Competition for talent top influence on benefit strategy for most U.S. employers, WTW survey finds
July 13 2023 - 9:54AM
As companies grapple with attracting and retaining key talent,
investment in employee benefits remains a key priority for most
U.S. employers; however, many still face cost challenges as benefit
expenses continue to rise, according to a new survey from leading
global advisory, broking and solutions company WTW (NASDAQ: WTW).
WTW’s 2023 Benefit Trends Survey found that competition for
talent (80%) and rising costs (67%) are the top two priorities
influencing employers’ benefit strategies followed by focus on
inclusion and diversity (41%) and rising mental health issues
(39%).
While competition for talent has been a priority for the past
few years, the survey found it to be top of mind in 2023. Almost
two-thirds (65%) of employers feel that their current benefit plan
is effective or highly effective in attracting and retaining key
talent, and half (49%) are focused on their benefit plans meeting
needs across all employees. As they look to meet these needs,
employers plan to improve their benefits position in financial
wellbeing (43%) and mental health support (37%).
“Employee benefits are significant differentiators in attracting
and retaining key talent, and companies must prioritize in order to
be an employer of choice,” said Courtney Stubblefield, managing
director and Insights & Commercialization leader, Health &
Benefits, WTW. “Employers must focus on what their workforce needs
by assessing the value of benefits and their impact on employees.
This can be challenging given the complexity of benefit programs
and the need to simplify operations.”
As most (75%) companies look to focus on managing plan costs in
their strategy, balancing employee needs might prove more
difficult. Employers are anticipating cost to be a top challenge
for benefit budgets in the next two years. Almost half (46%) are
concerned about the persistence of higher inflation on their
benefits budget, while 36% expect an impact from the weakening
economy and current business environment.
In a bid to manage costs and simplify offerings, 66% of
employers have taken action to improve vendor contract terms, while
83% are planning to do so. About one-third have taken action to
bundle services into one package from a single vendor, while
another third is planning to do so. About one-third of employers
are mitigating retirement plan risk, and 36% have plans to do so.
Alternatively, almost two fifths (43%) have increased the employee
share of cost, while another half (48%) are planning to do so.
For some employers, their only option is to evaluate
strategically the benefits they offer in response to rising costs.
Seven percent of employers have opted to reduce the generosity of
their benefit programs overall, while 15% have plans to do so.
“The current state of both the economy and labor market is
putting employers in a precarious position, balancing the
competition for talent with the rising cost of services, while
budgets remain tight,” said Debby Moorman, managing director and
head of Health & Benefits, North America, WTW.
“This is especially challenging when employees are seeking
benefit provisions that support the key areas of inclusive
wellbeing, lifestyle and financial protection and are at the same
time environmentally and socially conscious,” added Moorman.
About the survey
WTW surveyed 595 U.S. organizations across a broad range of
industries about their benefit strategies between March and April
of 2023 for its 2023 Benefit Trends Survey.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led
solutions in the areas of people, risk and capital. Leveraging the
global view and local expertise of our colleagues serving 140
countries and markets, we help organizations sharpen their
strategy, enhance organizational resilience, motivate their
workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover
opportunities for sustainable success—and provide perspective that
moves you.
Learn more at wtwco.com.
Media contact:
Ileana Feoli: +1 212 309 5504
ileana.feoli@wtwco.com
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