Employee benefits offerings are key to business success – organizations are realizing this truth as one-third of US corporates have increased their benefits offerings in the last 12 months. This has come out in the recently released SHRM’s ‘2017 Employee Benefits Study’.
Health (22%) and wellness (24%) benefits have seen the most growth in the past one year. The top reason for increasing benefits was to remain competitive in the talent marketplace. And HR professionals indicated that of the various benefits that they offered, the most effective of them was the flexible work arrangements. In 2016, about 68% organizations were experiencing recruiting difficulty and skills shortages for certain types of jobs. They needed to focus on providing a competitive benefits package to retain and attract top talent. With 91% of employees rating health care benefits as important, it is an important aspect of employee job satisfaction.
“Benefits can be leveraged to help with common recruiting strategies, including increasing retention efforts, expanding training programs to help improve skills of new hires, using/enhancing an employee referral program, offering more flexible work arrangements, providing monetary incentives to candidates (e.g., signing bonus) and offering new job perks.” And an interesting finding is that 15% had increased flexible working benefits, which could be another cost-effective way to enhance employee benefits while going through difficult financial times or organizational change.
Only few organizations (6%) had decreased benefits overall. Most commonly, organizations had to decrease the level of benefits to remain financially stable, whether it was due to increasing costs of benefits, economic factors or poor organizational performance. Other organizations had experienced a merger or acquisition or had implemented other strategic changes to their organization or to their benefits package.
Health Care Benefits
Given the fluidity of workplace these days, an important aspect from the Study is that there has been an increase in the number of organizations offering coverage for part-time employees, with one-third of organizations (34%) offering coverage in 2017, up from 27% in 2014. However, although most organizations shared the cost of premiums for part-time employees, fewer paid the full cost of premiums for these employees than for full-time employees, and 8% required costs to be fully paid by part-time employees.
Providing health care benefits to employees’ spouses and domestic partners is a strategy many organizations are using to help recruit and retain talent. Most organizations offered health care coverage to full-time employees in 2017—the same level as the past four years—and nearly all of them paid at least a portion of the health care coverage costs, with 16% covering the full cost. From 2014 to 2016, there was a large increase in coverage of both opposite- and same-sex spouses.
Compared with all other benefits, organizations were most likely to make improvements to wellness benefits. Nearly one-quarter of organizations (24%) had increased wellness benefits offerings in the past 12 months. The most common wellness benefit was providing wellness resources and information (71%), and 62% gave wellness tips or information at least quarterly in the form of a newsletter, e-mail, column, tweets, etc. About three out of five organizations (59%) offered a general wellness program.
As HR professionals are well aware, employee benefits play an important role in retaining employees. Although many employees (89%) are at least somewhat satisfied with their jobs, 40% considered the possibility of seeking employment elsewhere in the next 12 months. The leading reason for employees looking for external positions was higher compensation/pay (56%), followed by better overall benefits (29%). Other reasons for leaving that could be related to benefits were career advancement opportunities (21%) and flexibility to balance work and life issues (18%). In terms of motivation to stay with an organization, compensation/pay (44%) topped the list, followed by flexibility to balance work and life issues (34%) and the overall benefits package (32%).
Paid Leave Benefits
Paid leave is considered a very important aspect of overall job satisfaction by employees, and the most HR professionals agree that taking vacation is important for positive talent management outcomes like morale, wellness, performance, retention and productivity. The value of paid leave benefits is reflected by most of organizations (96%) that provided paid leave for the purpose of vacation, although fewer organizations (81%) offered paid time off for sickness. In addition to vacation and sick leave, one-third of organizations (33%) opted to provide paid personal leave. Most organizations (91%) paid at least some portion of unused paid vacation leave upon voluntary termination, and two-thirds (68%) allowed employees to roll over at least some of their unused paid vacation leave.
Work-Life & Convenience Benefits
Two out of five organizations cited offering more flexible work arrangements as one of the most effective recruiting strategies. 62% allowed some type of telecommuting, and 57% offered flextime, allowing employees to choose their work hours within limits established by the employer. The biggest change for flexible working benefits was an increase in telecommuting on an ad-hoc basis (59%) over the past five years. Not only has the workplace grown more flexible, the culture has become more casual, with more organizations allowing casual dress every day compared with 2013. Some organizations have gone further in terms of flexibility and work-life balance. A new benefit added to the survey in 2017, a four-day workweek of 32 hours or less per week, was implemented by 13% of organizations.
Financial & Career Benefits
Service anniversary awards (54%) were the most common type of compensation benefit; however, they have decreased in popularity from 62% in 2013. Monetary benefits were provided through various types of bonuses, like an executive incentive bonus plan (51%), employee referral bonus (48%) and spot bonus/ award (45%) for going above and beyond in some capacity. Sign-on bonuses for both executives (35%) and nonexecutives (25%) have increased over the past five years, possibly because of the improved economy and talent shortage. Another benefit that changed was shift premiums, offered by 33% in 2017, which dropped 8 percentage points from 2013 to 2014 and has stayed at a similar level since.
Travel & Relocation Benefits
The most common benefits in this category were travel reimbursements for taking a taxi to the airport (87%) and for parking at the airport (87%). 76% provided per diem reimbursement for meals and snacks, up from 70% in 2013. Fewer organizations provided reimbursement for personal telephone calls while on business travel (36% versus 44%) compared with 2013, but that may be because most employees have personal or business cell phones. The other business travel benefit that decreased was paid travel expenses for a spouse, only offered by 2% of organizations compared with 7% five years ago.
Housing and relocation benefits are the least commonly offered benefit category, with the top benefit—relocation lump sum payment—offered by 29% of organizations. Temporary relocation benefits decreased 4 percentage points over the last year, with 20% offering this benefit in 2017. Two benefits decreased over the past five years: location visit assistance (15% from 22%) and reimbursement of shipping fees (13% from 20%).
In today’s competitive talent marketplace, it is imperative for organizations to make informed and strategic decisions about what benefits to offer as part of their total rewards strategy. Using a variety of sources to stay up to date on benefits trends and innovative strategies and continually assessing the fit of offerings with your organization’s culture are crucial steps in securing the organization’s current and future talent needs.
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Graphic source: SHRM report