Employers across the United States are experiencing tremendous changes amid the Great Resignation. Starting in early 2021 in the wake of the COVID-19 pandemic, the economy experienced an elevated rate of voluntary employee resignations. The Great Resignation, also referred to as the Great Reshuffle or the Big Quit, led to millions of job openings as the demand for workers skyrocketed.
Resignation trends continued into 2022, with a record 4.5 million employees quitting their jobs for reasons other than retirement in March 2022, according to JOLTS data. By the end of March 2022, there were 11.55 million job openings, the highest on record.
To attract and retain employees, many employers are choosing to restructure their current benefit offerings. In fact, a study conducted by CITE Research revealed that 84 percent of HR professionals report improving employee benefits, and more than half (58 percent) of businesses have increased their health-care coverage. Nearly all (94 percent) of organizations believe that parental leave benefits should be a top priority to attract and retain workers.
Record High Employee Turnover Highlights Retention Issues Across Industries
Despite steps taken to draw in job candidates, many employers are still struggling to attract and retain employees. According to a recent Job Openings and Labor Turnover Summary published by the US Bureau of Labor Statistics, the average turnover rate in 2022 remained 20 percent higher than the annual turnover rate at pre-pandemic levels.
When companies fail to understand why their employees are resigning, and what they might gravitate to, business leaders are putting their businesses at risk. To address these issues, many employers are taking the initiative to develop a thriving post-pandemic organization that caters to the needs and wants of a modern workforce.
Why Employee Turnover Is So High
Many factors have contributed to employee turnover since the start of the pandemic. While these reasons can be frustrating for both employers and employees, it is important to recognize what reasons may be preventing workers from staying and what benefits could encourage them to remain loyal to the business.
According to a recent Pew Research Center survey that analyzed the top reasons why US workers left a job in 2021, the majority (63 percent) say low pay, while 63 percent also said no opportunities for advancement. The survey also revealed other reasons for quitting, such as feeling disrespected at work (57 percent) and childcare issues (48 percent).
Lower on the list include not having enough flexibility to choose when to put in hours (45 percent), poor benefit options (43 percent), wanting to relocate to another area (35 percent), working too many hours (39 percent), working too few hours (30 percent), and finally, the employer required a COVID-19 vaccine (18 percent).
HR Professionals Are Looking to Improve Benefits for Stronger Retention
Throughout 2021 and 2022, employees left their jobs in record numbers in search of better opportunities and benefits. With so many vacant positions in nearly all industries, the current job market continues to be favorable to job seekers. With a high demand for workers, employers must be diligent to retain the employees they have and to find opportunities to attract new workers.
Improving benefit offerings is one of the best ways to improve employee satisfaction and boost retention. According to a Fractl survey of 2,000 workers, 88 percent of job seekers said that they give “some consideration” or “heavy consideration” to better health, vision, and dental benefits when choosing between a lower-paying job with better benefits and a higher-paying job.
There are several highly sought-after benefits that modern employers should consider adding to their current benefits package or reelevating for effectiveness, such as health and wellness benefits, retirement benefits, educational benefits, professional development benefits, remote work opportunities, and other benefits that will attract and retain employees.
Employees Want Better Health-Care Coverage
Health-care benefits may be optional for smaller employers but are no less important for employee retention. The Patient Protection and Affordable Care Act requires all employers with 50 or more full-time or equivalent employees to provide adequate health coverage. However, even employers that are not mandated by law to offer health-care coverage should consider adding health and wellness benefits to their benefits package to attract and retain top talent.
According to a CITE Research survey, approximately 58 percent of organizations have improved health-care coverage. In addition, about 36 percent of HR decision makers have reported that employees are asking for better health coverage.
Employers who offer health insurance can also benefit in other ways, such as through tax advantages. By offering employees benefits that increase their compensation package, employers can get an income tax deduction for the contribution, meaning any out-of-pocket costs are less than the value of the benefit to the employee.
Employees Are Financially Stressed
Having access to financial benefits is more important than ever before when it comes to attracting and retaining employees. High levels of inflation and a looming recession are forcing many businesses to rethink their benefit offerings as employees voice that they are financially stressed and looking for benefits to help.
According to the CITE Research survey, 62 percent of HR leaders reported that their workers’ financial-related stress levels have increased within the past year. In addition, 80 percent of HR professionals believe that offering employees competitive benefits like 401(k) retirement matching is more important for attracting and retaining workers than it was just one year ago. The survey also found that 36 percent of HR decision makers have reported that employees have asked for increased financial benefits.
Employees Are Routinely Asking for More Benefits
Since the start of the pandemic, the demand for bigger and better employee benefits has steadily increased. More employees throughout the country are routinely asking for benefits to help them achieve financial stability and provide better care for their families. Results from the CITE Research survey showed that 94 percent of employers say that parental leave benefits are some of the most important benefits to attracting and retaining workers.
2022 was also a major year for new policies that impact women and the LGBTQIA+ community. The survey revealed that 66 percent of respondents support coverage for hormone replacement therapy, a benefit important to the modern workforce.
In addition, 60 percent stated that funding and leave for abortion are critical for employees. Finally, 58 percent say they support travel benefits for medical purposes if a particular procedure is not available in the employee’s state.
Partner With New City Insurance and Structure Employee Benefits to Meet Employee Needs
While the Great Resignation has made waves for businesses across America, many believe that this economic trend has changed companies for the better. Many employers are taking the necessary steps to adapt to workers’ needs by addressing employee mental and financial health, wellness, and by offering remote work opportunities, among other things.
It can be difficult for businesses to take the initial steps to alter their benefits plans and invest in new benefits. To maximize employee benefits cost savings while meeting employee needs, work with a results-driven benefits consultant at New City.
We build custom plans that enable employees to keep their networks and achieve greater overall satisfaction in the workplace. To get started, contact New City Insurance at 888.210.2765 or request a consultation online today.