Elevate your benefits strategy
Today, organizations are facing a shortage of key talent and an uncertain business environment due to a weakening economy and persistent inflation, while still grappling with the effects of the pandemic on their benefit strategy. The 2023 Benefits Trends Survey found that despite these pressures, employers are striving to elevate their benefit strategy in key areas.
The importance of the competitive talent landscape as a key influence on benefit strategy has persisted over the past two years since our 2021 survey. In addition to talent challenges, employers face cost pressures. Roughly half of employers globally (51%) cite rising costs as a key influence on benefit strategy. This figure jumps to 62% in North America and 66% in CEEMEA (Figure 1).
| Global | Asia Pacific | CEEMEA | Europe | Latin America | North America | |
|---|---|---|---|---|---|---|
| Competition for talent | 76% | 74% | 72% | 78% | 77% | 81% |
| Rising costs | 51% | 46% | 66% | 49% | 47% | 62% |
| Flexible work arrangements | 36% | 34% | 40% | 42% | 43% | 22% |
| Focus on inclusion and diversity | 33% | 31% | 24% | 32% | 37% | 42% |
| Rising mental health issues | 22% | 17% | 11% | 20% | 20% | 43% |
This puts employers in a difficult position. While attraction and retention issues would normally push employers to spend more on benefits, such a strategy would be at odds with the current business environment and focus on cost containment. This is prompting employers to look for alternative solutions such as enhancing choice and flexibility, and improving efficiencies.
But efforts to improve benefits may fall short if employers don’t understand employee priorities. Employees tend to place a greater emphasis on benefits that support their short- and long-term financial security and provide assistance with benefit decisions. For their part, employers recognize the need to bridge these gaps and improve their market position.
To boost program efficiency, employers are streamlining internal operations − for example, by making better use of technology from onboarding applications to collaboration software.
At the same time, in an effort to manage costs and capture efficiencies, employers are taking more aggressive steps to improve contract terms with vendors and bundle services.
While respondents recognize the need to improve all areas of their benefits strategy, there are significant opportunities around employee experience, and analytics and reporting. Capturing these and other opportunities will help employers shape a benefit strategy that strengthens their portfolio while controlling rising costs.
