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Employers Use Health Benefits to Recruit Workers

Tight employment is driving significant benefit growth, SHRM finds.

Employers are using every tool at their disposal to attract and retain employees and among them are what used to be called “fringe” benefits, especially those relating to health and wellness, according to the annual benefits survey released by the Society for Human Resource Management (SHRM).

“With unemployment at an 18-year low, employers view benefits as a strategic tool for recruiting and retention,” says Trent Burner, SHRM vice president of research. “Strategic organizations adjust their benefits year-to-year, depending upon their use by employees, cost and effectiveness in helping an organization stand out in the competition for talent.”

The survey results indicated that more than one-third (34%) of organizations increased their overall benefits in the last 12 months. When employers added offerings, they were most likely to increase health-related benefits (51%) and wellness benefits (44%).

Retention (cited by 72% of respondents) and recruiting (58%) were the top reasons for increasing benefits, the survey found. The survey of more than 3,500 randomly-selected human resources professionals in the U.S. was conducted in February and March.

The growth of health benefits should come as no surprise. A 2017 SHRM survey on the strategic use of benefits found that organizations that take a strategic approach to their benefits program, leveraging benefits to recruit and retain employees, are nearly twice as likely to have more satisfied employees and to report better business performance compared with organizations that are not strategic with benefits.

In a separate 2017 SHRM survey of job satisfaction and engagement, 92% of employees indicated that benefits are important to their overall job satisfaction. “This finding illustrates what HR professionals already know—benefits are powerful and can either cost or save an organization a substantial amount of money associated with turnover,” the SHRM benefits survey researchers note.

The job satisfaction survey also showed a relationship between benefits and retention, with 29% of employees citing their overall benefits package as a top reason to look for a position outside of their current organization in the next 12 months. The job satisfaction poll also found that 32% of employees who were unlikely to look for an external position cited their overall benefits package as a top reason as well.

Parental Leave Benefit Jumps

SHRM’s 2018 benefits survey reveals that the availability of paid parental leave increased significantly between 2016 and 2018 for every type of parental leave surveyed. Paid maternity leave increased from 26% in 2016 to 35% in 2018. Also showing increases from 2016 are paid paternity (21% to 29%), adoption (20% to 28%), foster child (13% to 21%) and surrogacy (6% to 12%) leave.

Why offer paid parental leave? Although employees are protected by the federal Family and Medical Leave Act for 12 weeks during any 12-month period to care for a new child, paid parental leave may enable eligible employees to take full advantage of this job-protected leave, the researchers explain.

SHRM points to research that shows it benefits employers by increasing organizational commitment and engagement, and providing opportunities for colleagues covering for employees on parental leave to learn new skills. It also is said to lower the incidence of maternal depression and actually reduce healthcare costs due to higher rates of breastfeeding, which promotes infant health.

Wellness benefits also are popular, the survey finds, with 75% of employers offering wellness resources and information and/or a general wellness program. Compared to last year, substantial increases were seen in company-organized fitness competitions/challenges, from 28% in 2017 to 38% in 2018. The prevalence of CPR/first aid training rose by 7% (47% to 54%) and standing desks increased from 44% to 53%.

On the other hand, the research finds that preventive programs specifically targeting employees with chronic health conditions fell by 8%, from 33% in 2017 to 25% in 2018. However, a substantial increase was seen for life insurance for dependents, with over two-thirds of organizations (70%) offering this benefit in 2018, an increase of 13% since 2017.

When it comes to other top benefits offering that are not related to health, employee programs and service benefits increased by 39% at organizations that increased benefits offerings in the past 12 months. For example, 50% of organizations allow casual dress every day, up 6% since last year. Several other benefits increased over the last five years, including free coffee, company-provided snacks and annual company outings.

In addition, 63% of organizations are presenting service anniversary awards to their employees, a rise of 9% from 2017. More than two-thirds (70%) of employers also offer some type of telecommuting, up from 62% last year.

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