As the U.S. unemployment rate has dropped, the battle to recruit and retain top talent has intensified. Accordingly, employers are turning to benefits as a way to differentiate themselves from the competition.
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The heightened need for strong benefits and compensation packages is a resonating theme throughout the 2017 Arthur J. Gallagher & Co. (Gallagher) “Benefits Strategy & Benchmarking Survey,” which is based on data from 4,226 organizations across the United States.
The survey, now in its fifth year, examines how employers are using benefits and compensation to differentiate their organizations. Notably, Gallagher research shows a growing emphasis on addressing the needs of the whole employee, integrating emotional, financial, social, and career well-being with physical health.
Shift in Employer Thinking from Wellness to Well-Being
Historically, wellness programs have focused on improving physical health as an extension of medical benefits, but this view is changing.
While reducing healthcare costs remains the main driver for offering a wellness program (60 percent), employers also cite investing in the organization’s culture (43 percent) and improving employees’ work experience and satisfaction (37 percent) as other top motivators. This broader, more holistic approach is also demonstrated by the increase in programs now covering financial well-being (34 percent), volunteer opportunities (28 percent), and community engagement (27 percent).
“This shift in thinking is one of the reasons we expect 70 percent of organizations will offer wellness programs by 2019,” said William F. Ziebell, president, Gallagher Employee Benefits Consulting and Brokerage. “When employers rebalance their priorities to include benefits like professional development and a workplace culture that promotes employee engagement and total well-being, they differentiate themselves in the talent marketplace.”
Leave Policies Play Role in Employee Attraction and Retention
The need to appeal to younger workers with parental leave policies has prompted a discussion about supporting the total well-being of employees as they try to solve the work-life equation.
However, despite headlines showcasing generous maternity and paternity leave policies, the Gallagher survey finds a vast majority (64 percent) of organizations do not offer paid parental leave apart from short-term disability. In fact, only 22 percent offer this benefit to both mothers and fathers.
Retirement Readiness Key to Higher Productivity and Engagement
Retirement benefits better equip employees for their financial future and give them greater peace of mind in the present.
Yet, the survey finds that while early half (48 percent) of employers use auto-enrollment in retirement plans to help employees improve savings, only 37 percent are measuring retirement readiness.
“During every life stage, employees encounter financial obstacles like paying student loans, buying a home, or paying for daycare,” said Ziebell. “These impact retirement savings and can result in employees needing to stay on the job longer than they’d like. An aging population often has higher healthcare costs and limits opportunities for younger employees to advance. So when organizations help their employees identify and manage these financial stressors, it often results in higher productivity and engagement.”
Important to Take a 360-Degree View
The 2017 “Benefits Strategy & Benchmarking Survey” underscores the importance of taking a 360-degree view of an organization’s benefits and compensation strategy, specifically through the lens of employee attraction and retention. Micro and macro-economic factors, such as the tightening labor market and shrinking candidate pool, make it even more imperative. As employers gain a deeper understanding of how these different elements work together, they can see more clearly how to align human resource and organizational strategies to drive better business results.
