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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
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
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