As the labor market continues its competitive trajectory, a growing number of employers are turning to new and expanded benefits to sweeten the pot in hopes of keeping employees and luring new candidates.
On the heels of other findings examining growth in employers’ benefits offerings, new data from LIMRA reveals that 60% of employers say they are considering adding a new insurance benefit within the next two years―roughly double the interest employers expressed five years ago.
Interest is even more prevalent among mid-sized and large companies: 27% of employers with 100-999 employees say are somewhat likely to offer new insurance benefits over the next two years and 42% say they are very or extremely likely to. Among employers with 1,000 or more employees, 37% say they are somewhat likely to offer new insurance benefits and 45% say they are very or extremely likely to.
If all of these organizations follow through, about 784,000 employers will introduce a new insurance benefit over the next two years, reaching more than 86 million employees, LIMRA reports.
Interest in benefits is growing in part because of the tight labor market, explains Alison Salka, senior vice president and head of LIMRA research.
“Competition for talent is fierce, and benefits are a way to stand out,” she says. “Having a wide variety of benefits to appeal to different employee segments is a way to differentiate. Also, the benefits offered inform potential employees about what the company values. For example, an employer who offers a flexible schedule, work-from-anywhere one month a year, and wellness benefits shows an employee orientation.”
Related: Learn more about the value of an inclusive wellbeing program with Microsoft VP, global benefits and mobility, Fred Thiele at HRE‘s Health & Benefits Leadership Conference next spring in Las Vegas.
When it comes to new benefits employers are considering, disability (both short- and long-term) and vision care benefits were mentioned most often, LIMRA reports. Employers that do not currently offer insurance benefits are most often considering adding major medical coverage, while employers with no existing insurance benefits are also looking to add dental insurance, life insurance, short-term disability and vision care coverage.
But, as Salka says, smart employers also are considering adding other non-insurance benefits that employees overwhelmingly value, such as work flexibility, caregiving benefits and wellness programs. Given the current competition for talent, coupled with the increased emphasis on job flexibility among workers, the LIMRA study finds more than half of employers (53%) are interested in introducing at least one new non-insurance option to address a wider array of their workers’ needs.
The LIMRA research isn’t the only recent data to find that employers are largely looking at enhanced benefits, from tried-and-true offerings like health and disability to more innovative like family benefits and pet insurance.
A recent survey of more than 4,000 organizations from consulting firm Gallagher finds that employers are turning to pay increases as well as more diverse benefits to capture the interest of current and potential workers.
While 78% of employers are increasing salary budgets, which increased six percentage points from last year, they’re also recognizing the importance of changing benefits to appeal to a diverse workforce. Such perks as fertility benefits/infertility treatment, gene therapy, bariatric surgery, pet insurance, critical illness coverage and gender reassignment surgery are among the benefits that organizations are increasingly turning to, Gallagher’s survey finds, while others are enhancing health plan access. For instance, the survey found that more than two in five organizations (42%) now offer medical coverage to domestic partners and about half as many (24%) extend this benefit to part-time employees.
And human resources consulting firm Mercer finds that more than two-thirds of U.S. employers say they are looking to enhance their health and benefits offerings next year in order to attract and retain talent. Better healthcare access, more affordable medical care and increased family-friendly benefits are all on tap, Mercer found.
“In today’s complex environment, employers who leverage an array of benefits that appeal to a diverse workforce are better positioned to attract the right person for the right job—and keep them,” William Ziebell, CEO of Gallagher’s benefits and HR consulting division, told HRE recently.
Salka says that when thinking and reconsidering their total rewards package, employers should evaluate the employees they’re looking to attract and make benefits decisions accordingly. For instance, for those looking for entry-level employees, benefits that include student loan support and formal development programs/opportunities would be valuable, she says. “Benefits are an extension of the company culture and will always be a key component of a good talent strategy,” she says.
All in all, increased movement on benefits is a good thing because it encourages innovation and a focus on employee needs, Salka says. “It’s not a race, it’s an opportunity,” she says. “And if employers offer similar benefits, that’s not a bad thing. Benefits are only one reason a candidate selects a company.”