The pandemic’s disruption on the economy and employment has been historical in both its impact and scope. As we enter the third year of upheavals, it is prudent for employers of any size to prepare for some continuing issues.
Daniel Zhao, a senior economist at Glassdoor, in recent analysis from their database and user inputs, has predicted four trends they expect to emerge next year.(1)
Hiring will get harder.
Remote work will increase access to talent but at a higher price point.
Employers will prioritize DEI (Diversity Equity & Inclusion) initiatives.
The workplace community will exist beyond office walls.
Hiring is Job One
That first point is the most acute one for most companies. It is also one that Commonwealth Insurance Partners can mitigate by utilizing our integrated retention, recruitment, and benefits program. It is designed to increase hiring, retention, health outcomes, and even positively impact a company’s budget by reducing what is usually their second largest cost. We will explain how, after we first examine the trend.
The COVID-19 Pandemic was not only a severe economic recession but also an unprecedented level of worker dissatisfaction with their jobs, leading to a record number of employees who are quitting their jobs that has been dubbed the “Great Resignation”. It began in the spring of 2021 and is continuing as of this writing.
According to the U.S. Bureau of Labor Statistics, in April 2021 a record 4.0 million Americans quit their job, 2.7% of the total U.S. workforce.2 August 2021 saw a new record set, as 4.3 million workers quit, 2.9% of the workforce.(2)
A month later, workers set another record, as 4.4 million Americans – a full 3% of the workforce – gave their two-week notice in September 2021!
To put this into historical perspective, in the last 20 years up to the start of the COVID-19 pandemic in 2020, the monthly resignation rate in the U.S. was never higher than 2.4% of the total workforce.(3) The number of workers who are quitting their jobs is unprecedented.
According to a Deloitte study of Fortune 1000 companies published in the October 2021 issue of Fortune magazine, 35% of CEOs already have expanded benefits to improve employee retention. The study also found that among Fortune 1000 companies, 73% of CEOs anticipate the work shortage will disrupt their businesses over the next 12 months.(4)
Benefits Can Fix This
It is well established that employees value benefits over pay. According to another Glassdoor survey, nearly half of job seekers cited attractive benefits and perks as a major factor driving them to apply for a job while 80% of employees said they prefer additional benefits over a pay increase.(5)
With Commonwealth Insurance Partners utilizing NextGen Benefits strategies, a company can offer better benefits with improved health care and outcomes, low or zero out-of-pocket expenses, and on average a $2000 savings per employee by the employer.
“Free Health Care”
A manufacturing firm in Ohio is in a fiercely competitive employee market, with its top competitor just 30 miles down the road. Employees were known to quit for an additional 50¢ an hour when offered by their competitor. Faced with such a tight labor market, this company implemented a NextGen health plan that eliminated their employees’ out-of-pocket costs. The company then posted billboards around their area touting “Free Healthcare.” The result: job candidates lined up out the front door and down the sidewalk waiting to apply. Not surprisingly, the company also experienced a dramatic decline in employee turnover.
CIP/NextGen plans offer health care benefits that are free, with no deductibles, co-payments, or co-insurance.
Remember that employers who currently offer cash incentives and expanded benefits are taking a hit on their bottom line, paying for these retention and recruitment initiatives from profits. Your opportunity is to radically improve their pay and benefits package to retain their employees and attract quality job candidates, but without having to spend any new dollars.
Because most CIP/NextGen health plans are designed to guide employees to high-quality care that produces better medical outcomes at a substantially lower cost, the employer pays less, with year-over-year savings of $2,000 or more per employee. In other words, this program to improve employee retention and recruitment pays for itself with plan savings. Those dollars can then be redirected to the company’s retention and recruiting initiative.
Employers can use this reclaimed capital to fund higher wages, performance bonuses, additional PTO, a premium holiday, additional benefits, a benefits shopping spree, and other valuable perks.
There is no shortage of ideas to retain and attract quality employees. And with Commonwealth Insurance Partners utilizing NextGen Benefits health strategies, there is no shortage of funds to pay for these benefits.
For an expanded and more detailed version of the concepts addressed in this blog, we urge you to download a PDF of our brochure, found here, which shows how to fix recruiting and retention issues while making healthcare a controllable cost. Additionally, if you would like printed copies or more information on these concepts, please contact a Commonwealth Insurance Partners benefits advisor today.
“Table 4. Quits Levels and Rates by Industry and Region”. www.bls.com. U.S. Bureau of Labor Statistics. Retrieved 2021-11-11.
“JOLTS”. Economic Policy Institute. Retrieved 2021-11-12.
L. Lambert, “The Great Resignation is No Joke”. Fortune (October 27, 2027). Retrieved 2021-10-25.
“Glassdoor’s 5 Job Trends to Watch in 2016”. Glassdoor.com. Glassdoor. Retrieved 2021-10-19