In a Tight Talent Market, Most Employers Re-Think Benefits Offerings, According to NFP’s US Benefits Trend Report
Over the past 12 months, two trends – a growing war for talent and rapidly escalating healthcare costs – have caused employers to re-think their benefits policies, plan design and offerings. Nearly half of employers (45%) list “challenges related to rapid growth and/or higher than normal turnover” as their primary Human Resources strategic obstacle. And, with U.S. health expenditures projected to grow by 47% by 2028, two-thirds of employers say they want to implement an innovative benefits cost containment solution.
These are among the key findings from NFP’s U.S. Employer Benefits Survey, the company’s inaugural survey of HR decision-makers, published alongside its annual data-driven 2022 US Benefits Trend Report, featuring expert commentary and actionable insights for employers to address today’s unique workplace challenges.
“In the wake of the pandemic, a tight labor market and shifting employee priorities, the workforce has changed dramatically – and so have their needs,” notes Kim Bell, executive vice president, head of Health and Benefits, NFP. “It is more important than ever for employers to get benefits right, and those who respond with policies and offerings that promote mental health, access to quality healthcare and life-work integration will be the talent leaders of tomorrow.”
High Growth and Turnover Prompt Benefits Re-Set
According to the report, employers’ top choices to improve employee satisfaction center on more benefit choices and customization (37%) and better communication/education (33%), underscored by most employers initiating a benefits “re-set” with an eye toward employee mental well-being and flexibility.
Over the past 12 to 18 months, 65% of employers surveyed have implemented alternative work schedules, and three-in-four intend to make this permanent. Two-thirds have adjusted their PTO and leave policies to support employee mental well-being. More than half offer online mental health resources. Roughly one-third provide health coaching (35%) and in-office mental health resources (29%), and 22% invest in peer support groups.
“Nearly every component of employee well-being – mental, physical, financial, social, career – has suffered over the past two years, prompting employees to rethink their jobs and benefits priorities,” said Deb Smolensky, head of Well-being and Engagement, NFP. “While employees want fulfilling work experiences, they want their lives – not their work – to come first. The goal is no longer work-life balance, its life-work integration.”
When it comes to time away from work, employers are also expanding the variety and prevalence of leave options. In the past year, more than half (54%) have reviewed or changed their leave policies. Nearly one-in-three employers plan to offer marriage leave (33%), enhanced bereavement leave (32%) and sabbatical leave (29%). More than two-in-ten will offer study/exam leave (22%) and volunteer leave (21%), while 13% will offer surrogacy leave.
Employers Eye Cost-Containment Strategies to Lower Premiums and Prescription Drug Spending
Against a backdrop of rapidly growing healthcare expenses, two-thirds of employers want innovative cost containment solutions. More than half (53%) would need the cost savings percentage to be between 11% and 15% to implement a cost containment solution.
When considering cost containment, roughly three-quarters of employers believe that each of the following are important factors: increasing employee access to quality providers (83%), transparency in cost (79%), reducing member out-of-pocket expenses for pharmaceutical costs (79%), ROI (74%) and member disruption (74%).
“Member accountability and consumerism were an employer’s main priorities for lowering benefits expenses,” observes Heidi Cottle, head of Cost Containment Strategies, NFP. “Today, employers realize ‘total cost transparency’ and holding the provider accountable is also essential. Next generation plan design simplifies the complexity of the healthcare ecosystem by adding incentives that encourage informed access, quality and cost decisions.”
Other key survey findings related to cost containment include:
Rising Prescription Costs: Employers are concerned about the rising cost of prescription drugs. Most (93%) are at least somewhat concerned, and two-thirds (68%) are very concerned. They have seen the most significant spending increases in commonly used brand drugs (33%) and specialty drugs (30%). To date, benefit design has had the most positive impact on reducing prescription drug spend (22%).
Healthcare Delivery Alternatives: More than one-in-three employers (36%) cite “cost containment” as a primary driver for considering healthcare delivery alternatives. Half have introduced virtual solutions in mental health (55%) and primary care (54%) in the past 18 to 24 months. Roughly one-third have implemented virtual solutions for urgent care (37%) and emergency care (31%).
HR Technology News: Broadleaf Results Announces Promotion Of David Savarise To President
[To share your insights with us, please write to firstname.lastname@example.org]