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Using Benefits as a Retention Tool

Open enrollment has traditionally been the root of great frustration for many employees. Now, employers are adding ease to the process to improve the overall experience and retain their talent.  

By Zee Johnson  

With inflation lingering and many organizations in or approaching open enrollment, Alera Group’s 2023 Healthcare and Employee Benefits Benchmarking Report captured the most common employer experiences, sentiments, and challenges surrounding employee benefits and human capital management. And with 43% of workers citing not having good benefits as a reason for leaving an organization, the survey also revealed how leaders are using proven strategies to help retain high-caliber employees. 

Here are the survey’s most notable findings when it came to recent benefits trends. 

  • Medical plan rates increased. The majority of respondents (85%) said they experienced an expected rate increase on their medical plans, an average of about 8% year-over-year for comparable plans, even if there were no changes to their plan design. The leading cost drivers included disease-management programs, diabetes (91%), obesity (62%), and hypertension (73%). 
  • More employers are offering supplemental benefits to bolster retention. More than 75% of larger employers offer life insurance and that same number offers protection for long- and short-term disability. Just about all employers offer vision and dental insurance, and coverage for behavioral health challenges and substance abuse disorders has become more common.  
  • High-deductible health plans (HDHPs) decline in popularity. While HDHPs offer a lower monthly premium and a higher deductible, they only account for 29% of the plans that respondents offer. Most companies are moving away from HDHPs in favor of preferred provider organization (PPO) plans to remove barriers to primary care. 
  • Pharmacy specialty tiers multiply. More than half of survey respondents said because of rising pharmacy costs, they now offer four or more tiers in their pharmacy plans. 

In analyzing the findings, many employers recognized that too much technical talk can quickly bewilder employees who are just trying to make the best decision for themselves and their families. This perplexity leads to a rolling of the dice when picking a plan, often misguidedly choosing the more expensive option.  

“Since employees are also consumers and bring that mindset to their benefits, many risk thinking that a higher-priced health plan is the best when in reality, that’s not always the case,” says Sally Prather, executive vice president and employee benefits practice leader at Alera Group. “After all, a fancy sports car may be nicer and more expensive than a minivan, but it won’t be useful for a family of four or more. The same holds true for benefits.”  

Employers can make the process easier by streamlining their correspondence and making communications clear and concise. That way, all employees know exactly what they’re getting. “Benefits communication should include the details employees need to make good choices at the time they are choosing and using their benefits. They should speak to employees in a user-friendly way, avoiding jargon and ‘insurance speak’,” Prather says. “They should meet employees where they are in print, online, and in-person, since there are five generations in the workforce, each with their own learning style and communication preference.” 

Prather also says that leaders should be using company data to narrow in on the offerings that employees want to see most. The most insightful healthcare analytics that leaders can leverage include: 

  • usage rates; 
  • claims; and 
  • information regarding employee behavior, health, and well-being programs. 

This information, she says, has been quite powerful for her company and for clients. “We’ve seen it time and time again in working with our clients to analyze data they can then use to make improvements in plan design and costs. We help them gather and pore through information to cull trends and insights that support them in making positive changes and creating meaningful benefits programs that drive employee satisfaction.” 

But by far the best way to ensure employees are knowledgeable and confident in their selection is by allowing them to have a say in company offerings. This can happen by capturing feedback through benchmark surveys, suggestions boxes, one-on-ones, and more. In fact, an Achievers survey found that employees who say their employer takes meaningful action on their feedback are 37% less likely to job hunt, therefore, 37% of leaders are prioritizing better listening and taking action on employee feedback to engage and retain talent this year. 

“Employers need to develop feedback programs that make it easy for all employees to be heard and their input weighed and acted on with the appropriate measure,” she says, while urging employers to be ready to take action on the feedback they receive. “Employers must also be careful about the feedback they’re looking for, especially if they’re not prepared to act. Those who ask for feedback on what benefits employees would like to see offered and then don’t do anything about it or communicate well, can do more harm to employee relations than good.” 

Tags: Benefits, Talent Retention

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