inc.

All or nothing?

Employer/employee relations have entered a new phase of ‘tug of war’ with a slight edge toward workers. Many businesses have shifted to a reserved approach to most items, including time spent in the office. Everyone wins, or everyone loses. Here’s why:

• The FOMC is anticipated to increase rates in 2023, before considering cuts in 2024. But the goldilocks narrative of “soft landing” allows businesses to take risks to grow. • We could see a zealous workforce push hot buttons amid one of the largest combined labor strikes seen in decades.

It may seem contrarian to stage strikes and walkouts amid talks of recession, but that’s why we still see labor dominating these narratives and outcomes (for now).

Derek Winn, chief growth officer, Business Benefits Group

Mind matters

Mental health has been a buzzing topic:

• We’ve seen a rise in depression and anxiety • Awareness of mental illness, work stress, and burnout has grown but solutions have not • Drug abuse and addiction rates have increased 3.8% YoY since 2000, to an all-time high • Suicide rates at an all-time high since 2018 • We use reactive care instead of preventative care for emergencies

I have conversations with HR and brokers daily about an emergency need for mental health support, suicide prevention, and post-traumatic-event response.

The Great Resignation and quiet quitting are directly tied to how much an employer provides/cares for employees. Wellness and mental health should be a key factor in recruitment and retention, because we are seeing employees prioritizing self-care, mental health, and work culture when looking for jobs.

Taylor Miles, national marketing & business development rep, M&S EAP Services

Rock and a hard place

Our roles as advisors to business leaders are high-level business relationships with a lot at stake. Employers entrust the most valuable part of their business to us: their employees’ health. Health events in people’s lives change everything. We must take this seriously.

We need to remember the employer (and employees) are in control. We need to listen and learn when it comes to their needs. We need to be educators to both parties and build a strategic plan. Lastly, we need to execute.

Read more: Unleashing the potential of benefits customization

I hear that employers feel caught between price increases and their desire to support employees. They’re willing to try new things, but also want to make sure there are clear “wins” along the way. Additionally, employees have difficulty navigating the health care landscape.

They are seeing delays in scheduling, finding difficulty dealing with provider billing offices, and there isn’t enough money to pay for their deductibles. On top of that, they just don’t understand things. The next several years need to be about simplification and education. We need to help the workforce navigate this crazy system. They need to have the tools to ask the right questions or engage with individuals who can help them formulate those questions. We can build the best health insurance solutions for employees, but it’s all for naught if they can’t learn how to use it.

Ben Conner, CEO, Conner Insurance

Give and take

A palpable shift is happening. The pandemic redefined work relationships and dynamics, with employees leveraging the Great Resignation to command more control.

There’s an emerging sense of negotiation, cooperation, and mutual benefit as businesses acknowledge the imperative to attract and retain talent in a competitive market. Benefits offerings have been diversified and are more tailored. Employees are no longer satisfied with the bare minimum.

Return-to-office is a hotbed of contention. After tasting remote work, many employees are resistant to full-time office commitments. Employers are experimenting with hybrid work models, balancing between in-person collaboration and employee preferences.

Businesses need to listen, be flexible, and act upon feedback. Innovative and empathetic approaches to benefits are imperative in the post-pandemic era. This shift isn’t just about keeping employees satisfied, but also maintaining productivity, innovation, and resilience.

Craig Gottwals, SVP, McGriff Insurance Services

Assume nothing

I typically expect CEOs and CFOs to be the most concerned with cost control, but this is not what I am hearing. Even in low-profit margin industries, I am hearing a high level of concern for health insurance coverage levels. Employers are foregoing significant first-year cost savings in lieu of enhancing the benefits coverage for the employee workforce.

John Millen III, co-founder & managing partner, MillenGroup

Tread lightly

Employees are asking more questions about benefits and demanding more carrier options and plan choices.

In a recent study, 1 in 4 employees indicated that they may begin looking for a new job if their premium increases more than $30. With unemployment below 4% and labor-participation rates stubbornly low, employers will need to carefully consider how aggressive they are with passing on costs to their workers. Medical insurance as a benefit is assumed by many employees, but the out-of-pocket cost for deductibles and living expenses is where they are begging for more financial support.

We are seeing more employers implementing HRAs to provide employees with money for out-of-pocket expenses. Things employers thought were “benefits” in the past are now status quo. Employers must go deeper to find better benefits for employees.

