For many employers, 2021 has been a year of frustration. Adjusting to COVID restrictions and dynamics has been challenging enough, and supply chain issues, labor shortages, and employee disengagement have piled on, leaving executives feeling like there is nothing they can do to make people happy.
Despite the public criticism of corporate leaders, many are trying to do right by their people. Safety protocols have been put into place. Requested benefits for mental, physical, and financial wellness have been added in huge numbers. Corporations are now leaning into ESG issues and trying to demonstrate that they have purpose beyond profit.
And yet, employers are finding that no matter how hard they try, the cost of attracting and retaining talent keeps going up while it feels like the return on that investment is decreasing. Workers are quitting in greater numbers than ever before. They are not using the benefits they requested. And they continue to voice displeasure with health & safety issues, workplace flexibility, and the failure of corporations to focus on values instead of just value.
Now, with compensation budgets stretched to their breaking point, many employers are out of ideas and out of money.
The good news is that there are solutions that benefit all parties and actually save employers on their compensation spend. Here are some of the best ideas we’ve seen making huge impacts in the past 12 months:
Redesigning Health Insurance
The biggest benefit spend is often the best place to start. Whether you are a small organization (less than 50 employees) or a large one, unbundling your health insurance plan can not only save big bucks, it can reduce deductibles and out-of-pocket costs for your people. For bigger companies, the savings on the pharmacy spend alone often reach into seven figures.
Rethinking Open Enrollment
Many organizations are still using a one-time cram session to education their people on the available benefits. Not only is this information overload, it comes from sources employees may not trust (the vendors selling the benefits) and it can be very hard to understand how individuals to understand how these programs relate to their specific circumstances. Talking about benefits and sharing the stories of how employees have leveraged their value throughout the year is a good start, and an even bigger engagement booster is providing unbiased, confidential, human guidance to help employees understand how to choose and use benefits based on their unique, personal situation.
Reimagining Compensation Strategy
For decades, compensation strategy has been a very mathematical design: dollars + benefits + perks = compensation. Unfortunately, that is not how today’s world works. More workers are concerned about purpose, trust, and outcomes instead of just thinking about the quantities of stuff in their compensation package. Employers who connect the dots in four crucial areas of wellness are winning the war for talent:
- Demonstrating commitment to corporate purpose. Leading with purpose—with a focus on how your treat your employees—yields outsized returns and does not have a hard dollar cost. But it does require strategic commitment to and measurement of “soft” goals.
- Building trust with employees. An Oxford study revealed that 54% of workers—more than all other responses combined—identified “trust” as the primary reason they would (or would not) recommend their organization as a place to work. That means giving workers more autonomy, flexibility, and recognition. This starts from the top and requires systematic implementation, and it is another way to attract and retain talent with no cost.
- Mental, physical, and financial wellness. The US Chamber of Commerce reports that wellness programs return an average of $1.50 to $3.00 for every dollar spent. Those returns are hard to find in any other business investment. The problem? Despite the potential value of these programs, only 24% of workers participate and half that many believe they actually work. But there is hope (read on to No. 4).
- Resource navigation. While many companies have spent big dollars and lots of time rolling out programs across the wellness spectrum, many employees just see a longer to-do list. Employers who provide confidential, unbiased guidance on how to make these programs work for each individual AND the opportunity (on the clock) to actually make progress are reaping huge rewards.
Every idea presented is proven to reduce compensation spend, improve employee outcomes, and increase retention. The challenge is that each of these ideas is a departure from business-as-usual and requires commitment from the highest levels of an organization to realize the potential rewards. But employers with the courage to reconsider how they approach compensation strategy have the opportunity to improve culture, help their people, and green the bottom line.