Employee Benefits: The Key to Winning the Talent War

One of the biggest challenges companies face as they try to weather the economic downturn, talent shortages, and technological disruption is the retention of employees that drive their innovation and growth.

In today’s agile and disruptive business environment, the success of a company's transformation is dependent on the caliber of its workforce, as only those workers can keep pace with the rapid and ever-evolving development of automation technologies, robotics, and artificial intelligence by rapidly learning new skills and adapting to innovative practices in line with shifting industry requirements.?

Because of these difficulties, businesses all over the world have scurried to elevate their employee benefits as a means of keeping their best workers on staff, which is essential to securing a company's bottom line. How exactly are they doing it? Through intensive inquiry into each worker's unique situation, as well as the provision of long-term financial and health security via tailor-made benefit packages.?

This Pacific Prime article will go into deep territory to highlight the increasing importance of offering competitive benefits in line with employee needs and market trends.?

The Importance of Employee Benefits

While turnover is inevitable, it is still up to employers to ensure changes happen within a reasonable time frame and threshold, and without too much hassle. As a result, it is important to prioritize the retention of employees in order to minimize disruptions to productivity and also save time and money. One way to do this is to update employee benefits in a way that demonstrates your dedication to your hardworking staff while also protecting your business for the long term.?

In essence, employee benefits do not only serve to help companies compete for and retain talent but also help them cope with the cost and time pressure associated with recruitment. The existing practices associated with the attraction and retention of talent, however, have now become inadequate. Now more than ever, it is imperative for businesses to tailor their offerings to each individual employee, taking into account their individual backgrounds, experiences, and preferences. This leads us to our next section—the major concern for employers in developing an effective benefit strategy.

The Key Issue Behind Employee Benefit Strategies

For employers, the key concern associated with benefit strategy is the cost of benefit plans that meet the needs of every employee and the overall wellbeing of their workforce.?

To provide a clearer picture of the baseline, we must think about how salaries and benefits are determined using Joe Hadzima's simple model from the MIT Sloan School of Management, which totals 1.25 to 1.4 times the base salary range. Generally, an employee who makes USD $100,000 a year could cost the company approximately USD $125,000 to $140,000 once benefits are calculated and added.?

These numbers, however, only provide an insight into the lump sum being paid for employee benefits and are likely to go through the roof because meeting the needs of all employees is becoming more and more important, which is directly linked to diversity, equality, and inclusion (DEI) outcomes—all of which require a more meticulous approach. As such, the key variables taken into consideration to accurately calculate a total lump sum comprise health insurance, workers compensation, disability insurance, life insurance, retirement and employee stock purchase plans, contributions, unemployment insurance, and other optional voluntary benefits.?

Additionally, the focus on the well being of employees is an increasingly important bargaining chip or selling point in the job market. If a company wants to stand out, it needs to take steps to address its stance on diversity, equity, and inclusion (DEI) issues by providing a work environment that prioritizes employees' health and happiness, prioritizes employees' individual needs, and offers a competitive benefits portfolio. This brings us to our next section, the future of employee benefits planning.?

A Glimpse into the Future of Employee Benefits Planning

In the coming years, we can expect employers to maximize their efforts in shaping and boasting their competitive benefit portfolios at the forefront of all their recruitment strategies. The areas of focus for the development of a competitive benefit package will fall into 5 concrete areas.?

1. Financial wellbeing and short-term solvency

As employees commit their future to a company, financial wellbeing serves as a safety net in order to mitigate challenges associated with macroeconomic effects and personal solvency issues. For example, the Deloitte Global 2022 Gen Z & Millennial Survey reported that the rising cost of living and inflationary pressures are among the greatest concerns among the Gen Z and Millennial workforce. Over a third of them are not confident that they will be able to retire with adequate financial security.?

So, employers will have to look at the changing times and adapt to them by looking at each employee's financial needs and debt, figuring out the best way to help, and putting together personalized benefit packages to deal with these problems.?

2. Mental health support?

At the heart of a company are employees with hopes, aspirations, dreams, and motivations.?

Every employee desires a stable livelihood, a sense of purpose and achievement, an opportunity to pursue meaningful relationships inside and outside of work, and a platform that supports and adds to their existing routines. While AI will continue to have an impact on the way businesses continue to govern and operate, the importance of human intervention will remain paramount to an organization’s identity, therefore affirming the importance of employee mental health.?

