Why your benefits plan must evolve to meet this moment

As the economy continues its recovery from 2020, organizations are seeing their revenue and headcount grow. Now pressure on their talent recruitment and retention efforts, a critical means of staying competitive, is mounting.

The talent pool is expanding as remote work offers an opportunity to court candidates from beyond commuting range. But this also brings challenges as top-tier employees now have far more options and can be enticed by higher pay and other perks. With some companies experiencing turnover of more than 15 percent, employers need to look critically at what they offer.

“Compensation has always been the quick solve in the war for talent,” says Vince Giacalone, Area Vice President, Central Ohio, at Gallagher. “Now, companies must look outside the mainstream solutions and explore employee benefits as a way to not only attract, but retain top-tier talent.”

Smart Business spoke with Giacalone about the role benefit plans are playing in the war for talent.

How did the pandemic affect employee benefits plans?

Across the board, there’s been an increase in major medical spending by employers. That direct injection of capital stems from less utilization. Overall, in 2020, employees utilized health care, and by extension their health insurance, less than was anticipated. That’s because they put off unnecessary procedures, such as dental cleanings and checkups with their physician. And so with the savings organizations gained through low utilization, they’ve been able to implement greater employer contributions and more robust offerings. For example, before the pandemic there may have been one plan option. Now it’s moved more so into a per employee, per class approach, tailoring plans to different employees.

Another trend is the addition of cost-saving measures to make sure that employees can realize the full breadth of their plan. That involves the inclusion of voluntary benefits such as life hospital indemnity plans, vision and dental.

How are benefits evolving to cover remote workers?

Some 50 percent of the workforce is now completely remote with no current plans to come back, so employers should look at how benefits plans need to be structured to accommodate remote workers. That makes understanding certain plan aspects more important, such as network — are hospitals and physicians where employees are now working and living included in the plan network? Employers need to make considerations in their plan design, network and total benefits offerings to include remote employees where they are. That’s led to a trend toward telemedicine as a way to both control costs and to account for the total workforce — those who are remote and those who work on-premise.

Why should organizations address employee well-being?

There’s increased attention on emotional well-being and mental health in organizations’ overall benefits packages. The pandemic has brought to the forefront the idea of whole employee wellness. So employers increasingly are offering voluntary benefits and other well-being products to help employees.

Embracing remote work is one of the main ways employers are addressing well-being. What that really means is understanding where and how each employee works best. It also means understanding the benefits of work-life balance and instituting programs within the organization to try bring that to the forefront.

Gone are the days of benefits that are just major medical and an accident plan. It’s now about life, health, family planning, financial literacy and more. That presents an opportunity for progressive-thinking companies to compete for top-tier talent with the help of a complete benefits package. Whether it’s attracting or retaining talent, offering employees a full, well-rounded benefits package — major medical, voluntary benefits, financial literacy, mental health, coaching, remote work — has never been more important. This is an opportunity to gain a competitive advantage by meeting head on the new day of work, which now includes remote and hybrid arrangements. It’s a chance, through an intentional focus on total employee wellness, to build a work place that attracts and retains talent, because organizations need it now more than ever.

Insights Insurance is brought to you by Gallagher