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Attraction and Retention with Employee Benefits

The pandemic during the past two years has changed the workplace dynamic and led to many employees giving thoughtful consideration to their personal priorities. Remote work grew exponentially, and many workers relished the resulting freedom and flexibility. While many jobs are well-suited to work-from-home (WFH) mode, frontline occupations cannot be performed remotely, including many services provided by schools, municipalities and healthcare organizations.

Service-based jobs require people to be present to effectively deliver those services, and even when there is a way to supplement those roles with remote work, the in-person nature of the services cannot be avoided. How do you retain your current workforce and attract new employees when battling against the attraction of a WFH model? The answer is total compensation.

Total compensation includes the employee's base salary plus other benefits, such as paid time off and health insurance. Salary is only one element of an employee's total compensation. Base pay rates and retirement contributions may be inflexible in your budget, but employee benefits are an area of total compensation where an employer has an incredible opportunity.

Recruitment and Retention with Employee Benefits
Employee benefits can often be overlooked as an essential employee retention tool. In 2018, a survey conducted by America's Health Insurance Plans (AHIP), a trade association for health insurers, found that 56 percent of adults with employer-sponsored health benefits said that liking their health coverage was a critical factor in deciding to stay at their current job. Furthermore, for recruitment purposes, that same survey found that 46 percent of respondents indicated health insurance was either the deciding factor or a positive influence in choosing their current job.

Stress and financial insecurity brought on by the COVID pandemic has only enhanced the importance of employee benefits to both existing workers and job seekers. A 2020 study conducted by Prudential showed that an overwhelming majority (77%) of existing employees felt employee benefits were a key part of their compensation and nearly as many (73%) said those benefits were important to them staying in that job. More than half of the respondents stated they would be willing to look at a new position if they were offered better benefits. All of these results were higher than when the same questions were posed in 2019, before the pandemic.

Too many employers are unaware or don’t act on these critical considerations. Employers often defer discussing benefits after an offer has been accepted during the onboarding process. Even then, most employers don’t actively promote the value of their benefits to existing employees. Your benefits package is the component of total compensation that allows you to truly differentiate your employment opportunity. Employers can better hold on to their current workforce and increase the attractiveness of vacant positions by highlighting the employee benefits that are available and how valuable they are in providing greater financial and health security.

Benchmarking Your Benefits
Communicating benefit information is only the first step. How do your benefits stack up against competing employers? Engaging with a benefits consultant with broad knowledge of the marketplace is a critical part of evaluating your benefits program's comparable value for employees and recruits.

This may be the most critical year for evaluating current benefits. To assist with this evaluation, AP Keenan has been conducting an employee benefits survey for this specific purpose for more than 45 years. Furthermore, AP Keenan's innovative financial and organizational tools for schools and public agencies have helped many agencies avoid budget cuts altogether during previous economically challenging times. Programs such as AP Keenan's Supplemental Employee Retirement Program (SERP), which allows qualifying employees to retire early without making financial sacrifices, have allowed clients to reorganize staffing while rewarding long-time employees.

The AP Keenan Employee Benefits Survey has been influential for decision-making and developing benefits strategies for clients. Many have utilized the data to identify leading-edge cost management programs. Those with unions use the data in their bargaining negotiations. Most apply the information for determining their annual contribution strategy. Finally, many organizations seek to improve the outcomes of their health management programs through refinements identified by the survey results across the state. Participating employers in AP Keenan's employee benefits survey have always included clients and non-clients and results are shared with all participating organizations.

Employee recruitment and retention will continue to create challenges. So, offering competitive benefits is a clear strategy. Yet competitiveness must balance against keeping costs under control. The survey helps uncover the factors in finding the most value for the dollar.

For more information on AP Keenan's Employee Benefits Survey or to participate in the survey, please email info@maintenance.assuredpartners.com/keenan.

About Jeffrey Mizokawa
Jeffrey Mizokawa is the Schools Employee Benefits Practice Leader for AP Keenan, and currently works with the Employee Benefits and AP Keenan Financial Services teams to develop strategic plans for schools across the state. He has been working with California schools and public agencies for more than ten years.