Competition for talent and rising costs are the top areas that are affecting how employers offer benefits, a recent survey found.
When asked what the key issues influencing benefits strategy are, 80% of employer respondents said competition for talent, 67% said rising costs, 41% said a focus on inclusion and diversity and 39% said increasing mental health problems. Employers could select three options.
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The 2023 Benefits Trend Survey was conducted between March and April by consulting firm Willis Towers Watson and included participation from 595 U.S. employers. The employers have a total of 8.9 million employees.
Two thirds of the employer respondents believe that their current benefit plan is effective in recruiting and retaining employees. But to improve their offerings, 42% said they plan on focusing on financial wellbeing and short-term finances, 37% said mental health support, 34% said inclusion and diversity and 29% said retirement plans and long-term finances.
“Employee benefits are significant differentiators in attracting and retaining key talent, and companies must prioritize in order to be an employer of choice,” said Courtney Stubblefield, managing director and insights and commercialization leader of health and benefits at WTW, in a news release. “Employers must focus on what their workforce needs by assessing the value of benefits and their impact on employees. This can be challenging given the complexity of benefit programs and the need to simplify operations.”
About 75% of employers said they plan to focus on managing costs. In addition, 46% of respondents said they’re worried about high inflation and 36% anticipate feeling the effects of the “weakening economy and current business environment.”
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In order to manage the cost of providing benefits, 66% of employers improved the terms in their vendor contracts, 43% increased employees’ share of costs and 31% “bundled” several services into a package from one vendor.
WTW said employers have to find the “right balance between managing costs and enhancing your portfolio, especially across wellbeing areas.” They can do this by engaging with employees through surveys, town halls and focus groups.
“The current state of both the economy and labor market is putting employers in a precarious position, balancing the competition for talent with the rising cost of services, while budgets remain tight,” said Debby Moorman, managing director and head of health and benefits of North America at WTW, in a statement.
The consulting firm also recommended measuring and analyzing the performance of benefits programs so employers can make changes when needed. In addition, employers should leverage technology in their offerings and make sure that employees have a choice in the benefits that best address their diverse needs.
Photo: VectorInspiration, Getty Images
