Faced with Record-Low Unemployment, More Employers Are Investing in Employee Benefits Rather than Reducing Costs

ROLLING MEADOWS, Ill., November 1, 2018 – Attracting and retaining talent remains the number one operational priority of 60 percent of employers according to the forthcoming 2018 Gallagher Benefits Strategy & Benchmarking Survey. That figure has increased two percentage points from 2017, and is in sharp contrast to the 37 percent of employers who ranked controlling benefit costs as the top priority, a figure that declined six percentage points from 2017. And nearly half (45 percent) of employers chose not to increase employee cost sharing of healthcare benefits.

“While keeping a lid on costs is always important, we are seeing a clear shift in the market as employers are having to compete more aggressively for talent in the face of the lowest unemployment rate in nearly 50 years,” said William F. Ziebell, President, Gallagher Employee Benefits Consulting and Brokerage. “Today’s workforce is comprised of five very different generations, meaning it is no longer good enough to simply offer standard medical coverage and a competitive retirement plan. The 2018 Benefits Strategy & Benchmarking Survey uncovered best practices that address employees’ total wellbeing, which will positively impact organizational retention and recruitment efforts.”

Employers Taking a Holistic View of Employee Wellbeing

The Benefits Strategy & Benchmarking Survey found forward-thinking employers are taking a more holistic view of employee wellbeing and developing strategies that both engage and appeal to their team. For example, more than half of employers (55 percent) now provide a telemedicine component, allowing employees to virtually connect with clinicians. That is an increase of more than 100 percent from 2016, when just 24 percent of employers utilized telemedicine. In addition to saving employees time, telemedicine has been shown to reduce expenses for both employers and employees.

The report also found employers are looking for ways to reduce medical expenses by encouraging their employees to live healthy lifestyles. The most popular physical wellbeing benefits include flu shots, tobacco cessation programs, health risk assessments and biometric screenings.

Because financial stressors can negatively affect productivity, financial wellbeing proved to be another area of interest for employers. More than six out of ten employers (62 percent) now offer employees access to financial advisors and nearly half (47 percent) provide financial-literacy education to help employees make better saving and spending decisions. The research also showed 43 percent of employers are taking steps to gauge employee retirement readiness, compared to previous years (33 percent in 2016).

Identifying and Changing Benefits Based on Employee Preferences

Because the tightening labor market has made it easier for top employees to leave their jobs voluntarily, more employers are tweaking existing benefits or adding new offerings. The goal is to provide employees with more choices that will better fit their own lifestyles and needs. Examples include:

• Health Benefits Choice: More than one in five employers (22 percent) now offer employees three medical insurance plans, and 13 percent offer four or more options.

• Tuition Assistance: Nearly half (46 percent) of employers provide tuition assistance, which is up from 42 percent in 2017. The most common tuition reimbursement amount totaled $5,250 annually per employee.

• Life Insurance: Nine of ten (89 percent) employers said they now offer employees life insurance, which is a five percent increase from 2017.

• Employee Assistance Programs (EAPs): 70 percent of employers provide access to EAPs, which is an 11 percent jump from 2017.

Small Segment of Employers Fully Engage Employees around Workplace Benefits

Given many employee rosters include a multigenerational workforce, it has become increasingly important for employers to offer benefits that appeal to each segment of their workforce. Surprisingly, just 13 percent of employers said they have a comprehensive communication strategy to guide how they collect and share benefits information with employees, and most (74 percent) noted they have a communication strategy for just some of their benefits and wellbeing offerings.

“More than half of employers (59 percent) expect to increase their headcount over the next two years. That will be a challenge considering there are currently more job openings than individuals to fill those positions,” Ziebell said. “As a result, employers must get smarter about working within their budgets to offer benefits and compensation packages that engage their teams. At the same time, it will be imperative for organizations to clearly communicate the offerings and measure their effectiveness. The days of ‘set it and forget it’ in regards to compensation and benefits are over.”

For more information about the 2018 Benefits Strategy & Benchmarking Survey, visit: www.ajg.com/NBS-2018.

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ABOUT GALLAGHER
Arthur J. Gallagher & Co. (NYSE: AJG), a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. The company has operations in 34 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.

ABOUT THE BENEFITS STRATEGY & BENCHMARKING SURVEY
Gallagher Benefit Services, Inc., the employee benefits consulting and brokerage operation of Arthur J. Gallagher & Co., developed the Benefits Strategy & Benchmarking Survey to provide employers with insights into how their peers are addressing benefit and human capital challenges. The 2018 survey, conducted from January to April of this year, aggregates responses from 4,241 organizations across the U.S. Additional survey results can be found at www.ajg.com/NBS-2018.

Millennial Engagement in Health

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Jonathan So, Senior Director of Health Care Initiatives, recently served on the panel focused on Millennial Engagement in Health and Wellness in the workplace at the 2015 Employer Healthcare & Benefits Congress in Orlando.  The session, which was was moderated by Vic Villanueva of the ROC Group, centered on the opportunities and challenges in engaging Millennial employees (those born between 1980 and 2000) in their health and wellness benefits. Jonathan’s comments centered on the need to get this population engaged as they will represent 50% of the workforce by 2020 and have no established behavioral patters when it comes to interacting with the health care system.

In  one question centered on busting stereotypes regarding millennials, So said, “I think that many regard millennials as not being loyal to their employer. So a lot of employers don’t want to invest in their young talent who may leave for another job at any time.  I actually think that this generation is one of the most loyal.  If you gain their trust and give them opportunities to grow, they will run through walls for you.  They are your biggest and loudest champions, but they can also be your most vocal detractors. They smell inauthenticity immediately and you can lose them just like that.  Its a population you need to win over every day.”

Another question was in regards to busting health care myths.  So said, “The need to get a CEO involved in health are is a huge myth.  Millennials couldn’t care less about whether the CEO is participating in the walking program. The people who need to be involved is the frontline managers because they are the ones who operationalize the culture in your organization.  They are the key to the success or failure of any initiative.  This is especially important with millennials because the oldest millennials are now 35.  They are or will represent most of an organizations front line supervisors within the next few years and if they are jaded, everyone else will be too.”

Jonathan managed to snap a selfie with the panel just before they exited.

To learn more about the Employer Healthcare and Benefits Congress, you can follow this link: http://www.employerhealthcarecongress.com/

If you would like to share your experiences with millennial engagement at your organization, contact Jonathan So at jso@detroitchamber.com