Retention levers in benefits  

February 10, 2022

“The Great Resignation.” “The War for Talent.” “The Pandemic Split.” Okay, we made that last one up – but whatever you want to call it, we are in the thick of it. Regardless of the industry, employee attraction and retention is one of the highest priorities on HR Leaders’ minds right now. Employers are looking for opportunities to reduce turnover now and in the future. Here are a few ideas to get started.

What Do Your Employees Need?

The best place to begin is understanding which employees you want to attract, and which employees you need to retain. Tools like an external labor market analysis can document the number of skilled employees for your roles versus the jobs available for those employees. This may help some employers focus their efforts in certain markets.

Employers are also utilizing surveys focused on employees’ “unmet needs” – where they ask for feedback on their biggest and smallest worries on a day-to-day basis. Moving beyond job satisfaction to needs brings new insights that lead to new interventions or areas of focus in your rewards programs. Focus groups, oftentimes virtual with new crowdsourcing apps, can also yield important, first-hand data and commentary directly from your workforce.

Are Your Benefits Helping or Hurting?

HR leaders are telling us: “I want to enhance our benefits to make it hard for our employees to leave.” That quickly leads to an important question: How much are you willing to invest? The answer may depend on the cost of turnover within an organization and the opportunity to reduce those expenses. But regardless of budget, there are many opportunities for enhancement:

• No Cost Benefits – Voluntary, 100% employee-paid benefits are not new, but they are evolving. Making programs available such as elder care, auto/home insurance, student loan refinancing and employee discounts may help meet employees’ needs without adding to an employer’s budget.
• Digital Health Solutions with Positive ROI – Digital health solutions focused on specific conditions (e.g. musculoskeletal pain, diabetes, infertility) can supplement your core health benefits program.  Oftentimes, an employer pays only for the employees that utilize the program, and many vendors have demonstrated positive ROI and put guarantees around their programs. The end result is a healthier workforce and a healthier bottom line.
• Lifestyle Accounts – Rather than selecting a few new programs, employers can fund an account offering a broad range of options and let each employee select what they need and want. These “Lifestyle Accounts” can provide creative and flexible options for employees. A Lifestyle Account can be a vehicle to pay for gym memberships, camping equipment, therapy expenses and numerous other expenses.
• Medical Benefits – Medical benefits have long been table stakes. For the first time in the 36 years of Mercer’s National Survey of Employer-Sponsored Health Plans, deductibles actually came down a bit. Furthermore, from our high tech industry survey, we are seeing employers offer at least one plan where individual coverage is free to the employee. If your budget allows for some spend, revisiting plan design and employee premium contributions may allow further differentiation from the competition.
• Retirement Savings – Don’t overlook the ability of a strong 401(k) match to attract and retain employees. If your budget allows, this may be the time to consider an increase to your matching formula. For a more innovative approach [HS1] consider allowing employees to contribute to their HSA and still receive their employer’s matching contribution in the 401(k) plan.

Can You Be More Flexible?

In our Health on Demand survey of 2,000 employees in the US, more than half (59%) of US workers rated flexible working as highly or extremely valuable. Remote work, 4-day work weeks and other structural changes were also rated as highly valuable. But flexibility does not just pertain to work/life balance – it can take on various forms as it relates to benefits, the options you make available and even your approach to PTO. When you recognize the differences among your employees and their needs, there’s usually no other option, but to offer options.

It is never too soon to better understand your workforce and their needs. And, many of these ideas can be implemented at any time during the year. Regardless of where you sit in your benefits planning cycle, now is the time to take a deeper dive in how you might differentiate your offerings and perhaps consider some new ideas along the way. Perhaps your efforts will allow your company to talk about The Great Retention in the years ahead.