Rethinking Your Employee Benefits Strategy Can Help You Fight the Sansdemic

By Erick D. Schmidt, Vice President & Managing Shareholder, McGohan Brabender

What’s a Sansdemic you ask?  It means without people, or, in this case, without enough people. 

We were heading this direction prior to the pandemic. However, the shutdown created a situation where many baby boomers realized how much they loved working from home. Others realized they could afford to retire early, largely due to the additional savings achieved by having a two-income household compared to prior generations where one spouse often stayed at home. Additionally, at a time when there are record numbers of open job positions, government subsidies have caused many people to delay engaging in long-term careers.

The current shortage of people actively looking for employment is creating greater challenges for employers everywhere as evidenced by statistics from payroll providers:   

Prior to the pandemic there were: 

  • 7,000,000 job postings
  • Record unemployment

Today, there are:

  • 10,000,000 job postings
  • Of those job vacancies, 6,000,000 do not require a college education
  • Yet only 3,400,000 of people without college degrees are actively seeking out employment.

Employers Rethinking Employee Benefits 

As the competition to attract and retain employees is becoming fierce, employers are rethinking their employee benefit strategies post-covid.

According to a September 2021 Willis Towers Watson Employer Survey:

  • More than two-thirds of respondents (69%) say integrating employee wellbeing into the benefit package will be the top strategic benefit objective over the next two years. 
  • Less than three in ten employers (28%) believe their benefit programs enhance employee appreciation and many employers are planning to take steps to boost support and communication.
  • Over one-third (34%) of employers are planning or considering the use of digital tools and technology to help employees feel connected.
  • Over one-half (52%) are planning or considering the use of personalized communication to specific segments of their workforce.

Three Things to Consider Right Now 

As the struggle to find and retain employees rages on, the cost of employee benefits is on the rise, creating a perfect storm for employers. 

Three things you should consider right now for next year:

1. Save 9% to 11% through steerage to high quality providers or a narrow network strategy.

Consider taking some of that savings and improving the benefits as either an incentive or in exchange for a smaller network of providers. This could be done as a total replacement or as an option for your employees. There are also third-party options that use additional Health Reimbursement Account dollars to offset deductibles when employees choose higher quality providers. These options can be paired with your current carrier options.

Employers could also offer a narrow network co-pay plan next to their current HDHP/Health Savings Account plan. High utilizing employees may be willing to change providers in exchange for better benefits, especially if your communication strategy explains the value of high quality and better outcomes in lowering overall episodic cost of care. Younger employees likely do not have established provider relationships, so you can steer them to higher quality providers (lower cost) from the start. These employees will appreciate the lower co-pays and deductibles when accessing care and since they do not have an existing provider relationship, this won’t be a negative. There are also options that can match employees through artificial intelligence and claims data to steer employees to the best provider upon the initial provider selection or point of access to care. This requires planning and analysis, and you need to start discussions early in your plan year to effectively implement.

2. Save 13.9% by focusing on employee wellbeing.

The numbers don’t lie - Health Management and wellness works. According to McGohan Brabender’s data analytics, employers engaged in outcomes-based health management strategies save on average $4,158 per employee per year when compared to non-engaged employers. That’s 53% better than the national average cost per employee per year! Take some of this savings and invest it in employee assistance programs, enhanced mental health benefits, telehealth offerings, and financial wellbeing tools.

3. Improve your communication and employee engagement.

A misunderstood benefit is no benefit at all. Consider using some of the savings from the two options above and revamping your employee communication using technology. Invest in a one stop virtual hub to house all of your benefit offerings enabling easy access from a phone. Target your communication using automation to communicate via text messaging, email, and voicemail.  Use video messages to personalize communication to specific employee populations. Track engagement based on clicks. Use the data to refine your messaging. Rinse and repeat.

For more information, contact Erick D. Schmidt at 513-489-2700 or eschmidt@mcgohanbrabender.com.

McGohan Brabender is a Goering Center sponsor, and the Goering Center is sharing this content as part of its monthly newsletter, which features member and sponsor articles.

About the Goering Center for Family & Private Business

Established in 1989, the Goering Center serves more than 400 member companies, making it North America’s largest university-based educational non-profit center for family and private businesses. The Center’s mission is to nurture and educate family and private businesses to drive a vibrant economy. Affiliation with the Carl H. Lindner College of Business at the University of Cincinnati provides access to a vast resource of business programing and expertise. Goering Center members receive real-world insights that enlighten, strengthen and prolong family and private business success. For more information on the Center, participation and membership visit goering.uc.edu.