NFP Survey: Employers Re-think Benefits During Tight Labor Market

During the last year, two trends – a growing war for talent and rapidly escalating health care costs – have caused employers to re-think their benefits policies, plan design and offerings. Nearly half of employers (45 percent) list “challenges related to rapid growth and/or higher than normal turnover” as their primary Human Resources strategic obstacle. And, with U.S. health expenditures projected to grow by 47 percent by 2028, two-thirds of employers say they want to implement an innovative benefits cost-containment solution.

These are among the key findings from NFP’s U.S. Employer Benefits Survey, the company’s inaugural survey of HR decision-makers, published alongside its annual data-driven 2022 U.S. Benefits Trend Report, featuring expert commentary and actionable insights for employers to address today’s unique workplace challenges.

“In the wake of the pandemic, a tight labor market and shifting employee priorities, the workforce has changed dramatically – and so have their needs,” said Kim Bell, executive vice president, head of Health and Benefits, NFP. “It is more important than ever for employers to get benefits right, and those who respond with policies and offerings that promote mental health, access to quality healthcare and life-work integration will be the talent leaders of tomorrow.”

According to the report, employers’ top choices to improve employee satisfaction center on more benefit choices and customization (37 percent) and better communication/education (33 percent), underscored by most employers initiating a benefits “re-set” with an eye toward employee mental well-being and flexibility.

During the past 12 to 18 months, 65 percent of employers have implemented alternative work schedules, and three-in-four intend to make this permanent. Two-thirds have adjusted their PTO and leave policies to support employee mental well-being. More than half offer online mental health resources. Roughly one-third provide health coaching (35 percent) and in-office mental health resources (29 percent), and 22 percent invest in peer support groups.

“Nearly every component of employee well-being – mental, physical, financial, social, career – has suffered over the past two years, prompting employees to rethink their jobs and benefits priorities,” said Deb Smolensky, head of Well-being and Engagement, NFP. “While employees want fulfilling work experiences, they want their lives – not their work – to come first. The goal is no longer work-life balance, its life-work integration.”

When it comes to time away from work, employers are expanding the variety and prevalence of leave options. In the past year, more than half (54 percent) have reviewed or changed their leave policies. Nearly one-in-three employers plan to offer marriage leave (33 percent), enhanced bereavement leave (32 percent) and sabbatical leave (29 percent). More than two-in-ten will offer study/exam leave (22 percent) and volunteer leave (21 percent), while 13 percent will offer surrogacy leave.

Against a backdrop of growing health care expenses, two-thirds of employers want innovative cost-containment solutions. More than half (53 percent) would need the cost-savings percentage to be between 11 percent and 15 percent to implement a cost-containment solution.

When considering cost containment, roughly three-quarters of employers believe each of the following are important factors: increasing employee access to quality providers (83 percent), transparency in cost (79 percent), reducing member out-of-pocket expenses for pharmaceutical costs (79 percent), ROI (74 percent) and member disruption (74 percent).

NFP’s inaugural U.S. Employer Benefits Survey was administered online in February and March 2022 and includes 563 respondents. Survey participants work in Human Resources, are employee benefits decision-makers and work for organizations with at least $1 million in annual revenue with at least 100 employees.