Employers have had their backs up against a wall for months as turnover woes continue to roil the workforce. Most businesses have been forced to throw money at the problem in the form of higher wages and better benefits.
In fact, in the wake of the so-called Great Resignation, 51% of workers report their employers have added new or increased their existing benefits over the last six months, according to a new survey conducted by The Harris Poll for Fortune of more than 2,000 U.S. workers.
In many cases, employers are increasing benefits, and making it easier for workers to access them, says Julie Stone, managing director of health & benefits for Willis Towers Watson (recently rebranded as WTW), a global advisory firm that specializes in risk management, talent and benefit solutions, among other business solutions. “There is an expansion of the breadth of services and a number of employers are now realizing they need to do something that is maybe not just a single, narrow solution,” Stone tells Fortune.
Improved dental and vision benefits, for example, were among the most commonly reported benefit expansions, according to the survey. Companies also added health and wellness stipends, and provided options for permanent remote work.
But not everyone is getting improved workplace benefits. Although half of workers said they saw added benefits, nearly half did not. That could be due in part to employee perception, according to Stone. Some companies may be expanding their benefits, but the message isn’t getting through to employees. Stone was working with a company that offered financial coaching and counseling to its employees, but there were a number of people that had no idea.
It may cost money to increase benefits for workers, but it could cost a lot more to lose those employees to other companies offering more.
Benefits can be an expensive part of worker compensation. Employee wage and salary costs averaged $27.35 per hour at the end of September, according to the U.S. Bureau of Labor Statistics. Benefits set employers back an additional $12.20 per hour worked. Benefits make up 31% of the $39.55 in total employer compensation costs.
As of December, benefit costs have risen 2.8% over the past 12 months, or 0.9% between the second and third quarter of 2021—a rate that’s been on a relatively steady upswing in recent years.
But companies are finding that it’s not as easy as it used to be to fill their empty positions. Typically, it costs employers $4,129 to recruit and hire a worker, according to a report by the Society for Human Resource Management (SHRM). Under normal circumstances, it takes an average of 42 days to fill an open position. But some companies have labored for several months to backfill open slots during the COVID-19 pandemic, cutting into productivity and, at times, hampering business’ ability to perform critical functions. Bottom line: it costs employers both time, money and lost productivity when a worker needs to be replaced.
The quality of benefits that companies are offering to placate their employees can vary dramatically. And adding benefits doesn’t always have to break the bank. The low-hanging fruit for businesses in terms of adding benefits are programs like wellness or lifestyle stipends, as well as adding more health plan options, Stone says.
“It adds a little bit of an administrative complexity that yet there's another choice, but you're already offering health care so that it's not as heavy lift as some might think,” Stone says, adding that wellness stipends can be done separately and even added outside the typical benefits cycle.
For workers who are seeing improved workplace benefits, Stone expects the programs to last beyond simply the pandemic or even the current worker shortages. The benefits companies are putting in place now will have “multiple years of staying power,” Stone says. Things like enhanced mental health support, telehealth options and even programs like wellness stipends are set to become a baseline benefit from a talent retention perspective.
“I don't think they're going to disappear quickly,” she says.
Never miss a story: Follow your favorite topics and authors to get a personalized email with the journalism that matters most to you.