THE GREAT RESIGNATION DRIVES CHANGE
Employers emphasize benefits and wellness offerings to boost recruitment, retention
By Sally Prather and Danielle Capilla
As quit rates in the United States remain at near-record highs, competition for talent across industries persists. According to the U.S. Bureau of Labor Statistics, more than 4.2 million Americans quit their jobs in June 2022, indicating that employees remain willing and able to leave their jobs for new opportunities. While many employers struggle to fill open positions, strategic leaders are leveraging benefits that address the changing needs of the workforce. Through innovation and flexibility, businesses can secure their position as an employer of choice and boost recruitment and retention.
Fallout from the COVID-19 pandemic, including the Great Resignation, is driving significant changes in employee benefits offerings, Alera Group’s 2022 Healthcare and Employee Benefits Benchmarking Report finds. The cost of benefits was cited as the most challenging area related to human capital management by survey respondents (35%), followed by employee retention (32%) and recruitment (27%).
To address these challenges, employers are revising their benefit programs and are expanding services to support employees with their work and wellness. Employers also continue to pay close attention to cost containment, evaluating long-term strategies to ensure sustainability and growth.
Benchmarking and strategic planning provide employers valuable insight into their benefits program, helping assess its strengths and weaknesses so they can design programs that are purposeful and efficient. By emphasizing programs that promote employee health and productivity, strategic employers not only differentiate them-selves from their competitors, but they also foster a workforce that is engaged and invested in organizational success.
Focus on health and productivity
Telemedicine remains the most common health and productivity benefit, the benchmarking report finds, with 89% of respondents offering telehealth services, up from 80% in 2020. Ancillary coverage is also on the rise with employers reporting increased offerings including family care leave, student debt repayment, identity theft, critical illness and hospital indemnity. This trend reflects recognition by employers that benefits must support all employees, regardless of what stage they are in life and in their careers.
By providing ancillary benefits such as mental health services, eldercare, family planning and childcare support, employers can meet the needs and expectations of workers from various generations, genders and races. This will help build employee engagement and strengthen the organization’s employer brand.
Medical, dental and life benefits remain the most common benefit offerings, but coverage is evolving to meet the unique needs of the workforce. Employers are offering more choices in medical plans in response to employee demand. Seventy-three percent of employers responding to the bench-marking survey offer two or more medical plan options, with preferred provider organizations and high-deductible health plans being the most common plan types.
Maintaining the status quo for benefits will not help attract or retain these workers who want flexibility, choice, and purpose in their work.
The survey shows that employees want the ability to select a plan that meets their needs, as well as the option of choosing the deductible and out-of-pocket maximum for the plan. The bottom line: A one-size-fits-all health plan is no longer enough to satisfy employees and can turn off potential new hires.
Employers continue to offer employee assistance programs (EAPs) to address personal problems that may affect work performance, along with programs targeting disease management, population health, and caregiver benefits, according to the benchmarking report. More employers are adding financial wellness programs to help employees understand and manage personal finances and fulfill important financial objectives, such as saving for college, retirement or purchasing a home.
Among employers offering a wellness program, about 30% included a financial wellness component in 2022, up from 18% in 2021. Financial wellness programs are a benefit employers need to consider when it comes to recruiting and retaining employees.
Behavioral health support is also on the rise. With nearly one in five adults in the United States living with a mental illness, according to the National Institute of Mental Health, it’s prudent for employers to address the mental health needs of the workforce. EAPs can include a range of services to address issues impacting mental health and emotional well-being, such as work-related stress, grief and family problems. Adopting a holistic approach to well-being can provide significant value to both employers and employees, helping reduce absenteeism and enhance employee satisfaction and productivity.
It’s important for employers to continue to benchmark their benefit programs to identify trends and opportunities, so they can expand offerings to meet the changing needs of the workforce.
Cost containment is key
Due to cost concerns, some employers may be wary of expanding benefits. The good news is that many of these new offerings don’t have to break the bank. Adding hospital indemnity and critical illness coverage, for example, provides more options to employees to manage their health and wellness, but has little cost impact for employers.
Employers continue to use a variety of strategies to defray healthcare costs, particularly for medical plans, which continue to increase year-over-year. Top cost-cutting strategies include changes in plan design, such as increased deductibles and out-of-pocket maximums. Other common cost-saving measures include implementing narrow provider networks, offering contingent cash in lieu of insurance for spousal plan selection, changing insurance carriers, and implementing defined contribution premiums.
Adopting a holistic approach to well-being can provide significant value to both employers and employees, helping reduce absenteeism and enhance employee satisfaction and productivity.
Most employers responding to the benchmarking survey are using more than one of these strategies to develop a high-performing health plan that meets the needs of their workforce while also addressing ongoing cost concerns.
The value of benchmarking and strategic planning
Through benchmarking and strategic planning, employers can address the increasing gap between their current benefit programs and employee must-haves. Employee bene-fits benchmarking helps businesses gauge the impact and the value of their benefit plans by allowing them to compare their current offerings against competitors of similar size and industry. It also is a critical step in the plan design process, helping employers understand and address the ever-changing needs of their workforce. Strategic employers are also benchmarking to gain insight into the prevalence and effectiveness of cost-containment strategies employers are adopting, including what fees employers are absorbing versus what costs they are passing on to their employees. This supports long-term strategic planning to ensure sustainability and growth.
The Great Resignation has signaled that employees are willing to change jobs in favor of employers who make them feel more valued in the workplace and who offer benefit plans that meet their individual needs. It’s important for employers to recognize that these factors will not go away. Younger workers, in particular, have a different mindset and expectations of their employer.
Maintaining the status quo for benefits will not help attract or retain these workers who want flexibility, choice, and purpose in their work. Expanding and repurposing benefits creates a competitive advantage in the marketplace, helping differentiate organizations by focusing on what matters to employees. Other advantages include reduced attrition and improved productivity, both of which can offset much of the up-front investment.
The benchmarking report confirms an ongoing shift in the workplace, with employers taking on a greater role in the well-being of employees—both within and outside the office. As the employer-employee relationship continues to evolve, employers must remain flexible and optimize benefits that support health and productivity. Otherwise, they risk losing out on talent to organizations whose benefits meet their employees’ immediate and future needs.
Sally Prather is executive vice president and practice leader, Employee Benefits, at Alera Group.
Danielle Capilla is vice president of compliance, Employee Benefits, at Alera Group.