Wages are still stagnant but employers have found something else to help attract and retain top talent.
(Bloomberg) Wages are still stagnant, yet employers have found something else to help attract and retain employees: health-care benefits. A good insurance plan has become a more vital tool than ever for hiring, according to a recent survey from the Society of Human Resources.
In general, the study found, companies are leaning on benefits to woo current and potential employees. Of the 460 human resources professionals in the survey, 33% said that in the last year their organisations used benefits of some kind—ranging from paid leave to wellness programs—to keep employees at all levels from leaving the company. That marks a surge from just 18% who relied on benefits to retain staff in 2012.
Of all the perks, however, health care was by far the most frequently used for employee retention. A full 80% of HR professionals in the survey cited health benefits, more than retirement and vacation, as a way to keep talent, up from 58% in 2012.
"There are ways and combinations that employers can use to make their health-care plans more attractive," said Evren Esen, director of the SHRM’s survey programs.
"A company may offer health-care coverage, but it might not be the best coverage. It might not include certain kinds of benefits such as Lasik surgery or bariatric surgery."
In addition to covering high-cost medical services, like fertility treatments and egg freezing, some companies offer a variety of health plans that a wider swath of employees find more attractive. If the benefits package includes a health savings account, for example, an employer might kick in some seed money to jump-start the fund.
Some employers may also cover a larger chunk of the employee benefit contribution, said Esen. Employers eat, on average, about 76% of the cost of health insurance premiums, according to the SHRM’s research. That jibes with data from the Kaiser Family Foundation's findings in its 2015 Employer Health Benefits Survey, which noted that workers on average contribute just 18% of the premium for single coverage and 29% of the premium for family coverage—a figure that hasn't changed statistically since 2010.
Things might change soon. Employers would like to curb the cost of health care, which has risen for both employees and employers over the last 10 years. Total premiums have increased 61%, according to Kaiser, with employees footing a larger percentage of that bill than ever. Respondents to the SHRM survey think employees will pay more than half of the premium in the near future. Yet with retention as the No. 1 issue facing companies, per another SHRM survey, employers can't transfer too much of the financial burden to their employees.
"They know it’s so important to employees, but the costs are making it very difficult for employers to continue to offer health care the way that they have in the past," said Esen. "They are stuck between a rock and a hard place."
Still, health coverage as a benefit isn't going anywhere soon. Despite predictions that the exchanges created by the Affordable Care Act would end the era of employer-sponsored health care, most employers haven't ditched the benefit. "That would be too shocking for employees. They’ve been in this relationship with their employers for so long regarding health care," said Esen. "Maybe more companies expected that they would move to a different type of system and they’re seeing that’s just not really possible at this time."
