Can benefits help combat the ‘talent tsunami’?
With employee turnover on the rise thanks to a hot job market and soaring burnout rates, employers are more aggressively leveraging benefits to attract and retain talent.
That’s according to a new report from Gallagher, which finds that with HR and talent managers anticipating a sharp increase in voluntary exits as the economy improves, there’s a sense of urgency to ensure benefit and compensation offerings appeal to the needs of current and prospective employees.
Specifically, the research finds that 71% of the nearly 4,000 employers surveyed see medical and pharmacy benefits as key assets to combat what Gallagher calls the “talent tsunami.” And 41% of surveyed employers said they’ve added more or different voluntary benefits to meet recruitment and retention objectives this year.
“This is one of the most complex labor markets in history,” says William Ziebell, CEO of Gallagher’s benefits and HR consulting division. “Our economy is growing, yet organizations are having trouble filling positions, thus putting employees in the driver’s seat. Decision-makers who base their comprehensive benefits and HR offerings on data and analytics, and effectively communicate their benefits and compensation strategies, will ultimately set their organizations up for success today and into the future.”
Among popular voluntary benefits employers are turning to are accidental death and dismemberment (offered by 87% of employers), employee discount programs (70%) and pet insurance (offered by 20%). Gallagher experts predict pet insurance, especially, will be a more widely embraced benefit offering in the coming years, especially as more employees work from home and adopt pets; researchers predict that 27% of employers will offer the benefit in 2023.
Overall, the pandemic has had a dramatic impact on employee benefits strategies, with many organizations turning to a variety of benefits to help keep workers safe, connected and productive. Many turned to expanded medical coverage, telemedicine, emergency time off, caregiving and childcare support over the past year and a half. Others got more creative with work-from-home stipends, tutoring and homeschool help and more.
And while it’s not clear if organizations will keep those COVID-era benefits post-pandemic—in fact, recent research from career development Intoo suggests that most companies won’t keep pandemic-era benefits—it seems likely employers will continue turning to benefits at least for the foreseeable future to help with their latest challenge—a hot talent market. Research generally finds that workers tend to stay at jobs for certain employee benefits and are likely to look for other jobs if they aren’t happy with their offerings. A Gallup poll conducted in March, for instance, found that one in six U.S. workers were working a job they would otherwise leave simply to keep the healthcare benefits.
Employers are struggling to manage the fast-changing job market as many employees are leaving or considering leaving their current jobs. Many organizations, especially ones with hourly workers, are having trouble filling positions. It makes sense that benefits will be beefed up to entice talent, experts say.
In fact, Target just announced it would offer all U.S. front-line employees debt-free assistance with certain educational costs through provider Guild Education. Target’s largest competitor, Walmart, has offered that same popular benefit for employees through the same provider since 2018.
Several other companies, like Momentive, Podium and Mailchimp, are giving workers more paid time off and recently embraced collective weeks off for their workers to help combat burnout and keep workers happy and committed.
“The pandemic elevated the importance of having healthcare offerings that appeal to employees, keeping them healthy, productive and engaged,” Ziebell says. “Our findings confirm what our consultants are hearing directly from employers: Organizations are selectively evolving their approach to traditional and voluntary benefits to improve their recruitment and retention efforts. And when new opportunities arise, decision-makers are closely evaluating the costs, the anticipated outcomes and the likelihood employees will utilize them. This will ultimately give them a competitive advantage.”