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A survey published by Harvard Business Review and League reveals that 77% of employers surveyed believe that offering “innovative” health benefits to employees is a key factor in competing for workers in a tight job market. Of the 238 employers surveyed, 57% said that the number of health benefits offered is rising, and 51% said they believe health benefits will be an even bigger strategic priority in a competitive job market in the future than it is today.
“Health benefits now are all about engaging a productive workforce,” said Brian Marcotte, President and CEO of the National Business Group on Health. “At our annual summit, we asked employers what keeps people up at night, and the number one answer was the ability to engage people with health benefits. I fully expected it to be high claims costs or the cost of special prescription drugs, but the number one answer was employee engagement.”
It does seem that employer perspectives on health benefits are changing. The survey revealed that 92% of employers believe that health benefits demonstrate that an organization cares about its employees, and 57% said that the number of health benefits programs offered in their organization is increasing.
Such figures indicate that employers are starting to look more closely at a value on investment (VOI) approach when it comes to health benefits. Value on investment includes measures like as improved retention, higher productivity, and increased employee satisfaction; it goes beyond just looking at health care costs.
As employers increasingly find themselves competing over the same skilled workers, differentiating themselves from the competition becomes more and more important. One important way to stand out from the field is with innovative, employee-centric benefits. A 2018 survey by the Association of International Certified Public Accountants (AIPCA) revealed that 80% of employees would favor a job with benefits over the same job with no benefits but a 30% increase in salary.
The AIPCA survey suggests that desired benefits vary according to demographics. Baby Boomers tend to favor generous healthcare plans and retirement benefits, whereas millennials look for benefits that emphasize work/life balance, such as paid time off, remote work options, and flexible hours. Given the generational disparity, smart employers should consider offering flexible benefits or concierge benefits.
The Harvard/League survey notes that KPMG Canada recently consolidated 20 benefits programs into one package. The company allows employees to choose—up to a specified benefit amount—which benefits they want. Options include health and wellness, elder and child care, financial well-being programs, and several other benefits.
Placing Value On Wellness
Employers surveyed in the Harvard/League study believe that offering a generous health benefits package that includes proactive health screenings and wellness program benefits can ultimately lower health benefit expenditures. With an increasing emphasis on personalization, employers are looking toward providing options that met employees at their individual stages in life and ensure that employees are taking advantage of benefits that best meet their needs.
Marcotte believes that as employers improve benefit options and tailor them to the needs of individual employees, overall employee wellness will improve, and companies will be better able to manage their health benefits spending.
Wellness programs will play a key role in employer-sponsored benefits going forward. In a 2018 study by Mercer, half of employees said they want more emphasis on wellness from their employers—and that includes physical, psychological, and financial well-being.
Employers who continue to innovate, adapt, and personalize their programs to meet individual employee needs will remain competitive in the employment market of the future—and see increased VOI going forward.