Attracting and retaining talent remains the number one operational priority of 60 percent of employers according to the forthcoming 2018 Gallagher Benefits Strategy & Benchmarking Survey. That figure has increased two percentage points from 2017, and is in sharp contrast to the 37 percent of employers who ranked controlling benefit costs as the top priority, a figure that declined six percentage points from 2017. And nearly half (45 percent) of employers chose not to increase employee cost sharing of healthcare benefits.
“While keeping a lid on costs is always important, we are seeing a clear shift in the market as employers are having to compete more aggressively for talent in the face of the lowest unemployment rate in nearly 50 years,” said William F. Ziebell, President, Gallagher Employee Benefits Consulting and Brokerage. “Today’s workforce is comprised of five very different generations, meaning it is no longer good enough to simply offer standard medical coverage and a competitive retirement plan. The 2018 Benefits Strategy & Benchmarking Survey uncovered best practices that address employees’ total wellbeing, which will positively impact organizational retention and recruitment efforts.”
Employers Taking a Holistic View of Employee Wellbeing
The Benefits Strategy & Benchmarking Survey found forward-thinking employers are taking a more holistic view of employee wellbeing and developing strategies that both engage and appeal to their team. For example, more than half of employers (55 percent) now provide a telemedicine component, allowing employees to virtually connect with clinicians. That is an increase of more than 100 percent from 2016, when just 24 percent of employers utilized telemedicine. In addition to saving employees time, telemedicine has been shown to reduce expenses for both employers and employees.
The report also found employers are looking for ways to reduce medical expenses by encouraging their employees to live healthy lifestyles. The most popular physical wellbeing benefits include flu shots, tobacco cessation programs, health risk assessments and biometric screenings.
Because financial stressors can negatively affect productivity, financial wellbeing proved to be another area of interest for employers. More than six out of ten employers (62 percent) now offer employees access to financial advisors and nearly half (47 percent) provide financial-literacy education to help employees make better saving and spending decisions. The research also showed 43 percent of employers are taking steps to gauge employee retirement readiness, compared to previous years (33 percent in 2016).
Identifying and Changing Benefits Based on Employee Preferences
Because the tightening labor market has made it easier for top employees to leave their jobs voluntarily, more employers are tweaking existing benefits or adding new offerings. The goal is to provide employees with more choices that will better fit their own lifestyles and needs. Examples include:
- Health Benefits Choice: More than one in five employers (22 percent) now offer employees three medical insurance plans, and 13 percent offer four or more options.
- Tuition Assistance: Nearly half (46 percent) of employers provide tuition assistance, which is up from 42 percent in 2017. The most common tuition reimbursement amount totaled $5,250annually per employee.
- Life Insurance: Nine of ten (89 percent) employers said they now offer employees life insurance, which is a five percent increase from 2017.
- Employee Assistance Programs (EAPs): 70 percent of employers provide access to EAPs, which is an 11 percent jump from 2017.
Small Segment of Employers Fully Engage Employees around Workplace Benefits
Given many employee rosters include a multigenerational workforce, it has become increasingly important for employers to offer benefits that appeal to each segment of their workforce. Surprisingly, just 13 percent of employers said they have a comprehensive communication strategy to guide how they collect and share benefits information with employees, and most (74 percent) noted they have a communication strategy for just some of their benefits and wellbeing offerings.
“More than half of employers (59 percent) expect to increase their headcount over the next two years. That will be a challenge considering there are currently more job openings than individuals to fill those positions,” Ziebell said. “As a result, employers must get smarter about working within their budgets to offer benefits and compensation packages that engage their teams. At the same time, it will be imperative for organizations to clearly communicate the offerings and measure their effectiveness. The days of ‘set it and forget it’ in regards to compensation and benefits are over.”