What Would Medicare for All Mean for Talent Retention?

“They have great benefits!”

When we think about what makes a “good” job, benefits are often front and center. Sure, benefits include things like gym membership and educational reimbursement, but there’s one benefit that carries most of the weight: Health insurance.

According to SHRM:

• 56 percent of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage, it’s a key factor in deciding to stay at their current job.
• 46 percent said health insurance was either the deciding factor or a positive influence in choosing their current job.

And in a Glassdoor survey: A full 40 percent of employees ranked health insurance as their most-preferred benefit, edging out vacation (37 percent) and performance bonuses (35 percent).

The connection between healthcare and recruiting, retention, even engagement, is irrefutable.

Who has what deductible? What percent of the plan is employer paid? Dental? Vision? What about HSA’s?

These are the questions asked by candidates and current employees alike.

With the possibility of Medicare for All on the horizon, employers are asking, what is our talent advantage?

If (more likely, when) the United States moves to a more affordable public healthcare option, there will be five big changes in the talent space:

1. Disengaged employees will leave. Quickly.

Employees who are checking the boxes in the name of keeping their health insurance will rapidly depart. In the short term, this immediate spike will be a financial and logistical challenge for employers. Replacing an employee costs between 6 to 9 months of salary. 

In the long term, though, a mass departure of disengaged employees will be a good thing. As I wrote about last year, retention and engagement are fundamentally different. Turnover is expensive in the short term. Disengagement is expensive in the long term.

A disengaged employee costs an organization an additional $3,400 for every $10,000 in annual salary. In engagement-critical roles like product development and sales, the cost is even higher. If a 100k/year employee slugs it out for 10 years? There’s an additional $340,000 down the drain for the employer.

A more symbiotic employee/employer relationship is ultimately positive for both parties. Employees are able to navigate their careers in a way that is fulfilling and employers reap the benefits of a more engaged workforce, who want to be there.

2. The “gig economy” will spike

Start your own business? Take a sabbatical? Join that 3-person startup? With Medicare for All, those options become more feasible.

Newfound flexibility will give rise to a new wave of consultants, freelancers, and solopreneurs.

3. Interviews will become more transparent (on both sides)

Without the looming need of health insurance, interviews will become more transparent. For the employer, and the perspective employee.

For employers, the likelihood of getting an honest answer to “Why do you want to work here?” increases. I’ve never read an article that suggests the transparent “Because I need health insurance in the next 45 days” as an interview talking point.

For employees, job offers will become more transparent and comparing offers becomes easier. Apples to apples comparisons are more feasible without reading the fine print of 74-page health benefit packages.

For all parties, a more transparent interview process is a bonus. Relationships with candidates that start with a foundation of trust and honesty and more fruitful for everyone.

4. Small Businesses will become more competitive

This shift would also level the recruiting playing field for small businesses. Big corporations often win talent based on their ability to dramatically subsidize healthcare. For small businesses, that subsidy is rarely feasible, causing those businesses to miss out on great talent, and employees to miss out on great perspective employers.

When health insurance loses the power of a deciding factor, small businesses will be more able to compete with their giant corporate counterparts for top talent.

5. Workplace culture will matter even more   

As it stands, fulfillment is paramount in recruiting and retaining talent. In a New York Times piece, Porath and Schwartz found, “Employees who derive meaning and significance from their work were more than three times as likely to stay with their organizations — the highest single impact of any variable. These employees also reported 1.7 times higher job satisfaction and they were 1.4 times more engaged at work.”

Without the added benefit of health insurance, employees will look to these organizations to recruit and retain in new ways. When employees aren’t bound to employers out of necessity, personal fulfillment, learning and development opportunities, and establishing a positive culture will carry even more weight.

Medicare for All would fundamentally change talent retention in the United States, and in my opinion, that’s a positive. 

When employers hold such a significant card, it creates unhealthy power dynamics.

Workers are more likely to tolerate unethical behavior, such as failure to pay overtime or offer safe working conditions, when they need health insurance. They’re more likely to stay at a job they hate, or turn down a job they love, because they need the health insurance. And they’re more likely to put themselves at risk, working when they are sick or hurt, when they need health insurance.

In a Medicare for All world, employment decisions won’t be based on the need for medications, the ability to see a specialist, or the access to primary care for employees and their families.    

With more flexibility, more security, and more transparent employment relationships, employees and employers will be able to work together harmoniously, towards a more fulfilling and more impactful future. 

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