Brad O’Neill, co-founder, The ICHRA Shop

A balancing act

With all the media reporting, you would think employee relations are at an all time low. Yet, over half of employees say they’re extremely satisfied with their job, 62% are satisfied with their manager and 78% say they’re treated with respect.

According to The Conference Board, “once workers are paid competitively, a strong workplace culture is the most important factor… Leaders gain the most by offering flexible, hybrid work arrangements, and emphasizing work experience and culture factors.” Advisors must balance health and welfare offerings with a thorough review of compensation, engagement and ancillary products supporting holistic wellbeing.

Bobbi Kloss, VP Human Capital Management Consulting Services, Benefit Advisors Network

In it together

Immigrant employees are always vulnerable to disconnects with employers because they are navigating a different country and culture. But there has been ugliness of late that has upped the ante. We recently learned of a family who was spit on, presumably because they were speaking Spanish. Reasonable people can disagree on immigration policy, but events such as this undermine employers trying to build stability for their teams and mitigate feelings of “us vs them.” There are also companies out there going the extra mile to build a positive culture with an immigrant workforce and having success. If I had to guess, I would say that it is generally one extreme or the other.

Melissa Burkhart, founder and president, Futuro Sólido USA

A tale of two cities

Employees want flexibility; employers want culture and learning opportunities. What’s the happy medium?

A flexible work schedule offers significant benefits. The biggest drawbacks are the impact on employee knowledge, learning and growth, and the ability to build a world class culture.

A significant amount of the knowledge I have acquired has been through what Steve Jobs called “serendipity” and creating an environment that fosters unintended creativity and collaboration. I’ve experienced firsthand the difficulty of building a culture remotely. Passion, energy, and trust are hard to “feel” over Zoom and you can’t observe someone living out core values.

• We’re in a new reality that’s here to stay • Acknowledge that some level of “play in the mud” is necessary • Total reward strategies need to change to exhibit the feeling they want to portray • This includes:

o Medical benefits: employees need better access to virtual and telephonic programs. Employers who are not helping employees “access” care are losing an opportunity. o “New Age” benefits: some benefits, like advanced primary care, expanded mental health           benefits, family planning, and pet insurance are now mandatory. o Scheduled collaboration: employers need to have scheduled fun time to ensure they are           building culture. o Individuality is more important than ever and needs to be governed with an “act like an             adult” attitude.

We need to understand that the old way is not going to make an impact. Our entire industry needs to step up to the challenge of change, because it’s here to stay.

Lester Morales, founder & CEO, Next Impact

Equal footing

In the wake of COVID, there was nearly unprecedented unemployment. Companies had to reevaluate how they positioned themselves, while candidates often had the upper hand in terms of negotiations. Companies had to get creative and nimble in how they were able/willing to accommodate people and they often had to offer richer benefits at lower costs. Benefit are usually the second-largest financial line item, so companies were really hurting, especially with the astronomical rise in health care costs. The war for talent had gotten so volatile that it resulted in an overcorrection, but the pendulum has started to swing the other way.

Some of the adjustments employers had to make were really positive. They had to do a lot of self-reflection and dive deep into what made their company different. I believe employers began to recognize that business is going to be better if people are happier.

Related: Overall employee wellbeing is key: Employers answer the call for help

Our job is to change employees’ perceptions so they see benefits as something their employer is doing for them, rather than to them. Benefits are more than what’s on your ID card and what’s coming out of your paycheck. Employees don’t know because they aren’t educated about them. If your employees knew that they could get their imaging for a quarter of the cost at a freestanding facility rather than going to the hospital, do you think they’d be happy about that?

If employees knew how to navigate the pharmacy system to ensure they’re getting their prescriptions at the lowest cost, how would they feel?

I think the most positive added benefit that came out of COVID was addressing the need for mental health resources. We have clients of all different sizes in myriad industries. The one commonality (aside from cost control) is that nearly every client is interested in conversations about mental health solutions. The mental health benefits landscape has boomed. There are so many more resources available, and as a consultant it has been really fulfilling to implement those solutions.

I think the employer/employee relationship is in a good place. Neither party is in a position to make demands, which is a great place to start. If an employer or employee is strongarmed as a result of an ultimatum, it’s not a great foundation for a long-term healthy relationship. Like all relationships, if everyone feels like they are working in concert with one another, it makes things a little more pleasant.

Chesley Gaddis, VP of sales, Intrepid