Getting ahead in the talent recruiting game
Due to the pandemic, seismic numbers of lower-level employees have been terminated and many of their positions have been eradicated. High-level employees – those critical to company benefits and growth – have filled the gaps with increased workloads and hours. The result: major burnout among top performers and what’s been dubbed ‘The Great Migration’.
The Great Migration saw a record 4.3 million Americans leave their jobs in August 2021, which was 242,000 more than July. According to June 2021 research data by Monster, 95% of workers say they are considering changing jobs due to burnout. Recent research from Robert Half finds that more than 90% of company senior managers are challenged to source adequate skilled professionals.
Compounding this dilemma for employers are health insurance premiums, which have topped the average 5% annual increase for those costs over the past 10 pre-COVID years. Health insurance costs for employers were up an estimated 5.3% in 2021, and are predicted to rise 6.5% in 2022. What remains the same is the high importance of health benefits to high-ranking employees.
In this highly competitive workforce and costly health insurance environment, how can smaller companies recruit and retain top talent affordably? One often-overlooked, yet increasingly popular, solution is an excepted-benefits health insurance plan. These non-traditional, fully insured and tax-advantaged health plans are exempt from Affordable Care Act requirements.
Basically, excepted-benefits health plans provide typically tax-exempt reimbursement to select employees and their eligible dependents for virtually all medical costs not covered by their primary health plan, including deductibles, co-pays, co-insurance and other out-of-pocket (OOP) costs. And importantly, all fixed and variable premium costs are fully tax-deductible for employers.
Excepted-benefits plans offer an annual maximum benefit of up to $100,000, which covers the employee and his/her eligible dependents. This not only covers deductibles, co-pays, co-insurance and other OOP costs, but also dental/orthodontic procedures, vision care, hearing aids, in-home nursing, speech therapy, physical therapy and maternity care.
Additionally, excepted-benefits plans can be added to any employee’s underlying group health policy as well as to an employee’s individual, spousal or Medicare policy – as long as those policies meet the requirements of the plan provider. Excepted-benefits plans typically have no pre-existing condition exclusions, very limited eligibility requirements, and no enrollment waiting periods. Excepted-benefits plans charge a fixed annual premium, as low as $500 per plan participant.
Benefits such as health savings accounts, flexible spending accounts, 401(k) plans and even office stipends are no longer enough to reel in top candidates and retain quality employees. They are merely table stakes. Forward-thinking benefits, such as housing support, that surpass employees’ expectations, are what will give a company an edge.
A new survey ranked the following benefits as among the most important: flexible work schedules were listed as a top-three benefit by 71% of respondents, followed by retirement plans (63%), home office stipends (33%), HSAs (33%), and wellness/fitness benefits (29%). 75% of female employees said flexible work schedules were a top benefit; 67% percent of male workers said the same.
A recent study of US employees found that one in three employees suffered a reduction of their financial wellness benefits due to the pandemic, which forced some to pull money from emergency funds or modify retirement plan funding. Nearly 80% of corporate managers have said that improving their financial wellness options would help them better recruit and retain employees.
Additionally, when asked which benefits influence a job candidate’s willingness to accept a position, managers put two at the top of the list: medical insurance and a retirement savings plan. The second tier included dental insurance, retirement matching contributions, life and vision insurance. For millennial employees, reimbursement for student loans and access to a financial advisor counted.
Another recent study revealed that by offering employees on-demand pay and empowering them with choice and control over their payday, they stayed 35% longer at their job. Benefits also need to be looked at through the lens of DEI. According to Monster, 62% of job candidates would turn down a job if they felt the company culture didn’t value workplace diversity.
As employers remain hindered by skills gaps among their workforces and look to attract and retain talent, upskilling should be a central focus of talent strategies. The opportunity for growth is a significant benefit and often considered a far greater compensation than small salary increases for many, because it may lead to far higher salaried positions within the organization.
Ultimately, employees are demanding more control of their work lives, what they want out of their experience and an increase in work-life balance. Organizations with a compelling, flexible benefits offering will be better positioned to attract and retain top talent.