As employers continue to bridge the disconnect between an employee’s mental health and their duties, they will come to realize that mental health plays a massive role in supporting the productivity of the organization as a whole. The World Health Organization (WHO) reports that depression and anxiety account for 12 billion lost workdays annually, costing businesses around $1 trillion. Additionally, 15% of working-age adults were estimated to have a mental disorder.?

In order to combat the pressing risk of mental health disorders among the workforce, companies will allocate a considerable amount of resources to provide their workers with access to mental health resources, such as employee assistance programs and direct contact with mental health professionals. To supplement a better understanding of organization wide wellbeing, it is also worth reading more about how to implement corporate wellness programs .?

3. Retirement plans, funds, and long-term finances

Providing your employees with retirement benefits has a direct impact on the present and future of their lives. Doing so establishes a long-standing trust and commitment between the employer and employee. While setting up and administering retirement benefit plans can be a time consuming and costly process, it will lead to better employee retention as it demonstrates an employer’s ability to take into account the varying stages of an employee’s journey.?

4. Employee benefit decision-making support

As more and more companies and insurers work together to offer more individualized insurance products for employees, the need for decision-making support has never been greater. This, of course, requires a balance between human re-assurance and 24-hour AI chatbot support. The future will see employers putting extra effort into guiding and explaining the benefits offered to their employees, the mechanisms, what they are entitled to, and which package they should choose.?

5. Employee diversity, equity, and inclusion

Every business should make an effort to promote diversity, equity, and inclusion in the workplace. In the near future, however, the maximization of innovation and productivity will be achieved by offering benefits that tie to an employee's sense of belonging, their personal identity, and personal hobbies. These initiatives can serve as a positive long-term strategy for an organization as a whole.?

For example, work life balance benefits should tie to almost every aspect of an employee's life, including their personal and professional duties. Considered another deal breaker in the job market, employers will look to offer paid time off, sabbaticals, flexible work arrangements, telecommuting, child care, and eldercare assistance. These perks give workers more time to focus on their personal endeavors in addition to their day jobs, resulting in better employee skill development, job satisfaction, and retention.?

Understanding Your Multigenerational Workforce

The world will soon have to face the reality of an aging population, and many businesses will need to adapt to the varying stages of their employees' careers and the circumstances that dictate their lives. This includes people who are just starting out in their careers, those who are raising young families, and those who have large extended families.?

By 2030, 55-year-olds will hold 150 million jobs worldwide , with Japan leading the way with 40% of its workforce being over the age of 55. In a similar vein, a global decline in fertility has led to a trickle-down effect that has reduced the supply of fresh and young talent. These ramifications necessitate a more vigilant focus on employee retention, as finding and training replacements will be difficult, time consuming, and expensive.?

Furthermore, due to the large age and population gap, long-term success requires meticulous preparation and targeted interventions to ensure smooth onboarding and consistent output. This can be done by providing the appropriate benefits and healthcare to employees, which will lead to improved onboarding, retention, a positive reputation, and a positive impact on future recruitment in the event of mass employee retirement.?

Elevate Your Benefits Administration with the Right Platform

To strengthen their position as attractive employers, businesses should look to implement the latest benefit administration platforms. The right platform can help centralize all policies on one platform, manage costs, drive engagement, and improve the wellbeing of your entire workforce. Moreover, offering employees convenience and portability to instantly view and manage their benefits is the key to driving growth in a diverse and multi-generational workplace.?

Pacific Prime CXA ’s One Portal helps companies shift spending from treatment and prevention to address the unique needs of employees, such as physical, mental, and financial health risks. Through the use of AI, we have integrated health, wealth, and wellness into a single core of our benefits platform, improving the lives of over 400,000 people at 600 different companies. If you want to learn more about how to apply flexible benefits with insurtech, read this article .?

Learning more about the importance of employee benefits is a continuous process, and it’s worth starting today to future-proof tomorrow. You may also read more about the trends happening in the insurtech industry to give yourself a better picture of what’s to come.?

If you’re in need of expert advice on employee benefits or in need of international health insurance , corporate health insurance , or expat health insurance , contact us today .?