ROLLING MEADOWS, Ill.,
Sept. 10, 2019 /PRNewswire/
-- Sustained low unemployment has forced U.S. employers to
offer richer compensation and benefits in order to attract and
retain top talent. According to the Gallagher's 2019 Benefits
Strategy & Benchmarking Survey, the largest survey of its
kind in the U.S., nearly three quarters (73 percent) of employers
increased employee compensation this year, and more than half (52
percent) enhanced medical benefits.
Even with compensation enhancements, voluntary employee turnover
remains a stubborn challenge, with one-third (32 percent) of
employers reporting full-time turnover in excess of 15 percent in
2018. That figure has increased by 8 percentage points from 2016.
In light of this, attracting and retaining a competitive workforce
remains the top priority for both operational and human resources
executives.
"More employers appear to be thinking strategically about their
benefit and compensation strategies to win the war for talent but
there's a question about whether these efforts are ultimately
paying off," said William F.
Ziebell, CEO of Gallagher Employee Benefits Consulting and
Brokerage. "Our 2019 Benefits Strategy & Benchmarking
Survey finds successful employers create and communicate
stronger cultural attachment points that resonate with the wants
and needs of talent — in support of their employees' health,
financial security and career growth. The data helps employers from
small, midsized and large organizations to determine where they
stand compared to similar companies and their benefits packages.
The report is a tool used to identify opportunities and match
organizations with cost-effective solutions, finding efficiencies
in building and communicating total wellbeing, boosting employee
engagement, and establishing retirement plans, medical and other
benefits that appeal to a company's current and prospective talent
pool. It helps build a better workplace."
Employers Leaning into High-Deductible Health Plans and
Technology to Curb Medical Costs
The high costs of medical services (67 percent) and prescription
drugs (42 percent) continue to put a significant burden on
employers' and employees' budgets. For more than a decade,
employers used cost-sharing methods to keep their expenses in
check, but the tight labor market has slowed this trend. Almost
half (47 percent) did not increase their employees' cost-share
spend in 2019.
As an alternative, forward-thinking employers are creating
health-plan structures based on incentives and value. For example,
2019 marked the first time the majority (51 percent) of employers
offered high-deductible health plans (HDHPs), which allow employees
to pay lower premiums. The trend has resonated with employees, and
employers note HDHPs had the second-highest enrollment (24 percent)
among their employees in 2019.
While high prescription drug prices are a cause for concern, the
survey surprisingly found many employers fail to capitalize on
tactics that could significantly reduce costs. For example, more
than half (55 percent) of organizations do not have or are not
aware of whether they have tactics in place to manage
specialty-drug costs. And many that have deployed tactics are not
tracking the results, often deferring to their health plan or
pharmacy benefit manager instead. Additionally specialty pharmacy
mandates that require employees to purchase specialty drugs through
a specific pharmacy have relatively low adoption rates (20
percent). By exploring options such as this, employers will help to
curb their organizations and their employees' prescription drug
expenses.
While there is room for improvement with prescription drug
strategies, employers have been eager to adopt proven methods to
reduce medical costs. Three of the most common include telemedicine
offerings (52 percent), health plan premium increases (42 percent)
and wellbeing incentives (41 percent).
Creative Voluntary and Wellbeing Benefits Allow Employers to
Stand Out
More than two-thirds (69 percent) of employers offer resources
to promote employee health or wellbeing. However, employers are
moving beyond traditional wellness benefits that focus solely on
employees' physical health, such as flu shots, tobacco cessation
and biometric screenings. Rather, 20 percent (up 2 points from
2018) have come to understand the need for a comprehensive
whole-health and wellbeing strategy to attract and retain talent in
a tight labor market.
In addition, the survey found between 31 percent and 40 percent
of employers have revamped their total-rewards offering by
enhancing supplemental and voluntary benefits, expanding leave
policies, adding wellbeing initiatives and/or enriching retirement
benefits as a way to appeal to their existing and prospective
employees. The most-often covered supplemental health insurance
electives in 2019 include autism treatment (64 percent), hearing
aids (48 percent), bariatric surgery (47 percent) and infertility
services or fertility treatment (46 percent).
For a significant number of employers, taking a holistic
approach to benefits and compensation offerings includes an
emphasis on employees' financial wellbeing, as personal financial
struggles can negatively impact productivity. Since 2017, 41
percent of employers indicate they have increased their emphasis on
their employees' financial wellbeing. Nearly 7 in 10 (69 percent)
of employers provide employees with access to financial advisors,
which is a 7 point increase from 2018. More than half (54 percent)
offer financial-literacy education opportunities, a 7 point
increase from the previous year.
Creativity and flexibility on the part of the employer have gone
a long way to align organizational goals with employees' lifestyle
needs. As a result, more than 1 in 4 employers allow telecommuting
either full-time (26 percent) or part time (29 percent).
Additionally, more than half (54 percent) of organizations offer
flextime, the ability for employees to transfer hours from one day
or work shift to another.
Employers Continue to Struggle with Program Adoption and
Employee Communication
While employers continue to experiment to find the right
benefits and compensation strategies that will enhance their
recruitment and retention efforts, participation, particularly with
wellbeing efforts, remains a challenge. Nearly 1 in 5 (19 percent)
employers indicate 20 percent or fewer eligible employees opt in to
such programs.
Communication efforts, or a lack thereof, are part of the
problem. In fact, reliance on a comprehensive communication
strategy is still relatively rare, with 85 percent of employers
noting they take a siloed approach or lack one altogether. Employer
goals for employee communications include ensuring the workforce
understands their benefits and how to use them (66 percent),
helping employees grasp the total value of their benefits and
compensation (56 percent), as well as increasing employees'
comprehension of the organization's vision, mission and values (41
percent).
"Effective communication is critical to effectively address HR
and operational challenges, and there continues to be a disconnect
between this high priority and the low level of interest it
receives," said Ziebell. "Forward-thinking employers understand
that they can pair creative voluntary and wellbeing offerings with
employee engagement and communication strategies, and this
ultimately leads to improved outcomes across the board that
maximize the value of their investments."
ABOUT THE 2019 BENEFITS STRATEGY & BENCHMARKING SURVEY
REPORT
Gallagher Benefit Services, Inc., the employee
benefits consulting and brokerage operation of Arthur J. Gallagher & Co., developed the
2019 Benefits Strategy & Benchmarking Survey to provide
employers with insights into how their peers are addressing benefit
and human capital challenges. The 2019 survey, conducted from
January to May of this year, aggregates responses from 4,155
organizations across the U.S. Additional survey results can be
found at www.ajg.com/US-Benchmarking-Report-2019.
ABOUT GALLAGHER
Arthur J.
Gallagher & Co. (NYSE: AJG), a global insurance
brokerage, risk management and consulting services firm, is
headquartered in Rolling Meadows, Illinois. The company has operations in 35
countries and offers client service capabilities in more than 150
countries around the world through a network of correspondent
brokers and consultants.
Contact:
Mary Schwartz, Gallagher
847.378.5893
mary_schwartz@ajg.com
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