Employers prioritize benefits amidst talent shortage and rising costs
A majority (66%) of employers feel that their current benefit plan is effective or highly effective in attracting and retaining key talent.
While a plethora of companies struggle to corral and keep top talent, financial investment in benefits programs remains a top priority for U.S. employers. As expected, much of the implementation issue is related to cost.
Many employers are struggling as benefit expenses continue to grow. While competition for talent has been an area of interest for the past few years, the survey found it to be a top priority this year. WTW’s 2023 Benefit Trends Survey found competition for talent and rising costs to be the top influencers of employers’ benefit strategies.
A majority (66%) of employers feel that their current benefit plan is effective or highly effective in attracting and retaining key talent. Many have shifted their focus towards benefit plans that satisfy all employees.
“Employee benefits are significant differentiators in attracting and retaining key talent, and companies must prioritize in order to be an employer of choice,” said Courtney Stubblefield, managing director of WTW. “Employers must focus on what their workforce needs by assessing the value of benefits and their impact on employees.”
About 3 in every 4 companies look to focus on managing plan costs, but balancing employee needs might prove to be more difficult. Employers are anticipating cost to be a challenge for benefit budgets in the next two years. About half of those surveyed are concerned about the persistence of higher inflation on their benefits budget. In an attempt to manage costs, employers have taken action to improve vendor contract terms.
Related: Are employers overspending on health insurance?
For many, their only option is to reevaluate the benefits offered. So far, 7% of employers have opted to reduce the generosity of their benefit programs, while another 15% plan to do so.
“The current state of both the economy and labor market is putting employers in a precarious position, balancing the competition for talent with the rising cost of services, while budgets remain tight,” said Debby Moorman, managing director and head of Health & Benefits for WTW.